Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
Last week saw encouraging employment news, with the unemployment rate falling and near-term layoffs dropping as well. Additionally, wholesale inventories outpaced market expectations to a solid degree.
The unemployment rate for December beat expectations by dropping to 5.6 percent, with the population of unemployed Americans falling by 383,000 to 8.7 million people, the Bureau of Labor Statistics reported last week. December’s performance marked the lowest unemployment rate in six and a half years.
The economy added 252,000 jobs in December, with key job sectors helping drive the growth including professional and business services, industry, administrative and waste services. All told, the U.S. economy added 2.95 jobs during 2014, marking the best year for job creation since 1999.
While December’s unemployment rate was encouraging, a key element many analysts say must improve is wages. In that regard, hourly earnings actually declined by 5 cents in December to $24.57. This was a 180-degree turn from November’s gain of 6 cents, but was likely a temporary setback, according to PNC Chief Economist Stuart Hoffman.
“Faster wage growth remains the missing piece of the puzzle, but with the unemployment rate declining further and 21 states raising their minimum wage starting this month, wages should accelerate as 2015 progresses,” Hoffman wrote in a public statement.
Initial Jobless Claims
The good news could be felt on the near-term employment front, as well. Judging by figures released last week by the Employment and Training Administration, it appears that employers decided to hang on to more of their holiday hires than usual.
First-time claims for unemployment benefits filed by the newly unemployed during the week ending Jan. 3 dropped to 294,000, a decline of 4,000 claims from the preceding week’s unrevised level of 298,000, the Administration reported.
That level of claims was “low enough to be consistent with very big payroll gains,” Pantheon Macroeconomics Inc. chief economist Ian Shepherdson noted in a public statement. “If the economy strengthens again in the first half, it could easily dip to new lows.”
The Administration’s four-week moving average — which is considered a more accurate measure of layoffs — notched down to 290,500, a dip of 250 from the prior week’s unrevised average of 290,750.
Wholesale inventories — a key indicator because it predicts the wholesale market’s expectations of economic growth or contraction — grew 0.8 percent in November to hit $547.2 billion, solidly outpacing market expectations of 0.3 percent growth, according to figures released last week by the Census Bureau.
Key sectors driving inventory gains were computer, peripheral equipment and software, which grew 2.6 percent; hardware, plumbing and heating equipment, which gained 1.7 percent; farm product raw materials, which shot up 5.7 percent; and drugs and pharmacist sundries, which moved up 2.6 percent.
Merchant wholesaler sales dipped 0.3 percent to $452.2 billion in November, but were up 2.4 percent compared to November 2013. This put November’s inventories-to-sales ratio for wholesalers at 1.21. The November 2013 ratio was 1.16.
This week we can expect:
- Tuesday — December budget from the Treasury Department.
- Wednesday — December retail sales and November Business Inventories from the Census Bureau; December import and export prices from the Census Bureau and Bureau of Economic Analysis.
- Thursday — Initial jobless claims for last week; December producer price index from the Bureau of Labor Statistics.
- Friday — December consumer price index from the Bureau of Labor Statistics; December industrial production and capacity utilization form the Federal Reserve.
Economic News in Review Greenville SC
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