Sunday, January 27, 2019

December’s existing home sales

The only major report that was released this past week was the existing home sales report for December from the National Association of Realtors (NAR); the regular Census bureau releases of the advance report on durable goods for December and the December report on new home sales, which had both been scheduled for Friday, were both postponed due to the shutdown...with the shutdown now ending, the postponed releases will presumably start being assembled next week; those should include the New Home Sales report for November from the Census Bureau, which is now two reports in arrears... meanwhile, reports such as the advance estimate of 4th quarter GDP from the Bureau of Economic Analysis, which had been scheduled for this coming Wednesday, will presumably still have to be postponed until the reports that feed into it are completed...we should know more by next week, when the BEA and Census employees return to work...

This week did see the release of two more regional Fed manufacturing surveys for January: the Richmond Fed Survey of Manufacturing Activity, covering an area that includes Virginia, Maryland, the Carolinas, the District of Columbia and West Virginia, reported its broadest composite index rose to -2 in January from -8 in December, still suggesting an ongoing slowdown in that region's manufacturing, and the Kansas City Fed manufacturing survey for January, covering western Missouri, Colorado, Kansas, Nebraska, Oklahoma, Wyoming and northern New Mexico, which reported its broadest composite index slipped to 5 in January from 6 in December but down from 15 in November, indicating a slower expansion of that region's manufacturing...

December Existing Home Sales Down 6.4% As Price Increases Shrink

The National Association of Realtors (NAR) reported that their seasonally adjusted count of existing home sales fell by 6.4% from November to December, the 6th decrease in eight months, projecting that 4.99 million existing homes would sell over an entire year if the December home sales pace were extrapolated over that year, a pace that was 10.3% below the annual sales rate they projected in December of a year ago...November sales are now shown at a 5.33 million annual rate, revised up from the 5.32 million annual rate indicated by last month's report...total existing home sales for 2018 added up to 5.34 million, 3.1% fewer than the 5.51 million homes that were sold in 2017...the NAR also reported that the median sales price for all existing-home types was $253,600 in December, which was down from $257,300 in November, but 2.9% higher than in December a year earlier, which they report as "the 82nd straight month of year-over-year gains".....the NAR press release, which is titled "Existing-Home Sales See 6.4 Percent Drop in December", is in easy to read plain English, so if you're interested in the details on housing inventories, cash sales, distressed sales, first time home buyers, etc., you can easily find them in that press release...as sales of existing properties do not add to our national output, neither these home sales nor the prices for which these homes sell for are included in GDP, except insofar as real estate, local government and banking services are rendered during the selling process…

Since this report is entirely seasonally adjusted and at a not very informative annual rate, we like to look at the raw data overview (pdf) to see what actually transpired during the month...this unadjusted data indicates that roughly 377,000 homes sold in December, down by 7.1% from the 406,000 homes that sold in November, and down by 11.7% from the 427,000 homes that sold in December of last year, so we can see that the seasonal adjustments did not have much of an impact this time....that same pdf indicates that the median home selling price for all housing types fell 1.4%, from a revised $257,300 in November to $253,600 in December, while the average home sales price was $292,800, down 1.1% from the $296,000 average sales price in November, but up 1.6% from the $288,300 average home sales price of December a year ago...for both seasonally adjusted and unadjusted graphs and additional commentary on this report, see the following two posts from Bill McBride at Calculated Risk: NAR: Existing-Home Sales Decreased to 4.99 million in December and Comments on December Existing Home Sales...

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most picked from the aforementioned GGO posts, contact me…)      

Sunday, January 20, 2019

December's industrial production & producer prices, et al

The major reports released this week were the December report on Industrial Production and Capacity Utilization from the Fed, and the December Producer Price Index and the December Import-Export Price Index, both from the Bureau of Labor Statistics...in addition, the BLS also released the Regional and State Employment and Unemployment for December on Friday, which breaks down the establishment survey and household survey data from the monthly jobs report released two weeks ago by region and by state...the regular reports on Retail Sales for December and Business Sales and Inventories for November from the Census Bureau, which had been scheduled for Wednesday, were postponed because of the Bureau's shutdown, as was the November report on New Residential Construction, which the Census Bureau had scheduled for Thursday... 

The week also saw the release of the first two regional Fed manufacturing surveys for January: the Empire State Manufacturing Survey from the New York Fed, which covers all of New York state, one county in Connecticut, Puerto Rico and northern New Jersey, reported their headline general business conditions index fell from +23.3 in November and from +10.9 in December to +3.9 in January, its lowest level since May 2017, suggesting much slower growth of First District manufacturing.... meanwhile, the Philadelphia Fed Manufacturing Survey, covering most of Pennsylvania, southern New Jersey, and Delaware, reported its broadest diffusion index of manufacturing conditions rose from a revised reading of +9.1 in December to + 17.0 in January, indicating a larger plurality of the region's manufacturing firms reported increases in their manufacturing activity this month...

Industrial Production Rose 0.3% in December After October & November Output Were Revised Higher

The Fed's G17 release on Industrial production and Capacity Utilization indicated that industrial production rose by a seasonally adjusted 0.3% in December after rising by a revised 0.4% in November and after rising by a revised 0.2% in October, which together meant that industrial production rose at a 3.8% annual rate in the 4th quarter, after rising by a revised 4.7% rate in the 3rd quarter....the industrial production index, with the benchmark now set for average 2012 production to equal to 100.0, rose to 109.9 in December from 109.6 in November, which was revised from the 109.4 reported last month, while at the same time the index for October was revised from 108.7 to 109.1, now a 0.2% increase from September, rather than the 0.2% decrease previously reported....year over year industrial production is now up 4.0%, up from the 3.9% year over year increase reported a month ago....

The manufacturing index, which accounts for more than 75% of the total IP index, rose 1.1% to 106.2 in December, after both the October index and the November indices were revised up from 104.9 to 105.0, the September manufacturing was revised from 105.0 to 105.1, the August index was revised from 104.8 to 104.9, and the July manufacturing index was revised from 104.3 to 104.4....meanwhile, the mining index, which includes oil and gas well drilling, rose from 128.5 in November to 130.5 in December, after the November mining index was revised down from 128.9, which lifted the mining index to a level 13.4% higher than it was a year earlier...finally, the seasonally adjusted utility index, which often fluctuates due to above or below normal temperatures, fell by 6.3% in December, from 108.9 to 102.0, after the November utility index was revised from 107.8 to 108.9, now 1.1% higher than October...since December 2017, like November of this year, was colder than normal, the utility index had been elevated at that time due to more heating, and hence the utility index is now 4.3% lower than it was a year ago...

This report also includes capacity utilization data, which is expressed as the percentage of our plant and equipment that was in use during the month, and which indicated that seasonally adjusted capacity utilization for total industry rose to 78.7% in December from 78.6% in November, which was revised from the 78.5% reported last month ...capacity utilization of NAICS durable goods production facilities rose from an upwardly revised 76.6% in November to 77.5% in December, while capacity utilization for non-durables producers rose from an unrevised 76.6% to 77.2%...capacity utilization for the mining sector rose to 94.8% in December from 93.9% in November, which was originally reported as 94.1%, while utilities were operating at 75.0% of capacity during December, down from 80.2% of capacity during November, which was previously reported at 79.4%...for more details on capacity utilization by type of manufacturer, see Table 7: Capacity Utilization: Manufacturing, Mining, and Utilities, which shows the historical capacity utilization figures for a dozen types of durable goods manufacturers, 8 classifications of non-durable manufacturers, mining, utilities, and capacity utilization for a handful of other special categories....

Producer Prices Down 0.2% in December on Lower Fuels,  Trade and Transportation Margins

The seasonally adjusted Producer Price Index (PPI) for final demand fell 0.2% in December, the largest drop since August 2016, as prices for finished wholesale goods were on average 0.4% lower, while margins of final services providers decreased by 0.1%...that followed an November report that indicated the PPI was 0.1% higher, with prices for finished wholesale goods falling 0.4% while margins of final services providers increased 0.3%, an October report that indicated the PPI was 0.6% higher, with prices for finished wholesale goods rising 0.6% and margins of final services providers rising 0.7%, a revised September report that indicated the PPI was unchanged, with prices for finished wholesale goods 0.3% lower and margins of final services providers 0.1% higher, and a revised August report that also indicated the producer price index was unchanged, with prices for finished wholesale goods rising 0.2% while margins of final services providers decreased by 0.1%....on an unadjusted basis, producer prices are still 2.5% higher than a year ago, same as the year over year increase that had been indicated by last month's report...meanwhile, the core producer price index, which excludes food, energy and trade services, was unchanged for the month, and is now 2.8% higher than in December a year ago...

As noted, the price index for final demand for goods, aka 'finished goods', was 0.4% lower in December, after being 0.4% lower in November, 0.6% higher in October, 0.3% lower in September, but after rising by a revised 0.2% in August, being unchanged in July after rising by 0.2% in June and by 0.9% in May....the goods index fell because the price index for wholesale energy was 5.4% lower, after falling 5.0% in November, rising 2.7% higher in October falling a revised 1.1% in September, rising a revised 0.6% in August, and falling 0.8% in July, while the price index for wholesale foods rose 2.6% after rising 1.3% in November, and the index for final demand for core wholesale goods (excluding food and energy) was up 0.1%....wholesale energy prices fell largely on a 13.1% decrease in the wholesale price for gasoline and a 9.7% decrease in the wholesale price of diesel fuel ...the wholesale food price index, meanwhile, included a 48.9% increase in wholesale prices for fresh fruits and melons and an 28.5% increase in wholesale prices for fresh and dry vegetables....among wholesale core goods, wholesale prices for construction machinery and equipment rose 3.1% while wholesale prices for industrial chemicals fell 6.7%..

At the same time, the index for final demand for services fell 0.1%, after rising 0.3% in November, 0.7% in October, and a revised 0.1% in September, after falling a revised 0.1% in August, and rising a 0.2% in July, 0.3% in June, 0.3% in May, 0.2% in April and 0.3% in March, as the December index for final demand for trade services fell 0.3% and the index for final demand for transportation and warehousing services fell 0.2%, while the core index for final demand for services less trade, transportation, and warehousing services rose 0.1%....among trade services, seasonally adjusted margins for fuels and lubricants retailers fell 2.1%, margins for sporting goods and boat retailers fell 3.3%, and margins for food retailers fell 2.5%... among transportation and warehousing services, margins for airline passenger services fell 1.5% while margins for truck transportation of freight rose 0.4%...among the components of the core final demand for services index, margins for guestroom rentals rose 2.9% while margins for cellular phone and other wireless telecommunications services fell 5.2%..

This report also showed the price index for intermediate processed goods fell 0.9% in December, after falling 0.7% in November, rising 0.8% in October, falling a revised 0.1% in September, but after rising a revised 0.2% in August....the price index for intermediate energy goods fell 2.6%, as refinery prices for gasoline fell 13.1% and refinery prices for jet fuel fell 14.0%, while producer prices for natural gas sold to electric utilities rose 27.6%...prices for intermediate processed foods and feeds rose 0.5%, as the intermediate price index for fats and oils rose 1.4% and producer prices for perishable prepared foods jumped 17.7%...meanwhile, the core price index for intermediate processed goods less food and energy was 0.7% lower on a 7.7% decrease in the index for basic organic chemicals and a 3.4% decrease in the price index for synthetic rubber....prices for intermediate processed goods are still 3.0% higher than in December a year ago, now the 25th consecutive year over year increase, after 16 months of negative year over year comparisons, as intermediate goods prices fell every month from July 2015 through March 2016....

Meanwhile, the price index for intermediate unprocessed goods rose 11.2% in December, the largest increase since November 2006, after falling 5.3% in November, rising 3.6% in October and a revised 0.8% in September, and falling a revised 3.7% in August....that was as the December price index for crude energy goods jumped 24.1% on a 64.3% spike in raw natural gas prices, even as crude oil prices fell 3.7%...in addition, the price index for unprocessed foodstuffs and feedstuffs rose 3.1%, as producer prices for slaughter turkeys rose 8.6% and producer prices for alfalfa hay rose 17.8%...at the same time, the index for core raw materials other than food and energy materials rose 1.5%, as prices for nonferrous metal ores rose 3.7% and raw cotton rose 4.8%...this raw materials index is now 9.1% higher than a year ago, a reversal of the 0.7% year over year decrease that we saw in November, which had been the first negative year over year reading in the index since October 2016...

Lastly, the price index for services for intermediate demand rose 0.1% in December, after rising 0.2% in November, 0.4% in October, a revised 0.3% in September, and being a revised unchanged in August...the price index for intermediate trade services was 0.2% higher, as margins for machinery and equipment parts and supplies wholesalers rose 1.1% and margins for paper and plastics products wholesalers rose 1.9%…the index for transportation and warehousing services for intermediate demand fell 0.2%, as the intermediate index for air transportation of passengers fell 1.5% and the index for air mail and package delivery services, excluding by USPS fell 1.0%...meanwhile, the core price index for intermediate services less trade, transportation, and warehousing was unchanged, as the index for gross rents for retail properties rose 3.8% while television advertising time sales fell 9.1%....over the 12 months ended in December, the year over year price index for services for intermediate demand, which has never turned negative on an annual basis, is still 3.1% higher than it was a year ago... 

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most picked from the aforementioned GGO posts, contact me…)      

Sunday, January 13, 2019

December's consumer price index; November's Mortgage Monitor and job openings & turnover survey

Major reports that were released this past week included the December Consumer Price Index and the Job Openings and Labor Turnover Survey (JOLTS) for November, both from the Bureau of Labor Statistics, which had funding prior to the government shutdown...major reports which were scheduled this week which were postponed due to department furloughs included the Full Report on Manufacturers' Shipments, Inventories and Orders for November from the Census Bureau, which had been scheduled for Monday, the  November report on our International Trade from the Commerce Department, which had been scheduled for Tuesday, and the Census report on Wholesale Trade, Sales and Inventories for November, which had been scheduled for Thursday....however, the Federal Reserve, which is self-funded, released the Consumer Credit Report for November on Tuesday...that report showed that overall consumer credit, a measure of non-real estate debt, expanded by a seasonally adjusted $22.2 billion, or at a 6.7% annual rate, as non-revolving credit expanded at a 7.1% rate to $2937.0 billion and revolving credit outstanding grew at a 5.5% rate to $1,042.2 billion...

Privately issued reports released this week included the December Non-Manufacturing Report On Business; which saw the NMI (non-manufacturing index) come in at 57.6%, down from 60.7% in November, indicating that a smaller plurality of service industry purchasing managers reported expansion in various facets of their business in December than did in November, and the Mortgage Monitor for November (pdf) from Black Knight Financial Services, which reported that 3.71% of all US mortgages were delinquent in November, up from 3.64% in October but down from 4.55% in November a year ago, and that 0.52% of all mortgages were in the foreclosure process at the end of the month, the same percentage as in October, but down from the 0.66% of mortgages that were in foreclosure in November a year ago...

Since it's been more than two years since we've looked at any of the metrics from the Mortgage Monitor, we'll include below an abbreviated portion of the Mortgage Monitor summary table, showing the monthly count of active home mortgage loans and their delinquency status, which comes from page 22 of the pdf...

November 2018 mortgage monitor loan count summary table

The columns in the table above show the total active mortgage loan count nationally for each month given, number of mortgages that were delinquent by more than 90 days but not yet in foreclosure, the monthly count of those mortgages that are in the foreclosure process (FC), the total non-current mortgages, including those that just missed one or two house payments, and then the number of foreclosure starts for each month over the past year and for each January shown going back to January 2005….in the last two columns, we see the average length of time that those who have been more than 90 days delinquent have remained in their homes without foreclosure, and then the average number of days those in foreclosure have been stuck in that process because of the lengthy foreclosure pipelines, especially in judicial states…the average length of delinquency for those who have been more than 90 days delinquent without foreclosure has continued falling from the April 2015 record of 536 days and is now at 397 days, while the average time for those who’ve been in foreclosure without a resolution is now at 859 days, down from the record high of 1061 days that was set in August 2015...considering that foreclosure starts have been averaging around 45,000 a month while the number of those that remain in the foreclosure process has been around 268,000, it appears that foreclosures started in recent months are typically being resolved in a period of less than 6 months (180 days)..…hence, for the average time for mortgages to be in the foreclosure process to still be as high as 859 days, some foreclosures started early in the mortgage crisis must still not yet be completed…there's got to be a story about those mortgages, but i haven't seen anyone in the media address it for several years..

December Consumer Prices down 0.1% as Lower Gasoline Prices Offset Higher Food and Rents

The consumer price index decreased by 0.1% in December, as somewhat higher prices for food and shelter were more than offset by much lower prices for gasoline... the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that the seasonally adjusted price index fell 0.1% in December after it had been statistically unchanged in November, risen 0.3% in October, 0.1% in September, 0.2% in August, 0.2% in July, 0.1% in June, 0.2% in May, 0.2% in April but after falling 0.1% in March after it had risen by 0.2% in February, 0.5% in January, and by 0.1% last December...the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, fell from 252.038 in November to 251.233 in December, which still left it statistically 1.9102% higher than the 246.524 index reading in December of last year, which is reported as a 1.9% year over year increase....with lower gasoline prices the primary reason for the drop in the overall index, seasonally adjusted core prices, which exclude food and energy, rose by 0.2% for the month, even though the unadjusted core price index also fell from 259.105 to 259.083, which left the core index 2.179% ahead of its year ago reading of 253.558, which is reported as a 2.2% year over year increase, same as the annual increase reported a month ago..

The volatile seasonally adjusted energy price index fell by 3.5% in December, after falling 2.2% in November, rising by 2.4% in October, falling by 0.5% in September, rising by 1.9% in August, falling by 0.3% in July and by 0.3% in June, rising by 0.9% in May and by 1.4% in April, falling by 2.8% in March, rising by 0.1% in February and by 3.0% in January, and thus is now 0.3% lower than in December a year ago...the price index for energy commodities was 7.4% lower in December, while the index for energy services rose by 1.8%, after rising by 0.3% in November...the energy commodity index was down 7.4% due to a 7.5% decrease in price of gasoline, the largest component, and an 11.4% decrease in the index for fuel oils, while prices for other energy commodities, such as propane, kerosene, and firewood, averaged 1.3% lower...within energy services, the index for utility gas service rose 5.6% after falling by 0.7% in November and is now 2.3% higher than it was a year ago, while the electricity price index was 0.7% higher, after it had risen 0.3% in November....energy commodities are now 1.8% lower than their year ago levels, with gasoline prices averaging 2.1% lower than they were a year ago, while the energy services price index is now 1.4% higher than last December, as electricity prices have also increased by 1.1% over that period…

The seasonally adjusted food price index was 0.4% higher in December, after rising 0.2% in November, falling 0.1% in October, being unchanged in September, rising 0.1% in August, 0.1% in July, 0.2% in June, after being unchanged in May, rising 0.3% in April, 0.1% in March, being unchanged in February, rising 0.2% in January, and 0.2% in December of last year, and after being unchanged in October and November of 2017, as the price index for food purchased for use at home rose 0.4% in December, while the index for food bought to eat away from home was also 0.4% higher, as prices at fast food outlets rose 0.4% and prices at full service restaurants rose 0.5%, while food prices at employee sites and schools averaged 0.2% lower...

In the food at home categories, the price index for cereals and bakery products was 0.4 higher as average bread prices rose 1.2%, cereal prices rose 1.3%, and cake and cupcake prices rose 1.0%....on the other hand, the price index for the meats, poultry, fish, and eggs group was unchanged, as the beef and pork indexes both rose just 0.1% and the seafood index rose 0.7% while egg prices were 2.9% lower...at the same time, the seasonally adjusted index for dairy products was 0.3% higher, even though unadjusted milk prices fell 0.5%...meanwhile, the fruits and vegetables index was 1.7% higher on a 1.9% increase in the price index for fresh fruits and a 2.6% increase in the price index for fresh vegetables, which included a 14.5% jump in prices for lettuce....at the same time, the beverages index was 0.3% higher, as carbonated drink prices rose 0.3% and roast coffee prices rose 1.1%...lastly, the index for the ‘other foods at home’ category was 0.3% lower, as both sugar and margarine prices fell 1.4% and average prices for snacks fell 1.9%....the itemized list for price changes in over 100 separate food items is included at the beginning of Table 2 for this release, which gives us a line item breakdown for prices of more than 200 CPI items overall...since last December, just lettuce, which is now priced 15.0% higher than a year ago, is the only ‘food at home’ line item that has seen prices change by more than 10% over the past year...

Among the seasonally adjusted core components of the CPI, which rose by 0.2% in December after rising by 0.2% in November, 0.2% in October, 0.1% in September, by 0.1% in August, 0.2% in July, 0.2% in June, 0.2% in May, 0.1% in April, 0.1% in March, 0.2% in February, 0.3% in January, and by 0.3% last December, the composite price index of all goods less food and energy goods was 0.1% higher, while the composite for all services less energy services was 0.3% higher....among the goods components, which will be used by the Bureau of Economic Analysis to adjust December retail sales for inflation in national accounts data, the index for household furnishings and supplies decreased by 0.1%, as the price index for laundry appliances fell 1.5% while the price index for window and floor coverings was 1.4 % lower...meanwhile, the apparel price index was unchanged, as a 1.3% decrease in the index for men's apparel was offset by a 1.1% increase in the index for boy's apparel and a 0.5% increase in the index for women's apparel...at the same time, the price index for transportation commodities other than fuel was also unchanged, as prices for both new and used cars fell 0.2% while tire prices rose 1.0% and the index for oil, coolant, and fluids rose 1.3%...on the other hand, prices for medical care commodities were 0.2% lower as prescription drugs prices fell 0.4%, while the recreational commodities index rose 1.3% on a 6.7% increase in the index for sports vehicles including bicycles and a 1.4% increase in the index for toys, games, hobbies and playground equipment...in addition, the education and communication commodities index was 0.7% higher after falling 1.3% in November and 1.5% in October, on a 1.4% increase in the index for personal computers and peripheral equipment and a 1.1% increase in the index for educational books and supplies...lastly, a separate price index for alcoholic beverages was unchanged, while the price index for ‘other goods’ fell 0.4% on a 1.4% decrease in the price index for miscellaneous personal goods...

Within core services, the price index for shelter rose 0.3% on a 0.3% increase in rents, a 0.2% increase in homeowner's equivalent rent, and a 3.1% increase in lodging away from home at hotels and motels, while the shelter sub-index for water, sewers and trash collection rose 0.3%, and other household operation costs were on average 2.0% higher....the price index for medical care services was up by 0.4%, as both hospital inpatient services and hospital outpatient services rose 0.6% and health insurance rose 1.3%...on the other hand, the transportation services index was down by 0.2% as vehicle repair costs fell 0.7% and airline fares fell 1.5%...at the same time, the recreation services price index was 0.3% higher as cable and satellite television service rose 0.6% and admission to sporting events jumped 4.9%....meanwhile, the index for education and communication services was 0.1% higher as tuitions rose 0.2% and child care and nursery school costs rose 0.4%....lastly, the index for other personal services was up 0.2% as haircuts rose 0.4% and apparel services other than laundry and dry cleaning rose 0.8%...among core line items, prices for televisions, which are now 18.6% cheaper than a year ago, and the price index for telephone hardware, calculators, and other consumer information items, which is down by 11.2% since last December, have both seen prices drop by more than 10% over the past year, while the price index for laundry equipment, which has still increased 13.2% year over year, and the price index for boy's apparel, which is up 13.1% since last December, have both seen prices rise by a double digit magnitude over that span...

Job Openings, Hiring & Quitting Decreased In November, Layoffs were Little Changed

The Job Openings and Labor Turnover Survey (JOLTS) report for November from the Bureau of Labor Statistics estimated that seasonally adjusted job openings decreased by 243,000, from 7,131,000 in October to 6,888,000 in November, after October job openings were revised 52,000 higher, from 7,079,000 to 7,131,000...November's jobs openings were still 16.1% higher than the 5,931,000 job openings reported in November a year ago, as the job openings ratio expressed as a percentage of the employed fell to 4.4% in November from 4.5% October, but it was still up from 3.9% in November a year ago....the largest percentage decrease in November openings was a 39,000 job opening decrease to 90,000 openings in the real estate, rental and leasing jobs sector, while the transportation, warehousing, and utilities sector saw job openings increase by 40,000 to 298,000 (see table 1 for more job openings details)...like most BLS releases, the press release for this report is easy to understand and also refers us to the associated table for the data cited, which are linked at the end of the release...

The JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and 'other separations', which includes retirements and deaths....in November, seasonally adjusted new hires totaled 5,710,000, down by 218,000 from the revised 5,928,000 who were hired or rehired in October, as the hiring rate as a percentage of all employed fell to 3.8% in November from 4.0% October, while it was still up from 3.7% in November a year ago (details on hiring by region and by sector since July are in table 2)....meanwhile, total separations fell by 114,000, from 5,621,000 in October to 5,507,000 in November, as the separations rate as a percentage of the employed fell from 3.8% to 3.7%, while it was still up from 3.6% in November a year ago (see table 3)...subtracting the 5,507,000 total separations from the total hires of 5,710,000 would imply an increase of 203,000 jobs in November, a bit more than the revised payroll job increase of 176,000 for November reported in the December establishment survey last week, but still within the expected +/-115,000 margin of error in these incomplete samplings...

Breaking down the seasonally adjusted job separations, the BLS finds that 3,407,000 of us voluntarily quit our jobs in November, down by 108,000 from the revised 3,519,000 who quit their jobs in October, while the quits rate, widely watched as an indicator of worker confidence, remained unchanged at 2.3% of total employment, while it was up from 2.2% a year earlier (see job quitting details in table 4)....in addition to those who quit, another 1,769,000 were either laid off, fired or otherwise discharged in November, up by 8,000 from the revised 1,761,000 who were discharged in October, as the discharges rate remained unchanged at 1.2% of total employment, which was also the same as the discharges rate of 1.2% in November a year ago....meanwhile, other separations, which includes retirements and deaths, were at 332,000 in November, down from 341,000 in October, for an 'other separations rate’ of 0.2%, which was the same rate as in October and as in November of last year....both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be accessed easily using the links to tables at the bottom of the press release...

 

 (the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most picked from the aforementioned GGO posts, contact me…)      

Sunday, January 6, 2019

December’s jobs report, et al

The only major economic report released this week was the Employment Situation Summary for December from the Bureau of Labor Statistics, as apparently the Labor Department had been funded prior to the government shutdown...the November report on Construction Spending from the Census Bureau had been scheduled for release on Thursday, but it has been postponed due to the government funding impasse over funding for Trump's Mexican border wall...after the 16 day government shutdown of October 2013, all such postponed reports were eventually released, with many of them delayed by more than 2 weeks, so presumably that will be the case again this time...

Meanwhile, with Federal Reserve being self-funded, the Dallas Fed Texas Manufacturing Outlook Survey reported their general business activity composite index fell to -5.1 from last month's +17.6, the largest drop in their index since 2008 and now indicating a modest contraction of the Texas manufacturing economy...privately issued reports released this week included the ADP Employment Report for December and the December report on light vehicle sales from Wards Automotive, which estimated that vehicles sold at a 17.51 million annual rate in December, up 0.9% from the 17.35 million annual pace of vehicle sales in November but down 1.4% from the 17.76 million vehicle rate reported in December of 2017...in addition, this week saw the release of the widely followed manufacturing purchasing manager's survey from the Institute for Supply Management (ISM): the December Manufacturing Report On Business reported that the manufacturing PMI (Purchasing Managers Index) fell to 54.1% in December, down from 59.3% in November and the lowest since November 2016, which suggests a much weaker expansion in manufacturing firms nationally..

Employers Add 312,000 Jobs in December, Unemployment Rate Rises to 3.9%

The Employment Situation Summary for December indicated that employers added the most jobs since February, but that the unemployment rate rose due to an increase in those looking for but unable to find work…estimates extrapolated from the seasonally adjusted establishment survey data projected that employers added 312,000 jobs in December, after the previously estimated payroll job increase for November was revised up from 155,000 to 176,000, and the payroll jobs increase for October was revised up from 237,000 to 274,000…that means that this report represents a total of 370,000 more seasonally adjusted payroll jobs than were reported last month, enough to increase the 2018 job increase average to 220,000 jobs per month over the past year....the unadjusted data, however, shows that there were actually 54,000 less payroll jobs extent in December than in November, as the usual seasonal layoffs in areas such as construction and other outdoor services were normalized by the seasonal adjustments to show the job increases indicated..

Seasonally adjusted job changes for December were spread throughout the goods producing and service sectors including government, with the 1,000 jobs lost in the information sector the only decrease noted...employment in health care and social assistance increased by 57,900 jobs during the month, as 13,300 more employees were added by home health care services and 8,300 more were employed by individual and family services...another 55,000 seasonally adjusted jobs were added in the leisure and hospitality sector, with the addition of 48,700 more jobs in bars and restaurants....the broad professional and business services sector, which usually leads in monthly job gains, added 43,000 jobs, with 14,800 of those working for employment services and 17,600 more employed in a variety of professional and technical services....construction work saw a relative job increase of 38,000, as seasonally adjusted employment in heavy and civil engineering construction increased by 16,300 and non-residential specialty trade contractors employed 16,100 more workers than normal for December... in addition, 32,000 more jobs were added by manufacturers, with factories producing fabricated metal products accounting for 6,700 of those...private educational services added 24,100 jobs in December, with no further details as to type of education given...then, after a downward seasonal adjustment, retail sales still added 23,800 more workers, with a 15,000 increase in those working in general merchandise stores offsetting a 9,400 decrease in employment in sporting goods, hobby, book, and music stores... meanwhile, employment in the other major sectors including mining, wholesale trade, transportation and warehousing, utilities, financial activities, and government, all saw smaller job gains over the month..

Boosted by sizable pay increases in the trade, transportation, and utilities sectors, the establishment survey also showed that average hourly pay for all employees rose by 11 cents an hour to $27.48 an hour in December, after it had increased by 6 cents an hour in November; that brought the average pay gain for the year to 84 cents, an increase of 3.2% since last December....meanwhile, the average hourly earnings of production and non-supervisory employees increased by 9 cents to $23.05 an hour...employers also reported that the average workweek for all private payroll employees increased by 0.1 hour to 34.5 hours in December, while hours for production and non-supervisory personnel was unchanged at 33.7 hours...at the same time, the manufacturing workweek increased by 0.1 hour to 40.9 hours, while average factory overtime increased by 0.1 hour to 3.6 hours...

Meanwhile, the December household survey indicated that the seasonally adjusted extrapolation of those who reported being employed rose by an estimated 142,000 to 156,945,000, while the estimated number of those unemployed rose by 276,000 to 6,294,000; which thus meant there was a rounded 419,000 increase in the total labor force...since the working age population had grown by 180,000 over the same period, that meant the number of employment aged individuals who were not in the labor force fell by 237,000 to 95,649,000...with the increase of those in the labor force proportionately larger than the increase in the civilian noninstitutional population, the labor force participation rate rose 0.2%, from 62.9% in November to 63.1% in December....meanwhile, the increase in number employed as a percentage of the increase in the population was nearly stable and left the employment to population ratio, which we could think of as an employment rate, unchanged at 60.6%...at the same time, the relatively large increase in the number considered unemployed was enough to raise the unemployment rate from 3.7% in November to 3.9% in December.. meanwhile, the number of those who reported they were forced to accept just part time work fell by 124,000, from 4,781,000 in November to 4,657,000 in December, which was enough to keep the alternative measure of unemployment, U-6, which includes those "employed part time for economic reasons", unchanged at 7.6% of the labor force in December...

Like most reports from the Bureau of Labor Statistics, the employment situation press release itself is easy to read and understand, so you can get more details on these two reports from there...note that almost every paragraph in that release points to one or more of the tables that are linked to on the bottom of the release, and those tables are also on a separate html page here that you can open it along side the press release to avoid the need to scroll up and down the page..

 

 

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most picked from the aforementioned GGO posts, contact me…)