Friday Economic Snapshot: Job market still holding out on recession
As we approach the second week of September, temperatures have cooled across the Northeast, Great Lakes and Pacific Northwest, while the South and Great Plains continue to bask in warm temperatures that should keep boaters on the water.
Things are comfortably warm in the economic realm, too, given a slew of largely positive economic indicators. Some of these numbers aren’t just OK— we’re actually seeing several concrete signs of expansion.
The jobless rate has fallen to 7.3 percent, automotive sales are red hot, the Dow Jones Industrial Average is headed back toward 15K, non-manufacturing employment is heating up and, oh yeah, America might be launching a war-not-war in Syria.
This is one of those exciting, high-stakes weeks that get business writers all hot and bothered. Put on another round of sunblock, and let’s hit it.
According to the ADP Research Institute, the U.S. economy added 176,000 private-sector jobs in August, including 71,000 new jobs in small businesses (1-49 employees).
Yesterday’s good news from ADP was quickly counterbalanced by the BLS report showing that only 169,000 jobs were added in August, below the consensus of expectations. This, combined with the number of people who dropped out of the labor force, lowered the official unemployment rate a tenth of a percent, to 7.3 percent, but isn’t enough to significantly impact the labor market — the biggest, lasting holdout of the Great Recession.
The Department of Labor also reported that unemployment claims decreased to 323,000, a positive drop of 9,000 from the previous week. The 4-week moving average fell to 328,000, keeping our employment hot streak alive.
At risk of sounding repetitive, automobile sales in the United States are off the charts, almost. The Seasonally Adjusted Annualized Selling Rate leapt ahead in August, with nearly every major automaker reporting sales surges. Imports were strong, domestics were strong, and impressive full-size pickup truck sales continue to deliver big profits to the automakers, while also signaling greater economic strength for contractors, homebuilders and the like.
At the current pace, we’re on track for 16.1 million cars sold in the United States during 2013, a level not seen since 2007. While we want to avoid the over-inflated, incentive-fueled madness we saw in the wake of 9/11, incentives have been largely flat. This demand appears real and durable.
The Institute for Supply Management released its non-manufacturing index showing a solid rise to 58.6%, up from 56% in July. Any number above 50 indicates economic expansion, and we’ve been growing for 44 consecutive months.
From the report: “This month’s NMI is the highest reading for the index since its inception in January 2008. The Non-Manufacturing Business Activity Index increased to 62.2 percent, which is 1.8 percentage points higher than the 60.4 percent reported in July, reflecting growth for the 49th consecutive month. The New Orders Index increased by 2.8 percentage points to 60.5 percent, and the Employment Index increased 3.8 percentage points to 57 percent, indicating growth in employment for the 13th consecutive month.”
A slight rise in jobs, more manufacturing, record sales, housing expansion, stock market stability, easing effects from the payroll tax increase and seasonal weather — we’re still doing pretty well, all things considered. It’s frustrating to see positive growth with the specter of war hanging over the world. So far the markets have remained calm. Let’s hope the leaders of this world can do the same, and keep this train on its tracks.