Global| Dec 04 2013

U.S. ADP Jobs Survey Unexpectedly Strengthens

Summary

Job growth recovered last month. The ADP/Moody's National Employment Report indicated a 215,000 rise (1.9% y/y) in non-farm private sector jobs during November, the firmest increase in a year. Consensus expectations were for a 175,000 [...]

Job growth recovered last month. The ADP/Moody's National Employment Report indicated a 215,000 rise (1.9% y/y) in non-farm private sector jobs during November, the firmest increase in a year. Consensus expectations were for a 175,000 employment gain in the Action Economics survey. The improvement followed upwardly revised increases of 184,000 and 185,000 during October and September, last month reported as 130,000 and 145,000. During the last three months, job increases averaged 196,000, the most since February. Growth remained down, however, versus its peak of 279,000 in February of last year.

The ADP survey is based on ADP's business payroll transaction system covering 406,000 companies and roughly 23 million employees. The data are processed by Moody's Analytics, Inc., then calibrated and aligned with the BLS data. Extensive information on the methodology is available here.

Service-producing payrolls increased 176,000 last month (2.0% y/y). Jobs in trade, transportation and utilities grew 45,000 (1.8% y/y), employment in professional & businesses increased 38,000 (2.5% y/y) while financial activities headcount nudged up 5,000 (0.7% y/y). Goods-producing payrolls rose 39,000 (1.3% y/y) as manufacturing employment gained 17,000 (0.2% y/y). Construction payrolls grew 18,000 (3.3% y/y).

Hiring amongst small businesses rose an improved 102,000 (1.8% y/y). Medium sized firms' payrolls advanced 48,000 (1.6% y/y), less than half of the gains early last year. Jobs at large-size companies rose 64,000 (2.3% y/y).

The ADP National Employment Report data are maintained in Haver's USECON database; historical figures date back to March 2001. The figures in this report cover jobs only in the private sector. The expectation figure is available in Haver's AS1REPNA database.

ADP/Moody's National Employment Report	Nov	Oct	Sep	Y/Y	2012	2011	2010
Nonfarm Private Payroll Employment (m/m chg, 000s)	215	184	185	1.9%	2.1%	1.8%	-0.7%
Small Payroll (1-49)	102	61	89	1.8	2.1	1.1	-0.7
Medium Payroll (1-49)	48	38	31	1.6	2.0	2.1	-0.5
Large Payroll (>500)	65	85	65	2.3	2.4	2.7	-1.0
Goods-Producing	39	29	22	1.3	2.0	1.7	-4.2
Manufacturing	18	10	2	0.2	1.4	1.9	-2.7
Service-Producing	176	156	163	2.0	2.2	1.8	0.0

U.S. Trade Deficit Shrinks As Exports Strengthen
by Tom Moeller December 4, 2013

The U.S. foreign trade deficit improved to $40.6 billion during October compared to a revised $43.0 billion in September, last month reported as $41.8 billion. A $40.1 billion deficit had been expected in the Action Economics survey. Exports jumped 1.8% (+1.1% y/y) following three months of slight decline. Imports nudged up 0.4% (3.6% y/y) after a 1.6% September increase. In chained 2009 dollars, the deficit in goods eased to $48.3 billion. Real exports jumped 3.2% (8.4% y/y) while real imports gained 0.4% (5.7% y/y).

The October trade deficit in goods with mainland China eased from the record to $28.9 billion. Exports to China jumped 20.6% y/y while U.S. imports gained 4.1% y/y. With Japan, the deficit deepened to $6.4 billion. U.S. exports fell 3.3% y/y and imports were down 6.4% y/y. The deficit with the European Union grew sharply to $14.3 billion. U.S. exports increased 6.7% y/y while imports rose 15.5% y/y.

The total real value of U.S. nonauto consumer goods exports jumped 6.8% (6.4% y/y) while real capital goods exports nudged up 0.6% (3.5% y/y). The constant dollar value of auto exports fell 1.6% (+9.7% y/y). Exports of foods, feeds & beverages increased 5.3% (8.5% y/y). Services exports improved 0.7% (5.0% y/y). Travel exports rose 0.8% (10.9% y/y) as the dollar's low value encouraged visits to the U.S. Passenger fares gained 2.3% (7.0% y/y).

The value of U.S. petroleum imports gained 1.5% (-7.3% y/y) as the quantity of petroleum product imports rose 5.7% (-5.1% y/y). The price of crude oil backed off m/m to $99.96 and remained down from the $109.69 high reached last year. Real imports less petroleum gained 0.2% in October (8.2% y/y). In constant dollars, imports of automotive vehicles declined 3.8% (+7.8% y/y) while real capital goods imports were off 0.4% (+4.3% y/y). Nonauto consumer goods imports rose 1.1% (11.5% y/y) and imports of foods, feeds & beverages gained 2.5% (7.4% y/y). Services imports nudged up 0.7% (2.3% y/y). Travel imports improved 1.0% (+3.3% y/y) but passenger fares jumped 4.3% (9.9% y/y).

The international trade data can be found in Haver's USECON database. Detailed figures are available in the USINT database. The expectations figures are from the Action Economics consensus survey, which is carried in the AS1REPNA.

Foreign Trade (Current Dollars)	Oct	Sep	Aug	Y/Y	2012	2011	2010
U.S. Trade Deficit	$-40.6B	$-43.0B	$-38.9B	$42.7B (10/12)	$534.7B	$556.8B	$499.4B
Exports (%)	1.8	-0.1	-0.0	5.5	4.6	14.5	16.9
Imports	0.4	1.6	0.0	3.6	2.8	13.9	19.5
Petroleum	1.5	2.7	-0.9	-7.3	-5.6	30.7	32.5
Nonpetroleum goods	0.2	2.1	0.1	6.5	5.2	12.1	20.8

U.S. New Home Sales Surge as Prices Plummet
by Tom Moeller December 4, 2013

New home sales during October jumped 25.4% to 444,000 following a 6.6% September decline. These figures were released jointly due to the federal government shutdown. The latest figure compared to expectations for 435,000 sales in the Action Economics Forecast Survey. The August sales figures were revised lower. These volume numbers are quoted at seasonally adjusted annual rates.

The median price of a new home declined 4.5% to $245,800 (-0.6% y/y) which was the lowest level since November of last year. The average price of a new home improved 2.5% during October to $321,700, up 12.7% from a year ago.

Sales mostly improved around the country. In the Midwest, the one-third sales jump to 63,000 (21.2% y/y) recovered September's drop. That was followed by the South where sales rose 28.2% to 259,000 (41.5% y/y). Sales in the Northeast gained 19.2% to 31,000 (29.2% y/y) and new home sales in the West increased 15.2% to 91,000 (-14.2% y/y).

The inventory of unsold homes rose roughly one-quarter y/y and it's been backing up this year. The months' sales supply of new homes dropped sharply to 4.9. The length of time to sell a new home fell to a new low of 2.6 months, compared to 14.0 months at the end of 2009.

The data in this report are available in Haver's USECON database. The consensus expectation figure is from the Action Economics survey and is available in the AS1REPNA database.

U.S. New Home Sales	Oct	Sep	Aug	Y/Y	2012	2011	2010
Total SAAR, 000s	444	354	379	21.6	368	306	321
Northeast	31	26	29	29.2	29	21	31
Midwest	63	47	57	21.2	47	45	45
South	259	202	212	41.5	196	168	173
West	91	79	81	-14.2	97	72	74
Median Price (NSA, $)	245,800	257,400	258,600	-0.6	242,108	224,317	221,242

U.S. ISM Nonmanufacturing Index Falls Sharply
by Tom Moeller December 4, 2013

The Composite Index for the service and construction sectors from the Institute for Supply Management (ISM) declined sharply during November to 53.9 after an increase to 55.4 in October. The latest was the lowest level since June and fell short of consensus expectations for 55.0. During the last ten years there has been a 76% correlation between the level of the nonmanufacturing composite index and the q/q change in real GDP for the service and the construction sectors.

Haver Analytics calculates a composite index using the ISM nonmanufacturing series and the ISM manufacturing sector index released Monday. The November figure fell to 54.3 and remained below the Q3 average of 56.3. During the last ten years there has been a 74% correlation between the composite index and the quarterly change in real GDP.

The business activity series dropped sharply as did the employment index. Since the series' inception in 1997, there has been an 88% correlation between the level of the ISM nonmanufacturing employment index and the m/m change in payroll jobs in the service-producing plus the construction industries. The new orders index slipped to its lowest level since June but the supplier delivery series improved, indicating slower delivery speeds.

The prices paid index dropped to its lowest level since May. Eleven percent of respondents indicated higher prices while 12% reported them lower. Since inception ten years ago, there has been a 65% correlation between the price index and the q/q change in the GDP services chain price index.

Beginning with the January 2008 Nonmanufacturing Report On Business, the composite index is calculated as an indication of overall economic conditions for the non-manufacturing sector. It is a composite index based on the diffusion indices of four of the indicators (business activity, new orders, employment and supplier deliveries) with equal weights.

The ISM data are available in Haver's USECON database. The expectations figure from ACTION ECONOMICS is in the AS1REPNA database.

The Federal Reserve's latest Beige Book covering regional economic conditions can be found here.

ISM Nonmanufacturing Survey (SA)	Nov	Oct	Sep	Nov'12	2012	2011	2010
Composite Diffusion Index	53.9	55.4	54.4	54.8	54.6	54.5	54.1
Business Activity	55.5	59.7	55.1	60.9	57.7	57.2	57.6
New Orders	56.4	56.8	59.6	58.0	56.6	56.3	57.0
Employment	52.5	56.2	52.7	51.4	53.5	52.4	49.8
Supplier Deliveries (NSA)	51.0	49.0	50.0	49.0	50.6	51.9	52.2
Prices Index	52.2	56.1	57.2	56.9	59.3	65.1	61.4

Tom Moeller
Author
Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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