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Economic Roundup: February 6, 2012
February 6, 2012
The Labor Department released numbers Friday morning showing that the unemployment rate has dropped to 8.3 percent, the lowest since February 2009, while new jobs were created in January more quickly than they have been over the past nine months. Analysts consider this to be an indication of a strengthening economy.
Job gains were seen across many industries. However, approximately 19.3 million people are still out of work or underemployed. Initial claims for the week ending Jan. 28 dropped to 367,000, a decrease of 12,000 from the previous week’s revised figure of 379,000, the Employment and Training Administration reported last week. The four-week moving average was 375,750, a decrease of 2,000 from the previous week’s revised average of 377,750.
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Personal income was up, with a modest average hourly wage increase of 4 cents, while spending was down in December, the Bureau of Economic Analysis reported last week. Incomes for the month posted an increase of $61.3 billion, or 0.5 percent. Disposable personal income (DPI) increased $47.1 billion, or 0.4 percent, and personal consumption expenditures (PCE) decreased $2.0 billion, or less than 0.1 percent. Real disposable income increased 0.3 percent in December, and real PCE decreased 0.1 percent.
Private wage and salary disbursements increased $29.1 billion in December. Looking at specific sectors, goods-producing industries’ payrolls increased $10.8 billion; manufacturing payrolls increased $7.4 billion; services-producing industries’ payrolls increased $18.3 billion; and government wage and salary disbursements increased $0.4 billion in December. Additionally, supplements to wages and salaries increased $3.6 billion in December.
The hope is that continued job gains will offset the slowdown in spending. “The pace of job growth in recent months, while still not satisfactory compared to most past cycles, at least seems sufficient to generate enough income growth to keep consumer spending moving ahead at a modest pace,” Joshua Shapiro, chief U.S. economist at MFR, told the Associated Press.
Turning to real estate, construction spending for December hit an annual rate of $816.4 billion, 1.5 percent higher than November’s revised estimate of $804.0 billion, the Census Bureau reported last week. The December figure is 4.3 percent above the December 2010 estimate of $782.9 billion. Looking at the full year, the value of construction in 2011 was $787.4 billion, 2 percent below the $803.6 billion spent in 2010.
Spending on private construction hit an adjusted annual rate of $529.7 billion, 2.1 percent above November’s revised estimate of $518.8 billion, with residential construction reaching an annual rate of $241.2 billion in December, which was 0.8 percent above November’s revised estimate of $239.4 billion.
The value of private construction in 2011 was $504.1 billion, 0.7 percent over the $500.6 billion spent in 2010. Residential construction in 2011 was $236.2 billion, 1.1 percent below the 2010 figure of $238.8 billion.
Auto manufacturers continued to see good news with January’s sales of cars and trucks in the United States hitting an annualized sales pace of 14.18 million vehicles, in comparison to December’s pace of 13.56 million units, according to last week’s update from auto industry watchers Autodata Corp. January’s sales pace was the highest rate since May 2008, with a total of 913,287 cars and trucks sold in the month.
Looking at the U.S. Big Three, Chrysler saw a 44 percent jump to 99,238 cars and trucks sold in January; Ford sales gained 7.3 percent, to 136,294 vehicles; and GM sales fell to 167,962 units. Meanwhile, after suffering a lasting impact on their manufacturing and distribution from Japan’s tsunami disaster, the Japanese manufacturers enjoyed U.S. sales gains in January, with Toyota posting a 7.5 percent increase, Honda seeing an 8.8 percent increase, and Hyundai Motor Co. reporting a 15 percent gain.
This week sees a moderate calendar of financial news, starting tomorrow with consumer credit figures for December from the Federal Reserve. On Thursday, the Employment and Training Administration releases initial jobless claims for last week, and the Census Bureau releases wholesale inventories for December. The Census Bureau continues on Friday with trade balance data for December, and the Treasury Department closes out the week with its January budget.
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