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.

Initial Claims for Unemployment Insurance Dip; Trend Remains Low

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 232,000 1st time claims for unemployment insurance for the week ended April 14 a DECREASE of 1,000 from the prior week;
  • The number of initial claims for the week ended March 31 was UNCHANGED at 233,000;
  • The four-week moving average of first-time claims ROSE 1,250 to 231,250;
  • Four-week moving average represented 0.149 percent of employment, UP from 0.148 the previous week;
  • The number of continued claims –individuals who have been collecting unemployment insurance — reported on a one-week lag, was 1,863,000 for the week ended April 7, DOWN 15,000 from the previous week’s UPWARDLY REVISED 1,878,000;

Trends:

  • The graph used in the Labor Department’s press release showed the four-week moving average of initial claims to be essentially flat over the last year except for an upward spike during last year’s hurricane season;
  • The number of first time claims for unemployment insurance remained below 250,000 for the 14th straight week. [350,000 is considered by labor economists to be the “tipping point” between a robust and weak labor market.]
  • As an indicator of the employment situation report for April (to be issued May 4), the data show first time claims rose 5,000 from mid-March to mid-April and the four-week moving average rose 8,000 in that span, both suggesting unemployment increased dashing hopes for a further decline in the unemployment rate.

Data Source: Department of Labor 

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We’ve yet to see any impact on unemployment from the higher tariffs announced by President Trump but layoffs in steel and aluminum dependent manufacturing could be offset by increased hiring at the retail level or, if as the President expects, new companies open to fill supply needs. According to a new research study by the New York Fed, the “25 percent steel tariff is likely to cost more jobs than it saves.”

The study looked at, among other things, the steel tariffs of up to 30 percent imposed during George W. Bush’s administration in 2002 and a 35 percent tariff imposed on Chinese tires in 2009 by the Obama Administration. Estimates of job losses from the Bush-era tariffs ranged as high as 200,000 (more than the 187,500 workers employed in the industry at the time). In response to the tariffs on tires, the researchers said, China imposed restrictions on U.S. shipments of chicken parts which cost chicken producers about $1 billion in sales in 2011.

The labor market has been one of the highlights of the Trump Administration but how much of it is momentum from the final Obama years and how much is attributable to Trump is hard to determine.

We do know if employment starts to tank, the White House bear the brunt of the blame.

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.

Single-family Construction Activity Falters in March

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The rate of single-family housing starts in March FELL 3.7 percent to a seasonally adjusted annual rate (SAAR) of 8967,000 units;
  • The rate of permits for single-family home permits filed in March also FELL, down 5.5 percent to an SAAR of 840,000 units;
  • The rate of permit filings for multi-family homes ROSE 19.0 percent in February to 514,000 units (SAAR); Permits for all housing ROSE 3.5 percent to 1.354 million units
  • The rate of all housing starts ROSE 1.9 percent in February to an SAAR of 1.32 million as multi-family starts improved 14.4 percent to 452,000.
  • The rate of home completions in March DECREASED 5.1 percent from February; Two-thirds of the decline came in from a 4.7 percent drop in single-family completions.

Trends:

  • The March report on single-family permits would have been worse had it not been for a slight downward revision to February data;
  • The seasonally adjusted annual rate of single-family permits dropped to its lowest level since September;
  • Permits for single-family homes represented 62.0 percent of all permits in March, the lowest share since January 2017;
  • At the same time single-family homes accounted for 65.7 percent of all starts, the lowest share since December 2016;

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

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Builders may have been right to betray falling confidence in housing in the monthly Housing Market Index survey conducted by the National Association of Home Builders which slipped for the fourth straight month.

Builders were seeing what the data released by the Census Bureau and Department of Housing and Urban Development reported: reduced building activity. The housing data reinforced the old saw that “the plural of anecdotes is data.”

And the future for single-family housing continues to look discouraging as fewer single-family housing permits were filed in March. Thus, the dip in confidence is not a surprise although multi-family housing continues to keep builders active.

Just how much of the drop in single-family activity is attributable to the new tax law which reduced incentives for homeownership is arguable. But, the combination of reduced confidence and fewer construction jobs suggests the law of unintended consequences may be at work.

The tax cut may have put more money is wage earner pockets with reduced withholding rates, but the increased take-home pay is not going toward home buying.

The Census-HUD data also point to a further increase in the inventory of unsold new homes. The rate of new home sales has averaged about 615,000 in the last 12 months while builders are completing new homes at a rate of about 815,000 per month,

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 Slips in April for Fourth Straight Month

By Mark Lieberman

Managing Director and Senior Economist

Data Highlights:

  • Housing Market Index EDGED DOWN one points in April to 69;
  • The index of current sales FELL two points to 79, the index of future (six months hence) sales DROPPED one point to 75; the index of buyer traffic WASX FLAT at 51;
  • By region, builder confidence FELL two points in the South and one in the West; The index ROSE one point in the Northeast and was flat in the Midwest.

Trends:

  • Overall index has fallen four straight months
  • At 69, the index is at its lowest level since last November
  • The index has been positive (i.e. over 5046 straight months

Data Source: National Association of Home Builders

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Home building continued to slip in April, with builder confidence – measured by The National Association of Home Builders (NAHB) Housing Market Index (HMI) – falling. The drop, attributable to the new tax bill which removed incentives for homeownership, ironically was reported the same day the Commerce Department offered data to suggest other aspects of the tax bill were helping the economy by boosting retail sales.

But the new law capped the deductible amount of mortgage interest as well local property taxes.

Builder confidence fell in the same month for which the Bureau of Labor Statistics reported a decline in the number of residential construction jobs, the first decline in those jobs in six months.

The dip in confidence coincided with a steady increase in mortgage rates. Freddie Mac reported last Thursday the rate for a 30-year fixed rate mortgage was 4.42 percent, up from 3.95 percent at the beginning of the year. The average rate for an adjustable rate loan as reported last week was 3.61 percent compared with 3.45 percent at the beginning of January.

The rates combined with the dip in builder confidence could foreshadow another housing crunch with ripple effects throughout the economy.

The Census Bureau and Department of Housing and Urban Development will report tomorrow on new housing permits and starts albeit for March.

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 Recover in March; 1Q Shows Modest Growth

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • March retail sales – measured by prices – ROSE $2.76 billion or 0.6 percent from February;
  • Auto sales accounted for most of the increase, up just under $2 billion from February;
  • The increase in retail activity came in the same month in which the Consumer Price Index fell 0.1 percent which means consumer activity increased as prices dipped;
  • Sales at gasoline fell though as gasoline prices were essentially flat from February to March.
  • In addition to gasoline stations, sales fell at sporting goods stores, clothing stores and building material/garden supply stores;
  • Other than auto sales, which rose 2.0 percent, the largest jump in sales came at health and personal care stores.

Trends:

  • Year-year total sales ROSE 4.5 percent in March, after a 4.1 percent February-February increase;
  • The increase in retail activity came in the same month in which the Bureau of Labor Statistics reported average weekly earnings rose at a 2.6 percent year-year pace, up from 2.5 percent in February;
  • BLS also reported the number of retail jobs in March fell 4,400 or .03 percent from February.

Data source: Census Bureau 

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Perhaps economists who forecast the demise of the economy in the wake of the wide-ranging tax cut enacted by Congress and signed into law by President Trump as a holiday gift were wrong. That at least could be the first blush conclusion from the Commerce Department’s retail sales report for March reflecting the first full month of increased take-home pay resulting from the new tax law.

The result was as average weekly earnings grew and workers kept more of their paychecks, when they opened their wallets there was something there to spend. They took advantage of lower prices and bought more goods.

BLS also reported the number of retail jobs fell in March, albeit 0.03 percent, but still a decline. Since one measure of retail efficiency is revenue (or perhaps profit) per employee, the drop in the number of jobs suggest even retailers themselves were pleasantly surprised by the sales volume.

Total sales in the first quarter were up $2.9 billion over the fourth quarter but up almost $59 billion over the first quarter last year. With personal consumption accounting for about 2/3 of Gross Domestic Product and retail activity about 55 percent of personal consumption, the numbers don’t suggest a robust GDP for the first quarter, tax cuts notwithstanding.

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

Initial Claims for Unemployment Insurance Drop; Fail to Reverse Prior Week’s Increase

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 233,000 1st time claims for unemployment insurance for the week ended April 7 a DECREASE of 9,000 from the prior week;
  • The number of initial claims for the week ended March 31 was UNCHANGED at 242,000;
  • The four-week moving average of first time claims ROSE 1,750 to 230,000;
  • Four week moving average represented 0.148 percent of employment, UP from 0.147 the previous week;
  • The number of continued claims –individuals who have been collecting unemployment insurance — reported on a one-week lag, was 1,871,000 for the week ended March 31, UP 53,000 from the previous week’s UPWARDLY REVISED 1,818,000;
  • The four-week moving average of continued claims DECLINED 1,500 to 1,850,250;

Data Source: Department of Labor

Trends:

  • The drop in the number of initial claims for unemployment insurance did not offset last week’s increase which was the largest since the hurricane-inflated 62,000 for the week ended last September 2;
  • The number of first time claims for unemployment insurance though remained below 250,000 for the 13th straight week.
  • Continued claims for unemployment insurance dropped This is the lowest level for this average since January 5, 1974 when it was 1,838,500.

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While unemployment insurance claims remain in a low zone, labor economists are bracing for a tariff impact when the higher cost of imported good – due to retaliatory levies – starts to cut into profits of US-based companies which rely heavily on imported goods.

There are of course ways around the higher tariffs but they could come at the cost of American jobs. In 2003, a study by the U.S. International Trade Commission found some steel consumers in response to higher tariffs on steel, shifted from importing steel to importing assembled steel part which were not subject to the higher duties. To the extent the tariff war has an impact on jobs, statistically it will likely show up in claims for unemployment insurance as workers are laid off.

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.

Economy Adds a Disappointing 103K jobs in March; Unemployment Rate remains 4.1% but Earnings Improve

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • Number of payroll jobs INCREASED 103,000 in March, smallest monthly increase in jobs since September’s hurricane-impacted 14,000;
  • Private sector jobs INCREASED 102,000;
  • Prior month job totals REVISED DOWN net 50,000: UP 13,000 in February to a growth of 326,000 jobs (from 313,000) but DOWN 63,000 in January to a gain of 176,000 (from the last report of a 239,000 increase);
  • Average weekly earnings ROSE $2.76 to $925.29, a 3.2 percent year-year gain;
  • Unemployment rate in March remained at 4.1 percent for the sixth straight month; number of persons unemployed FELL 121,000 but number of person employed also FELL 37,000;
  • Average hourly earnings GREW 8¢, in March a 2.6 percent annual increase after a 2.5 percent year-year boost in February;
  • Average weekly hours REMAINED at 34.5 in March;
  • Labor force – DROPPED 158,000 in March after a jump of 806,000 in February;
  • The number of persons NOT in the labor force INCREASED 323,000; labor force participation rate FELL BACK 0.1 percentage points to 62.9 percent;
  • Employment-Population ratio REMAINED at 60.4 percent,
  • Number of construction jobs FELL 15,000, with 7,000 fewer residential construction jobs;
  • Retail sector SHED 4,400 jobs;

Trends:

  • The 3.2 percent (year-year) increase in average weekly earnings was the strongest since August 2010 (3.4 percent)
  • First quarter saw 605,000 new payroll jobs, up from 532,000 gain in 1Q 2017
  • Number of full-time jobs DROPPED 311,000 in March, largest month-month decline since last May (357,000)
  • Part time jobs represented 18.0 percent of employment, up 0.3 percentage points – largest month-month increase since last October
  • Number of new entrants to the labor force (as unemployed) was 625,000 in March, down from 704,000 in February;
  • Unemployment rate for Blacks dropped back to 6.9 percent in February just above the record low of 6.8 percent recorded in December (rate had increased to 7.7 percent in January);

Data Source Bureau of Labor Statistics

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Color the labor picture blue in March as both employment and new entrants to the labor force dropped suggesting discouragement among workers.

Even the good news in the report, a relatively robust increase in average weekly earnings came with a discouraging word: earnings rose because the two lowest paying job sectors – retail and leisure-hospitality – added a combined 600 jobs compared with an average gain of 34,600 in the past three months.

There were some nuggets suggesting optimism: the unemployment rate among Blacks was 6.9 percent as it had been in February. That’s the second lowest unemployment rate among Blacks – who have been among the first to suffer in a struggling economy –in history. The Black unemployment rate dropped to 6.8 percent last December.

The March report came too soon after President Trump’s announcement of higher tariffs to suggest they may have contributed to the disappointing job numbers. However, the drop in residential construction jobs – the first since last September – could be directly attributed to the new tax laws which reduced the tax incentive for homeownership.  Indeed, residential construction jobs slipped by 7,000 in March after increasing an average of 20,000 a month in the last five months. (Then too, the weather may have played a role: since the end of the recession, residential construction jobs have increased in March four time, declined three times and were unchanged once.)

The drop in retail jobs came primarily at department stores which announced cuts following a disappointing holiday shopping season. Even the boost in take-home pay resulting from the tax code changes didn’t help.

The number of temp jobs – often considered a leading indicator for all jobs – fell 600 in March compared with a three-month average gain of 6,200.

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.

Initial Claims for Unemployment Insurance in Sharpest Jump since Last September

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 242,000 1st time claims for unemployment insurance for the week ended March 31 an INCREASE of 24,000 from the prior week;
  • The number of initial claims for the week ended March 24 was REVISED UP 3,000 to 218,000;
  • The four-week moving average of first time claims ROSE 3,000 to 228,250;
  • Four week moving average represented 0.147 percent of employment, UP from 0.145 the previous week;
  • The number of continued claims –individuals who have been collecting unemployment insurance — reported on a one-week lag, was 1,808,000 for the week ended March 24, DOWN 64,000 from the previous week’s UPWARDLY REVISED 1,872,000;
  • The four-week moving average of continued claims DECLINED 13,500 to 1,848,250;

Data Source: Department of Labor 

Trends:

  • The increase in the number of initial claims for unemployment insurance was the largest since the hurricane-inflated 62,000 for the week ended last September 2;
  • The number of first time claims for unemployment insurance was below 250,000 for the 12th straight week.
  • Continued claims for unemployment insurance dropped to the lowest level since December 29, 1973 when it was 1,805,000.

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Initial unemployment insurance claims put their downward drift on hold with a relatively sharp increase of 24,000 for the last week of March. The jump though did not come in the survey week used by the Bureau of Labor Statistics for the monthly Employment Situation report. Survey week data showed an increase in initial claims of 7,000, a modest rise (except for the individuals who were forced to apply for benefits).

The calendar and freak Spring snows may have affected the numbers reported Thursday. Filings for unemployment insurance frequently follow the weather with temporary closings due to storms so the unusually large increase should be no cause for alarm…. unless it continues. That total first-time claims have been under 250,000 for 24 of the last 26 weeks says a lot about the state of the labor.

Tomorrow’s BLS report is not expected to be as robust as the report for February which showed an increase of 313,000 jobs. Indeed, the consensus among economist is for an increase of 195,000 jobs. That job growth has been solid – a monthly average of 191,000 – without any significant movement in earnings remains an enigma, but data in last month’s BLS report suggested almost everyone who entered the labor force in February found a job meaning there may be no need to hike wages to fill open job slots.

The consensus forecast is for a slight drop in the unemployment rate, to 4.0 percent – the lowest since December 2000 — from 4.1 percent where it has been stuck for five months.

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. (Tomorrow, Friday April 6 at 8:45 am EDT, he will discuss the Employment Situation report for March which will be released by the Bureau of Labor Statistics at 8:30 am

Hold on For a Bumpy Ride Dow as Unemployment Claims Remain Low

 By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 229,000 1st time claims for unemployment insurance for the week ended March 17 an INCREASE of 3,000 from the prior week;
  • The number of initial claims for the week ended March 10 was UNCHANGED at 223,000;
  • The four-week moving average of first time claims ROSE 2,250 to 223,750;
  • Four week moving average represented 0.144 percent of employment, UP from 0.143 the previous week;
  • The number of continued claims –individuals who have been collecting unemployment insurance — reported on a one-week lag, for the week ended March 10 was 1,828,000, DOWN 57,000 from the previous week’s UPWARDLY REVISED 1,885,000;
  • The four-week moving average of continued claims DECLINED 11,750 to 1,880,500;

Data Source: Department of Labor 

Trends:

  • The number of continued claims for unemployment insurance dropped to its lowest level since December 29, 1973 (1,805,000)
  • The moving four-week moving average of continued claims fell to its lowest level since January 5, 1974 when it was 1,838,500.

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How low can claims for unemployment insurance go…and what do we do when there are no more individuals unemployed? Those questions may not be academic but could have serious economic ramifications. For one thing, low unemployment could freeze businesses where they are with no new enterprises starting and no expansion of existing firms.

For another, it could mean a sharp competition for workers which, in a perfect world, would drive wage rates up.

But as wages increase so will prices with no appreciable increase in the standard of living unless productivity increases as well.

Those may not be pleasant problems to have which goes to explaining the actions of the Federal Open Market Committee in boosting interest rates one day before the unemployment claims report was issued.

The ride up may be as bumpy as the ride down was.

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.

Job Openings Ratio at Record Low in January As Job Openings Surge

 By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • Job openings at the end of January ROSE to their highest level ever, 6.3 million an 11.4 percent increase;
  • The number of hires in January ROSE as well, up 1.1 percent to 5.6 million;
  • The ratio of unemployed to job opening DROPPED in January to1.06 to one, the lowest ratio since the Job Openings and Labor Turnover Survey began in December 2001;

Trends:

  • The job openings rate – job openings divided by the sum of job opening plus employment – ROSE to 4.1 in January, the second consecutive drop;
  • The hires rate – the number of hires divided by hires plus employment – was essentially FLAT in December at 3.8.
  • Not surprisingly, unemployment in the wholesale and retail trade sector ROSE by more in January – post holiday shopping – than any other industry sector

Data Source: Bureau of Labor Statistics

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That the January JOLTS (Job Openings and Labor Turnover Survey) showed a record number of job openings, it followed that the jobs report for February showed payrolls grew 313,000.

The number of openings rose most sharply in the “other services” and Information sectors, two sectors which saw unemployment grow, though they did not lead in unemployment growth.

In those sectors – and three others – the number of unemployed exceeds the number of job openings suggesting either cutbacks were too harsh or individuals who had been employed in those sectors should into remain unemployed for long.

On the flip side, according to the JOLTS data, there are 10 individuals unemployed in the professional and business services sector for every available job.

Other “tight” or competitive sectors are wholesale and retail trade (5.8 unemployed for every available job) and construction (4.4 unemployed persons for each job opening.

The JOLTS report fills in the lines of the painting of a tight labor market.

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.

Housing Construction Slips in February: Permits and Starts Both Fall

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • The rate of housing permit filings in February FELL 5.7 percent to a seasonally adjusted annual rate (SAAR) of 1.298 million units;
  • The rate of permits for single-family home permits in February EDGED DOWN 0.6 percent to an SAAR of 872,000 units;
  • The rate of permits for multi-family homes FELL 14.0 percent in February to 426,000 units (SAAR);
  • The rate of all housing starts FELL 7.0 percent in February to an SAAR of 1.24 million;
  • Single-family starts ROSE 2.9 percent to an SAAR of 902,000 while multi-family starts DROPPED 26.1 percent to an SAAR of 334,000;
  • The rate of home completions in February INCREASED 7.8 percent from January with single-family completions IMPROVING 3.0 percent and multi-family homes INCREASING 19.4 percent

Trends:

  • The February report on housing permits would have been worse had it not been for downward revisions to January;
  • The seasonally adjusted annual rate of permits dropped below 1.3 million for the first time since September (five months);
  • The percentage decline in multi-family starts was the steepest in 15 months (November 2016);
  • Single-family homes accounted for 73 percent of all starts, the highest share since last August (six months);
  • Builders completed single-family homes at the SAAR of 869,000 in January compared with a sales pace of 595,000. The “gap” between completions and sales –276,000 more completions than sales is the second widest since June 2010 when there were 379,000 more completions than sales; last July the pace of completion exceeded the sales pace by 280,000

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

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Despite the largest month-month increase in construction jobs in 11 years, residential construction activity fell broadly in February. Of the 61,000 construction jobs added in February 25,000 were residential construction jobs, the largest month-month increase in over a year (January 2017 saw 26,000 new residential construction jobs.

But those jobs may be fleeting as home-building activity all but dried up in February. The silver lining in the cloud could be that inventories may drop leaving builders with fewer homes they must “carry.”

Indeed, the number of new homes for sale in February 301,000 (computing to a 6.1-month supply) was the most since March 2009 (311,000). Inventory is a two-edged sword as higher inventories offer prospective buyers more choice but at the same time can drain builder cash reserves

Adding to builder concerns, the Housing Market Index produced monthly by the National Association of Home Builders slipped for the third straight month at the beginning of March (though it remains at a relatively high 10) and was led down by the measure of “buyer traffic” families “kicking tires” as they consider buying.

But if those window shoppers don’t buy, 2018 could be rough year for builders.

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