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.

Federal Worker Unemployment Claims Surge

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The number of federal workers applying for unemployment insurance SURGED by 3,831 in the week ended December 29, the first full week of the partial government shutdown to 4,760.
  • There were 216,000 1st time claims for unemployment insurance for the week ended January 5, a DECREASE of 17.000 from the prior week’s upwardly revised report (231,000 to 233,000)
  • The four-week moving average of first time claims ROSE 2,500 to 221,750;
  • Four week moving average represented 0.141 percent of employment, UP from 0.140 the previous week.
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,722,000 for the week ended December 29, DOWN 28,000 from the previous week’s upwardly REVISED 1,750,000 (from 1,740,000);
  • The four-week moving average of continued claims INCREASED 15,250 to 1,721,250.

Trends:

  • The week-week increase in unemployment insurance claims by federal workers represented an increase of more than 300 percent
  • The four-week moving average of continued claims fell week-week for the first time in the since the beginning of November.
  • The week-week decline in first time claims for unemployment insurance was the first in four weeks.

Data Source: Department of Labor

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The first statistical evidence of the impact of the partial government shutdown – claims for unemployment insurance – showed a sharp increase – more than 300 percent.

Federal workers are not covered by the same program as private sector workers and the number of claims is reported on a longer lag. During the week claims by federal workers increased, the number of private sector claims rose 12,000.

In the broader labor market, the drop in claims represented a positive change from the first week of 2018 when initial claims rose 11,000 to 261,000.

After the first week of the October 2013 government shutdown, initial claims by federal workers rose 70,000, but that shutdown was broader. This year’s shutdown involved full workweeks (with no holidays).

The decline in the overall number of jobless claims suggests the shutdown has yet to reach private sector contractors who could be receiving payments under previously approved programs. Contractors also may not have laid off employees in anticipation of a brief government closure.

You can hear Mark Lieberman tomorrow (Friday, December 7) at 8:45 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124.

Unemployment Claims Jump as Holiday Jobs Disappear


By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 231,000 1st time claims for unemployment insurance for the week ended December 28, an INCREASE of 10.000 from the prior week’s upwardly revised report (216,000 to 221,000)
  • The four-week moving average of first time claims DECLINED 500 to 218,750;
  • Four week moving average represented 0.140 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 1,740,000 for the week ended December 21, UP 32,000 from the previous week’s upwardly REVISED 1,708,000 (from 1,701,000);
  • The four-week moving average of continued claims ROSE 26,000 to 1,703,500.

Trends:

  • First-time claims rose for the third straight week and sixth time in the last eight weeks;
  • The number of continued claims rose for the fourth straight week, the longest stretch since Spring 2017;
  • The four-week moving average of continued claims topped 1,700,000 for the first time since the week ended September 1, signaling a possible hiring slowdown.

Data Source: Department of Labor

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The increase in first time claims for unemployment insurance came as scheduled in the last week of 2018 – the first post-holiday shopping week – a painful way to greet the new year. It’s unclear what the contribution of furloughed federal workers made to the tally. Those numbers are reported on a longer lag.

What is clear though is a disturbing trend in continued claims – a rough measure of job creation taking individuals off the unemployment rolls.

The weekly report set the stage for the December Employment Situation Report to be published Friday by the Bureau of Labor Statistics. The Department of Labor has been unaffected by the government shutdown.

From mid-November to mid-December, the number of first-time claims fell 8,00 while the four-week moving average of first-time claims fell 4,000. The number of continued claims rose 3,00 during the same period and the four-week moving average of continued claims jumped 10,750, suggesting a dip in job creation.

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.

Unemployment Claims Data Again Show Modest Dip


By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 216,000 1st time claims for unemployment insurance for the week ended December 15, a DECREASE of 1.000 from the prior week’s upwardly revised report (214,000 to 217,000)
  • The four-week moving average of first time claims DECLINED 4,750 to 218,000;
  • Four week moving average represented 0.139 percent of employment, DOWN from 0.142 the previous week.
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,701,000 for the week ended December 8, DOWN 4,000 from the previous week’s upwardly REVISED 1,705,000 (from 1,688,000);
  • The four-week moving average of continued claims FELL 1,000 to 1,675,750.

Trends:

  • First-time claims as a percentage of total employment is down from 0.153 percentage a year ago;
  • The number of continued claims declined for the just the second time since the beginning of November, a hint that hiring from the ranks of the unemployed may be slowing;
  • The four-week moving average of continued claims fell for the first time in seven weeks;

Data Source: Department of Labor

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The Federal Open Market Committee’s insistence in its statement last following that job gains “have been strong” may prove again to be prescient based on tea leaves from the weekly report on claims for unemployment insurance.

Understanding the key word in the previous sentence is “may,” the weekly report not on new claims for unemployment benefits but continued claims showed the first drop since the beginning of November. Continued claims represent those individuals who remain on the unemployment rolls. A decline in that number suggests an improvement in hiring – at least of the previously unemployed.

The Job Openings and Labor Turnover Survey noted an increase in hiring but that was for October since that report has even a longer lag. We have seen a slowdown in new jobs in the monthly Employment Situation report. The report for November showed 155,000 new jobs that month, down sharply from 237,000 in October.

As to the upcoming Employment Situation Report (for December), the surveys which make up the report were conducted as usual before the government shutdown but analysts who dig into those surveys were not working.

The 16-day shutdown in October 2013 came during the reference week for which data were collected for the report issued at the beginning of November. The current shutdown began after the reference week. It had no impact on hours worked or average hourly and weekly earnings since those figures are private sector only.

The federal government represented about 2.8 million of the 149.8 million jobs reported in the most recent (November) employment situation report.

As to those tea leaves, the four -week moving average of first time unemployment insurance claims dropped 4,000 from mid-November to mid-December pointing to yet another decline in unemployment and perhaps the reported unemployment rate since in November the rate actually dipped from October’s 3.74 percent to 3.67 percent. With rounding, the rate for each month was reported as 3.7 percent. The four-week moving average of continued claims also declined, about 1,000 suggesting a bump in hiring.

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.

Case Shiller Home Prices Index Staggers in October


By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Case Shiller CoreLogic 20-city index FELL in October for the first time in two years, dropping 0.1 percent [the first draft of the Case Shiller report showed a decline in August which was revised].
  • The 10-city index was UP 0.04 percent, the weakest month-month change since October 2016 when it fell 0.11 percent
  • The national index INCREASED 0.10 percent, an improvement since September (when it rose just 0.06 percent);
  • Index ROSE in just nine of the 20 cities surveyed in October; in September the index improved in eight cities;
  • While the index rose year-year in all 20 cities surveyed, the year-year increase in October was weaker in 12 cities than it had been in September

Trends:

  • All three index readings remained above their previous peak;
  • The National Index set a record high for the 22nd straight month;

Data Source: S&P Case Schiller/Core Logic

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Growth in home values, measured by the Case Shiller Core Logic Home Price Index moved sideways in October, barely increasing in the 10-city index but slipping in the 20-city metric. Nationally the index was essentially flat.

In the last year, the national index is down 10.3 percent.

The data suggest realtors will continue to struggle with home sales as even empty nesters are likely to hold on to their nest-egg as the price of homes staggers.

What’s likely at work here is the year-old tax act which reduced the tax advantage that came with home ownership by capping both the mortgage interest and local property tax deductions.

Indeed, home price growth according to both the Case-Schiller 10- and 20-city index has been slowing since April. Nationally, home price growth had been slowing since May; October’s reading marked the first month-month uptick since April.

The October Case-Shiller home price Index report covered the same month in which the National Association of Realtors found the median price of an existing single-family home fell 1.9 percent to $280,800, the lowest since May. (The median price, according to the NAR, rose 3.8 percent in November to $291,400.)

Sales of existing single-family homes fell for six straight months from April through September before edging up in October and November.

The price index slipped 1.1 percent in Seattle, the most of any city surveyed, followed by declines of 0,7 percent in San Francisco, 0.6 percent in Portland and 0.5 percent in Cleveland.  The price index rose 0.7 percent in Phoenix, 0.4 percent in New York and by 0.3 percent in three cities (Charlotte, Las Vegas, and Tampa).

Prices, according to the Case Shiller survey fell 0.3 percent month-month in the Midwest and West while increasing in the South and Northeast, 0.2 percent and 0.3 percent respectively. The index is heavily weighted to the South and West.

Year-year prices rose 12.8 percent in Las Vegas, 7.9 percent in San Francisco, 7.7. percent in Phoenix and 7.3 percent in Seattle.

While the slower price increases could have a positive impact on home sales, those sales still face challenges with increasing mortgage rates.

Hear Mark Lieberman this Friday on P.O.T.U.S. radio’s Morning Briefing, Sirius-XM 124, at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

1st Time Unemployment Claims Increase


By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 214,000 1st time claims for unemployment insurance for the week ended December 15, an INCREASE of 8.000 from the prior week’s unrevised report.
  • The four-week moving average of first time claims FELL 2,750 to 222,000;
  • Four week moving average represented 0.142 percent of employment, DOWN from 0.143 the previous week.
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,688,000 for the week ended December 8, UP 27,000 from the previous week’s upwardly REVISED 1,661,000 (from 1,631,000);
  • The four-week moving average of continued claims FELL 750 to 1,665,750.

Trends:

  • From mid-November to mid-December, first-time claims FELL 11,000; the four-week moving average of first-time claims ROSE 3,250
  • Year-to-date, first-time claims are down 4.9 percent from the same period last year.
  • The increase in first-time claims followed two week-week decline;

Data Source: Department of Labor



How Scrooge-like.

As we head into Christmas week, the number of first time claims for unemployment insurance (translation: layoffs) rose, meaning at least 214,000 individuals (and their families) face the prospect of a bleak holiday season.

But, unsentimental businesses — recommendations from HR professionals notwithstanding – don’t look at the calendar when making financial decisions (see GM layoff plans), Those same businesses can’t control externalities such as the California camp fire. Indeed, layoffs –claims – in the Golden State increased almost one thousand (not seasonally adjusted in the last week while first-time claims in Massachusetts rose by slightly more than 1,000.

That’s said, first time claims in Illinois and Michigan fell 1,911 and 1,423 respectively.

With economists warning of the onset of a recession, those declines could become fewer and fewer and, at the same time, falling stock prices could touch off a scramble to improve profits by reducing expenses translated as jobs.

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.

Home Sales in November Up for Second Straight Month

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By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales – closed sales — ROSE 1.9 percent, 100,000, in November to a seasonally adjusted annual sales rate of 5.32 million;
  • Median price of an existing single-family home ROSE 0.7 percent, $1,900, to $257,000;
  • Year-year the median price is up 4.0 percent or $9,800;
  • Number of homes available for sale FELL 110,000 or 6.3 percent to 1.74 million;
  • The months’ supply of homes for sale in November was DOWN 0.4 months to 3.9 months.

Trends:

  • Existing home sales ROSE for the second straight month after falling for six months in a row;
  • Year-year sales were DOWN 7.0 percent, the ninth month in a row year-year sales have slipped;
  • Number of homes for sale DECLINED for the fourth straight month, to the lowest level since March; the steepest month-month decline since last December;
  • The median price of an existing single-family home ROSE for the first time in five months;

Data Source: National Association of Realtors: (NAR)

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Realtors weren’t exactly popping champagne corks though they might have been as existing single family home sales rose for the second straight month for the first time since February-March of this year. Even so, the level of home sales in November was 5 percent below March.

The National Association of Realtors’ November report, though positive, suggested future concerns as the number of homes for sale dropped to the lowest level in eight months, bringing to mind realtor complaints earlier this year of weak inventory.

(The pending home sales index for September showed an increase which forecast the sales report for November. The PHSI for October tumbled 2.6 percentage points. In the last six months, the PHSI fell four times – and existing home sales dropped four times in the period.)

Looking deeper at the November closings report, it chronicled the median price of existing home sales which showed four month-month decline which did not send sales up suggesting home buyers are not driven by prices.

The same fundamentals have been in effect for virtually the entire year, overshadowed by tax law changes which eliminated most of the tax incentives for homeownership.

The report noted home sales fell only in the West which, coincidentally, was the only census regions which saw the median price of an existing single family home fall – down for the fourth time in the last five months (the median price was flat month-month in the fifth).

Would-be homebuyers are still plagued by weak earnings growth and, with the odds of a recession in the near future growing, memories of the housing downturn a decade ago as well as rising interest rates.

Ironically, the prospect of higher rates might actually boost sales as buyers rush to act before rates go higher.

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 Mark Lieberman on Twitter at @foxeconomics.

Construction Activity Edges Up in November on Multi-Family Strength

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Home building activity, measured by housing permits and starts IMPROVED in November, led by multi-family activity;
  • The seasonally adjusted annual rate of multi-family starts ROSE 21.7 percent while single-family starts FELL 4.6 percent;
  • Permit activity followed the same pattern: permits for single-family homes inched up 0.1 percent while permits for multi-family housing ROSE 14.8 percent; combi9ned, permits were up 5.0 percent;
  • The rate of housing completions though ROSE 0.4 percent, though single-family completions FELL 5.4 percent from October while multi-family completions ROSE 17.2 percent.

Trends:

  • The month-month increase in total permits was the strongest since October 2017;
  • The increase in the pace of multi-family permits was the strongest since March;
  • Single-family starts fell to the lowest level since May 2017.

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

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Census Bureau data on housing permits and starts provided the appropriate backdrop to Monday’ report the Housing Market Index (aka builder confidence index) tumbled for the second straight month, down to 56 (out of 100), a drop of 12 points or almost 18 percent in the last two months.

The National Association of Home Builders, which compiles the index, attributed the decline to concerns over affordability though prices for lumber – a major component of home building – are near their lowest levels of the year.

The Housing Market Index, NAHB’s yardstick for builder confidence fell to 56, the weakest since May 2015 but still in positive territory. Any reading above 50 is seen as noting confidence.

The NAHB has, in the past few months, excoriated the Administration’s new tariff proposals which affect, among things, lumber prices. At the time the tariffs were announced, the NAHB warned the higher duties “could have major ramifications for the housing industry. With housing costs on the rise, this action translates into a tax increase on housing that will rise even more significantly on Jan. 1 when the tariff rate jumps to 25 percent.”

The tariffs the NAHB came “on top of the current 20 percent tariffs on softwood lumber imports from Canada. The lumber tariffs have already added thousands of dollars to the price of a typical single-family home.”

Permits and starts were especially hard hit in the West, the scene of devastating forest firms. Permits rose 1.6 percent from October, but year-year are off 11 percent in the region. November starts in the West were down 14.2 percent from October and off 18.4 percent from November 2017,

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

1st Time Unemployment Claims Plunge

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 206,000 1st time claims for unemployment insurance for the week ended December 8, a DECREASE of 27.000 from the prior week’s upwardly revised report (231,00 to 233,000).
  • The four-week moving average of first-time claims FELL 3,750 to 224,740;
  • Four-week moving average represented 0.143 percent of employment, DOWN from 0.146 the previous week.
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,631,000 for the week ended December 1, DOWN 5,000 from the previous week’s upwardly REVISED 1,636,000 (from 1,631,000);
  • The four-week moving average of continued claims FELL 2,500 to 1,665,750.

Trends:

  • The drop in first-time claims was the largest since the week ended January 18 (down 46,000);
  • The four-week moving average of first-time claims dropped for the first time in five weeks;
  • The drop in the four-week moving average of 1,665,750 continued claims was the first in five weeks;

Data Source: Department of Labor 

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On the heels of Tuesday’s report showing an uptick in both job openings and hires, the weekly report on first-time unemployment insurance claims plunged for the week ended last Saturday.

The report likely reflects seasonal part-time hiring, a trend observed in last week’s Employment Situation report which showed both retail and temp jobs increase. The number of retail jobs increased in November by the largest amount since May and temp jobs were up for the fifth straight month.

The drop in claims in California (6,900 not seasonally adjusted) was a contributing factor. Initial claims in California shot up more than 29,000 one week earlier in the wake of devastating forest fires.

Still, the improvement in claims doesn’t automatically mean the jobs picture has emerged from the doldrums which saw the number of first-time claims jump from 210,000 at the beginning of October to 233,000 two weeks ago. The announcement of major labor layoffs at General Motors may have spooked other employers who see the end of the economic expansion which began in September 2010.

While “recession” has emerged from whispers to a regular part of the economic discussion, trouble signs are hardly hidden. GM’s announcement coupled with business plan changes at Ford put the auto industry in the economic crosshairs and the nation’s other major industry, housing. Continues to struggle, so much so that the Housing Market Index last month plummeted in November to the lowest level in more than two years. The December reading is due next week.

According to both Fortune and Forbes, the tariffs put into effect by the Trump Administration have resulted in cuts in manufacturing.

Falling stock prices could touch off a scramble to improve profits by reducing expenses translated as jobs

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.

1st Time Unemployment Claims Show Modest Dip; Longer Trends Not Encouraging

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 231,000 1st time claims for unemployment insurance for the week ended December 1, a DECREASE of 4.000 from the prior week’s unrevised report
  • The four-week moving average of first-time claims ROSE 4,250 to 228,000;
  • Four-week moving average represented 0.146 percent of employment, UP from 0.143 the previous week.
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,631,000 for the week ended November24, DOWN 74,000 from the previous week’s downwardly REVISED 1,705,000 (from 1,710,000);
  • The four-week moving average of continued claims FELL 250 to 1,667,000.

Trends:

  • The drop in first-time claims was the first in four weeks;
  • The four-week moving average of first-time claims increased for the fourth straight week, the eighth time in the last 10 weeks, to its highest level since April
  • The four-week moving average of 1,667,000 continued claims is the highest level for this average in ten weeks.

Data Source: Department of Labor

Image result for labor market

The labor market has taken on a decidedly different appearance in the last few weeks as noted by Thursday’s report on first-time unemployment insurance claims.

Initial claims, though down in the last week, have increased in three of the last four weeks and substantially, up 3 percent 2 percent and 4 percent before dropping by 2 percent. From mid-October to mid-November, claims rose 15,000, itself a jump of 7 percent and the largest mid-month to mid-month increase in a year.

The four-week moving average of first time claims also increased from mid-October to mid-November, up 9,000 or 4.3 percent to the highest since September 2017.

The increases don’t suggest alarm but taken with the higher levels of continued claims, a surrogate for hiring (more continued claims suggest fewer individuals getting job offers as a way to get off unemployment rolls) and there could be cause for concern.

Those concerns were noted in forecasts for tomorrow’s employment situation report. The median forecast is for 190,000 new payroll jobs, down from the 250,000 new jobs reported for October and below the average number of new jobs each month this year: 213,00

Though the unemployment rate is expected to remain at 3.7 percent, the year-year growth in average hourly earnings is also expected to remain at October 3.0 percent suggesting the tighter labor market is not pushing wages up.

We can expect retail hiring to show an increase in November as stores ramp up for holiday shoppers but given that retail is the lowest paying job sector, an increase in those jobs would likely adversely affect the average growth.

You can hear Mark Lieberman tomorrow (Friday, December 7) at 8:45 am on the Morning Briefing on P.O.T.U.S. radio @sxmpotus, Sirius-XM 124.

Unemployment Insurance Claims Remain Low; Data Suggest Labor Woes

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 214,000 1st time claims for unemployment insurance for the week ended November 3 a DECREASE of 1.000 from the prior week’s upwardly revised report.
  • The four-week moving average of first-time claims WAS DOWN 750 to 213,750.
  • 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 1,623,000 for the week ended October 27, DOWN 8,000 from the previous week’s UNREVISED 1,631,000;
  • The four-week moving average of continued claims FELL 7,500 to 1,633,250.

Trends:

  • Four-week moving average of continued claims has now declined for 13 straight weeks
  • The year-to-date average of initial claims for unemployment insurance is 4.9 percent below the level of a year ago.
  • The 1,623,000 continued claims are the lowest level for continued claims since July 28, 1973, when it was 1,603,000.
  • The 4-week moving average of 1,633,250 continued claims is at the lowest level since August 11, 1973, when it was 1,627,250.

Data Source: Department of Labor 

Image result for unemployment claims

The strong labor picture didn’t help Republicans in the House, but it may have been a factor from the GOP in extending its control of the Senate, according to polls, put health care on the top of their list of issues which could impact their vote.

Initial claims for unemployment insurance for the week ended November 3 continued to hover in a narrow range but permits more significantly continued claims fell again suggesting those on the unemployment rolls are finding jobs.

That said, job openings, according to Tuesday’s Job Openings and Labor Turnover Survey report from the Bureau of Labor Statistics, dipped slightly at the end of September to just over 7 million, from just under 7.3 million at the end of August. Hires in September dropped as well, 5.7 million in September from 5.9 million in August. The decline in job openings could suggest employment may have peaked as the unemployment rate in October remained at 3.7 percent.

The JOLTS report, taken together with eh claims data, suggests a widening of the skills gap between those available and looking for work and the types of jobs.

In fact, the number of unemployed per job opening rose again in September, up to 11.8 from 1.17 – the third straight monthly increase.

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.