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Economy

Economic Data (USA)

Friday, November 19, 2021

Leading Economic Index for October 2021

The Conference Board® released its Leading Economic Index® (LEI) for October 2021 this morning:

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Index for October 2021: 118.3 (The baseline 100 score is associated with 2016 data.)

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Predicted: +0.9%
  • Actual: +0.853% (+1.0 point)

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  • LEI for September 2021: 117.3

  • LEI for August 2021: 117.2

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The yellow-highlighted percentage is the month-to-month change for the index.  The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

The LEI is a composite of 10 of the nation's economic data releases that's put together by The Conference Board. Statistically, the components listed below have shown a significant increase or decrease before national economic upturns or downturns:

  1. The Standard + Poor's 500 Index

  2. Average weekly claims for unemployment insurance

  3. Building permits for new private housing

  4. The interest rate spread between the yield on the benchmark 10-Year Treasury Note and Federal Funds

  5. ISM® Index of New Orders

  6. Manufacturer's new orders for consumer goods or materials

  7. Manufacturers' new orders, nondefense capital goods excluding aircraft orders

  8. Average weekly manufacturing hours

  9. Average consumer expectations for business conditions

  10. Leading Credit Index™

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CHART: Leading Economic Index October 2021 Update

CHART: Leading Economic Index
October 2021 Update

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CHART: Leading Economic Index Six-Month Growth October 2021 Update

CHART: Leading Economic Index
Six-Month Growth
October 2021 Update
 
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From Today's Report:

"...'The U.S. LEI rose sharply in October suggesting the current economic expansion will continue into 2022 and may even gain some momentum in the final months of this year,' said Ataman Ozyildirim, Senior Director of Economic Research at The Conference Board. 'Gains were widespread among the leading indicators, with only the average workweek and consumers’ outlook making negative contributions.

'However, rising prices and supply chain bottlenecks pose challenges to growth and are not expected to dissipate until well into 2022. Despite these headwinds, The Conference Board forecasts growth to remain strong in the fourth quarter at around 5.0 percent (annualized rate), before moderating to a still historically robust rate of 2.6 percent in Q1 2022.'
..."

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Thursday, November 18, 2021

New Unemployment Insurance Claims for The Week of November 13, 2021

Jobless Claims
Jobless Claims

Earlier today, the Labor Department released its weekly report on New Jobless Insurance Claims for the week that ended on November 13, 2021:

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Predicted: 270,000

  • Actual: 268,000
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The yellow-highlighted figure represents the number of first-time claims for unemployment benefits for the entire United States. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

  • Previous Week (revised): 269,000
  • 4-Week Moving Average: 272,750

====================

From Today's Report

"...In the week ending November 13, the advance figure for seasonally adjusted initial claims was 268,000, a decrease of 1,000 from the previous week's revised level. This is the lowest level for initial claims since March 14, 2020 [the eve of the COVID-19 pandemic in the USA] when it was 256,000. The previous week's level was revised up by 2,000 from 267,000 to 269,000. The 4-week moving average was 272,750, a decrease of 5,750 from the previous week's revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week's average was revised up by 500 from 278,000 to 278,500..."


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Wednesday, November 17, 2021

Crude Oil Inventories Report for Week of November 12, 2021

Crude Oil Inventories
Crude Oil Inventories

The U.S. Crude Oil Inventories report for the week that ended on November 12, 2021 was released this morning:

-- Change from Last Week: -2,100,000 Barrels

-- Change from A Year Ago (Y/Y): -56,500,000 Barrels

-- Current U.S. Crude Oil Stocks: 433,000,000 Barrels

Diminishing crude oil inventories often translate to higher crude oil and fuel prices (and vice versa), but not always.

The report is produced by the U.S. Energy Information Administration (EIA).


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Housing Starts During October 2021

The U.S. Commerce Department this morning released its Housing Starts report for October 2021:

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Housing Starts:
Predicted: 1,600,000
Actual: 1,520,000

Change From Previous Month: -0.654% (-10,000 New Units)
Change From One Year Previous: +0.396% (+6,000 New Units)

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Building Permits:
Predicted: 1,600,000
Actual: 1,650,000

Change From Previous Month: +4.035% (+64,000 New permits)
Change From One Year Previous: +3.448%  (+55,000 New Permits)

----------------------------------------------------

Housing Starts: The top, yellow-highlighted figure is a measure of initial construction of single and multi-family residential units in the United States for the indicated month. Seasonally adjusted annual rate. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

If you're wondering about the demand for new homes in the United States, or about the American residential construction industry in general, then you should pay attention to the monthly Housing Starts report. This report also offers insight into specific types of consumer spending: when housing starts are up, demand for the stuff that a consumer would purchase for a new home (large appliances, consumer electronics, furniture, etc.) tends to also rise -- and vice versa.


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CHART: Housing Starts - October 2021 Update

CHART: Housing Starts - October 2021 Update

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Tuesday, November 16, 2021

Industrial Production + Manufacturing + Capacity Utilization During October 2021

The Industrial Production, Manufacturing and Capacity Utilization numbers for October 2021 were released by the Federal Reserve this morning:

Industrial Production:
Predicted: +1.5%
Actual: +1.6%

Manufacturing:
Predicted: +1.0%
Actual: +1.2%

The yellow-highlighted percentages represent the month-to-month change in manufacturing, and physical output from mining operations, utility plants and factories for the entire United States.

Capacity Utilization Rate:
Predicted: 75.0%
Actual: 76.4% 

The Capacity Utilization Rate represents the use of available resources at mining operations, utility plants and factories for the entire United States last month.

The "predicted" figures are what economists were expecting, while the "actual" is the true or real figure.

From Today's Report:

"...Industrial production rose 1.6 percent in October after falling 1.3 percent in September; about half of the gain in October reflected a recovery from the effects of Hurricane Ida. Manufacturing output increased 1.2 percent in October; excluding a large gain in the production of motor vehicles and parts, factory output moved up 0.6 percent. The output of utilities rose 1.2 percent, and mining output stepped up 4.1 percent.

At 101.6 percent of its 2017 average, total industrial production in October was 5.1 percent above its year-earlier level and at its highest reading since December 2019. In October, capacity utilization for the industrial sector increased 1.2 percentage points to 76.4 percent; even so, it was still 3.2 percentage points below its long-run (1972–2020) average.
.."

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CHART: Industrial Production + Manufacturing + Capacity Utilization

CHART: Industrial Production
+ Manufacturing
+ Capacity Utilization

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Import and Export Price Indexes for October 2021

The Labor Department's Bureau of Labor Statistics this morning released its report on U.S. Import and Export Price Indexes for October 2021:

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Import Prices
Predicted: +1.0%
Actual: +1.2%

Change From 12 Months Previous: +10.7%

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Export Prices
Predicted: +1.0%
Actual: +1.5%

Change From 12 Months Previous: +18.0%

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The above percentages, highlighted in yellow, represent the month-to-month change in prices for:

  • Imports: the cost of goods produced in other countries and sold in the United States.
  • Exports: the cost of goods produced in the USA and sold in other countries.


Together, these indexes offer insight into the status of inflation in the United States, and for the global economy as well. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.


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CHART: Import Price Index October 2021 Update

CHART: Import Price Index October 2021 Update

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CHART: Export Price Index - October 2021 Update

CHART: Export Price Index - October 2021 Update

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U.S. Retail And Food Services Sales Report for October 2021

The Commerce Department this morning released advance estimates of U.S. Retail and Food Services Sales for October 2021:

Predicted: +1.5%
Actual: +1.698% (+$10,653,000,000)

The yellow-highlighted percentage above represents the month-to-month change in total sales receipts for retailers that sell durable and non-durable goods, and retailers that provide food and beverage services.

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  • Estimated Retail Sales During October 2021: $638,189,000,000
  • Change From 12 Months Previous: +16.314% (+$89,513,000,000)

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CHART: Retail Sales - October 2021 Update

CHART: Retail Sales - October 2021 Update
  
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Saturday, November 13, 2021

Job Openings and Labor Turnover Survey (JOLTS) for September 2021

The Job Openings and Labor Turnover Survey (JOLTS*) for September 2021 was released by the Labor Department this morning:

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Job Openings

Predicted: 10,400,000
Actual:    10,438,000

  • Previous Month (revised): 10,629,000

  • One Year Previous: 6,611,000

  • Change from one year previous: +57.888% (+3,827,000)


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Hires: 6,459,000 

Quits: 4,434,000 (New Record-High)

Total Separations §: 6,218,000 

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From Today's Release:


"...Job Openings
On the last business day of September, the number and rate of job openings were little changed at 10.4 million and 6.6 percent, respectively. Job openings increased in health care and social assistance (+141,000); state and local government, excluding education (+114,000); wholesale trade (+51,000); and information (+51,000). Job openings decreased in state and local government education (-114,000); other services (-104,000); real estate and rental and leasing (-65,000); and educational services (-45,000). The number of job openings was little changed in all four regions.


Hires
In September, the number and rate of hires were little changed at 6.5 million and 4.4 percent, respectively. Hires increased in health care and social assistance (+109,000) and finance and insurance (+60,000). Hires decreased in state and local government education (-92,000) and educational services (-89,000). The number of hires was little changed in all four regions.


Separations
Total separations includes quits, layoffs and discharges, and other separations. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm.

In September, the number and rate of total separations were little changed at 6.2 million and 4.2 percent, respectively. Total separations decreased in retail trade (-100,000). The total separations level increased in several industries with the largest increases in other services (+87,000); health care and social assistance (+86,000); and finance and insurance (+61,000). Total separations were little changed in all four regions.

The number of quits increased in September to a series high of [4,434,000]  The quits rate also increased to a series high 3.0 percent. Quits increased in several industries with the largest increases in arts, entertainment, and recreation (+56,000); other services (+47,000); and state and local government education (+30,000). Quits decreased in wholesale trade (-30,000). The number of quits increased in the West region.

In September, the number of layoffs and discharges was little changed at 1.4 million. The layoffs and discharges rate was unchanged at 0.9 percent. Layoffs and discharges were little changed in all industries and in all four regions.

The number of other separations was little changed in September at 410,000. Other separations increased in finance and insurance (+41,000); state and local government education (+13,000); and other services (+12,000). Other separations were little changed in all four regions..."

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CHART: Hires and Total - Separations Rates September 2021 Update

CHART: Hires and Total Separations Rates
September 2021 Update

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§ = Here's How The Labor Department Defines Total Separations:


"Total separations includes quits, layoffs and discharges, and other separations. Total separations is referred to as turnover. Quits are generally voluntary separations initiated by the employee. Therefore, the quits rate can serve as a measure of workers’ willingness or ability to leave jobs. Layoffs and discharges are involuntary separations initiated by the employer. Other separations includes separations due to retirement, death, disability, and transfers to other locations of the same firm."

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Friday, November 12, 2021

Consumer Sentiment: Preliminary Results for November 2021

The University of Michigan's Index of Consumer Sentiment (ICS) -  Preliminary Results for November 2021 was released today:

Predicted: 70.0
  • Actual: 66.8
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  • Change from Previous Month: -6.834% (-4.9 points)
  • Change from 12 Months Previous: -13.134% (-10.1 points)

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  • Final ICS Reading for October 2021: 71.7

  • Final ICS Reading for November 2020: 76.9

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From today's report:

"...Consumer sentiment fell in early November to its lowest level in a decade due to an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation. One-in-four consumers cited inflationary reductions in their living standards in November, with lower income and older consumers voicing the greatest impact. Nominal income gains were widely reported but when asked about inflation-adjusted gains, half of all families anticipated reduced real incomes next year. Rising prices for homes, vehicles, and durables were reported more frequently than any other time in more than half a century. The reactions of consumers to surging inflation should be no surprise, as it has been reported during the past several months. The description that inflation would be "transient" has the undertone that consumers could "grin and bear it" as economic policies counted on a quick and automatic self-correction to supply and labor shortages. Instead, the pandemic caused economic dislocation unlike any prior recession, and has been intertwined with partisan interpretations of economic developments.

The moods of consumers play a central role in how information is processed. Positive moods promote more casual and less detailed information processing, and negative moods promote more formal and deliberate information processing, especially of potentially negative developments. Partisans aligned with the President's party have adopted very positive moods, and those in the opposing camp very negative moods. As a result, partisan supporters of one or the other presidents either mentioned or ignored rising home and stock values, inflation and
income growth rates, or mentioned or ignored employment or unemployment rates, and so forth. The partisan differences in perceptions were not minor, but were large and equal in size (see the table). They were larger than differences across income, age, and education; moreover, those partisan differences nearly equaled the entire span between cyclical peaks and troughs. The issues underlying the stark partisan divisions are based on stark differences in economic policies. The stylized difference is that one side favors maximizing economic growth and efficiency, the other side on maximizing distributional equity and fairness. Such legislative challenges are won or lost by extreme partisan support drawn from both sides of the aisle. Such extremes, however, make achieving their policy goals much more important than providing effective counter measures to ongoing economic hardships..."

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The ICS is derived from the following five survey questions:


  1. "We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?"


  2. "Now looking ahead, do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?"


  3. "Now turning to business conditions in the country as a whole, do you think that during the next twelve months we'll have good times financially, or bad times, or what?"


  4. "Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?"


  5. "About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?"

=========


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The ICS uses a 1966 baseline, i.e. for 1966, the ICS = 100. So any number that is below the 1966 baseline of 100 means that the folks who were polled recently aren't as optimistic about the U.S. economy as those polled back in 1966.

The ICS is similar to the Consumer Confidence Index in that they both measure consumer attitudes and offer valuable insight into consumer spending.

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The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

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Thursday, November 11, 2021

New Unemployment Insurance Claims for The Week of November 6, 2021

Jobless Claims
Jobless Claims

Earlier today, the Labor Department released its weekly report on New Jobless Insurance Claims for the week that ended on November 6, 2021:

====================

Predicted: 269,000

  • Actual: 267,000
====================

The yellow-highlighted figure represents the number of first-time claims for unemployment benefits for the entire United States. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

  • Previous Week (revised): 271,000
  • 4-Week Moving Average: 278,000

====================

From Today's Report

"...In the week ending November 6, the advance figure for seasonally adjusted initial claims was 267,000, a decrease of 4,000 from the previous week's revised level. This is the lowest level for initial claims since March 14, 2020 [the eve of the COVID-19 pandemic in the USA] when it was 256,000. The previous week's level was revised up by 2,000 from 269,000 to 271,000. The 4-week moving average was 278,000, a decrease of 7,250 from the previous week's revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week's average was revised up by 500 from 284,750 to 285,250..."


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Wednesday, November 10, 2021

Consumer Price Index (CPI) for October 2021

Earlier this morning, the Labor Department's Bureau of Labor Statistics released the Consumer Price Index (CPI) for October 2021:


=========================================

CPI During October 2021: 276.589

=========================================


Predicted: +0.3%
Actual: +0.831% (+2.279 points)

  • Change From 12 Months Previous: +6.222% (+16.201 points)

=========================================

The above, yellow-highlighted figures represent the seasonally unadjusted, month-to-month change in prices for a specific group of goods and services that consumers buy, and is, therefore, a very important part of the overall inflation picture for the country.

The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

General categories that constitute the CPI are:

  • Healthcare
  • Housing
  • Clothing
  • Communications
  • Education
  • Transportation
  • Food and Beverages
  • Recreation
  • Miscellaneous Goods and Services (grooming expenses, etc.)

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CHART: Consumer Price Index (CPI) 12 Month Percentage Change - October 2021 Update

CHART: Consumer Price Index (CPI)
12 Month Percentage Change
October 2021 Update

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CPI During September 2021: 274.310

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Producer Price Index - Final Demand (PPI-FD) for October 2021

The Producer Price Index - Final Demand (PPI-FD) for October 2021 was released this morning:

Predicted: +0.5%
Actual: +0.6%

Change from 12 months previous:  +8.6%

=============

Below is the PPI-FD when food, energy and trade services are removed:

Predicted: +0.2%
Actual: +0.4%

Change from 12 months previous:  +6.2%

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The above, yellow-highlighted percentages represent the month-to-month change in prices received by domestic producers of goods and services, for goods, services and construction in the United States, for final demand.

Final Demand = personal consumption (consumers), exports, government purchases and capital investment.

The PPI-FD is released by the Labor Department's Bureau of Labor Statistics.

The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.


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CHART: Producer Price Index - Final Demand (PPI-FD) 12 Month Percent Changes - October 2021 Update

CHART: Producer Price Index - Final Demand (PPI-FD)
12 Month Percent Changes
October 2021 Update

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Friday, November 05, 2021

Employment Situation Report for October 2021

The Employment Situation Report for October 2021 was released by The Department of Labor's Bureau of Labor Statistics this morning:

Nonfarm Payrolls (month-to-month change)
Predicted: +500,000
Previous Month (Revised): 312,000
Actual: +531,000


U-3 Unemployment Rate (Headline)
Actual: 4.6%
Previous Month: 4.8%
12 Months Previous: 6.9%

U-6 Unemployment Rate*
Actual: 8.3%
Previous Month: 8.5%
12 Months Previous: 12.1%

Average Hourly Earnings (month-to-month change)
Predicted: +0.5%
Actual: +0.357% (+$0.11)

Average Hourly Earnings (year-on-year change)
Predicted: +3.5%
Actual: +4.878% (+$1.44)

Average Weekly Earnings (month-to-month change)
Actual: +0.068% (+$0.73)


Average Weekly Earnings (year-on-year change)
Actual: +4.576% (+$47.01)

Civilian Labor Force Participation Rate: 61.6%
Previous Month: 61.6%
12 Months Previous: 61.6%

Average Workweek
Predicted: 34.8 hours
Actual: 34.7 hours

Economist, academics, central bankers and investors pay very close attention to the monthly Employment Situation report as it offers penetrating insight as to the current and near-future state of the overall U.S. economy. If a) Americans are earning more money and b) the economy is creating new jobs, this typically translates to more money being pumped into the economy (and vice versa.)

The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

===================

From Today's Report:

 "...In October, 11.6 percent of employed persons teleworked because of the coronavirus pandemic, down from 13.2 percent in the prior month. These data refer to employed persons who teleworked or worked at home for pay at some point in the 4 weeks preceding the survey specifically because of the pandemic.
 
In October, 3.8 million persons reported that they had been unable to work because their employer closed or lost business due to the pandemic -- that is, they did not work at all or worked fewer hours at some point in the 4 weeks preceding the survey due to the pandemic. This measure is down from 5.0 million in September. Among those who reported in October that they were unable to work because of pandemic-related closures or lost business, 13.3 percent received at least some pay from their employer for the hours not worked, little changed from the prior month.

Among those not in the labor force in October, 1.3 million persons were prevented from looking for work due to the pandemic. This measure is down from 1.6 million in September. (To be counted as unemployed, by definition, individuals must be either actively looking for work or on temporary layoff.)

Total nonfarm payroll
employment rose by 531,000 in October. Thus far this year, monthly job growth has averaged 582,000. Nonfarm employment has increased by 18.2 million since a recent trough in April 2020 but is down by 4.2 million, or 2.8 percent, from its pre-pandemic level in February 2020. Job growth was widespread in October, with notable job gains occurring in leisure and hospitality, in professional and business services, in manufacturing, and in transportation and warehousing. Employment in public education declined over the month.

In October, average hourly earnings for all employees on private nonfarm payrolls increased by
11 cents [+0.357%] to $30.96, following large increases in the prior 6 months. Over the past 12 months, average hourly earnings have increased by 4.9 percent. In October, average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents to $26.26..."

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CHART: Nonfarm Payroll Employment October 2021 Update

CHART: Nonfarm Payroll Employment
October 2021 Update

===================


CHART: U-3 (Headline) Unemployment Rate - October 2021 Update

CHART: U-3 (Headline) Unemployment Rate
October 2021 Update

 ===================

 * =  The U-6 Unemployment Rate is defined as:

"Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force."


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Thursday, November 04, 2021

New Unemployment Insurance Claims for The Week of October 30, 2021

Jobless Claims
Jobless Claims

Earlier today, the Labor Department released its weekly report on New Jobless Insurance Claims for the week that ended on October 30, 2021:

====================

Predicted: 270,000

  • Actual: 269,000
====================

The yellow-highlighted figure represents the number of first-time claims for unemployment benefits for the entire United States. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

  • Previous Week (revised): 283,000
  • 4-Week Moving Average: 284,750

====================

From Today's Report

"...In the week ending October 30, the advance figure for seasonally adjusted initial claims was 269,000, a decrease of 14,000 from the previous week's revised level. This is the lowest level for initial claims since March 14, 2020 [the eve of the COVID-19 pandemic in the USA] when it was 256,000. The previous week's level was revised up by 2,000 from 281,000 to 283,000. The 4-week moving average was 284,750, a decrease of 15,000 from the previous week's revised average. This is the lowest level for this average since March 14, 2020 when it was 225,500. The previous week's average was revised up by 500 from 299,250 to 299,750..."


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Monday, November 01, 2021

ISM Manufacturing Index for October 2021

Earlier today, the Institute for Supply Management® (ISM®) released their Manufacturing Purchasing Manager's Index (PMI®) for October 2021:

=========

Predicted: 59.9%

  • Actual: 60.8% (-0.3 point month-on-month change)

=========

Previous month: 61.1%

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Every month, the ISM surveys purchasing and supply executives at hundreds of companies across the country who are involved in manufacturing in some form. The resulting index is watched closely by academics, economists and investors because manufacturing accounts for about 12% of U.S. Gross Domestic Product (GDP).

The PMI is a reliable barometer of U.S. manufacturing: A PMI above 50% implies that U.S. manufacturing expanded during the month specified, while a reading below 50% implies that the made-in-the-USA sector contracted.

=========

From Today's Report:

"...Economic activity in the manufacturing sector grew in October, with the overall economy achieving a 17th consecutive month of growth, say the nation's supply executives in the latest Manufacturing ISM® Report On Business®..."

 

=========

The following is a sampling of quotes from a diverse pool of U.S. manufacturers:


  • "...'Global supply chain issues continue. Getting anything from China is near impossible -- extreme delays. Microchip and circuit breaker shortages continue and are expected to continue into 2022.'
     [Computer + Electronic Products]

 

  • 'Business is getting stronger, but the supply chain is getting worse every day.'
     [Chemical Products]

 

  • 'Strong sales continue; however, we have diverted chips (semiconductors) to our higher-margin vehicles and stopped or limited the lower-margin vehicle production schedules.'
     [Transportation Equipment]

 

  • 'Import costs and delays hurting business, requiring more safety stock for uncertainty. Rolling blackouts in China starting to hurt shipments even more.'
     [Food, Beverage + Tobacco Products]

 

  • 'Domestic original equipment manufacturer (OEM) capital-expenditure spending is trending up for our business. We are seeing an increase of capital equipment with life spans of more than 10 years in the fourth quarter.'
     [Fabricated Metal Products]

 

  • 'Demand continues to be strong, but we continue to be held back by supply chain issues — logistics delays, as well as capacity and labor issues at suppliers.'
     [Electrical Equipment, Appliances + Components]

 

  • 'Business remains strong, with brisk incoming orders. We have become much more supply driven versus demand driven, due to shortages of labor, materials and freight. Costs continue to increase on all fronts, and we are considering our third price increase of the year for our customers.'
     [Furniture + Related Products]

 

  • 'Customer demand remains high. COVID-19 related supply chain issues still hamper our ability to meet demand. Labor is still difficult for our suppliers to obtain, and labor costs are rising.'
     [Machinery]

 

  • 'Demand for our products remains strong, but we continue to struggle to secure enough raw material to keep our manufacturing lines running.'
     [Miscellaneous Manufacturing]

 

  • 'My prediction is that 2022 will be very similar to 2021 — similar demand, constrained supply, restricted logistics and rampant inflation.'
     [Plastics + Rubber Products]..."


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ISM Manufacturing Index - 12 Month History October 2021 Update

ISM Manufacturing Index - 12 Month History
October 2021 Update

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Construction Spending During September 2021

Earlier today, the U.S. Census Bureau -- which is part of the Commerce Department -- released its Construction Spending report for September 2021:

Predicted: FLAT
Actual: -0.532% (-$8,424,000,000)

The yellow-highlighted percentage represents the month-to-month change in new public and private construction activity for the United States. The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

  • Estimated construction spending during September 2021: $1,573,610,000,000.

  • August 2021 (revised): $1,582,034,000,000.
     
  • Change from 12 months previous: +7.836% (+$114,349,000,000.)


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CHART: Construction Spending During September 2021


CHART: Construction Spending During September 2021
 

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Friday, October 29, 2021

PCE Price Index + Personal Income + Consumer Spending Report for September 2021

The Commerce Department's Bureau of Economic Analysis (BEA) released its report on The PCE Price Index, Consumer Spending and Personal Income for September 2021:

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Consumer Spending (Personal Consumption Expenditures)

Predicted: +0.5%

  • Actual: +0.6%
  • Actual (2012 Chained* Dollars): +0.3%
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Personal Income

Predicted: -0.5%
  • Actual: -1.0%
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  • Disposable Personal Income, Current Dollars: -1.3%
  • Disposable Personal Income (2012 Chained* Dollars): -1.6%

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The above highlighted percentages represent the month-to-month change in Consumer Spending (aka Personal Consumption Expenditures), Personal Income and Disposable Personal Income for the entire United States.

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CHART: Month-on-Month Change in Personal Income September 2021 Update

CHART: Month-on-Month Change in Personal Income
September 2021 Update

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Personal Consumption Expenditures (PCE) Price Index
Predicted: +0.3%
Actual: 0.3% 

  • Change from 12 months previous: +4.4%
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Core PCE Price Index
( = PCE Price Index minus food and energy)
Predicted: +0.2%
Actual: 0.2%

  • Change from 12 months previous: +3.6%
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The yellow-highlighted percentages represent the month-to-month change in the prices associated with domestic personal consumption.  The PCE Price Index is different from the Consumer Price Index (CPI) in that it is a very broad measure of the prices associated with domestic products and services, while the CPI measures a more limited fixed basket of goods and services.

The broad nature of the PCE Price Index is key to why it is the Federal Reserve's preferred measure of inflation.  The Federal Open Market Committee (FOMC) pays very close attention to it.

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The "predicted" figures are what economists were expecting, while the "actual" figures are the true or real figure.


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*Chained dollars is a method of adjusting real dollar amounts for inflation over time, so as to allow comparison of figures from different years. The Commerce Department introduced the chained-dollar measure in 1996. Chained dollars generally reflect dollar figures computed with 2012 as the base year.


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Consumer Sentiment: Final Results for October 2021

The University of Michigan's Index of Consumer Sentiment (ICS) - Final Results for October 2021 was released today:

Predicted: 71.5
  • Actual: 71.7
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  • Change from Previous Month: -1.511% (-1.1 points)
  • Change from 12 Months Previous: -12.347% (-10.1 points)

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  • Final ICS Reading for September 2021: 72.8

  • Final ICS Reading for October 2020: 81.8

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From today's report:

"...Consumer sentiment remained virtually unchanged from its mid month reading, gaining just 0.3 Index points, and just 0.1 Index points above the average in the past two months, and only 0.1 Index points below the April 2020 low. The positive impact of higher income expectations and the receding coronavirus has been offset by higher rates of inflation and falling confidence in government economic policies. Consumers not only anticipated the highest year-ahead inflation rate since 2008 in the October survey, consumers also expressed greater uncertainty about the year-ahead inflation rate than anytime in nearly forty years (see the chart below.) Note that this was the first major spike in inflation uncertainty recorded outside of a recession. Even uncertainty about the long-term inflation rate was the highest in more than a decade. Declining living standards due to inflation were spontaneously mentioned by one-of-every five households, concentrated among older and poorer households.

The patterns of consumers' reactions to recent rises in inflation represent the preconditions that can promote an escalating inflation rate during the year ahead. Consumers' recognition of high and rising prices is near universal, so too is their desire to reestablish spending for a more traditional holiday season. People understand that the origin of inflation has been in the upheavals in supply lines and labor markets. The acceptance of higher prices was caused by swollen savings due to the record
pandemic cash incentives as well as by Biden's new social support programs. The declining resistance to price hikes among buyers will be joined by less resistance among sellers to hiking prices that will be justified by higher materials and labor costs. These reactions promote an accelerating inflation rate until a tipping point is reached when consumers' incomes can no longer keep pace with escalating inflation. In the past inflationary era, one recession was insufficient to realign expectations; it required a series of boom-bust cycles, until the Fed's Volcker finally defeated inflation by raising interest rates to record levels..."


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CHART: Inflation Uncertainty as Estimated by the Range of the Middle 50% in Inflation Expectations

CHART: Inflation Uncertainty as Estimated
by the Range of the Middle 50%
in Inflation Expectations

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The ICS is derived from the following five survey questions:


  1. "We are interested in how people are getting along financially these days. Would you say that you (and your family living there) are better off or worse off financially than you were a year ago?"


  2. "Now looking ahead, do you think that a year from now you (and your family living there) will be better off financially, or worse off, or just about the same as now?"


  3. "Now turning to business conditions in the country as a whole, do you think that during the next twelve months we'll have good times financially, or bad times, or what?"


  4. "Looking ahead, which would you say is more likely: that in the country as a whole we'll have continuous good times during the next five years or so, or that we will have periods of widespread unemployment or depression, or what?"


  5. "About the big things people buy for their homes, such as furniture, a refrigerator, stove, television, and things like that. Generally speaking, do you think now is a good or bad time for people to buy major household items?"

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The ICS uses a 1966 baseline, i.e. for 1966, the ICS = 100. So any number that is below the 1966 baseline of 100 means that the folks who were polled recently aren't as optimistic about the U.S. economy as those polled back in 1966.

The ICS is similar to the Consumer Confidence Index in that they both measure consumer attitudes and offer valuable insight into consumer spending.

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The "predicted" figure is what economists were expecting, while the "actual" is the true or real figure.

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