by Calculated Risk on 12/06/2024 08:30:00 AM

From the BLS: Employment Situation

Total nonfarm payroll employment rose by 227,000 in November, and the unemployment rate changed little at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment trended up in health care, leisure and hospitality, government, and social assistance. Retail trade lost jobs.
...
The change in total nonfarm payroll employment for September was revised up by 32,000, from +223,000 to +255,000, and the change for October was revised up by 24,000, from +12,000 to +36,000. With these revisions, employment in September and October combined is 56,000 higher than previously reported.
emphasis added

Click on graph for larger image.

The first graph shows the jobs added per month since January 2021.

Total payrolls increased by 227 thousand in November.  Private payrolls increased by 194 thousand, and public payrolls increased 33 thousand.

Payrolls for September and October were revised up 56 thousand, combined.

The second graph shows the year-over-year change in total non-farm employment since 1968.

In November, the year-over-year change was 2.27 million jobs.  Employment was up solidly year-over-year (Although the annual benchmark revision will lower the year-over-year change).

The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate decreased to 62.5% in November, from 62.6% in October. This is the percentage of the working age population in the labor force.

The Employment-Population ratio decreased to 59.8% from 60.0% in October (blue line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate.

The unemployment rate increased to 4.2% in November from 4.1% in October.

This was above consensus expectations, and September and October payrolls were revised up by 56,000 combined.  

This report was boosted by the end of strikes and workers returning after the hurricanes.

I'll have more later ...

by Calculated Risk on 12/05/2024 07:52:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Friday:
• At 8:30 AM ET, Employment Report for November.   The consensus is for 183,000 jobs added, and for the unemployment rate to be unchanged at 4.1%.

• At 10:00 AM, University of Michigan's Consumer sentiment index (Preliminary for December).

by Calculated Risk on 12/05/2024 02:39:00 PM

On Friday at 8:30 AM ET, the BLS will release the employment report for November. The consensus is for 183,000 jobs added, and for the unemployment rate to be unchanged at 4.1%.

There were 12,000 jobs added in October, and the unemployment rate was at 4.1%.

From Goldman Sachs:

We estimate nonfarm payrolls rose by 235k in November, above consensus of +215k ... the end of strikes and the recent hurricanes that weighed on October job growth will likely boost November job growth. We estimate that the unemployment rate was unchanged at 4.1%, in line with consensus.
emphasis added

• ADP Report: The ADP employment report showed 146,000 private sector jobs were added in November.  This was below consensus forecasts and suggests job gains below consensus expectations, however, in general, ADP hasn't been very useful in forecasting the BLS report (this also doesn't include the boost from the end of Boeing strike and bounce back from the hurricane impact in October).

• ISM Surveys: Note that the ISM indexes are diffusion indexes based on the number of firms hiring (not the number of hires).  The ISM® manufacturing employment index increased to was at 48.1%, up from 44.4%.   This would suggest about 30,000 jobs lost in manufacturing. The ADP report indicated 26,000 manufacturing jobs lost in November.

The ISM® services employment index decreased to 51.5% from 53.0%. This would suggest 115,000 jobs added in the service sector. Combined this suggests 85,000 jobs added, far below consensus expectations.  (Note: The ISM surveys have been way off recently)

• Unemployment Claims: The weekly claims report showed more initial unemployment claims during the reference week at 215,000 in November compared to 242,000 in October.  This suggests fewer layoffs in November compared to October.

• Strikes: The CES strike report shows almost 40,000 employees returned from strikes during the reference period in November. This will boost the headline jobs number.

• Conclusion: Employment was impacted by strikes and hurricanes in October.  There should be a bounce back in November.  In the four months prior to October, employment gains averaged 140 thousand.  Adding close to 40 thousand for the strikes, and maybe 50 thousand workers returning following the hurricane impact in October, would suggest employment gains will be above consensus expectations.

by Calculated Risk on 12/05/2024 02:11:00 PM

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For November, Realtor.com reported inventory was up 26.2% YoY, but still down 21.5% compared to the 2017 to 2019 same month levels. 

 Now - on a weekly basis - inventory is up 25.9% YoY.

Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending Nov. 30, 2024

• Active inventory increased, with for-sale homes 25.9% above year-ago levels

For the 56th consecutive week, the number of homes for sale has increased compared with the same time last year. However, this week’s growth was smaller than last week’s, marking the ninth consecutive week of deceleration and tied for the smallest annual increase since late March. Sluggish listing activity, combined with subdued buyer demand, has contributed to this slowdown in inventory growth.

• New listings—a measure of sellers putting homes up for sale—plummeted 29% during an idle Thanksgiving week

The number of newly listed homes plummeted 29% last week. While some of the drop may be due to a mortgage rate environment that remains persistently high, most of the large decrease is likely due to the Thanksgiving holiday as sellers are likely deciding to hold off listing their home until buyers are less occupied with their holiday festivities.

Here is a graph of the year-over-year change in inventory according to realtor.com. 

Inventory was up year-over-year for the 56th consecutive week.  

However, inventory is still historically low.

New listings remain below typical pre-pandemic levels.

by Calculated Risk on 12/05/2024 11:03:00 AM

Today, in the Real Estate Newsletter: Asking Rents Mostly Unchanged Year-over-year

Brief excerpt:

Another monthly update on rents.

Tracking rents is important for understanding the dynamics of the housing market. Slower household formation and increased supply (more multi-family completions) has kept asking rents under pressure. ...

Welcome to the December 2024 Apartment List National Rent Report. The national median rent dipped by 0.8% in November, as we get further into the slow season for the rental market. Nationwide rent fell $12 to $1,382, and we’re likely to see that number dip one more time before the year ends. ...

Realtor.com: 15th Consecutive Month with Year-over-year Decline in Rents

In October 2024, the U.S. median rent continued to decline year-over-year for the fifteenth month in a row, down $14 or -0.8% year-over-year for 0-2 bedroom properties across the top 50 metros, faster than the rate of -0.5% seen in September 2024.

by Calculated Risk on 12/05/2024 08:50:00 AM

The Census Bureau and the Bureau of Economic Analysis reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced today that the goods and services deficit was $73.8 billion in October, down $10.0 billion from $83.8 billion in September, revised.

October exports were $265.7 billion, $4.3 billion less than September exports. October imports were $339.6 billion, $14.3 billion less than September imports.
emphasis added

Click on graph for larger image.

Exports and imports decreased in October.

Exports are up 1.9% year-over-year; imports are up 4.4% year-over-year.

Both imports and exports decreased sharply due to COVID-19 and then bounced back - imports and exports have generally increased recently.

The second graph shows the U.S. trade deficit, with and without petroleum.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Note that net, exports of petroleum products are positive and have been increasing.

The trade deficit with China increased to $28.0 billion from $25.7 billion a year ago.

It is possible some importers are trying to beat potential tariffs.

by Calculated Risk on 12/05/2024 08:30:00 AM

The DOL reported:

In the week ending November 30, the advance figure for seasonally adjusted initial claims was 224,000, an increase of 9,000 from the previous week's revised level. The previous week's level was revised up by 2,000 from 213,000 to 215,000. The 4-week moving average was 218,250, an increase of 750 from the previous week's revised average. The previous week's average was revised up by 500 from 217,000 to 217,500.
emphasis added

The following graph shows the 4-week moving average of weekly claims since 1971.

Click on graph for larger image.

The dashed line on the graph is the current 4-week average. The four-week average of weekly unemployment claims increased to 218,250.

The previous week was revised up.

Weekly claims were close to the consensus forecast.

by Calculated Risk on 12/04/2024 08:00:00 PM

Note: Mortgage rates are from MortgageNewsDaily.com and are for top tier scenarios.

Thursday:
• At 8:30 AM ET, The initial weekly unemployment claims report will be released. The consensus is for 220 thousand initial claims, up from 213 thousand last week.

• Also at 8:30 AM: Trade Balance report for October from the Census Bureau. The consensus is the trade deficit to be $78.8 billion.  The U.S. trade deficit was at $84.4 billion in September.

by Calculated Risk on 12/04/2024 02:09:00 PM

This graph shows heavy truck sales since 1967 using data from the BEA. The dashed line is the November 2024 seasonally adjusted annual sales rate (SAAR) of 507 thousand.

Heavy truck sales really collapsed during the great recession, falling to a low of 180 thousand SAAR in May 2009.  Then heavy truck sales increased to a new record high of 570 thousand SAAR in April 2019.

Click on graph for larger image.

Note: "Heavy trucks - trucks more than 14,000 pounds gross vehicle weight."

Heavy truck sales declined sharply at the beginning of the pandemic, falling to a low of 288 thousand SAAR in May 2020.  

Heavy truck sales were at 507 thousand SAAR in November, up from a revised 463 thousand in October, and up 3.7% from 489 thousand SAAR in November 2023.  

Usually, heavy truck sales decline sharply prior to a recession.  Sales were solid in November, and sales for October were revised up significantly.

As I mentioned yesterday, light vehicle sales increased in November.

The second graph shows light vehicle sales since the BEA started keeping data in 1967.  Vehicle sales were at 16.50 million SAAR in November, up from 16.25 million in October, and up 6.7% from 15.46 million in November 2023.

by Calculated Risk on 12/04/2024 02:00:00 PM

Fed's Beige Book

Economic activity rose slightly in most Districts. Three regions exhibited modest or moderate growth that offset flat or slightly declining activity in two others. Though growth in economic activity was generally small, expectations for growth rose moderately across most geographies and sectors. Business contacts expressed optimism that demand will rise in coming months. Consumer spending was generally stable. Many consumer-oriented businesses across Districts noted further increases in price sensitivity among consumers, as well as several reports of increased sensitivity to quality. Spending on home furnishings was down, which contacts attributed to limited household mobility. Demand for mortgages was low overall, though reports on recent changes in home loan demand were mixed due to volatility in rates. Commercial real estate lending was similarly subdued. Still, contacts generally reported financing remained available. Capital spending and purchases of raw materials were flat or declining in most Districts. Sales of farm equipment were a notable headwind to overall investment activity, and several contacts expressed concerns about the future prices of equipment given ongoing weakness in the farm economy. Energy activity in the oil and gas sector was flat but demand for electricity generation continued to grow at a robust rate. The rise in electricity demand was driven by rapid expansions in data centers and was reportedly planned to be met by investments in renewable generation capacity in coming years.

Labor Markets

Employment levels were flat or up only slightly across Districts. Hiring activity was subdued as worker turnover remained low and few firms reported increasing their headcount. The level of layoffs was also reportedly low. Contacts indicated they expected employment to remain steady or rise slightly over the next year, but many were cautious in their optimism about any pickup in hiring activity.
...
Prices

Prices rose only at a modest pace across Federal Reserve Districts. Both consumer-oriented and business-oriented contacts reported greater difficulty passing costs on to customers.
emphasis added