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 Dip but Moving Averages Remain High

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 216,000 1st time claims for unemployment insurance for the week ended February 16, a DECREASE of 23.000 from the prior week’s unrevised report;
  • The four-week moving average of first time claims ROSE 4,000 to 235,750;
  • Four week moving average represented 0.150 percent of employment, UP from 0.148 the previous week;
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,725,000 for the week ended February 9, DOWN 55,000 from the previous week’s upwardly REVISED 1,780,000 (from 1,773,000)
  • The four-week moving average of continued claims INCREASED 2,750 to 1,754,750.

Trends:

  • Four-week moving average of initial claims is at highest level in more than a year (Jan 20, 2018: 237,500);
  • 1st time claims as percentage of employment reached the highest level since January 2018;
  • The four-week moving average of continued claims has increased for 15 straight weeks.

Data Source: Department of Labor

Keep an eye on the jobs data.

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Even as the President boasts of a roaring labor market and job creation, unemployment claims are slowly creeping up. They’re not at a panic level and nowhere near the heights of the Great Recession, but the trends are certainly disconcerting.

A breakdown of the new claims suggests no discernible regional or industrial patterns with claims increasing in disparate states such as Washington state and Virginia.

To be sure, initial – and even continued – unemployment insurance claims remain low by historical standards – lower than they were a year ago, for example – but the increase in the averages, combined with other signals of weakness in the economy suggest an end to the current expansion perhaps sooner than later.

A recent report from the Federal Reserve showed a sharp quarter-quarter increase in credit card debt and other consumer loans.

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.

Builder Confidence Starts 2019 On Positive Note: Up for Second Straight Month

By Mark Lieberman

Managing Director and Senior Economist


Data Highlights:

  • Housing Market Index ROSE four points in February to 62;
  • All three component measures ROSE led by the outlook for sales six months forward which went up five points to 68;
  • By region, builder confidence INCREASED in the Midwest and South while SLIPPING in the Northeast and West

Trends:

  • Forecast for home sales six months out exceeded the forecast for sales in the next month
  • After slipping at the end of 2018. The overall confidence index is now at its highest level since October;
  • The index has been positive (i.e. over 50) for 56 straight months

Data Source: National Association of Home Builders

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A year ago, builder confidence as measured by the National Association of Home Builders’ Housing Market Index struggled through an auspicious beginning to the year, falling for the each of the first four months of 2018. This year, despite significant for the housing market, the index has increased for the first two months of the year.

Whether that bodes well for the housing sector remains to be seen as builders are riding the crest of a relatively more favorable interest rate environment as well as a home-building spurt following natural disasters.

Along with those positive factors, negatives remain: millennials remain burdened by student loan obligations affecting their ability to obtain mortgages and unlike their parents, appear to have largely eschewed the outer bounds of metropolitan areas to remain close to their jobs. The increasing discussion and speculation about the likelihood of a recession serves to revive memories of mortgage defaults when those same millennials were coming of age.

That all said, the improved builder confidence was reflected in last week’s Job Openings and Labor Turnover Survey release which reported a record number of job openings overall and in the construction sector. Total construction employment is at its highest level in more than 10 years as is residential construction employment.

And to add to the positive outlook, the survey said buyer traffic improved four points suggesting a pickup in home sales.

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 Plunge in December

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • December retail sales – measured by prices – FELL $6.37 billion or 1.2 percent from December;
  • Sales at gasoline station sales and sporting goods stores led the decline down 5.1 percent and 4.9 percent respectively;
  • The decline in gas station sales flowed from 14.8 percent drop in the average price of a gallon of gasoline from $2.647 per gallon in November to $2.366 in December
  • Sales at non-store retailers (online) FELL almost 4 percent to the lowest level since last July;
  • The drop in retail activity came in the same month in which the Consumer Price Index was flat which means consumer activity declined faster than prices;
  • The only category of stores (other than autos) to show an increase in sales was building material and garden supply stores where sales ROSE 0.3 percent

Trends:

  • Year-year total sales ROSE 2.3 percent in December, compared with a 4.1 percent year-year growth in November; CPI inflation December to December was 1.6 percent;
  • BLS also reported the number of retail jobs in December rose 23,800 to 15.95 million or .01 percent from November.
  • Even with the December decline, in the 10 months since the revised tax code boosted take home pay, retail sales have increased $13.3 billion; in the same three months in 2017 though, retail sales grew $23.4 billion

Data source: Census Bureau

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If you want to know why retail stores – both giants and mom-and-pop – are closing the Commerce Department’s monthly retail sales report – based on prices – holds the key. Retail sales in December fell off the table, plunging almost $6,4 billion – the largest one-month decline since September 2009!

Nearly every category of stores suffered a hit even with the strongest month-month growth in weekly earnings since January 2016. Average weekly earnings rose 0.7 percent in December, a 3.3 percent year-year gain.

Retailers had clearly anticipated stronger sales, growing their payrolls, only to be disappointed.

The weaker sales are likely to ripple through the economy with economists quickly reducing their forecast of Gross Domestic Product growth for the fourth quarter. The advance report on fourth quarter GDP is scheduled to be released in two weeks, delayed by a month because of the partial government shutdown.

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

1st-time Unemployment Insurance Claims Increase Despite Jump in Job Openings

By Mark Lieberman

Managing Director and Senior Economist

Highlights:

  • There were 239,000 1st time claims for unemployment insurance for the week ended February 9, an INCREASE of 4.000 from the prior week’s upwardly revised report (234,000 to 235.000);
  • The four-week moving average of first time claims ROSE 6,750 to 231,750;
  • Four week moving average represented 0.148 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 1,773,000 for the week ended February 2, UP 37,000 from the previous week’s downwardly UNREVISED 1,737,000;
  • The four-week moving average of continued claims INCREASED 9,000 to 1,750,250.

Trends:

  • Initial claims as percentage of employment reached the highest level since last April;
  • The four-week moving average of first-time claims topped 230,000 for the first time since January 2018.
  • The four-week moving average of continued claims has increased for 14 straight weeks.

Data Source: Department of Labor

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Claims for unemployment insurance continue to climb despite a low unemployment rate and job openings were reported at a record high.

The Bureau of Labor Statistics (BLS) reported Tuesday there were 7.335 million job openings in December, highest since the BLS began publishing its Job Openings and Labor Turnover Survey (JOLTS) in December 2000.  

The conflicting data points to an ongoing skills mismatch which may be preventing those already collecting unemployment insurance (continued claims) from landing jobs.

The number of the private sector job openings was up almost 200,000, led by an 88,000 increase in the number of construction job openings from November to December and a 79,000 jump in openings in the health care sector. It remains hard to describe the Affordable Care Act as a “jobs-killer.”

The total number of hires in December was up 95,000 from November bringing the full-hires for 2018 to 68.5 million, an increase of 2.9 million over 2017. The 2018 hires were the most in a single year since JOLTS began.

So, with record job openings and record hires, why is there any unemployment? The answer clearly goes back to that skills mismatch and perhaps geographic mismatches. JOLTS data by the four census regions is published only for the total, not by industry).

The largest increase in total job openings was in the South, up 105,000 from November to December. Hires fell 58,000 in the South in the same month. Hires were up 166,000 in the Northeast, but job openings in that region fell 5,000.

The four-week moving average of first-time unemployment insurance claims continues to be heavily influenced by the partial government shutdown which led to a jump of 53,000 initial claims just two weeks ago, not government workers, but employees of companies retained by the federal government.

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.

1st-time Unemployment Insurance Claims Fall Back to Year-End Levels

By Mark Lieberman

Managing Director and Senior Economist

Highlights

  • There were 234,000 1st time claims for unemployment insurance for the week ended February 2, a DECREASE of 19.000 from the prior week’s unrevised report;
  • The four-week moving average of first time claims ROSE 4,500 to 224,750;
  • Four week moving average represented 0.143 percent of employment, UP from 0.141 the previous week.
  • The number of continued claims – individuals who had been collecting unemployment insurance — reported on a one-week lag, was 1,736,000 for the week ended January 26, DOWN 42,000 from the previous week’s downwardly REVISED 1,778,000 (from 1,782,000);
  • The four-week moving average of continued claims DECREASED 4,250 to 1,741,250.

Trends:

  • The report showed a sharp drop in the number of federal workers claiming unemployment insurance: 6,669 for the week ended January 29 from 14,739 one week earlier;
  • First-time claims for unemployment insurance have declined in four of the first five weeks of this year, essentially returning to the level at the end of 2018 despite last week’ surge of 53,000 more new claims than the prior week;
  • First-time unemployment claims remain uncomfortably high as a percentage of total employment (in relative terms). At 0.143 percent they are up from year-end 2018 but down from 2018.

Data Source: Department of Labor

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The key first-time claims for unemployment insurance data began to return to normal for the week ended February 2 though still reflecting the impact of the partial government shutdown on consultants and others employed by the federal government as part of outsourcing.

The number were complicated too by post-holiday layoffs as retailers and hoteliers scaled back. California was especially hard-hit with a jump of service sector layoffs.

While dated somewhat, the number of federal workers submitting claims dropped sharply in data reflecting the first week after the partial shutdown ended.

Even as the unemployment claims data return to “normal,” the impact of the partial shutdown and concerns of another as early as next week continue to plague the economy.

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.

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.