U.S. Payrolls Jump; Unemployment Rate Remains At 2008 Low

Nonfarm payrolls surged 321,000 during November (2.0% y/y) following upwardly revised increases of 243,000 and 271,000 during the prior two months. The gain outpaced expectations for a 225,000 rise in the Action Economics Forecast Survey. The unemployment rate held at 5.8%, its lowest level since July 2008. Expectations had been for 5.9%. The overall jobless rate, including workers who were marginally attached and those employed part-time for economic reasons, slipped to 11.4%.

From the payroll jobs survey, the 321,000 increase in employment (2.0% y/y) was the largest gain since January 2012. Job growth improved across industry categories. Factory sector employment rose 28,000 (1.4% y/y), its strongest rise in twelve months and driven by the nondurable goods sector. Construction sector jobs increased 20,000 (3.6% y/y), the best gain in three months. Private service-producing industries produced an outsized 266,000 improvement (2.3% y/y), the quickest hiring pace since January 2012. Professional & business services jobs jumped 86,000 (3.7% y/y), helped by a firm 22,700 rise (8.5% y/y) in temporary help. Trade, transportation & utilities employment gained 71,000 (2.1% y/y) and retail service sector jobs advanced 50,200 (1.9% y/y), boosted by a 6,400 rise (9.1% y/y) in nonstore jobs. Hiring in health care & social services gained 37,200 (2.0% y/y) and leisure & hospitality employment increased 32,000 (2.6% y/y). Jobs in transportation & warehousing rose 16,7000 (3.1% y/y) and financial industries employment grew an improved 20,000 (1.4% y/y). Information sector hiring gained 4,000 (0.1% y/y). In the government sector, payrolls grew a steady 7,000 (0.4% y/y). Federal government employment rose 5,000 (-0.7% y/y), state government jobs gained 3,000 (0.4% y/y) but local government hiring slipped 1,000 (0.5% y/y).

Hiring was broadly based last month as indicated by a one-month diffusion index of 69.7%, its highest since January 1998. Over three months, 70.6% of industries added jobs. In the factory sector, 63.0% of industries raised employment but over three months, 69.1% added jobs, the most since December.

Average weekly hours-worked rose to 34.6, the highest level since May 2008. The factory sector workweek extended to 41.1 hours, the longest of the recovery, but the construction sector workweek dipped to 39.1 hours. The private service sector workweek held steady at 33.4 hours. Aggregate hours worked (employment times hours) rose 0.6% (2.6% y/y). For Q4, aggregate hours rose 2.8% (AR) from Q3 following a 2.4% rise during that quarter. During the last ten years there has been a 68% correlation between the q/q rise in aggregate hours and the change in real GDP.

Average hourly earnings gained 0.4% (2.1% y/y), the strongest rise since April 2013. The gain was driven by a 0.4% improvement (2.1% y/y) in service sector earnings. Construction sector earnings gained 0.2% (2.7% y/y) and factory sector earnings gained 0.1% (1.5% y/y).

The household employment survey indicated that the unemployment rate held at 5.8%. Employment increased 4,000 (2.0% y/y) while unemployment rose 115,000 (-16.0% y/y). The labor force rose 119,000 (0.7% y/y). The population rose 0.9% y/y, leaving the labor force participation rate of 62.8% stable m/m and near its lowest level since 1977.

For individuals with less than a high school diploma, the unemployment rate was 8.4% and for high school graduates but no college, it was 5.6%. For those with some college, the jobless rate was 4.9% while for college graduates the unemployment rate was 3.2%.

The figures referenced above are available in Haver's USECON database. Additional detail can be found in the LABOR and in the EMPL databases. The expectation figures are from Action Economics and are in the AS1REPNA database.

Employment: (M/M Chg., 000s)	Nov	Oct	Sep	Y/Y	2013	2012	2011
Payroll Employment	321	243	271	2.0%	1.7%	1.7%	1.2%
Previous	--	214	256	--	--	--	--
Manufacturing	28	20	12	1.4	0.7	1.7	1.7
Construction	20	7	18	3.6	3.3	2.1	0.2
Private Service Producing	266	208	213	2.3	2.2	2.2	1.9
Government	7	7	22	0.4	-0.3	-0.8	-1.8
Average Weekly Hours - Private Sector	34.6	34.5	34.5	34.5 (Nov.'13)	34.5	34.4	34.3
Private Sector Average Hourly Earnings (%)	0.4	0.1	0.0	2.1	2.1	1.9	2.0
Unemployment Rate (%)	5.8	5.8	5.9	7.0 (Nov.'13)	7.4	8.1	8.9

 

U.S. Factory Sector Orders Decline As Petroleum Prices Fall
by Tom Moeller  December 5, 2014

New orders to all manufacturers fell 0.7% (+2.1% y/y) during October following a 0.5% decline. No change in orders was expected in the Action Economics Forecast Survey. Orders for nondurable goods (which equal shipments) declined 1.5% (-1.1% y/y) as the value of  petroleum shipments fell 6.3% (-9.3% y/y) due to lower prices. Chemical shipments also fell 1.1% (-2.2% y/y). To the upside, apparel shipments rose 3.0% (11.3% y/y) and food product shipments gained 1.2% (7.5% y/y). Shipments of durables ticked 0.1% higher (5.7% y/y). Transportation equipment shipments gained 0.8% (3.8% y/y), led by a 2.6% rise in heavy duty trucks. New orders for durable goods rose 0.3% (5.5% y/y), initially reported as 0.4%. Transportation equipment orders rose 3.4% (3.9% y/y) but machinery orders fell 1.4% (+6.0 y/y).

Unfilled orders increased 0.4% (12.3% y/y) for the second month while order backlogs excluding the transportation sector rose 0.4% (6.9% y/y). Electrical equipment backlogs rose 1.4% (14.3% y/y) and unfilled orders of computers & electronic products gained 0.7% (6.9% y/y). Unfilled orders of furniture improved 0.9% (12.2% y/y) but machinery backlogs slipped 0.4% (+10.9% y/y).

Inventories in the factory sector ticked 0.1% higher (3.5% y/y). In the durable goods sector, inventories rose 0.5% (6.0% y/y). Primary metals inventories gained 0.9% (8.1% y/y) but electrical equipment inventories retreated 1.2% (-3.8% y/y). Amongst nondurable goods industries, inventories declined 0.5% (-0.2% y/y). Petroleum inventories dropped 3.6% (-9.0% y/y), basic chemicals slipped 0.1% (+0.7% y/y) but apparel inventories rose 3.1% (25.3% y/y).

The factory sector figures are available in Haver's USECON database.

Factory Sector- NAICS Classification (%)	Oct	Sep	Aug	Y/Y	2013	2012	2011
New Orders	-0.7	-0.5	-10.0	2.1	2.7	2.9	12.9
Shipments	-0.8	0.1	-1.1	2.2	2.0	4.0	12.1
Inventories	0.1	0.2	0.1	3.5	2.3	2.4	10.2
Unfilled Orders	0.4	0.4	0.6	12.3	7.0	3.7	10.0

 

U.S. Consumer Credit Usage Tapers Off
by Tom Moeller  December 5, 2014

Consumer credit outstanding increased $13.2 during October (6.7% y/y) following a revised $15.4 billion September rise, initially reported as $15.9 billion. It was the slowest rate of gain since December. Expectations were for a $16.5 billion increase, according to the Action Economics Forecast Survey. During the last ten years, there has been a 54% correlation between the y/y growth in consumer credit and the y/y growth in personal consumption expenditures.

Usage of non-revolving credit eased to $12.3 billion (8.1% y/y), the weakest rise this year. Federal government loans increased 15.6% y/y. These constitute roughly one-third of total non-revolving credit. Finance company lending (27% of the total) edged 0.3% higher y/y. Bank borrowing (26% of the total) rose 6.9% y/y and borrowing at credit unions (10% of the total) advanced 13.1% y/y. Nonprofit & educational institution loans (3% of the total) declined 9.0% y/y. Nonfinancial business loans (1% of the total) were unchanged y/y.

Revolving credit outstanding improved $0.9 billion (3.1% y/y). Commercial bank & savings institution lending (81% of the total) increased 4.6% y/y. Finance company balances (8% of the total) declined 8.9% y/y while borrowing from credit unions (5% of the total) gained 8.1% y/y. Nonfinancial business accounts (3% of the total) remained unchanged y/y and securitized credit card balances (4% of the total) fell 5.0% y/y.

These Federal Reserve Board figures are break-adjusted and calculated by Haver Analytics. There is a break in the credit outstanding data from November 2010 to December 2010 due to the Fed's benchmarking process. Benchmark estimates are based on the Census of Finance Companies (CFC) and the Survey of Finance Companies (SFC) conducted in 2010 and 2011, respectively. The consumer credit data are available in Haver's USECON database. The Action Economics figures are contained in the AS1REPNA database.

Consumer Credit Outstanding (M/M Chg, SA)	Oct	Sep	Aug	Y/Y	2013	2012	2011
Total	$13.2 bil.	$15.4 bil.	$13.6 bil.	6.7%	6.0%	6.1%	4.1%
Revolving	0.9	1.4	-0.3	3.1	1.3	0.6	0.2
Nonrevolving	12.3	14.0	13.8	8.1	7.9	8.5	5.9