No Harvey Impact yet but 1st Time Unemployment Insurance Claims Rise

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 236,000 1st time claims for unemployment insurance for the week ended August 27, 1,000 MORE than the previous week;
  • The number of initial claims for the week ended August 19 was UNCHANGED at 232,000;
  • The four-week moving average of first time claims FELL 1,250 to 236,750 or 0.154 percent of total employment;
  • The number of continued claims – reported on a one-week lag – for the week ended August 19 was 1,942,000, a decline of 12,000 from the previous week’s unrevised number;
  • The four-week moving average of continuing claims DROPPED 6,250 to 1,951,500;

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The increase in first time claims for unemployment insurance for the week ended August 26, as the Department of Labor reported Thursday is just a tease as to what this report will look like in a few weeks.

If history is any guide, we can probably expect unemployment insurance claims to jump by about 100,000, In 2005, about two weeks after Hurricane Katrina ravaged Louisiana (and, not, internet rumors notwithstanding Barack Obama was not president then), initial claims which had been averaging about 320,000 per week, spiked by 96.000 and then dropped 65,000 two weeks later. Claims returned to their pre-storm average within two months.

President Obama was in the White House when Superstorm Sandy tore up the East Coast in 2012, sending first-time claims up 90,000 two weeks later.

Just as Harvey’s impact on employment will be transitory, so too will be impact of the storm be on gasoline prices, affected because it hit a refinery-rich part of the country. Analysts expect a 15¢ jump in the per gallon price of gasoline in the next couple of weeks but prices should be back to pre-storm levels in a couple of weeks.  Platforms and rigs were shut down in anticipation of the storm, which made landfall late Friday as a Category 4 storm but weakened mid-Saturday into a tropical storm. Following Katrina, gasoline prices shot up 40¢ per gallon within a month but then fell back to below pre-storm levels two months later.

Thursday’s data on claims will have no impact on the Bureau of Labor Statistics’ report Friday on the August labor market. The unemployment rate is expected to remain at 4.3 percent and non-farm payrolls to increase about 182,000 which would be below the July increase of 209,000 and the three-month average increase of 195,000.

Average hourly earnings are expected to increase 6¢ to $26.42 which would compute to a 2.6 percent annual increase and average weekly earnings are expected to slip $3.59 to $905.83 which would be 2.6 percent higher than August 2016.

You can hear Mark Lieberman tomorrow (Friday Sep. 1) at 8:45 am and again at 12:05 pm on POTUS Sirius XM 124 and every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Unemployment Rate Drops to 4.5% in March as Job and Earnings Growth Stall

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Unemployment rate FELL in March to 4.5 percent, the lowest rate in almost 10 years (May 2007);
  • Payroll jobs INCREASED 98,000 in March, the weakest job growth since last May;
  • Prior month job totals were revised down: February from a gain of 235,000 to a gain of 219,000 and January from a gain of 238,000 to an increase of 216,000 jobs;
  • Private sector payrolls rose 89,000 in March, also the weakest growth since last May;
  • Average weekly hours in March FELL to 34.3, the lowest since last November;
  • Average weekly earnings INCREASED in March to $896.60 — up $1.77 from February but the 2.4 percent year-year growth was slightly weaker than the 2.5 percent annual growth recorded in February;
  • Average hourly earnings ROSE 5¢ in March to $26.14, a 2.7 percent year-year jump; in February average, hourly earnings registered a 2.8 percent year-year improvement;
  • The number of full-time workers INCREASED 326,000 in February; the number of part-time workers ROSE 149,000;
  • Labor force participation rate HELD at 63.0 percent;
  • Employment-Population ratio ROSE to 60.1 percent, the highest level since February 2009;
  • The number of multiple jobholder went UP 138,000; multiple jobholders represent 5.2 percent of all employed individuals, up from 5.1 percent in February;

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Despite the lowest unemployment rate in almost 10 years, this has to be considered a disappointing Employment Situation report, with the weakest job growth in 10 months and downward revisions to the job totals reported for the first two months of the Trump Administration. The revisions to January and February job growth trimmed the number of new jobs by 38,000.

So, what happened?

Some of the changes can be attributed simply to the calendar as the number of retail jobs fell marking the official end of the holiday shopping season. Some too relates to the weather with 6,000 new construction jobs in March, down from the addition of 15,000 in February.

Unusually good winter weather in the Midwest and Northeast probably strengthened job growth in January and February. March was payback time.,

Offsetting the drop in retail jobs, the number of restaurant jobs grew 21,700. Restaurant jobs have been a steady source of job growth having increased for 57 consecutive months. But, those jobs remain among the lowest paying jobs.

The health care sector too remained a strong source of new jobs, adding 16,700 jobs in March, the 54th straight month of job growth. The health care sector, of course, dodged a bullet when the House cancelled a vote on a replacement for the Affordable Care Act. Since the ACA took effect, the number of health care jobs has increased by 1.5 million or just over 39,000 per month.

Wage growth, though up in March appears to be slowing slightly. Coupled with the dip in average weekly hours, it means workers have less, not more, money in their pockets. Indeed, the slight drop in weekly hours is a bad omen for future hiring. An increase in hours would mean employers have to add to staff. In the immediate aftermath of the onset of the Great Recession, hours fell below 34, dropping as low as 33.8.

Average weekly earnings fell in the construction, and manufacturing sectors. The construction sector is one of the highest paying industry sectors with average weekly earnings of $1,039.77, topped only by the utilities sector ($1,5550.86) and the mining and logging sector ($1,262.69). Manufacturing workers earned an average of $864.84 per week in March, down $2.04 from February. Construction worker earnings fell $6.97 a week in March.

The weakness in hours and the mild slowing in wage growth suggest a weaker labor market than we’d like to see but there also seems to be little basis for concern about inflationary pressures.

The overall job growth should be tempered by the increase of 138,000 multiple jobholders.

The drop in the unemployment rate though remains the redeeming factor in this report. The number of persons unemployed fell 326,000 to 7.2 million, the lowest level since September 2007. Delving into that number, the number of individuals unemployed because of layoffs dropped 190,000 in March and the number of individuals unemployed for fewer than five week dropped 232,000. Some of those could have left that bracket and are now unemployed for 5-14 weeks, but that category fell 29,000. Together that suggest that new entrants to the ranks of the unemployed don’t remain there very long.

Unemployment rates for sub-categories also showed improvement. The unemployment rate for blacks dipped to a still high 8.0 percent from 8.1 percent in February and the unemployment rate for Hispanics dropped 0.5 percent to 5.1 percent. Even the teenage unemployment rate was down, dropping 1.3 percentage points to 13.7 percent, the lowest it has been since May 2001 when it stood at 13.4 percent.

Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124.

You can follow Mark Lieberman on Twitter at @foxeconomics.

 

1st Time Jobless Claims Remain Highly Volatile, Falling 10,000 in Last Week

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • 1st time claims for unemployment insurance for the week ended December 3 FELL 10,000 to 258,000;
  • The number of claims for the week ended November 28 was unchanged at 268,000
  • Filings remained under 300,000 for the 92nd straight week, the longest streak since 1970;
  • Four week moving average of first time claims INCREASED 1,000 to 252,500;
  • The four week moving average represented 0.166 percent of total employment, UP .001 percentage points from a week earlier;
  • Continuing claims for the week ended November 28 – reported on a one-week lag – DECREASED 79,000 – largest week-week drop since July 2015 — to 2,005,000;
  • The number of continuing claims for the week ended November 21 was REVISED UP 3,000 to 2,084.000;
  • Four-week moving average of continuing claims FELL 9,500 to 2,028,750;

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First time claims for unemployment insurance remained extremely volatile as the calendar turned to December, with a five-figure swing for the fifth straight week, according to the Labor Department.

The average change (regardless of direction) for the last five weeks has been 15,400 compared 6,600 for the previous five weeks. To be sure, the net change has been a drop of 7,000 claims over the last five weeks, but the wide swings suggest some instability in labor markets which would call into question the wisdom of tinkering with interest rates in the short term. Nonetheless, “body language” from the Federal Open Market Committee – the federal Reserve Board’s policy-setting arm – suggest the FOMC is poised to lower the target fed funds rate when it convenes next Tuesday. Though widely anticipated, the FOMC action could our a damper on holiday sales. Retailers had been anticipating strong sales, up about 3.6 percent, according to the National Retail Federation (NRF).

The NRF estimated retailers would add between 640,000 and 690,000 jobs to deal with the increased sales volume for the holiday season which, according to NRF, covers all of November and December.

The four week moving average, designed to smooth the volatility of the weekly numbers, is showing less of a swing in the last five weeks ranging from an increase of 1,000 to a drop of 6,000 and a net decline of 5,250 for the period dropping the total to 252,500, 6.7 percent below the level a year ago.

Despite the recent volatility, both initial claims and continuing claims have been on a relatively stable downward trajectory over the past year. Continuing claims, often seen as a surrogate for hiring, are down 10.7 percent from a year ago. The four-week moving average of continuing claims has dropped a more modest7.1 percent.

In raw numbers, continuing claims fell 241,000 in the last year with most of that decline, 137,000, since September 1.

You can hear Mark Lieberman every Friday at 6:20 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Modest Increase in 1st-time Unemployment Insurance Claims

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 208,000 1st-time claims for unemployment insurance for the week ended September 14, 2019, an INCREASE of2,000from the previous week’s upwardly revised 206,000 (from 204,000);
  • The four-week moving average of initial claims FELL 750 to 212,250;
  • Four-week moving average represented 0.135 percent of employment, unchanged from the prior week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,661,000 for the week ended September 7, DOWN 13,000 from the previous week’s UPWARDLY REVISED 1,674,000 (from 1,670,000)
  • The four-week moving average of continued claims FELL 3,750 to 1,677,500;

Trends:

  • The week-week increase in initial claim was the third in the last four weeks;
  • The decline in the four-week moving average of initial claims was the third in the last four weeks;
  • The drop in the four-week moving average of continued claims was the fourth in the last five weeks.

Data Source: Department of Labor

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The southeast dodged a labor sector bullet from Hurricane Dorian according to unemployment claims data reported Thursday by the Labor Department.

Two weeks after the storm which was preceded with dire warnings for Florida and the Carolinas, claims for unemployment insurance were essentially at pre-storm levels.

And, the report – covering the same “reference” week used by the Bureau of Labor Statistics for its monthly Employment Situation release, suggested the nation’s unemployment rate will not go up from the 3.7 percent level of the last three months. Comparison data for the reference week for continued claims won’t be available until next week. The Employment Situation report for September is scheduled for release October 4.

According to data not seasonally adjusted, first-time claims rose most sharply in California which accounted for 36 percent of the increase in new claims.

The weekly report reaffirmed initial reports that minimized the impact on businesses of Hurricane Dorian with relatively few jobs affected.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Housing Construction Soars in August — on Multi-Family Gains

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Homebuilding activity, measured by housing permits and starts ROSE SHARPLY in August with both permits and starts recording their largest month-month increases of the year;
  • The seasonally adjusted annual rate of total permits ROSE 7.7 percent or 102,000 to1.42 million, the highest level since May 2007;
  • Permits for new single-family homes rose 4.5 percent or 37,000 to 866,000;
  • The SAAR of all housing starts ROSE 12.3 percent or 149,000 to 1.36 million;
  • Single-family permits ROSE 4,4 percent or 39,000 while multi-family starts INCREASED 110,000 or 32.8 percent to 445,000;
  • The rate of total housing completions ROSE 30,000 or 2.4 percent in August; The SAAR of single-family completions ROSE 3.7 percent or 34,000 while the pace of multi-family completions FELL 4,000 or 1.1 percent;
  • The pace of single-family housing completions for July exceeded the pace of new home sales in July (the most recent month available) by 43 percent compared with 21 percent in June.

Trends:

  • About 61 percent of the total number of August permits were for single-family homes, lower than the 63 percent share from January through July
  • The pace of total housing permits for July was revised down 19,000, increasing the August gain;
  • The rate of single-family permits was up year-year for the first time in 11 months;
  • Total starts ROSE to their highest level since June 2007.

Data Source: Census Bureau and Department of Housing and Urban Development

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Homebuilding – led by multi-family activity – improved in August as single-family home construction continued to struggle.

That’s been the story for the last four years as single-family construction – either permits or starts – continue to fall as a percentage of all housing permits and well below levels in the aftermath of the Great Recession.

In 2015, for example, single-family permits were 60.0 percent of all permits, down from 74.1 percent in 2010. While the year-to-date share is up from 2015, it just 62.9 percent.

For housing starts, single-family homes represented 80.5 percent of all starts dipping to 64.4 percent in 2015. The current year-to-date share is a more respectable 69.4 percent but still 11 percentage points below 2010.

At the same time, new home sales continue to struggle with younger buyers trending more to multi-family units which tend to be closer to urban cores.

The Census and Housing and Urban Development data came just one day after the National Association of Home Builders (NAHB) reported its Housing Market Index rose slightly with builders seeing improvement in all three components of the index: current home sales, home sales six months out and buyer traffic.

Indeed, the HMI may have foretold the Census data.

That said, both the sales and construction figures remain well below pre-Recession levels, especially concerning as mortgage rates are at near-record lows.

Younger, potential home-buyers remain saddled with heavy student loan debt burdens affecting their ability to take advantage of the low rates.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Builder Confidence At 15-month High in September

By Mark Lieberman

Managing Director and Senior Economist

Data Highlights:

  • Housing Market Index ROSE one point in September to 68 (out of 100);
  • The short-term outlook for home sales ADDED two points but the outlook for sales in six months FELL a point;
  • The gauge of buyer traffic was unchanged from August;
  • The Index for August was REVISED UP one point to 67.
  • By region, builder confidence ROSE in three of the four Census regions and unchanged in the fourth, the Midwest.

Trends:

  • The total index was UP year-year for the first time since September 2018;
  • The overall index hit its highest level since June 2018.

Data Source: National Association of Home Builders

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Builder confidence continues to try to put the lie to sales and permit statistics showing weakness in home building Despite weakness in new home sales and new residential permits and starts, builders remain confident about residential housing markets.

The most recent Census report on housing permits and starts, for example, showed starts down 4.0 percent month-month and essentially flat to 2018. It was the third straight month housing starts had fallen.

And the most recent report on new home sales showed them down 12.8 percent month-month, the steepest month-month decline in six years.

Nonetheless. the Housing Market Index computed by the National Association of Home Builders showed builder confidence at its highest point in over a year, rising for the third month in a row. Even the first reading for August was revised up for the most recent, September, report.

Builders are bullish about near-term sales though not as sanguine about sales six months out and are seeing relatively strong buyer traffic.  

At least that’s what they’re telling the National Association of Home Builders in its monthly three question survey which checks views about the current sales market for new homes, views of the market six months out and the flow of buyer traffic to model homes.

Builder sentiment continues to outpace the reality of weak new home sales however. And, sales are likely to take their seasonal dip as autumn approaches. The months between school semesters are said to be the strongest months for home sales as parents try to settle in new homes before a new school begins.

The NAHB data showed a distinct regional tilt with confidence jumping in the Northeast and to a lesser degree in the South but slipping in the Midwest and West. Confidence hit 65 (out of 100) in the Northeast, matching May with the highest reading since 2005.

Indeed, recent news reports suggest builders may be dusting off incentives to, improving again in July although new home sales for May (the last reporting month) fell and new home sales sit at their lowest point of the year.

The builders may be encouraged by continued low mortgage rates as reported by Freddie Mac in its weekly survey. Freddie Mac reported last week the average rate for a 30-year fixed rate loan was 3.56 percent, down from 4.60 a year ago. That drop of 1.04 percentage points would reduce the monthly payment on a 30-year $300,000 loan to $1,363.94 from $1,537.93 a savings of about $175 per month.

Hear Mark Lieberman every Friday on P.O.T.U.S. radio, Sirius-XM 124, at 6:20 am Eastern Time. Follow Mark Lieberman on Twitter at @ foxeconomics.

Retail Sales UP in August for Sixth Straight Month

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Retail sales (measured by prices) ROSE a 0.4 percent or $1.9 billion in August, about half of July’s upwardly revised 0.9 percent gain;
  • Non-store retail (online) sales led all retail sectors and GREW $1.1 billion or 1.6 percent;
  • Non-store retailers accounted for 12.8 percent of all retail activity in August, up from 12.7 percent in July and 12.2 percent a year ago;
  • Gasoline stations FELL $405 million or 0.9 percent as gasoline prices FELL 4.3 percent from July to August;
  • Auto sales ROSE $1.82 billion or 1.8 percent in August;
  • Excluding autos, retail activity was up a modest $63 million or .02 percent in August;
  • Other than gasoline stations, restaurants, clothing stores, food and beverage stores and appliance stores showed a dip in sales from July to August;
  • Beyond auto and non-store retailers, retail activity rose at building material and garden supply stores, sporting goods stores and health and personal care stores;
  • All retail activity was up 4.1 percent year-year in August – compared with 3.6 percent in July — while the Consumer Price Index rose 1.7 percent from August 2018 to August 2019.

Trends:

  • Total retail sales have increased for six straight months, the longest stretch since 2017 when sales were up for seven straight months from June through December;
  • BLS reported the number of retail jobs FELL in August and have fallen for seven straight months; The number of retail jobs fell in August to the lowest level since January 2016.

Data source: Census Bureau

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Tariff-fueled retail sales rose again in August offering a somewhat cloudy picture of the economy.

The Census Bureau’s monthly report is not adjusted for price changes, is more a gauge of prices, many of which have been rising as a result of the imposition of tariffs on Chinese and other imported goods. The next round of tariff hikes is due in December according to the Trump Administration.

One element helping sales is the drop in gasoline prices which has enabled consumers to withstand the higher prices resulting from the higher tariffs. The price of a gallon of gasoline fell 11.9¢ per gallon in August and is down 7.6 percent in the last year.

Sales at both furniture stores and electronics/appliance stores have both remained sluggish reflecting a weaker home sales market.

Hear Mark Lieberman every Friday on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124, at 6:20 am Eastern Time. You can follow him on Twitter at @foxeconomics.  

1st-time Unemployment Insurance Drop Sharply; Little Impact from Dorian

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 204,000 1st-time claims for unemployment insurance for the week ended September 7, 2019, a DECREASE of15,000from the previous week’s upwardly revised 219,000 (from 217,000);
  • The four-week moving average of initial claims FELL 4,250 to 212,500;
  • Four-week moving average represented 0.135 percent of employment, DOWN from the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,670,000 for the week ended August 31, DOWN 4,000 from the previous week’s UPWARDLY REVISED 1,674,000 (from 1,662,000)
  • The four-week moving average of continued claims FELL 14,500 to 1,680,250;

Trends:

  • The week-week decline in initial claims, 15,000, was the largest drop number of first-time claims for unemployment insurance since the week-ended May 11, 2019, when the week-week decline was 16,000;
  • The drop in the four-week moving average of continued claims was the steepest since the week ended April 13 when the four-week moving average of continued claims fell 22,250 to 1,687,500;
  • The number of continued claims was 5,000 higher than a year ago, on the second time since January 2010 continued claims were higher than they had been a year earlier. (The first time was four weeks ago.)

Data Source: Department of Labor   

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Separate from its devastating impact in the Bahamas and despite dire forecast and warnings, Hurricane Dorian appears to have little impact on labor markets in the two weeks since it threatened Florida and other coastal states.

Indeed, the number of first-time claims for unemployment insurance fell in the week after the storm and in the week immediately following the hurricane, Florida was one of the states with largest declines in initial claims. Georgia and both North and South Carolina also registered declines.

That doesn’t mean the situation won’t be reversed as the impact of the storm begins to settle in. In the aftermath of Hurricane Harvey which made landfall in Texas on Friday, August 25 two years ago, initial unemployment insurance claims jumped 61,000, in the Labor Department report for the week ended September 2. In the interim, Hurricane Irma struck Florida on August 30.

In 2012, Superstorm Sandy battered the Northeast on Monday, October 29. The claims report for the week ended November 3, 2012, showed a slight increase of 1,000 in initial unemployment insurance claims, but for the week ended November 10 that year claims skyrocketed by 81,000

Within just a few weeks, claims filings returned to pre-storm ranges and the number of continued claims dropped as well suggested individuals laid off by the storms were rehired.

You can hear Mark Lieberman Friday mornings at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Job Openings Dip in July, Signals Labor Downturn

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Hiring in July ROSE 4.1 percent from June to 5.95 million
  • Job openings at the end of July FELL 0.4 percent to 7.22 million;
  • The ratio of job openings per unemployed EDGED DOWN to 1.19 in July from 1.21 in June.

Trends:

  • Job openings dropped to the lowest level since May 2018: 7.13 million
  • Hiring in July rose to the second highest level since the JOLTS data began in December 2000; highest level was 5.99 million in April this year;
  • July hires represented 82.1 percent of end-of-June job openings, highest percentage since May 2018;
  • Number of job openings fell for the second straight month for the first time since December 2016-January 2017;
  • Job openings per unemployed fell for the fourth straight month for the first time since 2008-2009.

Data Source: Bureau of Labor Statistics

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There were more warning signs about the job market Tuesday in the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey (JOLTS) report.

Indeed, employers may have dipped as deep as they could in July into the pool of available workers, filling 82.1 percent of June’s end-of-month job openings. As a result, job openings at the end of July were down to a 14-month low, falling for the first time in more than two years.

And, the ratio of job openings per unemployed, though well-below Great Recession levels, fell for the fourth straight month making getting a job from unemployment more challenging. That said, the number of “quits” rose almost 4 percent in July to 3.59 million, all all-time high. Even though the number of layoffs-and-discharges rose in July, the ratio of quits to layoffs-and-discharges remained at 2:1.

With the sharp increase in hires in July, the nation remained on pace to exceed last year’s total of 68.9 million hires though separations are in pace as well.

While those numbers suggest another good labor market year, it’s the short-term outlook that could be cloudy. The high “usage” rate of job openings suggested a slowdown in hiring and indeed the BLS’ Employment Situation report last week showed an increase of 130,000 new payroll jobs, weaker than had been expected and disappointing (except, of course, for those who got the new jobs!).

The outlook remains dim though in several industry sectors. The number of job openings fell in July in construction, leisure-and-hospitality, wholesale-and-retail trade and professional and business services even as the number of unemployed in several of those sectors rose.

You can hear Mark Lieberman on P.O.T.U.S Morning Briefing (Sirius 124) every Friday at 6:20 am Eastern Time. Follow him on Twitter at @foxeconomics.

Economy Adds Disappointing 130K jobs in August; Unemployment Rate Holds at 3.7%

By Mark Lieberman

Managing Director and Senior Economist

Highlights of the Employment Situation report for August

  • Number of payroll jobs INCREASED 130,000 in August;
  • The economy has added 1,266,000 jobs in the first eight months of 2019, DOWN 32.3 percent from 1,871,000 in the first eight months of 2018 and DOWN 14.5 percent from 1,481,000 in the first eight months of 2017;
  • Unemployment rate in August REMAINED at 3.7 percent (though taken out to one more decimal the unemployment rate DROPPED to 3.69 percent from 3.71 percent);
  • Unemployment rate for blacks FELL to 5.5 percent, the lowest rate since such statistics began in 1972;
  • Unemployment rate for Latinos FELL to 4.2 percent matching the record low in April and May this year (the government began collecting employment data on Latinos in 1973);
  • Private sector payrolls GREW 96,000, under 100,000 for the third time in the last two years;
  • Government payrolls INCREASED 34,000, the largest month-month increase in a year as the federal government added 28,000 (25,000 Census-related) jobs;
  • Average weekly earnings INCREASED $6.58 in August to $966.98, a 2.9 percent year-year gain; August marked the fifth straight month of year-year weekly income growth of under 3.0 percent;
  • Average hourly earnings GREW 11¢, in August to $28.11 a 3.2 percent annual increase. The average work week, which had fallen to 34.3 hours in July, moved back to 34.4 in August, multiplying the impact of the increase in hourly earnings;
  • About one of every five new jobs came in the two lowest paying sectors, retail and leisure and hospitality. In fact, the number of retail jobs dropped for the seventh straight month;
  • Prior month job totals were REVISED DOWN, a combined 20,000, cutting further into the August job growth; July’s originally reported increase of 164,000 jobs was reduced to 159,000 and the number of new jobs in June was lowered to 178,000 from the last report of 193,000.
  • The employment-population ratio – an unqualified measure of the “employment rate” – ROSE to 60.7 percent, its highest level since December 2008;
  • Construction sector ADDED 14,000 jobs, half of which came in non-residential building; the number of residential construction jobs GREW by 2,000;

Data Source: Bureau of Labor Statistics

Hear Mark Lieberman every Friday morning at 6:20 am on The Morning Briefing on POTUS on Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

1st-time Unemployment Insurance Edge Up

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 217,000 1st-time claims for unemployment insurance for the week ended Aug 31, 2019, an INCREASE of1,000from the previous week’s upwardly revised 216,000 (from 215,000);
  • The four-week moving average of initial claims ROSE 1,500 to 216,250;
  • Four -week moving average represented 0.137 percent of employment, UNCHANGED from the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,662,000 for the week ended August 24, DOWN 39,000 from the previous week’s upwardly REVISED 1,701,000 (from 1,698,000)
  • The four-week moving average of continued claims FELL 6,250 to 1,691,750;

Trends:

  • The number of first-time claims for unemployment insurance increased for the second straight week and third time in the last four weeks;
  • The four-week moving average of initial claims rose for the fourth time in the last five weeks;
  • On a percentage basis, the increase in the four-week moving average of first-time claims (1.3 percent) was the largest since mid-May.

Data Source: Department of Labor

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Before any impact from Hurricane Dorian, the number of first-time claims for unemployment insurance inched up in the last week of August. Larger, temporary, increases are likely in the wake of the storm, if history is any guide.

In the aftermath of Hurricane Harvey two years ago, initial unemployment insurance claims jumped 61,000, 25.5 percent but then fell for five of the next six weeks, reverting to the pre-storm range.

In the second week after Superstorm Sandy in 2012, unemployment ranks swelled 81,000 but then fell back over the ensuing four weeks.

Thursday’s Labor Department report will have no impact on the Employment Situation data to be released tomorrow with the unemployment rate and job creation statistics for August. The monthly ADP survey which tracks private sector jobs said the number of jobs jumped 195,000 in August, up from 156,000 in July. In July the Bureau of Labor Statistics said the economy added 164,000 jobs including 16,000 new government jobs.

Comparing the mid-month tallies of first -time and continued unemployment claims suggests the potential for a further reduction in the 3.7 percent unemployment rate. First-time claims for unemployment insurance fell 18,000 from mid-July to mid-August and the four-week moving average of initial claims dropped 3,750. In both cases, the declines exceeded the mid-June to mid-July declines.

The number of continued claims – a rough surrogate for hiring – grew 24,000 and the four-week moving average of continued claims was virtually unchanged, up 500, from mid-July to mid-August pointing to a less than spectacular change in the number of new jobs for August, ADP notwithstanding.

You can hear Mark Lieberman tomorrow, Friday September 6, at 8:45 a.m. EDT on POTUS’ Morning Briefing, Sirius-XM 124. You can also hear him other Fridays at 6:20 am EDT on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.

Pending Home Sales Index Falls Despite Lower Mortgage Rates

Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • National Association of Realtors’ May Pending Home Sales Index (PHSI) FELL 2.5 percent in July to 105.6;
  • Year-year the index FELL 0.5 percent.

Trends:

  • Following one-month respite, the PHSI fell year-year for the 18th time in the last 19 months’;
  • The Index for July essentially gave back virtually the entire June gain

Data Source: National Association of Realtors (NAR)

Image result for pending home sales

Despite – or perhaps because of – continuing low mortgage rates, the National Association of Realtors’ Pending Home Sales Index fell in July essentially back to where it was in May.

The decline was reported as Freddie Mac said the average rate for a 30-year fixed-rate mortgage rose ever so slightly to 3.58 percent from 3.55 percent one week earlier.

The dip in pending existing home sales mirrored the decline in new home sales (contracts) as reported last week by the Census Bureau and Department of Housing and Urban Development.

According to the Census-HUD data, new home sales plunged 12.8 percent in July as the median price of a new home rose 2.2 percent or $6,800 to $312,800.

The lower mortgage rates have given home-sellers a bit of leeway to raise the asking price of an existing home, A year ago, the average rate on a 30-year fixed-rate mortgage was 4.52 percent.

Sales of existing single-family homes have struggled this year although the sales pace (closings) improved in July. For the first seven months this year, the annualized sales pace averaged 5,271,000, down 3.2 percent from 5,443,000 a year ago. The median price of an existing home rose 4.3 percent in the last year to $280,800.

Earlier this week, according to the Standard & Poor’s Case Shiller-CoreLogic Home Price Index, home prices rose 0.58 percent in June (the most recent survey month) and were up 3.1 percent year over year. According to both measures, however the rate of increase in home prices in slowing.

The housing market has shown weakness for the second straight year against slow rising earnings according to the Bureau of Labor Statistics. At the same time, a separate Census-HUD report continues to show a slowdown in construction of new single-family homes which multi-family construction has increased.

The weaker home sales market has had broader implications. In addition to a slowdown at related retail stores, the sales slump affected seniors who were counting on proceeds from the sale of their homes to fund retirement.

Hear Mark Lieberman every Friday at 6:20 am on POTUS Morning Briefing, Sirius-XM 124. You can follow Mark Lieberman on Twitter at @foxeconomics.

1st-time and Continued Unemployment Insurance Both Increase

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 215,000 1st-time claims for unemployment insurance for the week ended Aug 24, 2019, an INCREASE of 4,000 from the previous week’s upwardly revised 211,000 (from 209,000);
  • The four-week moving average of initial claims FELL 500 to 214,500;
  • Four -week moving average represented 0.136 percent of employment, DOWN from 0.137 percent the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,698,000 for the week ended August 17, UP 22,000 from the previous week’s upwardly REVISED 1,676,000 (from 1,674,000)
  • The four-week moving average of continued claims FELL 250 to 1,697,250;

Trends:

  • The week-week drop in the four-week moving average of initial claims was the first decline in four weeks;
  • Initial claims for the first eight weeks of this third quarter are up, less than one percent, from the same period in the second quarter.

Data Source: Department of Labor 

Image result for layoffs 2019

Though the numbers haven’t been huge, there’s been a mildly disturbing trend in the weekly report on unemployment insurance claims with a slow but steady increase in the numbers reported each week.

The increases haven’t been large, and indeed the “smoothing” four-week moving average of first-time claims continues to drop but the number of new claimants has been climbing, another signal of a softening economy.

To be sure, the number of first-time claims is far from Great Recession levels but some industry sectors – notably retail – are struggling as suggested by the large numbers of chain store closings.

While job cuts remain relatively low, they have increased. According to the July report of outplacement firm Challenger, Gray and Christmas, July’s total number of layoffs, 38,845, is 43.2% higher than the 27,122 job cuts announced in the same month last year. So far this year, employers have announced plans to cut 369,832 jobs, a 35.8% increase from the 272,301 cuts announced in the first seven months of last year. It is the highest seven-month total since 2015, when 393,368 cuts were announced.

“Manufacturers, the Challenger report said, are being hit, not only by shifting consumer behavior and automation, but by the imposed tariffs. Last month saw over 1,000 cuts announced due to the impact of tariffs,” According to the report, 1,053 pf the July job cuts were due to tariffs, for a total of 1,430 this year.

You can hear Mark Lieberman every Friday at 6:20 am on POTUS’ Morning Briefing, Sirius-XM 124. You can follow him on Twitter at @foxeconomics.