Happy Labor Day from Economic Advisor! The monthly jobs report turned in stable, but not stunning performance, while layoffs ticked up slightly, and residential construction spending was slightly up.
The economy added 151,000 jobs in August, keeping the unemployment rate hovering at 4.9 percent, with the total unemployed population essentially unchanged at 7.8 million people, Bureau of Labor Statistics reported last week. This was slightly off from market expectations of 180,000 added jobs and an unemployment rate of 4.8 percent.
“At this point in the business cycle, adding 100,000 jobs a month is not bad at all,” Carl Tannenbaum, chief economist at Northern Trust, told the Wall Street Journal. “It confirms that the economy is performing well, but does not provide the threat of overheating that might have caused an interest-rate increase sooner rather than later,” he added, in another interview with the New York Times.
The number of people involuntarily employed on a part-time basis in August, for reasons such as their hours being cut or that being the only work they could find, saw little change at 6.1 million workers for the month. The number of people without work for 27 weeks or longer — the long-term unemployed — was also essentially unchanged at 2 million in August.
Initial Jobless Claims
Turning to more recent economic news, layoffs ticked up slightly, according to last week’s report from the Employment and Training Administration. First-time claims for unemployment benefits filed by the newly unemployed during the week ending August 27, hit 263,000, a gain of 2,000 claims from the preceding week’s total of 261,000 claims.
The four-week moving average — considered a more reliable gauge of lay-offs — actually dipped to 263,000 claims, a drop of 1,000 claims from the preceding week’s average of 264,000 claims.
The total was still well below the 300,000-claim mark that economists consider indicative of a growing job market. Moreover, the report marked the 78th straight week of initial jobless claims totaling less than 300,000 claims, the longest such streak since 1970.
Shifting to housing market news, overall construction spending during July was essentially flat, hovering at an annual rate of $1.153 trillion the Census Bureau reported last week. The market had expected that construction spending would grow by at least 0.6 percent. Compared annually, July’s performance was 1.5 percent higher than the July 2015 estimate of $1.135 trillion.
While overall spending was flat, spending on private construction grew 1 percent to hit an annual rate of $875 billion, and residential construction spending grew 0.3 percent to hit an annual rate of $445.5 billion.
This week we can expect:
- Thursday — Initial jobless claims for last week from the Employment and Training Administration; consumer credit for July from the Federal Reserve.
- Friday — Wholesale inventories for July from the Census Bureau.