Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
Unemployment fell to its lowest point since 2008, new jobless claims dropped and personal spending and incomes were up, but construction spending dipped.
Unemployment
Unemployment fell below 6 percent for the first time since 2008, with the economy adding 248,000 jobs in September, which pushed the unemployment rate down to 5.9 percent, the Bureau of Labor Statistics reported last week. Overall, the number of unemployed Americans dropped by 329,000 to 9.3 million.
The big drivers for September’s job gains were in professional and business services, retail trade, and healthcare.
“This is a very muscular report,” RBC Global Asset Management chief economist Eric Lascelles told the Washington Post. “It’s showing powerful job creation, no matter how one cares to slice it.”
That said, there were still Americans trying to get into the workforce. The population of long-term unemployed people — those without jobs for 27 weeks or longer — continued to hover at 3 million, comprising 31.9 percent of total unemployment. The labor force participation rate — those employed or looking for work compared to the total population of employable individuals — also was essentially unchanged at 62.7 percent. Also, the number of people involuntarily employed part-time because either their hours had been cut or that was the only work they could find was holding at 7.1 million in September.
“The remaining challenge now is to ensure that the rising tide that we clearly see lifts all boats,” Labor Secretary Thomas Perez told the Post.
Initial Jobless Claims
In related news, initial jobless claims saw positive performance, as first-time claims for unemployment benefits filed by the newly unemployed during the week ending Sept. took an unexpected tumble to 287,000, a drop of 8,000 claims from the prior week’s revised level of 295,000, the Employment and Training Administration reported last week.
The four-week moving average, which is a more stable gauge of near-term unemployment, dipped to 294,750, a decline of 4,250 from the preceding week’s revised average of 299,000.
Personal Incomes
Personal incomes and spending both saw increases in August, according to data released last week by the Bureau of Economic Analysis. Specifically, incomes grew by $47.3 billion, or 0.3 percent, and disposable personal income (DPI; income after taxes) increased $35.2 billion, or 0.3 percent, in August, meeting market expectations of 0.3 percent growth.
Similarly, personal consumption expenditures (PCE) increased $57.5 billion, or 0.5 percent, slightly outpacing market expectations of 0.4 percent. Personal outlays — which combine PCE, interest payments, and transfer payments — saw a strong increase of $60.4 billion in August, compared with July’s increase of $3.5 billion.
Personal savings, which is DPI minus personal outlays, dipped to $705.3 billion in August from July’s $730.5 billion. Likewise, the personal saving rate, which describes the personal saving as a percentage of DPI, dipped to 5.4 percent in August from 5.6 percent in July.
Overall, the incomes and spending gains pointed to sustained economic improvement, according to TD Securities economist Millan Mulraine.
“(The data) is a further signal that the positive momentum in domestic activity is being sustained,” Mulraine told the Christian Science Monitor.
Construction Spending
One down note was that construction spending saw its second decline in the past three months, with spending in August dropping 0.8 percent from July to an annual rate of $961 billion, the Census Bureau reported last week. That said, August’s spending was still 5 percent higher than August 2013’s rate of $915.3 billion.
Residential construction fared better, falling only 0.1 percent in August to an annual rate of $351.7 billion.
The drop was largely unexpected by economists, and the sudden volatility followed six months of gains, which makes August’s drop tough to pin down.
“This is a volatile series, but the 12-month trend is still headed in the right direction … higher,” BMO Capital Markets economist Jennifer Lee told Business Insider.
This week, we can expect:
- Tuesday — Consumer credit scores for August from the Federal Reserve.
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; August wholesale inventories from the Census Bureau.
- Friday — September export and import prices from the Census Bureau and Bureau of Economic Analysis.
Economic News in Review Greenville SC
Have a Big day,
Randy
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