Friday December 02 2016
US Jobless Rate At 9-Year Low Of 4.6%
BLS | Yekaterina Guchshina |

US unemployment rate fell to 4.6 percent in November 2016 from 4.9 percent in the previous month and well below market expectations of 4.9 percent. It was the lowest jobless rate since August 2007, as the number of unemployed persons declined by 387 thousand to 7.4 million while the labor force participation rate decreased by 0.1 percentage point to 62.7 percent.

Among the major worker groups, the unemployment rate for adult men declined to 4.3 percent in November. The rates for adult women (4.2 percent), teenagers (15.2 percent), Whites (4.2 percent), Blacks (8.1 percent), Asians (3.0 percent), and Hispanics (5.7 percent) showed little or no change over the month. 

The number of job losers and persons who completed temporary jobs edged down by 194,000 to 3.6 million. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.9 million and accounted for 24.8 percent of the unemployed. Over the past 12 months, the number of long-term unemployed was down by 198,000. 

The civilian labor force participation rate, at 62.7 percent, changed little in November, and the employment-population ratio held at 59.7 percent. These measures have shown little movement in recent months.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 5.7 million, changed little in November but was down by 416,000 over the year. These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job. 

In November, 1.9 million persons were marginally attached to the labor force, up by 215,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, there were 591,000 discouraged workers in November, little different from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million persons marginally attached to the labor force in November had not searched for work for reasons such as school attendance or family responsibilities.

Friday December 02 2016
US Economy Adds More Jobs Than Expected
BLS | Joana Taborda |

Total nonfarm payroll employment in the United States increased by 178,000 in November of 2016, more than a downwardly revised 142,000 in October and above market expectations of 175,000. Employment gains occurred in professional and business services and in health care.

Employment in professional and business services rose by 63,000 in November and has risen by 571,000 over the year. Over the month, accounting and bookkeeping services added 18,000 jobs. Employment continued to trend up in administrative and support services (+36,000), computer systems design and related services (+5,000), and management and technical consulting services (+4,000).

Health care employment rose by 28,000 in November. Within the industry, employment growth occurred in ambulatory health care services (+22,000). Over the past 12 months, health care has added 407,000 jobs.

Employment in construction continued on its recent upward trend in November (+19,000), with a gain in residential specialty trade contractors (+15,000). Over the past 3 months,construction has added 59,000 jobs, largely in residential construction.

Employment in other major industries, including mining, manufacturing, wholesale trade, retail trade, transportation and warehousing, information, financial activities, leisure and hospitality, and government, changed little over the month.

The average workweek for all employees on private nonfarm payrolls was unchanged at 34.4 hours in November. In manufacturing, the workweek declined by 0.2 hour to 40.6 hours, while overtime was unchanged at 3.3 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.6 hours. 

In November, average hourly earnings for all employees on private nonfarm payrolls declined by 3 cents to $25.89, following an 11-cent increase in October. Over the year, average hourly earnings have risen by 2.5 percent. Average hourly earnings of private-sector production and nonsupervisory employees edged up by 2 cents to $21.73 in November.

The change in total nonfarm payroll employment for September was revised up from +191,000 to +208,000, and the change for October was revised down from +161,000 to +142,000. With these revisions, employment gains in September and October combined were 2,000 less than previously reported. Over the past 3 months, job gains have averaged 176,000 per month.

Thursday December 01 2016
US Factories Grew For Third Straight Month
Anna |

The Institute for Supply Management’s Manufacturing PMI rose to 53.2 in November 2016 from 51.9 in October, above market expectations of 52.2. It was the highest reading in five months as new orders, production and inventories of raw materials came in stronger than in the previous month while employment growth slowed down.

The New Orders Index registered 53 percent, an increase of 0.9 percentage point from the October reading of 52.1 percent. The Production Index registered 56 percent, 1.4 percentage points higher than the October reading of 54.6 percent. The Employment Index registered 52.3 percent, a decrease of 0.6 percentage point from the October reading of 52.9 percent. Inventories of raw materials registered 49 percent, an increase of 1.5 percentage points from the October reading of 47.5 percent. The Prices Index registered 54.5 percent in November, the same reading as in October, indicating higher raw materials prices for the ninth consecutive month. Comments from the panel cite increasing demand, some tightness in the labor market and plans to reduce inventory by the end of the year.

Of the 18 manufacturing industries, 11 are reporting growth in November in the following order: Miscellaneous Manufacturing; Petroleum & Coal Products; Paper Products; Computer & Electronic Products; Food, Beverage & Tobacco Products; Chemical Products; Fabricated Metal Products; Plastics & Rubber Products; Machinery; Nonmetallic Mineral Products; and Primary Metals. The six industries reporting contraction in November — listed in order — are: Printing & Related Support Activities; Wood Products; Apparel, Leather & Allied Products; Electrical Equipment, Appliances & Components; Transportation Equipment; and Furniture & Related Products.

Thursday December 01 2016
US Markit Manufacturing PMI Revised UP
Markit | Joana Taborda |

The Final US Markit Manufacturing PMI increased to 54.1 in November of 2016 from 53.4 in October and above flash estimates of 53.9. It is the strongest reading since October last year as output rose the most in 20 months, payrolls increased and cost inflation slowed.

A sharp and accelerated rise in new business volumes was reported by manufacturing companies during November. This was mainly driven by domestic sales, as new orders from abroad increased only marginally since the previous month, with survey respondents citing competitive pressures and the strong dollar. Anecdotal evidence suggested that improving U.S. economic conditions and greater confidence among clients had led to rising levels of new work.
Mirroring the trend for new business, latest survey data highlighted the steepest rise in production volumes since early-2015. Increased manufacturing output has now been recorded for six months in a row, and the latest expansion was faster than the post-crisis trend. Alongside stronger sales, higher production also reflected efforts to boost inventories. Stocks of finished goods have risen in each of the past two months, in contrast to the declines seen through the third quarter of 2016.
Improving demand conditions resulted in a sustained accumulation of unfinished work across the manufacturing sector in November. Backlogs have now risen for six months running, which is the longest continuous period since late-2015.
Renewed pressures on operating capacity resulted in a moderate increase in payroll numbers. Some firms linked greater staff recruitment to more confidence regarding the business outlook. This also contributed to further increases in input buying and pre-production inventories at manufacturing companies in November.
Despite rising purchasing activity, supplier lead times were broadly unchanged in November. Moreover, input cost pressures remained moderate, and the rate of inflation eased from October’s two-year peak. Factory gate charges also increased at a slower pace in November, reflecting weaker cost pressures and intense competition for new work.

Thursday December 01 2016
US Jobless Claims at 5-Month High
DOL | Joana Taborda |

The number of Americans filing for unemployment benefits increased by 17 thousand to 268 thousand in the week ended November 26th from the previous week's level of 251 thousand. It is the highest figure since the last week of June and above market expectations of 253 thousand. However, it is the 91st consecutive weeks of initial claims below 300,000, the longest streak since 1970.

The 4-week moving average which smooths out week-to-week volatility was 251,500, an increase of 500 from the previous week's unrevised average of 251,000.
The advance seasonally adjusted insured unemployment rate was 1.5 percent for the week ending November 19, unchanged from the previous week's unrevised rate.

Continuing claims during the week ending November 19 were at 2,081,000, an increase of 38,000 from the previous week's unrevised level of 2,043,000. The 4-week moving average was 2,037,500, an increase of 12,750 from the previous week's unrevised average of 2,024,750.

Wednesday November 30 2016
US Personal Spending Rises Less Than Expected in October
BEA | Joana Ferreira |

Personal consumption expenditures in the United States increased by 0.3 percent month-over-month in October 2016, easing from an upwardly revised 0.7 percent growth in September and below market expectations of 0.5 percent gain. Consumption of goods rose by 1.3 percent while spending on services fell by 0.2 percent.

Spending rose at a faster pace for goods (+1.3 percent from +1.2 percent in September), boosted by nondurable goods (+1.4 percent from +0.7 percent) while consumption of durable goods slowed (+1 percent from +2.1 percent). Spending on services fell by 0.2 percent, after growing by 0.5 percent the previous month. 

Personal income went up 0.6 percent, compared to a 0.4 percent gain in September and market expectations of a 0.4 percent increase. It primarily reflected increases in compensation of employees (+0.5 percent from +0.4 percent in September) and personal interest income (+1.8 percent from +0.2 percent). Real DPI increased by 0.4 percent, following a 0.2 percent rise in the previous month.

The PCE price index increased 0.2 percent from September, the same as in the previous month. Excluding food and energy, the PCE price index edged up 0.1 percent, the same as in September.

Tuesday November 29 2016
US GDP Growth Revised Up to 3.2% in Q3
BEA | Joana Taborda |

The US economy advanced an annualized 3.2 percent on quarter in the three months to September of 2016, up from 1.4 percent growth in the previous period and better than a 2.9 percent expansion in the advance estimate. It is the highest growth rate in two years, as consumer spending, exports and investment in structures rose faster than anticipated while fixed investment fell more, according to the second estimate released by the Bureau of Economic Analysis.

Personal consumption expenditure (PCE) contributed 1.89 percentage points to growth (1.47 percent in the advance estimate) and rose 2.8 percent (2.1 percent in the advance estimate). Spending on both durable goods (11.6 percent compared to 9.5 percent in the advance period) and services (2.5 percent compared to 2.1 percent in the advance estimate) increased faster than anticipated and spending on nondurable goods fell less (-0.6 percent compared to -1.4 percent in the advance estimate). 

Fixed investment subtracted 0.15 percentage points from the growth (-0.09 percent in the advance estimate) and shrank 0.9 percent (-0.6 percent in the advance estimate). Investment in equipment fell for the fourth straight quarter at a faster 4.8 percent (-2.7 percent in the advance estimate) and investment for intellectual property products increased at a slower 1 percent (4 percent in the advance estimate). In contrast, residential declined less than anticipated 4.4 percent (-6.2 percent in the advance estimate) and investment in structures grew faster (10.1 percent compared to 5.4 percent in the advance estimate).

Private inventories added 0.49 percentage points to growth (0.61 percentage points in the advance estimate), the first positive contribution since the first quarter of 2015. Businesses accumulated $7.6 billion worth of inventory, lower than $12.6 billion in the advance estimate. 

Meanwhile, exports increased 10.1 percent (10 percent in the advance estimate), the biggest gain since the last quarter of 2013. Imports rose at a slightly slower 2.1 percent (2.3 percent in the advance estimate), bringing the impact from trade up to 0.87 percent (0.83 percent in the advance estimate).

Government spending and investment added 0.05 percentage points to growth (0.09 percent in the advance estimate) and rose at a slower 0.2 percent (0.5 percent in the advance estimate).

Wednesday November 23 2016
Fed Says Case for Rate Hike Strengthened
Federal Reserve | Joana Taborda |

Federal Reserve policymakers consider the case for a rate hike continued to strengthen and that it would be appropriate to raise rates relatively soon, depending on further evidence of progress on inflation and employment, minutes from FOMC meeting held on November 1-2 showed.

Extracts From the Minutes of the Federal Open Market Committee:

Against the backdrop of their views of the economic outlook, participants discussed whether the available information warranted taking another step to reduce policy accommodation at this meeting. Based on the relatively limited information received since the September FOMC meeting, participants generally agreed that the case for increasing the target range for the federal funds rate had continued to strengthen. Participants saw recent information as indicating that labor market conditions had improved further and considered the firming in inflation and inflation compensation to be positive developments, consistent with continued progress toward the Committee's 2 percent inflation objective. 

Most participants expressed a view that it could well become appropriate to raise the target range for the federal funds rate relatively soon, so long as incoming data provided some further evidence of continued progress toward the Committee's objectives. Some participants noted that recent Committee communications were consistent with an increase in the target range for the federal funds rate in the near term or argued that to preserve credibility, such an increase should occur at the next meeting. A few participants advocated an increase at this meeting; they viewed recent economic developments as indicating that labor market conditions were at or close to those consistent with maximum employment and expected that recent progress toward the Committee's inflation objective would continue, even with further gradual steps to remove monetary policy accommodation. In addition, many judged that risks to economic and financial stability could increase over time if the labor market overheated appreciably, or expressed concern that an extended period of low interest rates risked intensifying incentives for investors to reach for yield, potentially leading to a mispricing of risk and misallocation of capital. In contrast, some others judged that allowing the unemployment rate to fall below its longer-run normal level for a time could result in favorable supply-side effects or help hasten the return of inflation to the Committee's 2 percent objective; noted that proximity of the federal funds rate to the effective lower bound places potential constraints on monetary policy; or stressed that global developments could pose risks to U.S. economic activity. More generally, it was emphasized that decisions regarding near-term adjustments of the stance of monetary policy would appropriately remain dependent on the outlook as informed by incoming data, and participants expected that economic conditions would evolve in a manner that would warrant only gradual increases in the federal funds rate.

After assessing the outlook for economic activity, the labor market, and inflation, as well as the risks around that outlook, the Committee decided to maintain the target range for the federal funds rate at 1/4 to 1/2 percent at this meeting. Members generally agreed that the case for an increase in the policy rate had continued to strengthen. But a majority of members judged that the Committee should, for the time being, await some further evidence of progress toward its objectives of maximum employment and 2 percent inflation before increasing the target range for the federal funds rate. 

Wednesday November 23 2016
US Consumer Sentiment Revised Up to 6-Month High
University of Michigan | Joana Ferreira |

The final reading of the University of Michigan's consumer sentiment for the United States rose to 93.8 in November 2016 compared to a preliminary figure of 91.6 and a final 87.2 in October. It was the strongest reading since May this year, as consumers' expectations regarding their personal finances and prospects for the national economy improved sharply.

The gauge of current economic conditions rose to to 107.3 from a preliminary reaing of 105.9 and a final of 103.2 in October; and the barometer of future expectations rose to 85.2 from 82.5 in the preliminary estimate and 76.8 the previous month.

Americans expect the inflation rate to be 2.4 percent in the next year, the same as in October; and 2.6 percent over the next 5 years, up from 2.4 percent the previous month.

Wednesday November 23 2016
US New Home Sales at 4-Month Low
US Census Bureau | Joana Taborda |

Sales of new single-family houses in the United States declined 1.9 percent to a seasonally adjusted annual rate of 563,000 in October of 2016, compared to market expectations of a 0.3 percent rise. Figures for the previous month were revised down by 19,000 to 574,000.

Sales in the South declined 3 percent to 322 thousand; those in the Midwest fell 13.7 percent to 63 thousand and in the Northeast sales were down 9.1 percent to 30 thousand. In contrast, increases were recorded in the West (8.8 percent to 148 thousand). 

The median sales price of new houses sold decreased to $304,500 from $314,100 in the previous month but was up from $298,700 a year earlier. The average sales price also declined to $354,900 from $364,100 in September and $366,900 a year earlier. 

The stock of new houses for sale increased 2.9 percent to 246 thousand. This represents a supply of 5.2 months at the current sales rate.

Year-on-year, new home sales jumped 17.8 percent.