Economic News in Review Greenville SC
Here is last week’s economic news in review Greenville SC.
The January jobs report offered a mixed bag of employment news, while consumer credit for December posted its biggest gain in 10 months, according to last week’s economic headlines.
January Employment
The most positive way to spin January’s job performance was that it was a “glass half-full, or glass half-empty” scenario. While the month’s employment rate marked a five-year low, the number of new jobs was lackluster.
The economy added just 113,000 non-farm jobs in January, putting the unemployment rate at 6.6 percent, which was slightly down from December’s 6.7 percent rate, the Bureau of Labor Statistics reported last week. All in all, 10.2 million Americans were unemployed, according to the report.
Key sectors that added jobs were construction (up 48,000 jobs), manufacturing (up 21,000 jobs), wholesale trade (up 14,000 jobs), and mining (up 7,000 jobs). These labor-oriented job sectors buoyed employment for men, which is notable given that some analysts had referred to the recession as the “man-cession,” because male employment has been so hard-hit. Besides being good news for men, it could also be indicative of continued economic strengthening, according to Gary Burtless, an economist at the Brookings Institution.
“You rarely see expansions in these industries without the economy being in fairly healthy shape,” Burtless told Businessweek.
The number of Americans involuntarily employed part-time for economic reasons, such as their hours being cut or not being able to full-time work fell by 514,000 to 7.3 million. The number of workers unemployed for 27 weeks or longer dropped by 232,000 to 3.6 million. Overall, the population of those long-term unemployed workers has fallen by 1.1 million over the past year. Meanwhile, the labor force participation rate, which tracks how many people of working age either have jobs or are trying to get one, ticked up to 63 percent.
Perhaps Chief U.S. Economist for IHS Global Insight Doug Handler summarized the report best by noting that job gains had “clearly downshifted over the past two months. But we still believe the economic fundamentals remain strong and … forecast an acceleration of growth later in the year."
Initial Jobless Claims
Turning to more recent employment figures, first-time claims for unemployment benefits filed by the newly unemployed during the week ending Feb. 1 dropped by 20,000 claims to 331,000 from the previous week’s total of 351,000, according to last week’s report from the Employment and Training Administration.
Turning to a less volatile figure, the four-week moving average slightly edged up to 334,000 claims, an up-tick of 250 from the prior week's revised average of 333,750.
The total number of out-of-work Americans covered by unemployment insurance during the week ending Jan. 25 hit 2,964,000, an increase of 15,000 from the previous week's revised level of 2,949,000.
Consumer Credit
In other news, consumer credit for December not only outpaced analyst expectations, but hit a 10-month high. The Federal Reserve reported last week that overall consumer credit grew by 7.3 percent in December to hit $3.1 trillion dollars. December’s borrowing marked an $18.8 billion gain over November, and was well above the $12 billion increase that analysts were expecting for the month.
Looking at the types of borrowing, revolving debt, such as credit cards, grew by 7 percent to hit $861.9 billion, and non-revolving debt, such as car and student loans, grew by 7.4 percent to reach $2.24 trillion.
While non-revolving debt has been the core driver in consumer borrowing, the increased revolving debt could be indicative of increased consumer spending, which would be encouraging, given that consumer spending comprises 70 percent of U.S. economic activity. Ultimately, jobs, credit and spending are all connected, according to Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
“To the extent that the labor market holds up and wealth holds up, then I think you’d expect to see credit continue to rise along with consumer spending,” O’Sullivan told the Bloomberg news service. “Consumer credit tends to be positively correlated with growth. It’s generally a good sign when credit is rising.”
This week we can expect:
- Tuesday — December wholesale inventories from the Census Bureau.
- Wednesday — January Treasury Department budget.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; January retail sales data and December business inventories from the Census Bureau.
- Friday — January import and export prices from the Census Bureau and Bureau of Economic Analysis; January industrial production and capacity utilization from the Federal Reserve.
Economic News in Review Greenville SC
Have a Big day,
Randy
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