Last Week's Economic News In Review
February 8, 2017
Construction spending was down, while unemployment ticked up slightly, and layoffs saw a sizable drop.
Construction spending unexpectedly tumbled 0.2 percent to an annual rate of $1.181 trillion in December, according to last week’s report from the Census Bureau. The market had actually expected a 0.2 percent gain over November’s rate of $1.184 trillion.
That said, when compared annually, December’s performance was 4.2 percent higher than December 2015’s rate, and the total value of construction during 2016 expanded to $1.16 trillion, which was 4.5 percent higher than 2015’s total of $1.11 trillion.
While overall construction dipped in December, residential construction enjoyed good results, growing 0.5 percent to an annual rate of $466.9 billion in December. Spending on construction of single-family homes grew 0.5 percent to a pace of $250.3 billion, and spending on multi-family units grew 2.8 percent to a rate of $63.7 billion. Closing out the year, residential construction for 2016 totaled $456.2 billion, which was 5.2 percent over 2015’s total of $433.7 billion.
Employment for January beat expectations, with the economy adding 227,000 jobs for the month, rather than the 170,000 the market had expected, according to last week’s report from the Bureau of Labor Statistics. This put the unemployment rate at 4.8 percent — slightly up from December’s 4.7 percent — with the total number of unemployed Americans at 7.6 million.
The likely reason for the increase in the unemployment rate was that the civilian labor force grew by 584,000 people. This also pushed the labor force participation rate — the percentage of employable Americans either with jobs or actively looking for work — up by 0.2 percentage point to 62.9 percent.
“Today we have a near record number of job openings. About 5.5 million jobs are sitting open in the U.S. today,” Glassdoor Chief Economist Andrew Chamberlain told Forbes. “The biggest sectors hiring right now are retail, healthcare, leisure and hospitality and professional business services. If you want to get a job in healthcare or tech, you'll need training.”
January’s population of individuals unemployed for 27 weeks or longer saw little change at 1.9 million, which constituted 24.4 percent of the unemployed population. During the past 12 months, the number of long-term unemployed individuals has dropped by 244,000.
Americans employed part time for reasons such as their hours being cut or that being the only work they could find — so-called “involuntary” part-time workers — hovered at 5.8 million in January.
Initial Jobless Claims
First-time claims for unemployment benefits filed by the newly unemployed during the week ending Jan. 28 dropped to 246,000, a fall of 14,000 claims from the prior week’s revised level of 260,000, the Employment and Training Administration reported last week.
The four-week moving average — considered a more stable measure of layoffs — came in at 248,000, a gain of 2,250 claims from the preceding week’s average of 245,750.
Initial jobless claims have now been below 300,000 claims, a level that economists consider indicative of a growing job market for 100 weeks.
This week, we can expect a light calendar of economic reports, due to the holidays:
Tuesday — December balance of trade from the Census Bureau and the Bureau of Economic Analysis; consumer credit for December from the Federal Reserve.
Thursday — Initial jobless claims for last week from the Employment and Training Administration; wholesale inventories for December from the Census Bureau.
Friday — Import and export prices for January from the Census Bureau and the Bureau of Economic Analysis; January budget from the Treasury Department.
Written by Summit Mortgage Corporation