U.S. Non-farm Payrolls Up Less Than Expected

December 5, 2003

By Tom Moeller

· Non-farm payrolls rose a less than expected 57,000 in November. Consensus expectations were for a 150,000 rise. Though the gain in October payrolls was revised up slightly to 137,000, September payrolls were revised down to +99,000 from +125,000.  

· From the separate household survey, the unemployment rate fell to 5.9% versus expectations for 6.0%. Employment surged another 589,000 (1.5% y/y).

· The labor force also surged, up 484,000 (1.4% y/y), as the number of discouraged workers fell sharply.

· The one-month diffusion index for private non-farm payrolls rose sharply to 54.7 from an upwardly revised October reading of 53.6. This was the strongest breadth of employment gain since December 2000.

· Manufacturing sector payrolls fell another 17,000 (-3.6% y/y), but the one-month diffusion index for factory payrolls improved to 42.3, the highest level since July 2000. Weakness in factory sector jobs was notable last month in nondurable goods industries.

· Service producing jobs rose 64,000 (0.2% y/y). The gain was held back by declines in both the financial and in the retail trade industries. Temporary help services jobs were again strong, up 20,800 (5.6% y/y). Education & health services jobs also rose a firm 34,000 (1.9% y/y). Government sector jobs rose just 7,000 (-0.2% y/y).

· Construction jobs rose 10,000 (1.6% y/y).

· Average hourly earnings rose just 0.1% (2.1% Y/Y), but earnings in the factory sector rose 0.2% (2.3% Y/Y).

· The index of aggregate hours worked rose 0.2% and so far in 4Q are up at a 2.5% annual rate versus 3Q. Hours worked fell in 3Q versus 2Q.

 
Employment Nov

Oct

Y/Y

2002

2001

2000
Payroll Employment 57,000 137,000 -0.2% -1.1% 0.0% 2.2%
  Manufacturing -17,000 -14,000 -3.6% -6.9% -4.8% -0.3%
Average Weekly Hours 33.9 33.8 33.8 33.9 34.0 34.3
Average Hourly Earnings 0.1% 0.1% 2.1% 2.9% 3.8% 3.9%
Unemployment Rate 5.9% 6.0% 5.9% 5.8% 4.8% 4.0%

 

OECD Leaders Firm Again

December 5, 2003

By Tom Moeller

· The Index of Leading Indicators for the Major Seven OECD Countries rose 1.0% (6.5% y/y) in October for the seventh consecutive firm monthly gain.

· Gains amongst the member country leading indexes again were broad and strong. The leading index for the European Union rose 0.7% (3.9% y/y).

· In France, the leading index gained 0.7% (3.2% y/y), the sixth strong gain in as many months. The leaders in Germany boomed 1.3% (6.0% y/y but in Italy the leaders fell 0.2% (2.0% y/y).

· In Canada the leading index jumped 1.1% (6.4% y/y) but in the U.K. the leaders only squeaked out a 0.1% uptick (0.2% y/y). Leaders in Japan were little changed (3.7% y/y) for the first month since April.

· Leading indicators in the United States surged 1.9% (9.9% y/y).

· The latest increase pulled the OECD leading index above its trend level.

· Visit the OECD's website at this website.

 
OECD Main Economic Indicators Oct Sept Y/Y

2002

2001

2000
OECD Major Seven - Leading Index (Trend Restored) 125.0 123.8 6.5% 4.1% -2.3% 3.1%
  European Union 121.2 120.4 3.9% 3.1% -1.9% 3.7%
  Japan 104.9 104.9 3.7% 0.8% -3.1% 2.5%
  United States 139.1 136.5 9.9% 5.6% -2.7% 2.7%

 

Factory Orders Surge, Inventories Unchanged

December 5, 2003

By Tom Moeller

· Factory orders surged an expected 2.2% in October. The advance report of a jump in durable goods orders was little revised and October orders show a 3.4% (8.4% y/y) pop. Non-durable goods orders rose just 0.7%. That was held back by a 0.7% decline in petroleum refinery orders (shipments) which followed a 4.0% September decline.

·  Manufacturing inventories were unchanged following five consecutive months of decline. A turn toward inventory accumulation occurred in the electronic products, defense aircraft and miscellaneous categories, but inventories of computers, furniture, and automobiles continued down.   

· Factory shipments rose 0.7%, but the gain was held back by a 1.4% decline (-2.3% y/y) in shipments from the transportation sector. Shipments excluding transportation jumped 1.1% (4.3% y/y).

 
Factory Survey (NAICS)

Oct

Sept

Y/Y

2002

2001

2000
Inventories 0.0% -0.3% -1.1% -1.8% -6.1% 3.8%
New Orders 2.2% 1.4% 6.6% -1.9% -6.7% 5.0%
Shipments 0.7% 1.8% 3.2% -2.0% -5.4% 4.2%
Unfilled Orders 1.6% 0.4% 1.9% -6.1% -5.9% 8.7%

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