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Employment Situation

The jobless claims report is one of the three reports that came out this week that reflect the continued strength seen in the employment sector of the economy. Jobless claims remained low though they did see some increases to initial claims and the four-week average, as well as the four-week average for continuing claims. Despite these small increases claims are little changed from a month ago – a positive sign for the employment report. The ADP Employment report is computed from a subset of ADP records and is usually a prediction of the employment situation report. The ADP consensus for December was a call of steady strength at 188,000. The employment situation, the last of this week’s employment related reports, is a set of labor market indicators based on two separate surveys in one report. In the report, hiring has cooled, though employment levels remain high. Nonfarm payrolls rose 148,000, though favorable, they came in lower than expected. Revisions are mixed with November up sharply to 252,000 and October sharply down to 211,000 for a 9,000 decline. The number of unemployed actively seeking work rose slightly to 5.308 million though the unemployment rate remained at 17-year low of 4.1 percent. Both labor participation rate and pool of available workers remain little changed. Average hourly earnings rose a noticeable 0.3 percent on the month as November got a one tenth downgrade to only 0.1 percent gain. On a yearly basis this reading is moving in the right direction but at a very slow pace, up only one tenth to 2.5 percent. The payroll breakdown confirms that the housing and factor sector had accelerated into the year end, as manufacturing was up 25,000 while construction increased 30,000.

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