Here is an update on the National Economic Numbers from my good friend Lauren Zetye at Movement Mortgage. The numbers here in Michigan show outstanding consumer confidence levels and an unemployment rate that continues to decline.
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Last Week’s Economic News in Review
New job creation underperformed while the unemployment rate held, and lay-offs increased, but remained in safe territory. Meanwhile, construction spending enjoyed noteworthy gains.
Unemployment
The unemployment rate for September held at 5.1 percent, but the economy only added 142,000 jobs for the month, the Bureau of Labor Statistics reported last week. This was well below analysts' expectations of 200,000 new jobs, and many economists chalked the lackluster performance up to a poor global economy.
"Today's report does show the impact of slowing growth in Europe and China in U.S. job markets,"
Glassdoor.com Chief Economist Andrew Chamberlain told the Washington Post. "The global economy connects every place with every place else in some way. It's just a question of how big are the effects?"
A key figure from the Bureau's jobs report was the labor force participation rate, the rate at which employable individuals are either working or actively seeking work. The participation rate dipped to 62.4 percent from the previous three months' 62.6 percent. This was the lowest rate since 1977 and debate remains over its causes — such as Baby Boomers retiring or college degrees taking longer to earn.
The number of Americans involuntarily employed on part-time basis due to economic reasons — such as their hours being cut or inability to find full-time work — actually dropped by 447,000 people to 6 million in September.
Initial Jobless Claims
First-time claims for unemployment benefits filed by the newly laid off during the week ending Sept. 26 surged to 277,000 claims, an increase of 10,000 claims from the preceding week's level of 267,000, the Employment and Training Administration reported last week. This was much larger than the 270,000-claim level that analysts had expected, but safely within the sub-300,000-claim mark that economists designate as a growing job market.
"This latest figure was a little worse than expectations, but the trend in the data still is sending a favorable signal regarding conditions in the labor market," J.P. Morgan economist Daniel Silver told the Wall Street Journal.
Looking at the four-week moving average — considered a more stable measure of near-time jobless activity — claims actually skirted down to a total of 270,750, a dip of 1,000 claims from the preceding week's average of 271,750.
Construction Spending
Construction spending ticked up 0.7 percent to an annual rate of $1.086 trillion in August, according to last week's report from the Census Bureau. Compared to last year, this was 13.7 percent higher than August 2014's rate of $955.0 billion.
Spending on private construction also grew 0.7 percent to an annual rate of $788 billion in August, with spending on residential construction enjoying a 1.3 percent gain to an annual rate of $383.3 billion for the month.
August's gains marked the highest monthly growth for construction spending in seven years. Moreover, given that most real estate watchers agree that increased inventory will help keep prices in check and stoke increased volume, the fact that housing led August's gains was welcome news.
