e-EDGE is now available as an RSS feed. [Click here to subscribe to it.]The Bureau of Labor Statistics just released its latest U.S. Labor Market Report covering the U.S. employment situation in December. Although job losses edged up in December, the average number of jobs lost per month during the fourth quarter of 2009 was only -69,000 compared with an average of -691,000 jobs lost per month during the first quarter.
Looking at the employer survey, total nonfarm employment fell by -85,000 jobs in December compared with a decline of -11,000 jobs in November and -111,000 jobs in October. The largest losses month-to-month were in construction, manufacturing and wholesale trade, while temporary help services and health care added jobs.
Government payrolls shed -21,000 workers in December while job counts in the private sector fell by -64,000 jobs (the twenty-fifth consecutive monthly decline). On the plus side, professional and business services added +50,000 jobs following an increase of +86,000 jobs in November. Included in this category are temporary employment services firms (+46,500 workers). This is encouraging because an increase in temporary hiring indicates firms are starting to think about expanding their workforce. Jobs in educational services grew by +10,800 and jobs in health care & social assistance increased by +24,700. The biggest payroll declines over the month were reported by construction (down -53,000 jobs), trade, transportation & utilities (-37,000 jobs) and manufacturing (-27,000 jobs)
Compared with December 2008, nonfarm employers in the U.S. have sliced payrolls by -4,164,000 workers, a decrease of -3.1%. Private-sector employment dropped by -4,099,000 jobs or by -3.6% over the year. The only major private –sector industry group reporting higher payrolls versus last year was education & health services (+376,000 jobs). However, employment has also increased in several smaller industries: motion picture & sound recording (+11,100 jobs), computer systems design services (+10,300 jobs), waste management & remediation services (+3,100 jobs), and museums, historical sites, zoos & parks (+400 jobs). [This list—only seven industries with a total increase of +24,900 jobs over the past year—is still short. However, it should grow in the future as the economic recovery gathers momentum.]
On the downside, the manufacturing and construction sectors continued to shed large numbers of workers over the year. Compared with December 2008, job counts have plunged by -1,272,000 jobs and -934,000 jobs respectively. Manufacturing losses were widespread. The largest declines occurred in these four sectors: fabricated metal products (-191,600 jobs), machinery (-180,600 jobs), motor vehicles & parts (-126,300 jobs), and computers & electronic products (-117,800 jobs).
The separate BLS-sponsored survey of households in December suggested that labor market conditions may be stabilizing. The U.S. unemployment rate remained unchanged at 10.0% last month. Still, joblessness was markedly higher than the 7.4% rate of December 2008 and was still the second highest reading since the spring of 1983, following the last deep recession. Comparing the major demographic groups in December 2008, the jobless rates for adult men and women have risen by +2.8 percentage points and by +2.2 percentage points respectively, while the rate for teenagers jumped by +6.3 percentage points. Over the same period, the unemployment rate for whites increased by +2.3 percentage points. Joblessness among black and Hispanic workers grew by +4.1 percentage points and by +3.5 percentage points respectively.
Although these numbers still present a pretty dismal picture, this report does offer a few glimmers of hope. As business begins to pick up in the first stages of an upturn, many firms turn to temporary workers while they wait to see if the improvement is permanent. December was the 5th consecutive month with higher job counts in the temporary help industry. In addition, the year-to-year employment declines reported for several industries are beginning to taper off, another early recovery sign. And perhaps best of all, the nation’s unemployment rate held steady last month. (Kimberly Ritter)
PR: http://www.bls.gov/news.release/pdf/empsit.pdf
Six months into the 2009/2010 fiscal year, California’s reported deficit continued to grow at a shocking pace. Total revenues fell short of disbursements by $12.9 billion. The State’s cash balance now stands at -$24.8 billion ($11.9 billion of which was carried over from the end of the 2008/2009 FY). The latest financial results released by the State Controller for the General Fund show that during the first six months of FY 2009-2010, total receipts decreased by -6.6% to $38.7 billion (down by -$2.8 billion compared with the same period last year). Total disbursements also fell – declining by -$7.6 billion to $51.5 billion (or by -12.8% on a year-over basis).
Looking at the “big three” revenue sources, corporate tax receipts declined by -5.8% to $3.6 billion (compared with December 2008) while revenues from retail sales and use taxes increased by +6.0% to $13.0 billion. Held in check by high unemployment rates (12.3% statewide in November), personal income tax revenues took a steep dive – plunging by -11.5% to $18.7 billion over the same period.
On the expenditure side, Local K-12 Education received $17.7 billion during the first six months of the fiscal year, a decrease of -$2.2 billion from July-December 2008. Community Colleges fared somewhat better, receiving $2.5 billion, an increase of $79 million over the prior year. Contributions to CALSTRS (the teachers’ pension fund) increased by +15.2% to $653 million. Spending for the Department of corrections fell again in December to $4.7 billion (-7.3%), while spending for the UC and CSU systems fell by a massive -65.5% to $1.2 billion compared with $3.4 billion last year. Spending on Health and Human Services fell by -17.6% to $1.1 billion. Payments to Resources also declined, falling by -15.6% to $800 billion compared with last year. Spending on General Government dipped slightly to $788 million (-2.3%) in December and spending on Legislative/Judicial/Executive expenses was reigned in to $834 million (-5.1%).
As of the end of December, the State had $28.4 billion in borrowable resources against $24.8 billion in outstanding loans which left just $3.6 billion in unused borrowable resources. The outstanding loan balance of $24.4 billion is comprised of $16.0 billion of internal borrowing and $8.8 billion of external borrowing. (Kimberly Ritter)
PR: http://www.sco.ca.gov/eo_pressrel.html
Consumer credit contracted in November, declining at an annual rate of -8.5% (the steepest decline since the early 1980s) compared with -2.0% (revised) in October. Revolving credit decreased at an annual rate of -18.5% and accounted for 78% of the total decline in consumer credit. Non-revolving credit fell by -2.9% after rising by +2.4% (revised) in October. November was the tenth consecutive monthly decline. By dollar volume, total consumer credit fell by a record breaking $17.5 billion over the month (seasonally adjusted). The average decline in consumer credit over the past year was -$8.3 billion per month.
Revolving debt, including balances owed on store charge accounts and bank credit cards, tumbled by -$13.7 billion in November (-18.5%). Over the past year, revolving debt plummeted by -9.3%, its worst year-on-year decline since recordkeeping began in 1968. A year ago, the year-over growth rate was +3.0%.
Non-revolving debt, including auto loans, slipped by -2.9% or $3.8 billion in November. Over the past 12 months, non-revolving debt declined by -0.6%. A year ago, non-revolving debt was growing by +1.5%.
Over the past year, total outstanding consumer credit fell by -3.9% or by -$99.9 billion, the worst year-over decline in the post World War II era. Total outstanding consumer credit has fallen by $117 billion from its peak in July 2008 and is at its lowest level as a percentage of disposable income since July 2000. In the months ahead, consumer credit is likely to decline further. Credit card issuers are tightening standards, raising interest rates and slashing credit lines in anticipation of the Credit Card Act. After the new laws go into effect in February, credit card companies will not be able to easily raise rates. (Kimberly Ritter)
PR: http://www.federalreserve.gov/releases/g19/Current/
December saw another encouraging uptick in sales of autos and light trucks. Total light vehicle sales for the month were 11.2 million (seasonally adjusted annual rate or SAAR), up by +8.8% from December 2008 and up by +2.9% from November. While this is good news, keep in mind that the year-over increase was based on the low sales levels posted near the bottom last year’s “carpocolypse”. There were also two additional selling days this December versus December 2008.
Total car sales, including both foreign and domestic models, jumped by +13.1% from twelve months earlier (to 5.9 million SAAR). Foreign auto sales rose by +7.2% (to 1.8 million SAAR), while sales of domestic nameplates surged by +15.8% (to 4.1 million SAAR). On a month-over basis, domestic sales growth was still strong (+8.7%), while sales of foreign models edged up by +1.1%.
Combined sales of foreign and domestic light truck models improved in December. Over the year, sales rose by +4.3% (following an increase of +1.6% in November) to 5.3 million vehicles, but over the month, the number of light trucks sold slipped by -0.7%. Once again, the stronger year-over result in the light truck sector was entirely due to a +7.5% in sales of domestic models (to 4.4 million SAAR). During the same period, sales of imported trucks fell by -9.5% to just 0.8 million vehicles.
Sales of medium-heavy trucks fell by -5.6% compared with December 2008, but improved by +15.3% over the month.
Since September’s post cash-for-clunkers crash (9.2 millions SAAR), light vehicle sales have risen each month. The December results were due in part to year-end incentives, but momentum may be beginning to build for the automotive industry – provided cautious consumers shift back into a spending mindset before any latent recovery stalls out. (Kimberly Ritter)
PR: www.bea.gov
China: Data released on Sunday by China’s Customs Bureau demonstrated that China’s exports jumped significantly in December from a year earlier. Exports rose by +17.7 percent year-over-year, the first increase in 14 months. The substantial expansion provided another signal that the global economic recovery is underway. China’s two largest export markets experienced strong increases. Sales to the U.S. jumped by nearly +16%, while exports to the European Union rose by +10%. In addition, imports surged by nearly +60% in December on a year-to-year basis as domestic consumption continues to expand. Of course, it is important to point out that both export and import annual growth rates were distorted somewhat due to the low starting point of December 2008.
Although, Chinese exports did fall by -16.0% in 2009, China surpassed Germany in 2009 to become the world’s largest exporter. Over the first eleven months of 2009 China had exports valued at $1.07 trillion while Germany was at $1.05 trillion. China also saw its share of world exports increase to nearly 10%, more than tripling in the past ten years. At the same time, U.S. imports from China are now at almost 20% of all American imports. The fiscal and monetary policies implemented in late 2008 and in 2009 have resulted in strong economic growth, and the Chinese economy is expected to become the second largest in the world in 2010 surpassing Japan. (Ferdinando Guerra)
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