Last Week’s Economic News in Review December 7, 2016

unnamedUnemployment enjoyed an unexpected drop, while layoffs increased, but remained in safe territory. Meanwhile, construction spending grew, particularly in the residential category.

Unemployment

The U.S economy added 178,000 jobs in November, pushing the unemployment rate down to 4.6 percent, according to last week’s report from the Bureau of Labor Statistics. This marked a 0.3 percent drop from the 4.9 percent unemployment rate of October, which the market had expected to continue into last month. The number of unemployed Americans declined by 387,000 to 7.4 million.

The number of people unemployed for 27 weeks or longer — the so-called long-term unemployed — saw barely any change, totaling 1.9 million, which accounted for 24.8 percent of the unemployed population. Over the past 12 months, long-term unemployment has ticked down by 198,000 people. November’s civilian labor force participation rate — the percentage of employable Americans either employed or looking for a job — saw little change at 62.7 percent.

The number of people involuntarily employed on a part-time basis in November for reasons such as that was the only work they could find or their hours had been cut totaled 5.7 million, which was similar to October. That said, the population of involuntary part-time workers was down by 416,000 for the year.

Initial Jobless Claims

First-time claims for unemployment benefits filed by the recently laid off during the week ending November 26 jumped to 268,000, a gain of 17,000 claims from the previous week’s total of 251,000, the Employment and Training Administration reported.

The four-week moving average — considered a more stable measure of layoffs — ticked up to 251,500, a slight increase of 500 from the previous week’s average of 251,000.

This marked the 91st consecutive week of initial jobless claims below 300,000, a level that economists consider an indicator of a growing job market. That’s the longest streak since 1970.

Construction Spending

Construction spending for October notched up to an annual rate of $1.17 trillion, which was 0.5 percent over September’s pace of $1.16 trillion, the Census Bureau reported last week. Compared to last year, October’s total was 3.4 percent higher than October 2015’s rate of $1.13 trillion.

Spending on private construction for October dipped to an annual rate of $885.9 billion, which was 0.2 percent below September’s revised rate of $887.4 billion. However, spending on residential construction grew to an annual rate of $466.2 billion in October, which was 1.6 percent over September’s pace of $458.8 billion.

This week we can expect:

  • Tuesday — Third quarter productivity from the Bureau of Labor Statistics; October trade balance and October factory orders from the Census Bureau.
  • Wednesday — Consumer credit for October from the Federal Reserve.
  • Thursday — Initial jobless claims for last week from the Employment and Training Administration.
  • Friday — Wholesale inventories for October from the Census Bureau.
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