October 28, 2021

Reports Show Weaker Hiring and Service Sector Growth

WASHINGTON (AP) — Two reports showed Wednesday that American service companies grew more slowly in March and private employers pulled back on hiring. The declines suggest businesses may have grown more cautious last month after federal spending cuts took effect.

The Institute for Supply Management said that its index of nonmanufacturing activity fell to 54.4 last month. That is down from 56 in February and the lowest in seven months. Any reading above 50 signals expansion.

Slower hiring and a steep drop in new orders drove the index down. A gauge of hiring fell 3.9 points to 53.3, the lowest since November.

The group’s report covers companies that employ roughly 90 percent of the work force, including the retailing, construction, health care and financial services industries.

A separate report from the payroll processor ADP also pointed to slightly weaker hiring in March. ADP said private employers added 158,000 jobs in March, down from 237,000 the previous month. Construction companies did not add any jobs after three months of solid gains.

Economists were not overly concerned with the weaker reports. Several noted that ADP’s figures were less reliable than the government’s more comprehensive employment report, which comes out on Friday.

Still, many say the pace of hiring has probably dropped off from the previous four months, when employers added an average of 200,000 net jobs a month. And a few reduced their forecasts for March job growth after seeing the two reports.

Jim O’Sullivan, chief United States economist at High Frequency Economics, now expects just 160,000 net jobs in the March employment report, instead of 215,000. Jennifer Lee, an economist at BMO Capital Markets, said her group had lowered its forecast to 155,000, from 220,000.

Ms. Lee said businesses might have temporarily suspended hiring because they wanted to see the impact of $85 billion in government spending cuts, which began on March 1.

Still, most economists say any slowdown is likely to be temporary. Most say growth accelerated in the January-to-March quarter to a 3 percent annual rate, buoyed by a resilient consumer and a steady rebound in housing.

And even if growth slows in the April-to-June period to roughly 2 percent, as some predict, that would still leave the economy expanding at a solid pace in the first half of the year.

Article source: http://www.nytimes.com/2013/04/04/business/economy/survey-shows-158000-new-jobs-in-march.html?partner=rss&emc=rss

In Survey, Fed Finds Economic Growth Is Widespread

The survey noted that 10 of the Fed’s 12 banking districts reported moderate growth, while the Boston and Chicago districts reported slow growth. The survey, called the beige book, provided anecdotal information on economic conditions through Feb. 22.

The information will be discussed along with other economic data during the Fed’s next policy meeting on March 19 and 20Consumer spending increased in most regions, but much of the gains were driven by auto sales.

Many districts said consumers spent slightly less after taxes rose and gas prices increased. Some districts also expressed concern about federal spending cuts that started March 1.

Housing markets showed increased strength in nearly all of the country. Manufacturing grew modestly in most districts after struggling through most of 2012. Many districts reported improvement in individual job markets.

Analysts said the survey was slightly more upbeat than the previous one by the Fed, noting the modest rebound in manufacturing in the last two months. Jennifer Lee, senior economist at BMO Capital Markets, said the latest survey was “more encouraging news on the U.S. economy.”

Many economists believe the Fed will maintain its low-interest-rate policies at current levels, taking no new steps at the March meeting.

In January, the Fed stood behind aggressive steps it introduced in December to try to lower unemployment. It repeated its intention to keep its key short-term interest rate at a record low at least until unemployment falls below 6.5 percent. The Fed also said it would keep buying Treasuries and mortgage bonds to help lower borrowing costs and encourage spending.

When the Fed last met in January, the unemployment rate was 7.9 percent. The government will report on February’s unemployment figures on Friday, and some economists are forecasting that the jobless rate will decline to 7.8 percent, with the economy adding 152,000 jobs.

The payroll processor A.D.P. said Wednesday that American businesses added 198,000 jobs in February. The private survey also revised January’s hiring figures to show that companies added 215,000 jobs that month, 23,000 more than what had initially been reported.

That suggests the government’s February unemployment report could come in above economists’ forecasts.

In another positive economic sign, orders for machinery and other factory goods that signal business investment surged in January.

Orders for so-called core capital goods, which also include equipment and computers, rose 7.2 percent from December, the Commerce Department reported Wednesday. It was the largest gain in more than a year and higher than the initial 6.3 percent increase estimated by the government last week.

Total factory orders fell 2 percent in January compared with December. But the decline was mostly a result of a steep drop in aircraft and military orders.

Demand for durable goods, items expected to last at least three years, dropped 4.9 percent. Demand for nondurable goods, such as chemicals and paper, rose 0.6 percent.

Article source: http://www.nytimes.com/2013/03/07/business/economy/in-survey-fed-finds-economic-growth-is-widespread.html?partner=rss&emc=rss

New Jobless Benefit Applications Fall to 5-Year Low

The Labor Department said Thursday that weekly unemployment benefit applications dropped 5,000 to a seasonally adjusted 330,000. That is the fewest since January 2008.

The four-week average of jobless claims, a less volatile measure, fell to 351,750. That is also the lowest in nearly five years.

The decline may reflect the government’s difficulty adjusting its numbers to account for layoffs after the holiday shopping season. Layoffs spike in the second week of January and then plummet. The department seeks to adjust for those seasonal trends, but the figures can still be volatile.

If the trend holds up, fewer applications would suggest that the job market is improving.

“Encouraging news on the U.S. jobs front, even when you remove all of the noise,” said Jennifer Lee, an economist at BMO Capital Markets. “Weekly data are noisy, particularly at this time of year, so keep that in mind.”

Applications are a proxy for layoffs. They have fluctuated between 360,000 and 390,000 for most of last year. At the same time, employers added an average of 153,000 jobs a month. That has just been enough to slowly push down the unemployment rate, which fell 0.7 percentage points last year to 7.8 percent in December. The government will issue its January employment report at the end of next week.

The number of people continuing to claim jobless benefits is also falling. Nearly 5.7 million people were receiving unemployment aid in the week ended Jan. 5, the latest data available. That is down from almost 5.9 million in the previous week.

Separately, a measure of the American economy intended to signal future activity increased in December from November, suggesting growth might strengthen in early 2013.

The Conference Board said on Thursday that its index of leading indicators rose 0.5 percent in December, the best showing since September. In November, the index was unchanged.

The gauge is meant to forecast economic conditions three to six months out.

A decline in applications for unemployment benefits, stock market gains on Wall Street and increases in applications for building permits drove the index higher in December.

Kenneth Goldstein, a Conference Board economist, said the rebound in the leading indicators suggested an improving outlook, in contrast to a few months ago when the expectations were not so optimistic.

“Housing, which has long been a drag, has turned into a positive for growth, and will help improve consumer balance sheets and strengthen consumption,” Mr. Goldstein said. “However, for growth to gain more traction we also need to see better performance on new orders and an acceleration in capital spending.”

Article source: http://www.nytimes.com/2013/01/25/business/economy/us-jobless-claims-reach-lowest-mark-in-five-years.html?partner=rss&emc=rss

Jobless Claims Rise Slightly

Other data suggested that the economy remained on a steady growth path, with sales at wholesalers rising by the most in more than 18 months in November, keeping inventories balanced.

Initial claims for state jobless benefits increased 4,000 to a seasonally adjusted 371,000. The prior week’s figure was revised to show 5,000 fewer applications than previously reported.

“Jobless claims data continue to suggest steady but modest U.S. employment gains,” said Robert Kavcic, a senior economist at BMO Capital Markets.

The four-week moving average for new claims, a better measure of labor market trends, increased 6,750 to 365,750, still at a level consistent with steady job gains.

The labor market has been gradually improving, with job gains last year averaging 153,000 a month, little changed from 2011. The unemployment rate ended the year at 7.8 percent.

A separate report from the Commerce Department showed that sales at wholesalers rebounded 2.3 percent in November, the largest gain since March 2011, after falling 0.9 percent in October.

Wholesale inventories rose 0.6 percent after advancing 0.3 percent in October.

Article source: http://www.nytimes.com/2013/01/11/business/economy/jobless-benefits-claims-rise.html?partner=rss&emc=rss

U.S. Housing Prices Fell Again in January

The Standard Poor’s Case-Shiller Home Price Index for 20 large cities dropped 1 percent from December, putting it only 1.1 percent above its spring 2009 low. The index is down 31.8 percent from its 2006 peak.

Analysts expected a rough winter, but not quite so brutal.

“We are more negative on housing than we were three months ago,” said Jennifer Lee of BMO Capital Markets. Any recovery will be delayed until next year, she said.

Maureen Maitland, S. P.’s vice president for index services, noted that sales of both new and existing homes were weak, compounding the market’s struggles. “We can’t see a bottom for housing,” she said.

Atlanta, Cleveland, Detroit and Las Vegas are now below their average prices of 11 years ago, and Phoenix is almost there. Charlotte, Chicago, Dallas and Minneapolis are not doing much better.

Buying a house is a mix of faith and necessity, but the first element is scarce these days. The Conference Board reported Tuesday that its consumer confidence index tumbled 8.6 percent in March, the first drop in six months and the largest in a year.

Among the troubles facing the market is a pervasive sense that houses are a bad bet at the moment. If prices still have further to fall, if loans are tough to get, if interest rates are no longer plunging, why not put off a deal if you can?

First-time buyers, a critical force in the market, have become scarcer since a stimulus program involving tax credits came to an end last spring.

“That really motivated a lot of people to act,” said Steven Thoele, a broker with Keller Williams in Portland, Ore. “Eight grand in your pocket went a long way to making the numbers work”

Portland was one of 11 cities in the Case-Shiller index that reached another low for the current downturn in January. Prices fell 1.8 percent from December, pushing them back to 2005 levels.

“You do kind of wonder where the bottom is,” said Mr. Thoele. “Sellers know in the back of their mind that their home is worth less than at the peak, but they’re still a little surprised when you tell them their $400,000 house is now worth $300,000.”

Case-Shiller is a three-month moving average, which means it is resistant to quick changes. On a seasonally adjusted basis, January’s drop was 0.2 percent, the same as in December. In the slower winter months, the adjusted numbers are considered less indicative of the market’s true condition.

Prices were down 3.1 percent from their levels a year earlier. Only two of the 20 cities in the index recorded price increases during that time: Washington and, barely, San Diego.

The report capped a run of weak housing reports. Existing-home sales were down in February by nearly 10 percent from January, the National Association of Realtors reported last week, much worse than expected.

New-home sales in February were 14 percent below forecasts. At an annual rate of 250,000, sales were the lowest since the advent of record-keeping in 1963.

In one hopeful note, the National Association of Realtors said this week that pending home sales rose 2.1 percent in February. Those deals, which will become final in March and April, indicate that sales are unlikely to continue to tumble, which could help stabilize prices.

Article source: http://feeds.nytimes.com/click.phdo?i=0991a02d8d4ea08cdeca2e8b7d79c0a9