|09-07-2014, 02:27 AM||#1|
This week cheerful data was overshadowed by a gloomy jobs report
Regardless of the better than projected reports released this week regarding the services activities and exports pessimism was spread across the nation after that Friday’s unexpectedly gloomy jobs report was released; the key report of the economy and major measurement of growth.
In fact on the last day of the week the jobs report was released and showed that the U.S. job creation slowed to its lowest pace of the year in August, a stumble for the labor market that had seen a stretch of steady 200,000-plus gains over the past six months.
Non-farm employment advanced a seasonally adjusted 142,000 in August, according to the Labor Department.
July’s gain was revised higher to a gain of 212,000 from an earlier estimate of 209,000. June’s gain was revised lower to 267,000 from 298,000.
Job growth has averaged 207,00 over the last three months, and 215,000 jobs every month so far this year, which is the best pace of job growth since hiring average 265,000 a month in 1999.
The unemployment rate ticked lower to a seasonally adjusted 6.1% from 6.2% in July. Unemployment has fallen 1.1 percentage points since August 2013, when it was 7.2%.
A broader measure of unemployment that includes those working part-time but who would like full-time jobs fell to 12% in August from 12.2% in July.
The labor-force participation rate fell in August to 62.8%, matching its lowest level since the late 1970s. The rate had ticked up to 62.9% in July.
Yet wage growth showed a slight improvement in August ; the average hourly earnings for private-sector workers rose in August to $24.53, up 6 cents from July and 2.1% from a year earlier. The average workweek was unchanged at 34.5 hours for the sixth straight month.
Now earlier this week a report showed that the country’s private employment slowed a bit in August, trailing what was anticipated but still maintaining the pace of job making in 2014.
ADP said the economy added 204,000 in August in the private sector, compared with 212,000 in July. Analysts by Bloomberg called for a 220,000 increase.
As for the jobless claims; they were slightly changed last week, showing employers had enough confidence in the economy to hang on to their staff.
The total number of people on the employment benefits rolls dropped to the lowest in over seven years.
Initial jobless claims climbed 4,000 to 302,000 in the week-ended August 30, according to data by the Labor Department on Thursday. Analysts by Bloomberg called for 300,000.
As for the trading current status of the country, this week a report showed that U.S. trade deficit unexpectedly narrowed in July to the lowest in six months as exports jumped to a record.
In fact deficit fell 0.6% to $40.5 billion, the lowest since January, compared with a revised $40.8 billion in June that was lower than initially seen. Analysts by Bloomberg called for a widening to $42.4 billion.
Exports climbed 0.9% to a record high of $198 billion in July, on growing demand for U.S. goods, autos and petroleum products.
Imports rebounded 0.7 per cent in July to $238.6-billion after declining in June. The rebound in imports is a sign of underlying strength in domestic demand. The increase in imports was driven by food and autos, which both hit record highs.
Plus it is important to notice that the politically sensitive trade gap with China was the highest on record in July .
And turning to the service activity in the U.S, it actually expanded at the fastest pace in nine years in August, according to a report by the Institute for Supply Management.
ISM said its services index rose to 59.6 last month from 58.7 in July. The August reading was the highest since March 2005, and topped estimates by Bloomberg for a decline to 57.7. A reading above 50 signals expansion in the sector.
Furthermore this week the Federal Reserve’s Beige Book showed that the U.S. economy gained momentum in all regions in July and August in most industries including consumer spending, auto sales, and tourism.
The survey showed economic activity expanded in all twelve districts for the second straight time.
All 12 of the Fed`s regions reported growth. New York, Cleveland, Chicago, Minneapolis, Dallas and San Francisco characterized their growth as "moderate." The other districts reported somewhat slower expansion.
The survey, known as the Beige Book, is based on anecdotal reports from businesses and will be considered with other data when Fed policymakers meet Sept. 16-17.
And turning to the nation’s major trading partner and neighbor, Canada, it’s Bank kept its rate unchanged but also the bank’s governor; Stephen Poloz, extended the country’s interest-rate pause to four years today and actually remained neutral on his next move as the economy remains on struggling to fully recover.
The central bank kept its benchmark rate on overnight loans between commercial banks at 1%, the same it has been since September 2010, meeting estimates by Bloomberg.
Keeping in mind that the rate has been a one per cent for more than four years, dating back to September 2010, the longest stretch of level rates in Canadian history.
Also the bank added regarding its neutrality that: “The Bank is neutral with respect to the timing and direction of the next change to the policy rate, which will depend on how new information influences the outlook and assessment of risks”
Furthermore it is important to be aware that a reason why the Bank is planning o keep its rate unchanged on a long term is inflation, knowing that the country’s price pressures slowed to 2.1 percent in July from 2.4 percent in June, after accelerating from 0.7 percent in October.
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