Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
S&P 500 – Is a 5% Correction Enough? - 6th Dec 21
Global Stock Markets It’s Do-Or-Die Time - 6th Dec 21
Hawks Triumph, Doves Lose, Gold Bulls Cry! - 6th Dec 21
How Stock Investors Can Cash in on President Biden’s new Climate Plan - 6th Dec 21
The Lithium Tech That Could Send The EV Boom Into Overdrive - 6th Dec 21
How Stagflation Effects Stocks - 5th Dec 21
Bitcoin FLASH CRASH! Cryptos Blood Bath as Exchanges Run Stops, An Early Christmas Present for Some? - 5th Dec 21
TESCO Pre Omicron Panic Christmas Decorations Festive Shop 2021 - 5th Dec 21
Dow Stock Market Trend Forecast Into Mid 2022 - 4th Dec 21
INVESTING LESSON - Give your Portfolio Some Breathing Space - 4th Dec 21
Don’t Get Yourself Into a Bull Trap With Gold - 4th Dec 21
4 Tips To Help You Take Better Care Of Your Personal Finances- 4th Dec 21
What Is A Golden Cross Pattern In Trading? - 4th Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - Part 2 - 3rd Dec 21
Stock Market Major Turning Point Taking Place - 3rd Dec 21
The Masters of the Universe and Gold - 3rd Dec 21
This simple Stock Market mindset shift could help you make millions - 3rd Dec 21
Will the Glasgow Summit (COP26) Affect Energy Prices? - 3rd Dec 21
Peloton 35% CRASH a Lesson of What Happens When One Over Pays for a Loss Making Growth Stock - 1st Dec 21
Stock Market Sentiment Speaks: I Fear For Retirees For The Next 20 Years - 1st Dec 21 t
Will the Anointed Finanical Experts Get It Wrong Again? - 1st Dec 21
Main Differences Between the UK and Canadian Gaming Markets - 1st Dec 21
Bitcoin Price TRIGGER for Accumulating Into Alt Coins for 2022 Price Explosion - 30th Nov 21
Omicron Covid Wave 4 Impact on Financial Markets - 30th Nov 21
Can You Hear It? That’s the Crowd Booing Gold’s Downturn - 30th Nov 21
Economic and Market Impacts of Omicron Strain Covid 4th Wave - 30th Nov 21
Stock Market Historical Trends Suggest A Strengthening Bullish Trend In December - 30th Nov 21
Crypto Market Analysis: What Trading Will Look Like in 2022 for Novice and Veteran Traders? - 30th Nov 21
Best Stocks for Investing to Profit form the Metaverse and Get Rich - 29th Nov 21
Should You Invest In Real Estate In 2021? - 29th Nov 21
Silver Long-term Trend Analysis - 28th Nov 21
Silver Mining Stocks Fundamentals - 28th Nov 21
Crude Oil Didn’t Like Thanksgiving Turkey This Year - 28th Nov 21
Sheffield First Snow Winter 2021 - Snowballs and Snowmen Fun - 28th Nov 21
Stock Market Investing LESSON - Buying Value - 27th Nov 21
Corsair MP600 NVME M.2 SSD 66% Performance Loss After 6 Months of Use - Benchmark Tests - 27th Nov 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Labor Market is Improving, but Imminent Europe Recession Could Upset the Apple Cart

Economics / Employment Dec 03, 2011 - 03:33 AM GMT

By: Asha_Bangalore

Diamond Rated - Best Financial Markets Analysis ArticleCivilian Unemployment Rate: 8.6% in November, down from 9.1% in October. Cycle high jobless rate for the recent recession is 10.1% in October 2009.

Payroll Employment: +120,000 jobs in November vs. +100,000 in October. Private sector jobs increased 140,000 after a gain of 117,000 in October. Addition of 82,000 jobs after revisions to payroll estimates of September and October

Private Sector Hourly Earnings: $23.18 in November vs. $23.19 in October; 1.8% y-o-y increase in November vs. 1.9% gain in October.

Household survey – The unemployment rate fell to 8.6% in November from 9.0% in October. Not only is the headline impressive but digging deep in to the details confirms that there is a gradual improvement in the labor market.

The increase in the employment-population ration to 58.5% in November from 58.1% in July is another piece of evidence supporting the view that the labor market is probably turning the corner.

In August and September, the gain in part-time employment exceeded the increase in total employment, a reversal occurred in October and November (see Chart 4); this one more positive feature of the household survey among the other listed so far.

Establishment Survey – Payroll employment increased 120,000 in November after upward revisions to estimates of the prior two months adding 82,000 jobs. Revisions of payroll estimates since June have resulted in an addition of jobs, which is a noteworthy aspect. In the last three months, the average gain in payrolls is 143,000 vs. an increase of only 84,000 jobs in the three months ended August (see Chart 5). This pace of job creation is inadequate to bring the unemployment rate down in the near term, which leads us to conclude that the recent improvement in hiring is encouraging but insufficient for the Fed to stop fretting about the labor market.

Highlights of changes in payrolls during November 2011:

Construction: -12,000 vs. -12,000 in October
Manufacturing: +6,000 vs. +2,000 in October
Private sector service employment: +140,000 vs. +117,000 in October
Retail employment: +50,000 vs. +13,000 in October
Professional and business services: +39,000 vs. +33,000 in October
Temporary help: +22,300 vs. +15,800 in October
Financial activities: +8,000 vs. +8,000 in October
Health care: +17,200 vs. +25,500 in October
Government: -20,000 vs. -17,000 in October

The workweek was steady at 34.3 hours in November, while both hourly (-0.1%) and weekly (-0.2%) earnings slipped. The increase in payroll employment combined with a decline in earnings is most likely to result only in a small increase in personal income during November. The weak trend of personal income is a headwind for consumer spending going forward. The 0.5% drop in the manufacturing man-hours index bodes poorly for industrial production in November.

Conclusion – Latest economic reports have bought the Fed time until the early months of 2012 to consider another round of quantitative easing. Bank credit has risen in the third quarter and is on track to post an increase in the fourth quarter, which augurs positively for economic activity. Auto sales rose to an annual rate of 13.63 million units in November, putting the October-November (13.4 million units) average strongly ahead of the 12.5 million sales pace registered in the third quarter. The November ISM manufacturing survey showed increases in indexes tracking new orders and production. Sales of existing and new homes advanced in October, the Pending Home Sales Index for October posted a sharp increase. The tone of these economic reports and moderate gains in hiring visible in the November employment report have marginally modified the profile of the U.S. economy but the challenges in the labor market and still distressed conditions in the housing sector overwhelm these improvements such that the case for additional monetary policy support remains strongly legitimate. In addition, we have not felt directly or indirectly the effects of the European recession, which is likely to wash up the shores of the U.S. economy in early-2012 and bolster the case for renewed monetary policy support.

Asha Bangalore — Senior Vice President and Economist

Asha Bangalore is Vice President and Economist at The Northern Trust Company, Chicago. Prior to joining the bank in 1994, she was Consultant to savings and loan institutions and commercial banks at Financial & Economic Strategies Corporation, Chicago.

Copyright © 2011 Asha Bangalore

The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in