Friday Economic Snapshot: Recovery still sluggish
It’s cold out there, and I’m not talking about the persistent polar temperatures over North America. The day’s major news is another disappointing jobs report from the Bureau of Labor Statistics. This follows a shockingly bad December, so it’s either the potent weather slowing commerce or an organic economic slowdown.
While economists were forecasting somewhere around 180,000 new jobs added during January, the data came in at 113,000 new jobs with the unemployment rate slightly dipping to 6.6 percent — due to people giving up on finding work.
This recovery has been historically sluggish, lacking a burst of job growth typically seen following a recession. With the recent months coming in far below expectations, the recovery has slowed to a crawl.
Economists would generally say this is a good time for government-driven stimulus, but that isn’t happening in our political climate. So what’s next? It’s anybody’s guess.
Fortunately there were no surprises with this week’s initial unemployment claims report from the Department of Labor. For the week ending February 1, seasonally adjusted claims were 331,000, a decrease of 20,000 from the previous week’s 351,000. This puts the 4-week moving average at 334,000, which is a mini-gain of 250 from the previous week’s revised average.
Zooming out at the unemployment claims for the last several years, we’ve hit a plateau as claims hover between 330,000 and 350,000. Without any positive changes in job creation figures, expect this to remain consistent.
The Senior Loan Officer Opinion Survey isn’t steamy reading, but it is an interesting economic indicator most of us don’t hear about often. As lending is so important in the marine retail business, everyone should be pleased to hear that domestic banks have been easing their lending standards on loans to both businesses and consumers.
According to the survey, financial institutions are seeing increased demand for loans. An interesting nugget: “Respondents indicated that they had eased standards on credit card loans, auto loans and other consumer loans.”
Most expected December’s forlorn jobs numbers to be revised for the better, but that didn’t happen and January was almost as bad. Indicators suggest this isn’t the weather’s fault, as the construction sector has actually been a bright spot.
If you’re looking to shock your senses, I suggest this eye-opening article about China’s economy — is it too big to fail, or too big to save?