U.S. Labor Market Delivers in November

The U.S. Labor Market Report covering the national employment situation in November showed a gain of 211,000 nonfarm jobs. The unemployment rate held steady at 5.0%. The average workweek edged down by 0.1 hour to 34.5 hours, but the average hourly wage increased by four cents to $25.25. Over the year, average hourly earnings were up by 2.3%.

The employer payroll survey reported that total nonfarm employment in the United States increased by 211,000 jobs in November. The private sector contributed 197,000 jobs to the November increase, while the public sector added 14,000 jobs with gains at all three levels of government: federal, state and local. Employment growth was broad based with nearly every major industry sector adding jobs over the month. The exceptions were manufacturing, hurt by weak export growth and the strong dollar, mining and logging (primarily in the energy extraction sector), and information.  There was also a positive net revision to the September and October figures of 35,000 jobs. Over the past three months, job gains have averaged 218,000 per month. The 2015 year-to-date average monthly gain was 220,000 jobs, somewhat below the 253,000 figure recorded for the same period in 2014.

On a year-to-year basis, U.S. employment expanded by 2.637 million jobs, an increase of 1.9%. In year-to-year terms (YTY), mining and logging was the only major industry to record a decline with a loss of 123,000 jobs (-13.5%). The largest YTY gain occurred in health care and social assistance with 580,800 jobs added over the year, an increase of 3.2%. Leisure and hospitality added 438,000 jobs (up 2.9%). Professional and technical services also posted a strong gain (298,400 jobs, 3.5%), as did retail trade (284,200 jobs, 1.8%).

Turning to the household survey, in November, the unemployment rate held steady over the month at 5.0% and was down from the year-ago rate of 5.8%. The labor force participation rate increased slightly over the month, rising to 62.5% and bringing 273,000 workers into the workforce. Last year at this time, it was 62.9%.

The more comprehensive U-6 unemployment rate was 9.9%, well below the 20-year average for this indicator of 10.7%. The U-6 unemployment rate counts part-time workers who would prefer full-time work and individuals who would like to work but have given up looking for a job.

Other indicators also demonstrate labor market slack is diminishing. The share of workers who have been jobless for 27 weeks or more dropped to 25.7% of all unemployed persons, down from the year ago rate of 31.0%. The average rate going back to 1990 is 25%. Over the past 12 months, the number of long-term unemployed persons has fallen by 782,000. The median duration of unemployment is also on the decline, falling from 12.8 weeks in November 2014 to 10.9 weeks last month.

Summary: The labor markets delivered another strong performance in November. With manufacturing jobs edging lower last month, and mining employment falling for the 11th consecutive month, the services sector delivered 163,000 jobs, while the rebound in residential and nonresidential construction pushed construction employment higher by 46,000 jobs. Overall job growth has kept the unemployment rate steady at its lowest rate in seven years, and wage growth continues to outpace inflation.

Source:  http://www.bls.gov/news.release/pdf/empsit.pdf

Personal Income Growth Strengthens

Although holiday retail sales have gotten off to a slow start, the uptick in personal income in October may be a sign of better things to come for the nation’s retailers. Total personal income in the U.S. increased in October by 0.4% on a nominal basis. Wages and salaries, the largest component of personal income, rose by a robust 0.6%.

Real disposable income (adjusted for taxes and inflation) also increased by 0.4%. Real personal consumption expenditures, on the other hand, were up by a tepid 0.1%. Accordingly, the personal saving rate rose from 5.3% in September to 5.6% in October. Real spending on durable goods was up by 0.2% over the month, while spending on nondurable goods edged up by 0.1%. Spending on services, which comprise 65% of consumer spending, was flat.

On a year-to-year basis, incomes and spending moved higher in October:

• Real disposable income growth rose by 3.9% in October, the same rate as September.
• Real personal consumption expenditures grew by 2.7%
• Growth in real spending on goods (3.7%) outpaced spending on services (2.2%) although in dollar terms, Americans spend more than two times as much on services as they do goods.

Consumer prices ticked up by 0.1% in October and were up over the year by 0.2%. Excluding food and energy, prices advanced by 1.3%.

Personal income growth in October taken together with weaker than expected spending implies consumers were in a good position ahead of the holidays. The next two months will tell if higher incomes translate to an increase consumer spending and a happy holiday season for the nation’s retailers.

Source:  http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

SoCal Home Sales and Median Prices in October

Southern California home sales increased slightly over the year in October, edging up by 1.3% to 19,930 units (new and resale houses and condominiums). Although sales have now risen on year-over-year basis for nine months in a row, the October advance was the second smallest over that period coming in just ahead of February’s gain of 0.5%. After a comparatively strong summer, sales dipped more than usual from September to October, falling by 5.5% over the month.

The median price across Southern California increased by 5.6% over the year to October to $435,000 but was flat over the month. The median prices has now risen for 43 consecutive months on a year-over–year basis but remains 13.9% below the peak price reached in mid-2007. The share of sales for homes priced above $500,000 was 39.8% in October, up from 36.4% a year ago. The number of homes sold for $500,000 or more increased by 10.8% over the year, while sales for less than $500,000 were up by just 0.8%.

Sales remained constrained by the lack of inventory and declining affordability. More buyers of low- to mid-prices homes are turning to low down payment FHA loans for which the mortgage premium insurance was lowered this year. The increased use of these loans is contributing to the limited supply of homes in more affordable markets. These same markets have also experienced some of the sharpest increases in median prices. Meanwhile, although investor purchases have been trending lower, they are still above normal and tend to be in lower-priced areas, adding to demand. On the supply side, new home construction is still below historical levels and what is being built has been in the mid- to high-price range. This is understandable given high development costs, but it further exacerbates supply and affordability issues. 

Source:  http://www.corelogic.com/solutions/configurable-real-estate-data-reports.aspx/

California Home Sales and Median Prices in October

The California Association of Realtors recently released their report on California existing home sales and median prices in October. The statewide median price fell by 1.3% compared with September to $475,990, but was up over the year by 5.7%.

The number of single-family homes in California that closed escrow in October increased by 1.3% over the year to 403,510 units (seasonally adjusted annualized rate). Compared with September, sales were down by 5.1%. The year-to-year gain was the lowest since January 2015 and was well below the six-month average increase of 9.7% recorded between April and September of this year.

California home sales are on track to close the year with a mid-single digit increase over last year. Employment growth and low interest rates should keep demand growing at a modest pace through the remaining months of 2015, but housing affordability is a big issue in many parts of California and is negatively impacting sales in some regions. The Bay Area in particular continues to see sharp increases in median price due to a shortage of homes for sale. As a result, homeownership is increasingly out of reach for more and more people.

Below is a year-over-year summary of sales and price activity in Southern California by county. Although the statewide sales figures are seasonally adjusted, regional and county figures are not.

§  Los Angeles County:  unit sales declined by 1.4% over the year in October, while the median price rose by 6.7% to $509,570.

§  Orange County: sales edged higher by 1.9% and the median price increased by 1.7% to $704,370

§  Riverside County:  sales of existing homes rose by 4.5% and the median price moved higher by 4.0% to $334,660.

§  San Bernardino County:  sales dipped by 0.7% in October but the median price was up by 11.2% to $231,330.

§  San Diego County:  unit sales edged down by 0.5% as the median price rose by   9.3% to $539,000.

§  Ventura County:  sales increased by 11.6% over the year while the median price rose by 3.6% to $604,610.

Source: http://www.car.org/newsstand/newsreleases/2015releases/october2015sales?view=Standard

October State and Local Employment Report

The Employment Development Department (EDD) released the state and local employment reports for the month of October. Total California nonfarm employment increased by 41,200 jobs over the month in seasonally adjusted (SA) terms. Moreover, the 8,200 job gain initially reported for September was revised up to 21,100 jobs.

The year-over-year change showed an increase of 463,000 jobs (SA). This equated to a growth rate of 2.9%, once again exceeding the October national increase of 2.0%. California’s private sector added 427,200 jobs (an increase of 3.2% over the year), while employment in the public sector rose by 1.5% (35,800).

There was little change in employment trends across industries. Nine of the 11 super-sectors added jobs over the year to October: construction; trade, transportation and utilities; information; financial activities; professional and business services; educational and health services; leisure and hospitality; other services and government for a combined gain of 468,300 jobs. Professional and business services once again posted the largest gain on a numerical basis, adding 130,000 jobs (up 5.3%), while construction continues to claim the largest gain in percentage terms, increasing by 7.3% and adding 49,800 jobs.

Two sectors that recorded a decline over the year in October. Mining and logging was down by 7.4%, a loss of 2,300 jobs; manufacturing employment edged down by 0.2% or 3,000 jobs.

California’s unemployment rate declined slightly from 5.9% in September to 5.8% in October and was down from the year ago rate of 7.2%. California’s unemployment rate is now the lowest it has been since December 2007 when it was also 5.8%. The civilian labor force edged down over the month by 0.1%, but was up over the year by 0.6%. Of the 11.4 million Californians not in the labor force, 808,000 (7.1%) say they would like a job, while 0.7% of that group reported being discouraged over job prospects.

County highlights:

(Note: With the exception of the Los Angeles unemployment rate, county level numbers are not seasonally adjusted, which means there can be large month-to-month fluctuations in job counts. A truer picture of how local labor markets are faring is revealed by focusing on the year-over-year numbers. Annual trends “correct” for the seasonal factors that influence certain industry sectors over the course of the year.)

·      In Los Angeles County, the seasonally adjusted unemployment rate was 6.1%, down from 6.5% in September and below the year ago rate of 8.0%. Total nonfarm employment (not seasonally adjusted) increased by 37,800 jobs over the month and was up over the year by 85,300 jobs, an increase of 2.0%.

Educational and health services posted the largest year-over-year gain in employment in October with a net increase of 22,600 jobs. The health care industry added 23,500 jobs, but a drop of 900 jobs in educational services reduced the overall industry gain.

Also recording significant job gains were leisure and hospitality, which picked up 18,700 jobs, most of which were in accommodation and food services, and professional and business services employment with the addition 15,300 jobs.

Four major industry sectors reported year-over-year declines in October: manufacturing employment contracted by 5,000 jobs; information lost 3,400 jobs; financial activities was down by 200 jobs, and in the mining and logging sector, job counts fell by 200.

·         In October, the unemployment rate in Orange County was 4.3%, up from 4.0% in September but below the year-ago figure of 5.2%. Nonfarm payroll jobs increased by 13,900 over the month and were up by 41,000 over the year (an increase of 2.7%).

·      In the Riverside-San Bernardino area, the unemployment rate in October was 6.4% compared with 6.1% in September but below the year ago estimate of 7.7%. The Inland Empire gained 21,400 nonfarm payroll jobs over the month and 43,200 over the year. This represented an increase of 3.3%.

·       In Ventura County, the unemployment rate was 5.4%, down from the year ago estimate of 6.4%. Total nonfarm employment was up by 3,900 over the month and was up over the year by 6,700 jobs (2.3%).

Summary: California’s labor market was back on track in October after a somewhat weaker showing in September and the unemployment rate continued its downward trend. In Southern California, every region saw job gains along with year-over-year decreases in their unemployment rates. Los Angeles County’s unemployment rate fell to 6.1%, the lowest since early 2008.

Sources:  http://www.labormarketinfo.edd.ca.gov/

U.S. Light Vehicle Sales Strong and Steady

U.S. Light Vehicle Sales Strong and Steady

In October, U.S. light vehicle sales were up by 10.1% over the year to 18.1 million units (seasonally adjusted annualized rate). This marked only the second time on record auto sales have recorded two consecutive months with an SAAR north of 18 million units. On a per unit volume basis, 1.45 million light vehicles were sold last month, an impressive increase of 13.6% over the month, making it the highest October volume on record.

Demand is still solidly on the side of light trucks, especially crossover utility vehicles. Sales increased by 18.6% over the year in October to 10.4 million units and accounted for 57.2% of the light vehicle sales mix.

• Sales of domestic trucks increased by 12.6% over the year to 8.3 million units
• Foreign light truck sales, which currently account for slightly less than 20% of the light truck market, surged by 51.1% to 2.0 million units
• Compared with September, however, sales of pick-ups, SUVs and crossovers edged down by 0.5%.

Total passenger car sales, including foreign and domestic models, edged up by 0.5% over the year to 7.8 million units.

• Sales of domestic autos were up by 1.3% over the year to 5.8 million units
• Sales of foreign passenger cars declined by 1.7% to 1.9 million units
• Compared with September, total passenger car sales moved higher by a modest 1.5%

Sales of medium-heavy trucks rose by 13.4% over the year in October to 483,000 vehicles. Since these heavier trucks are commonly used by business to haul freight and make deliveries, an increase in demand for these vehicles is an indication of stronger business activity.

Even though the pace of sales in September and October was exceptionally robust, there is little indication sales will slow dramatically during the final two months of 2015. Most automakers posted double-digit sales gains last month led by Subaru (up 20.0%) and GM (up 15.9%).  Even VW, in the midst of an emission scandal and a stop-sale order on specific models posted a 5.6% gain for the month.  At the risk of being repetitive, U.S. auto manufacturers have been riding high on a wave of credit availability, lower gasoline prices, increasing levels of leasing activity and positive (mostly) economic news. 

Source:  www.bea.gov

U.S. Labor Market Bounces Back in October

U.S Labor Market Bounces Back in October

The U.S. Labor Market Report covering the national employment situation in October showed a gain of 271,000 nonfarm jobs. The unemployment rate edged down to 5.0%. The average workweek was unchanged last month at 34.5 hours, but the average hourly wage increased by nine cents to $25.20. Over the year, average hourly earnings were up by 2.5%, the fastest pace of wage growth since mid-2009.

The employer payroll survey reported that total nonfarm employment in the United States increased by 271,000 jobs in October. The private sector contributed 268,000 jobs to the October increase, while the public sector added 3,000 jobs, all of which were in state government. Employment growth was broad based with nearly every major industry sector adding jobs last month. The exceptions were mining and logging (mainly energy-related activities), and information. The manufacturing sector was flat with a gain of 3,000 jobs in nondurable goods, which was offset by an equal loss in durable goods.

There was also a positive net revision to the August and September figures of 12,000 jobs. Over the past three months, job gains have averaged 187,000 per month. The 2015 year-to-date average monthly gain was 206,000 jobs, somewhat below the 236,000 figure for the same period in 2014.

On a year-to-year basis, U.S. employment expanded by 2.814 million jobs, an increase of 2.0%. In year-to-year terms (YTY), mining and logging was the only industry to record a decline. The largest YTY gain occurred in health care and social assistance with 606,000 jobs added over the year, an increase of 3.3%. Leisure and hospitality added 433,000 jobs (up 2.9%) and retail trade employment rose by 433,000 jobs (up 2.0%). Professional and technical services also posted a strong gain (313,400 jobs, 3.7%), as did administrative and waste services (295,200 jobs, 3.4%).

Turning to the household survey, in October the unemployment rate was 5.0%, the lowest in seven years. The year ago rate was 5.7%. The labor force participation rate held steady at 62.4%, a 38-year low. The more comprehensive U-6 unemployment rate was 9.8%, well below the 20-year average for this indicator of 10.7%. The U-6 unemployment rate counts part-time workers who would prefer full-time work and individuals who have given up looking for a job.

Other labor market indicators also continue to show improvement. The share of workers who have been jobless for 27 weeks or more currently stands at 26.8% of all unemployed persons, down from the year ago rate of 31.9%. Over the past 12 months the number of long-term unemployed persons has fallen by 762,000. The median duration of unemployment is also on the decline, falling from 13.5 weeks in October 2014 to 11.2 weeks last month.

Summary: The addition of 271,000 jobs last month far exceeded expectations and are an indication that underlying economic growth remains solid despite some recent soft readings in the manufacturing sector. Although the LAEDC expects job gains will moderate over the next year as the expansion matures, the unemployment rate will continue to trend down.

Source:  http://www.bls.gov/news.release/pdf/empsit.pdf