Economic Highlights from the Cleveland Federal Reserve


    • The Employment Situation

  • Nonfarm payrolls rose by 155,000 in December, in line with its 2012 average gain of 153,000. Revisions to the previous two months’ estimates added 14,000 in sum, but that includes a shift in the composition away from government payrolls toward the private sector. Government payrolls were revised down by 24,000 over the previous two months, and slipped 13,000 further in December. On the other hand, private nonfarm payrolls were revised up by 38,000 over October and November (interestingly, a little more than half of that upward revision came from the construction sector). Private nonfarm payrolls rose 168,000 in December, slightly above its average monthly gain during 2012 of 159,000. In December, most broad industry groups outpaced their respective near-term trends, with payroll gains in healthcare (up 45,000), leisure and hospitality (up 31,000), and construction (up 30,000) leading the way. The gain in construction employment comes on the heels of some relatively volatile swings (down 10,000 in November and up 25,000 in October), which is usually a sign of measurement issues. Nonetheless, over the past three months, construction payrolls are averaging a 15,000 increase, compared to a measly 2,000 average for 2012 as a whole.

    There were a couple of other interesting employment swings in December. First, manufacturing payrolls rose 25,000 in December, its strongest monthly performance since March, and have steadily increased since hitting a low point (shedding 16,000) in September. December’s factory employment increase was broad-based. Durables employment rose a little over 11,000 (roughly 5,000 of that was autos-related), and nondurables rose roughly 14,000. The other interesting swing came from retail trade payrolls, which fell 11,300 in December, after an increase of roughly 110,000 over the previous two months. Much of this weakness stemmed from a 19,000 decrease in employment at clothing and accessories stores in December (after an increase of 30,000 in November). Given the time of year, this pattern is suggestive of some seasonal adjustment issues. Turning to the household side of the report, the unemployment rate remained at 7.8 percent in December (November’s original unemployment rate estimate of 7.7 percent was revised up to 7.8 percent as the Bureau of Labor Statistics updated their 2012 seasonal factors for the household survey). The labor force participation rate was steady at 63.6 percent, and the employment-to-population ratio was virtually unchanged at 58.6 percent (about where it began the year).

    • New Home Sales

  • The pace of new single-family home sales fell 7.3 percent from November to December, but have risen 8.8 percent since December 2011 to a seasonally-adjusted annualized rate of 369,000 units. Regionally, the Northeast experienced the sharpest monthly decline of 29.4 percent, but also the largest annual increase of 20.0 percent. The monthly supply of new single-family homes rose to a 4.9 month supply at the current sales pace. Meanwhile the median sales price rose 1.3 percent for the month and 13.8 percent over the past 12-months. Overall, there were an estimated 367,000 new single-family homes sold throughout 2012, which is a 19.9 percent increase above the 2011 figure of 306,000 units.
  • 01.22.2013
      • The Employment Situation

    • Nonfarm payrolls rose by 155,000 in December, in line with its 2012 average gain of 153,000. Revisions to the previous two months’ estimates added 14,000 in sum, but that includes a shift in the composition away from government payrolls toward the private sector. Government payrolls were revised down by 24,000 over the previous two months, and slipped 13,000 further in December. On the other hand, private nonfarm payrolls were revised up by 38,000 over October and November (interestingly, a little more than half of that upward revision came from the construction sector). Private nonfarm payrolls rose 168,000 in December, slightly above its average monthly gain during 2012 of 159,000. In December, most broad industry groups outpaced their respective near-term trends, with payroll gains in healthcare (up 45,000), leisure and hospitality (up 31,000), and construction (up 30,000) leading the way. The gain in construction employment comes on the heels of some relatively volatile swings (down 10,000 in November and up 25,000 in October), which is usually a sign of measurement issues. Nonetheless, over the past three months, construction payrolls are averaging a 15,000 increase, compared to a measly 2,000 average for 2012 as a whole.

      There were a couple of other interesting employment swings in December. First, manufacturing payrolls rose 25,000 in December, its strongest monthly performance since March, and have steadily increased since hitting a low point (shedding 16,000) in September. December’s factory employment increase was broad-based. Durables employment rose a little over 11,000 (roughly 5,000 of that was autos-related), and nondurables rose roughly 14,000. The other interesting swing came from retail trade payrolls, which fell 11,300 in December, after an increase of roughly 110,000 over the previous two months. Much of this weakness stemmed from a 19,000 decrease in employment at clothing and accessories stores in December (after an increase of 30,000 in November). Given the time of year, this pattern is suggestive of some seasonal adjustment issues. Turning to the household side of the report, the unemployment rate remained at 7.8 percent in December (November’s original unemployment rate estimate of 7.7 percent was revised up to 7.8 percent as the Bureau of Labor Statistics updated their 2012 seasonal factors for the household survey). The labor force participation rate was steady at 63.6 percent, and the employment-to-population ratio was virtually unchanged at 58.6 percent (about where it began the year).

    • 01.04.2013
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About walterrhett

Walter Rhett is a New York Times verified commenter. He writes "Digging Deeper," a blog for Democrats for Progress and his blog, "Walter Rhett" appears in the San Francisco Examiner. The Oxford Dictionary follows him on twitter.
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