Shaking Off Hurricane Sandy
Employers added 146,000 jobs in November, which squarely beat expectations that looked for hiring to be hit by Hurricane Sandy. The jobless rate fell to 7.7 percent as fewer people looked for work.
Activity in the manufacturing sector looks to have weakened in November, with the ISM manufacturing index falling to 49.5. This marks the fourth sub-50 reading in six months. Activity in the rest of the economy looked stronger, with the ISM non manufacturing index rising to 54.7
Employment: Strength Through the Storm
The November employment report is always a bit of a wildcard due to the Thanksgiving holiday and retail hiring around it. Today's report had an even bigger potential for a surprise reading because of Hurricane Sandy hitting the Northeast only a few weeks before the survey period. However, the Labor Department reported that the storm had no substantial impact on the November report. Firms added 146,000 jobs in November, which beat expectations of a gain of 85,000. That said, the previous months' gain was revised down by 49,000. The average thus far through the year is 151,000 jobs - nearly the same as the average monthly gain of 153,000 jobs in 2011.
Gains were concentrated in private services, which added 169,000 jobs. Retailers geared up for the holiday shopping season by hiring 53,000 workers. Over the past two months, retailers have added 104,000 new jobs - the largest two-month gain since the mid-1990s. Government employment moved sideways, while construction and manufacturing firms shed jobs. Average hours worked held steady, while average hourly earnings rose 0.2 percent.
The unemployment rate fell t0 7.7 percent in November, helped by a decline in the labor force. Sandy looks to have played at least a partial role here as the number of people reporting they were unable to work due to bad weather was roughly five times higher than a typical November.
Shaky Factory Sector, but Signs of Life Elsewhere
The ISM manufacturing index unexpectedly fell back into contraction territory in November and is another sign that the factory sector remains on shaky ground. Subindexes indicated that production picked up in November, but new orders were virtually unchanged. Businesses appeared more cautious about the near-term outlook, as inventories declined and respondents noted concern over the fiscal cliff. That said, the factory orders report for October suggests that demand for manufactured goods may be on the mend. Non defense capital goods orders ex-aircraft were revised higher to 2.9 percent from the initially reported gain of 1.7 percent last week.
One area of manufacturing that is looking a bit stronger is the auto sector. Light vehicle sales climbed to a 15.5 million unit annual rate in November. This was the fastest pace of sales since the past recession began, with sales getting a boost from replacement demand following Hurricane Sandy. Sandy has been estimated to have lifted sales by about 400,000 units in November, but auto sales were already on track for their best year since 2008, helped by improving consumer confidence and record-low interest rates.
Outside the manufacturing sector, the economy is holding its ground. The ISM non manufacturing index rose in November and remains firmly in expansion territory at 54.7. The survey showed that hiring activity slowed over the month, but the forward looking new orders index rose to its highest print since March.
IMOH, Patrick E.
+234 803 616 2613
+234 802 846 3657
No comments:
Post a Comment