Economic News in Review Greenville SC
Here is last week’s Economic News in Review Greenville SC.
Last week's voluminous economic headlines featured a mixed bag of gains in personal incomes and consumer credit, while consumer spending dipped, the unemployment rate saw a slight increase, and layoffs increased as well.
Let's start with the unemployment news: The economy added 257,000 jobs in January, while unemployment rate for January ticked up by a tenth of a percent to 5.7 percent for the month, according to last week's Bureau of Labor Statistics report. Also, hourly earnings went up 12 cents to an average of $24.75 for the month.
So why did the unemployment rate go up while the economy actually added jobs? The answer is that more employable people were joining the job market. The Bureau's civilian non-institutional population, which is a fancy way of saying, "all employable Americans", grew by 696,000 people to hit 249,723,000.
Moreover, the labor force participation rate, which describes the number of employable Americans either with a job or looking for one, increased by 0.2 percent to 62.9 percent, while the number of discouraged workers (out-of-work Americans who have given up on hunting for a job) dropped to 682,000, which was down 155,000 people from the same period a year ago.
The net-net is that employment is on good enough an upswing and more workers want in on an economy that has added 1 million jobs since November.
"These are pretty amazing numbers," IHS Inc. Chief Economist Nariman Behravesh told Bloomberg. "The January number is strong, but then you've got sizzling November and December numbers too. And then you've got the wage gains."
Initial Jobless Claims
First-time claims for unemployment benefits filed by the newly unemployed saw a moderate gain after a massive plummet from two weeks ago. Initial jobless claims for week ending Jan. 31 grew to 278,000, a gain of 11,000 claims from the preceding week's total of 267,000, the Employment and Training Administration reported last week.
The four-week moving average, considered a more reliable measure of lay-off activity, dipped to 292,750, a decline of 6,500 claim from the prior week's revised average of 299,250.
Incomes and Spending
Personal incomes grew by 0.3 percent to hit $41.3 billion, as did disposable personal income (DPI; income after taxes), which increased 0.3 percent $35.8 billion, according to last week's report from the Bureau of Economic Analysis. Meanwhile, personal consumption expenditures (PCE; consumer spending) dropped $40.0 billion, or 0.3 percent.
Meanwhile, personal saving — DPI less PCE, personal interest payments, and personal current transfer payments — grew to $643.2 billion in December from $568.2 billion in November. Similarly, the personal saving rate — personal saving as a percentage of DPI — grew 4.9 percent in December, compared with 4.3 percent in November.
"Consumers appear to be saving most of their recent windfall from lower gasoline prices," PNC Financial Services Group senior economist told Morningstar. "However, consumer spending growth will be solid in 2015 thanks to more jobs, higher wages, and lower energy costs. Households will be able to both spend more and save more this year."
Last but not least, consumer credit grew by 5.4 percent in December to hit a total of $3.3 trillion, a $14.7 billion gain, the Federal Reserve reported last week.
Encouragingly, the big gain was in revolving debt, such as credit cards, which grew 7.9 percent to $887.9 billion. This showed an increased willingness on the part of Americans to use credit cards for their spending. Meanwhile, non-revolving debt, such as student and car loans, showed a healthy 4.5 percent increase to reach $2.4 trillion for the month.
Economic News in Review Greenville SC
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