| Economy Review This Week 09/12/2013 |
Employment
figures were a key newsmaker last week, and whether or not the news was
favorable depended on the eye of the beholder. Specifically, the economy added
169,000 in August, which put the unemployment rate at 7.3 percent, the Bureau of
Labor Statistics reported last week. This was little changed form July, but the
lowest since December 2008.
On the face of things, that’s good news, but it skirts the issue of people who have given up looking for work, which is described by the labor-force participation rate. For August, the percentage of working-age people either working or looking for work, dropped to 63.2 percent from 63.4 percent in July. This was its lowest rate since 1978. Ignoring the participation rate and going by the 7.3 percent rate, the number of unemployed Americans totaled 11.3 in August, the number of long-term unemployed (those jobless for 27 weeks or longer) hovered at 4.3 million. The long-term unemployed accounted for 37.9 percent of the total unemployed population. The number of Americans involuntarily employed part time for economic reasons, such as their hours were cut or they were unable to find full-time work dropped by 334,000 to 7.9 million in August. While the monthly unemployment scenario’s progress was unclear at best, more recent employment scores were more upbeat, with first-time claims for jobless benefits remaining at a five-year low. First-time claims for unemployment insurance filed during the week ending Aug. 31 dipped to 323,000, a decline of 9,000 from the previous week's revised figure of 332,000, according to last week’s report from the Employment and Training Administration. The four-week moving average was 328,500, a drop of 3,000 from the prior week's revised average of 331,500. The total number of unemployed Americans covered by jobless benefits during the week ending Aug. 24 dropped to 2,951,000, a loss of 43,000 from the previous week's revised level of 2,994,000, the Administration also reported. The four-week moving average was 2,979,500, a decrease of 18,000 from the previous week's revised average of 2,997,500. Switching gears to real estate news, construction spending during July notched up 0.6 percent over June’s revised rate of $895.7 billion to hit an annual rate of $900.8 billion, the Census Bureau reported last week. Compared to last year, July’s rate was 5.2 percent over July 2012’s rate of $856.3 billion. Spending on private construction hit an annual rate of $631.4 billion in July, which was 0.9 percent higher than June’s revised June estimate of $625.6 billion. Residential construction hit an annual rate of $334.6 billion in July, which was 0.6 percent over June’s revised estimate of $332.7 billion. Finally, in international trade, the trade gap widened in July with exports of $189.4 billion and imports of $228.6 billion creating a trade deficit of $39.1 billion, which was up from $34.5 billion in June, the Census Bureau and the Bureau of Economic Analysis jointly reported last week. July exports were down $1.1 billion from June’s exports of $190.5 billion, while July’s imports were $3.5 billion higher than June’s imports of $225.1 billion. This increase in imports was due to a combination of increased crude oil prices as well as consumer spending on goods from overseas, which could point to an improving economy, according to some analysts. This week, we can expect:
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