Inflation further inflates. Here are the five things we learned from U.S. economic data released during the week ending December 10.
Consumer inflation surged to a 39-year high in November. The Consumer Price Index (CPI) jumped a seasonally adjusted 0.8 percent during the month, following a 0.9 percent bounce in October. Over the past year, the Bureau of Labor Statistics measure has risen 6.8 percent, its highest year-to-year gain since June 1982. Energy CPI rose 3.5 percent (gasoline: +6.1 percent) and food CPI jumped 0.7 percent. Net of both energy and food, core CPI increased by a half percentage point (after gaining 0.6 percent in October). Core CPI had a 12-month comparable of +4.9 percent (a 30-year high). Prices for every major product and service category jumped in November. Rising were prices for used cars/trucks (+2.5 percent), apparel (+1.3 percent), new vehicles (+1.1 percent), transportation services (+0.7 percent), shelter (+0.5 percent), medical care services (+0.3 percent), and commodities (+0.1 percent).
There were even more open jobs at the end of October. The Bureau of Labor Statistics reports a seasonally adjusted 11.033 million open jobs at the end of the month, up 431,000 from September and 60.5 percent from a year earlier. Only in July have there ever been as many unfilled jobs in the U.S. Industries with at least 1 million open positions were retail, manufacturing, professional/business services, education/health services, and accommodation/food services. The pace of hiring did not keep up. The 6.464 million hired workers were down 118,000 from September and up 7.1 percent from a year earlier. Also declining were the number of people leaving their jobs as separations declined by 255,000 to 5.892 million (+8.6 percent versus October 2020). Layoffs slipped by 35,000 to 1.361 million (down 21.2 percent from a year earlier) and voluntary quits dropped by 345,000 to 4.276 million (up 23.9 percent from a year earlier). At least a half million quit their jobs in retail, health care/social assistance, professional/business services, and accommodation/food services.
At the same time, jobless claims fell to a 52 week low in early December. The Department of Labor estimates there were a seasonally adjusted 184,000 first-time claims made for unemployment insurance benefits. Not since September 6, 1969(!) has there been so few initial jobless claims. The four-week moving average of 218,750 was 71.5 percent below the year-ago moving average and its lowest point since the pandemic started (the week ending March 7, 2020).
Consumer sentiment continued to stumble in early December. The preliminary December Index of Consumer Sentiment from the University of Michigan came in at a seasonally adjusted 70.4. Despite adding three points from November, the measure remained 10.3 points under its year-ago mark. The current conditions index added one point to 74.6 (December 2020: 90.0) as the expectations index jumped by 4.3 points to 67.8 (December 2020: 74.6). The press release noted that lower income survey respondents fueled the increase in the headline index. The survey also found that inflation (rather than unemployment) concerned most consumers.
The trade deficit narrowed in October as exports surged. Export activity jumped 8.1 percent to $223.6 billion during the month, while imports grew 0.9 percent to $290.7 billion. As a result, the trade deficit dropped 17.6 percent to -$67.1 billion, the smallest value for the Census Bureau/Bureau of Economic Analysis measure since April. The goods deficit plummeted by $14.0 billion to -$83.9 billion and the services surplus inched up $0.3 billion to +$16.8 billion. Supporting the former were increased exports of industrial supplies (e.g., crude oil and gold), capital goods (e.g., aircraft), food, gem diamonds, and automotive vehicles. The U.S. had its largest goods deficits with China, the European Union, and Mexico.
Other U.S. economic data released over the past week:
- Wholesale Inventories (October 2021, Merchant Wholesaler Inventories, seasonally adjusted): $759.4 billion (+2.3% vs. September 2021; +14.4% vs. October 2020).
- Productivity (2021Q3-revised, Nonfarm Business Labor Productivity, seasonally adjusted annualized rate): -5.2% vs. 2021Q2; -0.6% vs. 2020Q3.
- Consumer Credit (October 2021, Outstanding Consumer—Non-Real Estate—Credit Balances, seasonally adjusted): $4.381 trillion (+$16.9 billion vs. September 2021; +5.2% vs. October 2020).
- Monthly Treasury Statement (November 2021 (1st 2 Months of FY2022), Federal Budget Deficit): -$356.4 billion (vs. 1st2 Months of FY2021: -$429.3 billion).
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