June 9, 2021
Construction spending grew, while employment expanded, and layoffs declined.
Construction spending rose to an annual rate of $1.524 trillion in April, which was 0.2 percent over March’s rate of $1.521 trillion, according to last week’s report from the Census Bureau. Compared to the same period a year ago, April’s construction spending was 9.8 percent higher than April 2020’s pace of $1.387 trillion.
Looking at spending on housing construction, April’s residential construction spending grew to an annual rate of $729.2 billion, which was 1 percent higher than March’s pace of $721.8 billion.
Outlays on the construction of new single-family homes in April grew to an annual rate of $396.3 billion, which was 1.3 percent higher than March’s rate of $391.2 billion. Spending on the construction of new multi-family housing increased to an annual rate of $98.4 billion in April, which was 1.9 percent above March’s rate of $96.6 billion.
The U.S. economy gained 559,000 jobs in May, the Bureau of Labor Statistics reported last week. Job categories that helped drive new employment included leisure and hospitality, public and private education, and healthcare and social assistance.
May’s unemployment rate dropped to 5.8 percent from 6.1 percent, with the unemployed population falling by 496,000 to 9.3 million.
The population of long-term unemployed people – those who haven’t had jobs for 27 weeks or longer – dropped by 431,000 to 3.8 million in May. This represented 40.9 percent of the total unemployed population for the month.
The report was below economists’ expectations of 671,000 jobs, but those estimations were too exuberant, according to Kathy Jones, senior vice president of fixed income strategy for Charles Schwab.
“Economists have been a little overly optimistic about the pace at which we’re moving here,” Jones told CNBC. “It takes a while for people to get jobs.”
While the jobs report was positive, the Federal Reserve won’t likely change rate policy based on it.
Initial Jobless Claims
In related news, first-time claims for unemployment benefits filed by recently unemployed Americans during the week ending May 29th fell to 385,000, which was 20,000 claims lower than the preceding week’s total of 405,000, the Employment and Training Administration reported last week.
The four-week moving average – regarded as a more reliable measure of jobless claims – declined to 428,000 claims, which was 30,500 claims down from the previous week’s average of 458,500.
Two weeks ago, initial claims were at 444,000, and the average was at 504,750 claims. This week’s report marked the lowest level for initial claims since March 14th, 2020 posted 256,000 claims, as well as the lowest level for the four-week average since March 14, 2020 has an average of 225,500.
This week, we can expect:
Monday – Consumer credit for April from the Federal Reserve.
Tuesday – Trade in goods for April from the Census Bureau and the Bureau of Economic Analysis.
Wednesday – Wholesale inventories for April from the Census Bureau.
Thursday – Consumer prices for May from the Bureau of Labor Statistics; Initial jobless claims for last week from the Employment and Training Administration; the federal budget for May from the Treasury Department.
Friday – Consumer sentiment for June from the University of Michigan’s Surveys of Consumers.
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