The unemployment rate held steady while layoffs swung back down, and consumer credit grew. Meanwhile, construction spending shrank, but fortunately not where homes were concerned.
The U.S. economy added 292,000 jobs in December, which kept the unemployment rate at 5 percent, with the total number of unemployed Americans at 7.9 million people, the Bureau of Labor Statistics reported last week. Key sectors for job growth included professional and business services, construction, healthcare, and food services.
The number of long-term unemployed people — those without jobs for 27 weeks or longer — hovered at 2.1 million, accounting for 26.3 percent of the unemployed population. Similarly, the civilian labor force participation rate — the portion of the population of employable individuals who were either working or looking for work — hovered at 62.6 percent.
The number of Americans involuntarily employed on a part-time basis due to economic reasons, such as their hours being cut or part-time being the only work they could find, totaled 6 million in December, which was 764,000 less compared to a year ago.
“The job market is not fully healed, but we’re getting much closer to where we’d like to be,” Nationwide Insurance Chief Economist David Berson told the Washington Post.
Initial Jobless Claims
Turning to more recent employment activity, after seeing a stiff gain in the previous week, initial claims for unemployment benefits filed by the newly unemployed saw a similarly large decline. Initial jobless claims filed in the week ending January 2 dropped to 277,000, a decline of 10,000 claims from the preceding week’s unrevised level of 287,000, the Employment and Training Administration reported last week.
The four-week moving average — considered to be a more reliable gauge of jobless claims — ticked down to 275,750, a fall of 1,250 claims from the preceding week’s average of 277,000.
Consumer borrowing for November grew 4.8 percent to a total of $3.52 trillion, according to last week’s report from the Federal Reserve. Revolving debt, such as credit cards, grew 7.4 percent to hit $929.1 billion, while non-revolving debt, such as student or car loans, grew 3.8 percent to $2.59 trillion.
This was the slowest pace of growth in 10 months, and likely reflected a drop in auto financing, as well as school loans. However, the gains in revolving debt are encouraging because they indicate increased consumer confidence and spending activity.
Overall construction spending for November notched down to an annual rate of $1.122 trillion, which was 0.4 percent below October’s revised rate of $1.127 trillion the Census Department reported last week. Compared annually, November pace was 10.5 percent higher than November 2014’s rate of $1.016 trillion.
There was good news where the housing market was concerned. Residential construction spending for November actually ticked up to an annual rate of $427.9 billion, which was 0.3 percent higher than October’s revised rate of $426.8 billion. For a market needing increased inventory, any investment in new homes is good news.
This week we can expect:
Wednesday — The December budget from the Treasury Department.
Thursday — Initial jobless claims for last week from the Employment and Training Administration.
Friday — Retail sales for December from the Census Bureau; the Producer Price Index for December from the Bureau of Labor Statistics; November business inventories from the Census Bureau; and December industrial production and capacity utilization from the Federal Reserve.