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.

1st-time Unemployment Insurance Claims Remain Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 211,000 1st time claims for unemployment insurance for the week ended May 18, DOWN 1,000 from the previous week’s unrevised 212,000
  • The four-week moving average of initial claims FELL 4,750 to 220,250;
  • Four week moving average represented 0.146 percent of employment, DOWN from 0.149 percent the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,676,000 for the week ended May 11, UP 12,000 from the previous week’s UPWARDLY REVISED 1,664,000; (from 1,660,000)
  • The four-week moving average of continued claims ROSE 5,500 to 1,674,250.

Trends:

  • The week-week decline in the four-week moving average of 1st time claims for unemployment insurance was the first in five weeks

 Data Source: Department of Labor

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While first-time claims for unemployment insurance remained at low levels for the week ended May 18, trend data in the report suggest the possibility of a negative surprise when the Bureau of Labor Statistics reports on the Employment Situation for May on June 7.

Comparing mid-April and mid-May data, first-time claims for unemployment rose 18,000 and the four-week moving average of first-time claims grew 18,750. The Bureau of Labor Statistics uses employment data collected in the mid-month “reference week” (the week including the 12th calendar day of the month) in computing the monthly unemployment rate. An increase in unemployment claims could mean an increase in the five-decade low 3.6 percent unemployment rate.

Data on continued claims for unemployment roughly translates into hiring, which is the way most people leave the unemployment rolls, is reported on a one-week lag and will be released next week serving as an indicator the jobs count for May.

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

New Home Sales Stumble Badly in April

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Pace of contracts for new home sales FELL 6.9 percent in April to a seasonally adjusted annual rate (SAAR) of 673,000;
  • The March sales pace originally reported as 692,000 was revised up to 723,000
  • The unsold inventory of new homes SLIPPED 3,000 or 0.9 percent in April to 332,000;
  • With the slower sales rate, the months’ supply of new homes for sale ROSE to 5.9 in April from 5.6 in March;
  • Median price of a new home JUMPED $27,800, or 11.9 percent, from March to $342,200, the highest since December 2017 ($343,300); Year-year the median price was up 8.8 percent, $27,800.

Trends:

  • The number of contracts for the sale of new homes fell month-month for the first time this year;
  • The year-year increase in the median price of a new home was first since last October;
  • The Census Bureau and Department of Housing and Urban Development, in a separate report last week, reported completions of single-family homes at a915,000 SAAR – 245,000 more than sales.

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

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Even as home builder confidence remains at lofty levels, new home sales fell sharply in April, the traditional start of the home-buying season.

The National Association of Home Builders last week reported its Housing Market Index rose three points to 66 (out of 100) in May with “buyer traffic,” one of three components of the index, improving two points to 49.  The NAHB noted despite the sharp April decline, the April sales pace was the third highest monthly rate since the end of the Great Recession.

But the weaker sales rate came in the same months the National Association of Realtors reported sales of existing homes fell, albeit by 0.4 percent, in April, the third time in the last four months and 11th time in the last 13 months sales have declined.

While reported new home sales (contracts for sale, not closings) declined, the median price of a new home rose at the fastest rate since February 2018. Sales typically fall when the median price increases. The cost of a new home is likely to continue to rise as higher tariffs affect the price of raw materials used in home building.

Meanwhile, Freddie Mac reported its weekly survey of mortgage interest rates showed another rate drop, the fourth in as many weeks, with the average rate for a 30-year fixed rate loan edging down to 4.06 percent from 4.07 percent one week earlier, the change saving $1.74 per month on a $300,000 mortgage or $626.40 over the life of the loan, probably not enough to boost home sales.

Indeed, the basic challenges to home ownership remain: still weak earnings growth, heavy student debt burdens affecting younger potential borrowers and recollections of observing the mortgage meltdown 10 years ago.

Meanwhile, the number of residential construction jobs, according to the Bureau of Labor Statistics, was rose about 600 from March to April to 2,899,200.

Hear Mark Lieberman on P.O.T.U.S. (Sirius-XM 124) Friday at 6:20 am Eastern Time. You can follow Mark Lieberman on Twitter at @foxeconomics.

Home Sales Tick Down in April

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The pace of existing home sales – closed sales – SLIPPED 0.4 percent, 20,000, in April to a seasonally adjusted annual sales rate of 5.19 million;
  • Median price of an existing single-family home ROSE 2.9 percent, $9,400, to $267,300;
  • Year-year the median price is up 3.6 percent or $9,400;
  • Number of homes available for sale ROSE 160,000 or 9.6 percent to 1.83 million;
  • The months’ supply of homes for sale in January JUMPED 0.4 months to 4.2 months.

Trends:

  • The pace pf existing home sales has FALLEN in three of the four reporting months this year and 11 of the last 13 month;
  • Year-year sales were DOWN 4.8 percent, the 14th consecutive month year-year sales have dropped;
  • The median price of an existing single-family home ROSE for the third straight month;
  • The month-month increase in holes for sale – 160,000 – was the largest since April 2018 when inventory also rose 160,000.

Data Source: National Association of Realtors: (NAR)

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The beleaguered home sales market took another hit in April, though a modest one, perhaps more of a glancing blow.

Nonetheless, the slight dip in sales in April marked the continuation of a trend which began a year ago.

The sales slump, despite a drop in mortgage rates, is affecting more than just realtors and mortgage lenders as sales at real estate related retailers are also feeling the slowdown. Sales at furniture and appliance stores, according to the Census Bureau, have fallen 3.1 percent and 3.5 percent respectively in the last year.

The average rate of a 30-year fixed rate mortgage is down from 4.47 percent in April 2018 to 4.14 percent in April 2019.

The roots of the depressed sales are both financial and environmental. Younger potential buyers remain saddled by student loan debt hampering their ability to qualify for a mortgage and have only recently seen a breakthrough from stagnant earnings growth. But as recent residential construction data suggest, there appears to be a shift away from single-family homes in favor of multi-family construction bringing people closer to jobsites to reduce commuting time and the other environmental affects of lengthy travel to work.

At the same time, the memories of the mortgage meltdown a decade ago remain fresh in the minds of potential buyers who may have experienced the impact in their own families or those of friends making them a bit gun-shy of mortgage financing.

The inventory build-up affects the other end of the age spectrum – senior who anticipated using the equity built up in their homes as a retirement nest egg. The median price of an existing single-family home rose 2.9 percent in April, $7,600, to $267,300 — the highest since last August. In the last year, the median price has risen 3.6 percent or $9,400.

One spot of good news in the NAR report was distressed sales – sales of foreclosures – represented three percent of sales as they had a month ago, down from four percent in April 2018.

Sales to first-time homebuyers, the NAR said, represented 32 percent of all transactions in April, down from 33 percent in March and a year ago. In 2010, first-time buyers accounted for 40 percent of existing home sales.

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.

1st-time Unemployment Insurance Claims Return to “Normal”

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 212,000 1st time claims for unemployment insurance for the week ended May 11, DOWN 16,000 from the previous week’s unrevised 228,000
  • The four-week moving average of initial claims ROSE 4,750 to 225,000;
  • Four week moving average represented 0.149 percent of employment, UP from 0.146 percent the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,660,000 for the week ended May 4, DOWN 28,000 from the previous week’s UPWARDLY REVISED 1,688,000; (from 1,684,000)
  • The four-week moving average of continued claims ROSE 1,200 to 1,668,250.

Trends:

  • The week-week decline in 1st time claims for unemployment insurance was the largest in 11 weeks. The number of initial claims fell 18,000 in the week ended February 16
  • The four-week moving average of initial claims rose for the fourth week in a row for the first time since January;
  • The four-week moving average of continuing claims rose for the first time in eight weeks.

 Data Source: Department of Labor

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Whew.

After a couple of weeks of relatively high initial unemployment insurance claims, first-time claims fell back to their new normal for the week ended May 11. The “culprit” appears to have been in New York State which showed sharp increases in claims during the two weeks ended May 4 and then an equally sharp decline one week later. The uptick was due to one-time layoffs in the transportation and warehousing, education service, and public administration industries, according to the (federal) Labor Department.

The claims increase in New York accounted for more than 4 percent of the increase in claims nationwide, a function not of any specific issues in the Empire State but of arithmetic as the low level of claims overall magnifies movement in any one industry or state.

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

Construction Activity Improves in April on Multi-Family Gains

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Home building activity, measured by housing permits and starts IMPROVED in April, as both starts and permits ROSE;
  • The seasonally adjusted annual rate of permits EDGED UP 0.6 percent to a seasonally adjusted annual rate (SAAR) of 1.296 million; all the increase came in multi-family (almost 40 percent of the total) which ROSE 8.9 percent while the annualized pace of permits for single-family homes FELL 4.2 percent from March;
  • The SAAR of starts ROSE 5.7 percent or 67,000 to 1.235 million. Single-family starts IMPROVED 6.2 percent or 50,000 while the rate of multi-family starts INCREASED 17,000 or 4.7 percent;
  • The rate of total housing completions FELL 19,000 or 1.4 percent. The SAAR of single-family completions DROPPED 39,000 or 4.1 percent, while the pace of multi-family completions ROSE 20,000 or 5.3 percent.

Trends:

  • Total permit activity rose for the first time this year. The SAAR of permits for single-family homes fell for the fifth straight month, the longest streak of declines since April-September 2010;
  • Single-family permits represented 60.3 percent of all permit filings, the lowest share since November 201 (58.1 percent)5;
  • Year-year, the rate of total permits is down for four straight months and the rate of permits for single-family construction is down for five straight months;
  • The rate of new starts has fallen year-year for six straight months for the first time since the Great Recession when it fell year-year for 44 straight months;
  • Single-family starts were 69.1 percent of the total, below the 71.2 percent historic average for the third straight month;

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

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The increase in builder confidence reported Wednesday by the National Association of Home Builders (NAHB) became even more mysterious with the Census Bureau’s report Thursday of a decline in both permits and starts for single-family homes.

Perhaps the only bright spot in the report was that the slowdown in building activity will give inventories of unsold homes a chance to correct and reverse the price decline for new homes.

But otherwise the data suggest potential cutbacks in construction sector employment. The number of residential construction jobs barely increased (up less than 1,000) in May, according to the Bureau of Labor Statistics after increasing 11,000 in April.

The confidence report Wednesday showed an uptick in buyer traffic according to builders surveyed but the buyer traffic measure remained the ionly one of three index components to score under 50, the dividing line between positive (over 50) and negative survey readings. The overall index has been in optimistic territory for 63 straight months, just over five years.

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

Retail Sales Fall in April After March Surge

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • March retail sales FELL 0.2 percent or $873 million in April after surging an upwardly revised 1.7 percent or $8.5 billion in March
  • Excluding auto sales, which FELL almost $1.2 billion, retail activity was up 0.1 percent in April, well below March’s 1.3 percent increase;
  • Sales at gasoline station ROSE 1.8 percent — $773 million — as the price of a gallon of gasoline increased 11.2 percent in April;
  • Other than gasoline stations, the only store categories to show an increase in sales were sporting goods and restaurants; sales rose 0.2 percent in each of those categories;
  • The only store category to show a decline was sporting goods and hobby stores where sales fell 0.3 percent from February to March.
  • All retail activity was up 3.1 percent year-year while the Consumer Price Index rose 2.0 percent in the same period.

Trends:

  • After increasing for six straight months from February through July last year, total retail sales have improved in only three of the last nine months;
  • BLS reported the number of retail jobs FELL an average of 13,800 in the last three months to the lowest level since February 2016;
  • Sales at non-store retailers – online sales – remained at 11.8 percent of all retail activity in April

Data source: Census Bureau

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Despite climbing gasoline prices which increased sales at gasoline stations, retails sales stumbled in April after a sharp increase in March. The fall in sales coincided with a slight uptick in Consumer Price Index inflation which suggests higher price drove consumers to watch their wallets more closely.

The retail sales report, produced by the Census Bureau, is not adjusted for price changes which means and increase in prices – even if the quantity of goods sold is unchanged – is viewed as an increase in sales.

That retail jobs have been declining appeared to reinforce a sales trend which has seen traditional brick and mortar stores yielding to online retailers.

The April report also reflected the slowdown in home sales – both new and existing – with sale declines at building material, appliance, and furniture stores. Sales at appliance stores have fallen month-month in six of the last eight months and in April were at their lowest level in three years.

We can likely expect a sales increase in May not because consumers re-energize but because newly hiked tariffs will raise prices.

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.  

Builder Confidence Up in May to 8-Month High

By Mark Lieberman

Managing Director and Senior Economist

Data Highlights:

  • Housing Market Index ROSE three points in May to 66;
  • All three index components INCREASED led by the outlook for current home sales which rose three points;
  • By region, builder confidence INCREASED all four Census Regions, jumping 10 points in the Northeast to 65, the highest level since October 2004 (67).

Trends:

  • The overall Index has not fallen this year (it was unchanged from February to March);
  • Since slipping at the end of 2018, the Index is at its highest level since last October;
  • The Index has been positive (i.e. over 50) for 59 straight months;
  • Despite recent positive performance, the Index and each of its components, remain down year-year.

Data Source: National Association of Home Builders

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With three straight months of improvement in the pace of new home sales, rose again in May, reaching the highest level since last October.

The improvement in the index came as mortgages interest rates, according to Freddie Mac, fell for the second straight week, with the rate for a 30-year fixed rate loan dipping to 4.10 percent, the lowest level since early April when, at 4.06 percent, it was at its lowest point since mid-January 2018, 4.04 percent.

Counter-intuitively, falling rates could actually slow home sales as potential buyers anticipate that rates could continue to fall and hold off on making mortgage commitments.

That builder confidence is improving was also suggested by a slow but steady increase in the number of residential construction jobs. According to the Bureau of Labor Statistics, residential construction employment rose in April to 2,899,0000, its highest since April 2008.

Other housing related reports are not as optimistic. The most recent report on homeownership, for example, showed the homeownership rate fell in the first quarter, to 64.2 percent, the first quarter-quarter decline in two years. Of particular note, according to the homeownership data, homeownership among younger families decline 1.1 percentage points to 35.4 percent, the lowest level in a year, contributing to the overall decline.

Younger families continue to face challenges, chief among them student loan burdens which affect credit applications and ratings.

Meanwhile, while builder confidence grew, the median price of a new single-family home fell in March to its lowest level in more than two years, a factor which may have contributed to the boost in sales.

Home builders themselves still must overcome an increase in material costs following the imposition of higher tariffs on steel and other construction components.

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.

1st-time Unemployment Insurance Claims Dip but Remain at Elevated Level

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 228,000 1st time claims for unemployment insurance for the week ended April 27, DOWN 2,000 from the previous week’s unrevised 230,000
  • The four-week moving average of first-time claims ROSE 5,750 to 220,250;
  • Four week moving average represented 0.146 percent of employment, UP from 0.141 percent the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,684,000 for the week ended April 20, UP 13,000 from the previous week’s UNREVISED 1,671,000;
  • The four-week moving average of continued claims DROPPED 8,000 to 1,665,750.

Trends:

  • The year-to-date average of 1st-time claims for unemployment rose 2.3 percent from the previous week but remains down year-year;
  • The four-week moving average of initial claims rose for the third week in a row for the first time since January;
  • The four-week moving average of continuing claims fell for the seventh straight week – for the first time since last August to October — to the lowest level of the year

Data Source: Department of Labor

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It says something about the state of the economy when eyebrows are raised as the tally of weekly initial employment insurance claims hovers around 230,000. At the height(depth) of the Great Recession ten years ago we probably would have sacrificed just about anything for claims at the 230,000 level. Claims at the time, the week ended May 9, 2009, were 659,000.

Another example of looking at data in context.

That said, it is difficult to ignore the recent sharp increase in first-time claims to what might be a new norm. Just three weeks ago, the number of filings hit a 50-year low of 193,000 but jumped 19.2 percent the following week, the largest week-week increase since the 25.2 percent jump in September 2017 due to hurricane Irma. (Indeed, according to the National Weather Service, September 2017 was the most active month of any Atlantic hurricane season on record. In that month, Hurricanes Irma and Maria achieved category 6=5 status and Hurricane Jose was a category 4 storm.

There were no hurricanes to mar the labor landscape and contribute to the recent sharp increase in unemployment insurance claims. In context, 230,000 claims is not a large negative number (except for those personally affected). With last week’s Employment Situation report showing a 50-year low unemployment rate, the labor picture remains positive.

While there’s been White House pressure on the Federal Open Market Committee to alter course and lower the target fed funds rate, the employment situation report suggested the FOMC should at a minimum hold the line. According to the BLS, weekly earnings rose at a 2.9 percent annual rate in April and the increase in weekly wages has averaged 3.2 percent this year, exceeding the rate of inflation. Wages going up faster than prices would fuel demand and itself send prices higher resulting in, you guessed it, inflation, one of the evils the FOMC is supposed to guard against.

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

Job Openings Up 4.8 Percent in March

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Job openings at the end of March ROSE 4.8 percent to 7.49 million, 17 percent higher than the number of persons unemployed;
  • The number of hires FELL 0.6 percent to a 5.66 million in March;
  • The ratio of job openings per unemployed ROSE to 1.17 in March from 1.08 in February.

Trends:

  • Job openings exceeded unemployed for the 13th month in a row;
  • The month-month percentage increase in job openings was the largest since March 2018;
  • The number of layoffs/discharges is on pace to be lower in 2019 than it was in 2018.

Data Source: Bureau of Labor Statistics

Image result for job openings images

The JOLTS (Job Openings and Labor Turnover Survey) report for March showed a continuation of the trend we’ve seen in the labor market for several months with available jobs remaining unfilled as a skills mismatch among workers continues.

In several key industry sectors – notably professional and business services and construction – the ratio of job openings to unemployed shot up, to 7.9 in professional and business services and 3.3 in construction from 1.8 and 1.6 respectively.

The job openings data tracks new jobs as reported in the Bureau of Labor Statistics monthly Employment Situation report. The Employment Situation report is a snapshot of the labor market while the JOLTS data resemble more of a moving picture, detailing the “ins” an “outs” of the labor sector. For March, the BLS reported the nation added 189,000 jobs

Each major industry sector had more openings than unemployed, according to JOLTS. In the manufacturing, financial activities and information sectors, the number of openings per unemployed in March however dipped from February. The total number of unemployed individuals, according to the BLS, fell to 6,382,000 in March from 6,625,000 in January.

The JOLTS data suggest a slight weakening of labor confidence as the number of “quits” fell for the second straight month for the first time since the end of 2017. The number of “quits” offers a glimpse into worker confidence as workers are confident in their ability to secure a new job.

Hires as a percentage of job openings has also fallen underscoring a skills mismatch which could affect the economy’s future strength.

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.

1st-time Unemployment Insurance Claims Remain at Elevated Level

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 230,000 1st time claims for unemployment insurance for the week ended April 27, UNCHANGED from the previous week;
  • The four-week moving average of first-time claims ROSE 6,500 to 212,500;
  • Four week moving average represented 0.135percent of employment, UP from 0.131 percent the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,671,000 for the week ended April 20, UP 17,000 from the previous week’s downwardly REVISED 1,654,000 (from 1,655,000)
  • The four-week moving average of continued claims DROPPED 13,750 to 1,673,750.

Trends:

  • First time this year initial unemployment insurance claims have not declined for two straight weeks; last time was the last two weeks of December;
  • The increase in initial claims broke a string of five consecutive weekly declines;
  • The four-week moving average of continuing claims fell for the sixth straight week – for the first time since last August to October — to the lowest level of the year

Data Source: Department of Labor

Though it won’t be reflected in the Employment Situation release Friday, first-time claims for unemployment insurance remained at a (relatively) elevated level for the week ended April 27.

Coming in to Easter week, the year-to-date weekly average of initial claims had been just under 218,000, and the last time the number of claims was as high as 230,000 was during the government shutdown which idled contractor employees who were not assured of receiving back pay for the work time missed.

Still we should see another strong labor market report from the Bureau of Labor Statistics. Forecasts call for 189,000 to 220,000 new jobs in April in part because the Census Bureau added temporary workers in the run-up to next year’s population count.

That would support data from the weekly claims reports. From mid-March to mid-April – the reference points for the monthly report – initial claims fell 23,000 and the four-week moving average of first-time claims dropped 19,000 both pointing to a possible improvement in the unemployment rate. The number of continued claims and four-week moving average of continued claims fell 101,000 and 63,500 during the same span suggesting those previously unemployed may have gotten new jobs.

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