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The Economic Data Global Express (e-EDGE)The Kyser Center for Economic ResearchThe Economic Data Global Express (e-EDGE) is a free, weekly broadcast of useful economic news for the greater Los Angeles area. It covers news and statistics at the international, national, California and local levels. Past e-EDGE newsletters are available online back to July 2000. Subscribe to e-EDGE and receive current economic news and major developments. Your e-mail address will not be disclosed to any outside party (including e-EDGE sponsors) under any circumstances. e-EDGE is now available as an RSS feed. [Click here to subscribe to it.] v.12 n. 18 - Released May 5, 2008 [Printer-friendly version] THIS WEEK'S HEADLINES:
First Quarter 2008 Economic Report CardThe U.S. economy grew by 0.6% last quarter according to “advance” estimates of the Bureau of Economic Analysis. This pace was the same as in fourth quarter 2007, though both were well below the 4.9% registered in 3q2007. [All percentage changes in this article are seasonally adjusted annual rates and adjusted for changes in inflation.] Business firms’ additions to inventories were the biggest positive contributor to last quarter’s performance, adding 0.8 percentage points to the economy’s overall growth rate. Consumer spending for goods and services followed right behind, adding 0.7 percentage points. Other sectors also generated positive contributions. Government purchases of goods and services contributed 0.4 percentage points, while net exports (gross exports minus gross imports) added 0.2 percentage points to growth in the first quarter. On the downside, residential investment spending sliced -1.2 percentage points from the first quarter’s economic growth rate, the ninth quarter of negative performance. And business spending for plant, equipment and software pulled down the economy’s growth rate by another -0.3 percentage points The BEA called its release an “advance” report because all of the figures are still preliminary. When preparing its estimates, the BEA did not know for sure what happened to foreign trade, inventories, or construction in March and had to make some assumptions, which may or may not prove correct. Also, the information on consumer spending during March is still incomplete. We’ll get a better picture of the first quarter economy next month. However, the main headline—slow economic growth boosted by decent spending by consumers and governments, foreign trade and some re-stocking by businesses but still held back by the ongoing decline in housing and conservative business investment spending—seems unlikely to change. (Nancy D. Sidhu) PR: http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
April U.S. Labor Market ReportThe Bureau of Labor Statistics released its latest U.S. Labor Market Report on Friday, covering the U.S. employment situation in April. Total nonfarm employment fell in April by -20,000 jobs. However, this was smaller than the monthly declines of January-March. In total, U.S. employment has shrunk by -260,000 workers over the past four months, after growing steadily for the previous four years and four months. Government payrolls increased by 9,000 employees last month; so private-sector payrolls dropped by -29,000 jobs, the fifth consecutive monthly decline. Five of the ten major industry groups reported higher job counts in April. The “plus” industries were led by education & health services (up by +52,000 jobs over the month), professional & business services (+39,000 jobs, net of a loss of -9,000 temporary help positions) and leisure & hospitality (with an increase of +18,000 jobs). The biggest payroll declines were reported by construction (down by -61,000 jobs over the month), manufacturing (-46,000 jobs), and retail trade (-27,000 jobs, with losses at building material & garden supply stores and department stores). Compared with 12 months ago, nonfarm employers have added 462,000 workers to their payrolls, an increase of about 0.3%. Again, five private-sector industry groups reported higher payrolls over the year. The biggest job gainers were education & health services (+549,000 jobs), leisure & hospitality (+320,000 jobs), and professional & business services (+165,000 jobs, even though temporary help firms shed -124,000 workers over the year). The construction and manufacturing sectors continued in the red, falling by -385,000 jobs and -326,000 jobs respectively compared to April 2007. Note that residential construction employment has declined by -306,000 jobs over the year; so payrolls in nonresidential and heavy construction have fallen by a combined -79,000 workers over the past twelve months. In the separate BLS survey of households, the U.S. unemployment rate edged back down to 5.0% in April from 5.1% in March, which was up from 4.8% in February. The nation’s jobless rate was 4.5% in April 2007; so the unemployment rate has risen by +0.5 percentage points over the past 12 months. Among the major demographic groups, the jobless rate for adult women rose by +0.4 percentage points over the year and the rate for adult men was up by +0.6 percentage points, while the rate for teenagers did not change at all. Over the same period, unemployment rates for whites and blacks both increased by +0.4 percentage points, while joblessness among Asians was down by -0.1 percentage point. The rate of unemployment among Hispanic workers has risen by +1.4 percentage points. The nation’s jobless rate has moved in an irregular-but-clearly-upward direction over the past 13 months (from 4.4% in March 2007). Job counts are falling in many sectors of private industry, with the steepest declines in those related to housing construction, automotive and apparel/textiles manufacturing, and mortgage finance. These sectors lost -65,000 jobs in April and have shed -615,000 workers over the past 12 months. The only sectors reporting consistent employment gains are education & health care (which seem to grow no matter what happens in other parts of the economy), leisure & hospitality, and professional & business services (outside of employment services). Many business firms are simply unwilling to hire more workers, reflecting a high level of uncertainty about the outlook, not just for the economy in general but also for their own businesses. (Nancy D. Sidhu) PR: http://www.bls.gov/news.release/pdf/empsit.pdf
U.S. Employment Cost Index Eased in 1Q 2008The Bureau of Labor Statistics released the Employment Cost Index (ECI) for first quarter 2008, which showed a slight slowdown across the board since the third quarter of 2007. The index measures total compensation costs, including wages and salaries and benefit costs, in private industries and government. The easing had been expected due to loosening labor market conditions. Compensation costs for all civilian workers rose by 0.7% (quarter-over-quarter, SA) in 1Q 2008 compared with a 0.8% increase during 4Q 2007. Wages and salaries rose by 0.8%, the same pace as the last two quarters. Benefit costs rose by 0.6% during the first quarter, following a 0.8% increase the previous two quarters. Private industry compensation costs rose by 0.8% (quarter-over-quarter) during 1Q 2008, following a 0.9% increase in 4Q 2007. Wages and salaries rose by 0.8%, the same as the last three quarters. Benefit costs for private industry were up by 0.6%, following a 0.8% increase during the last two quarters. State and local government compensation costs went up by 0.6% (quarter-over-quarter) during 1Q 2008, following a 0.9% increase in the previous two quarters. Wages and salaries rose by 0.7%, following a 0.8% increase during the previous quarter. Benefit costs rose by just 0.3%, following a strong 1.2% increase during 4Q 2007. (Candice Flor Hynek) PR: http://www.bls.gov/news.release/pdf/eci.pdf
January 1, 2008 City & County Population EstimatesThe Demographic Research Unit of the California Department of Finance has just released their January 1, 2008 city and county population estimates. The headline news was that the state added 490,000 residents over the year to January 1, pushing the total population count to 38,049,462 persons. Around Southern California, Los Angeles County added 87,936 residents between January 2007 and January 2008 (remember the recent Census Bureau estimate that the County had lost 2,000 people?). Between 2007 and 2008, Orange County added 31,544 residents, Riverside County gained 53,482 persons, San Bernardino added 29,441 persons, San Diego County gained 46,142 people and Ventura County was up by 8,458 residents. Together, the six Southern California counties added 257,003 residents between January 1, 2007 and January 1, 2008, pushing the regional total to 21,607,050 residents. Looking at city details, the 10 largest cities in the state include: #1. Los Angeles (+49,803 persons to a January 1, 2008 count of 4,045,873 residents); #2. San Diego (+19,240 persons to 1,336,865 residents); # 5. Long Beach (+2,449 persons to 492,642 residents); #9. Santa Ana (+1,372 persons to 353,184 residents); and #10. Anaheim (+2,850 persons to 346,823 residents). Only one Southern California city made the roster of fastest growing in the state on the basis of percentage change between 2007 and 2008, and that was Beaumont. It grew by 11.3% or by +3,206 persons to a total of 31,477 residents. For the record, the six Southern California counties have 43 cities with a January 1, 2008 population of over 100,000 residents. Los Angeles has 16, Orange County has 8, Riverside, San Bernardino and San Diego counties have 5 each, and Ventura County hadd4. Which city in the region had the smallest population? It was Vernon with 95 residents. It’s an industrial city, which makes it my kind of town. (Jack Kyser) PR: http://www.dof.ca.gov/research/demographic/reports/estimates/e-1_2006-07/
2008 Fortune 500 Companies in Southern CaliforniaThe 2008 Fortune 500 list has recently been released, and the five-county area had 20 firms on the list compared with 22 on the 2007 roster. San Diego County had four firms on the list in both 2007 and 2008. Disappearing from the five-county’s roster were Computer Sciences (which moved its headquarters to Virginia), and Hilton Hotels. The latter was taken private – the headquarters are still in Beverly Hills. The top three local firms on the 500 roster are: Walt Disney at 67th with revenues of $35.9 billion; Ingram Micro at 69th with revenues of $35.0 billion; and Northrop Grumman at 76th with revenues of $32.0 billion. What are the top cities for Fortune 500 headquarters in Southern California? Los Angeles claimed 5, San Diego had 4, and El Segundo was the home for 3 company headquarters. (Jack Kyser)
Events of InterestThursday, May 8 Register today: Wednesday, May 14 Wednesday, May 21 Los Angeles Chapter of the National Association for Business Economics " The Economic Outlook for the United States and California: Slow Growth or Recession?" with Ross DeVol of Milken Institute. To register and for more information www.lanabe.org
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