Hiring remained robust as the number of unfilled jobs declined. Here are the five things we learned from U.S. economic data released during the week ending December 8.
Payrolls continued their winning streak in November. Nonfarm payrolls expanded by a seasonally adjusted 199,000, per the Bureau of Labor Statistics. This followed gains of 262,000 and 150,000 in September and October, respectively. Private sector payrolls grew by 150,000, split by service sector and goods-producing sector gains of 121,000 and 29,000, respectively. The sectors adding the most workers were health care/social assistance, leisure/hospitality, durable goods manufacturing, and the government. Average weekly earnings of $1,173.04 were up 3.7 percent from a year earlier.
Based on a separate household survey, the unemployment rate dropped by 2/10ths of a percentage point to 3.7 percent. The labor force added 532,000 people, bringing the labor force participation rate to 62.8 percent (up 1/10th of a percentage point from October). The 25-54 labor force participation rate held steady at 83.3 percent. The typical length of unemployment grew by 3/10ths of a week to 9.2 weeks. The number of people with part-time employment but seeking full-time work shrank by 295,000 to 3.988 million. The broadest measure of labor underutilization (the U-6 series) shed 2/10ths of a percentage point to 7.0 percent.
The number of job openings contracted to a 2.5-year low in October. The Bureau of Labor Statistics reports there were a seasonally adjusted 8.733 million open jobs at the end of October, down 617,000 from the previous month and 16.6 percent from a year earlier. Private sector employers had 7.746 unfilled positions, with more than a million opportunities available in professional/business services, accommodation/food services, and health care/social assistance. Employers hired 5.886 million people, down 18,000 from September and 4.5 percent from a year earlier. 5.646 million workers separated from their jobs, up 51,000 for the month but off 3.4 percent from a year earlier. Voluntary quits slipped by 18,000 to 3.628 million (-10.4 percent versus October 2022) and layoffs inched up by 32,000 to 1.642 million (+7.7 percent versus October 2022).
Service sector activity picked up in November. The Institute for Supply Management’s Services PMI grew by 9/10ths of a point to 52.7. The Services PMI has remained above 50.0—the threshold between an expanding and contracting service sector—for 11 straight months. Growing (and staying above 50.0) were indices for business activity/production, new orders, employment, and inventories. Fifteen of 18 tracked service sector industries indicated growth in November, led by agriculture, health care, and real estate. Commenters reported “continuing concern about inflation, interest rates and geopolitical events.”
Factory orders slowed in October. New orders for manufactured goods dropped 3.6 percent to a seasonally adjusted $576.8 billion. The Census Bureau estimates manufacturing orders over the first ten months of this year totaled $5.800 trillion, a modest 0.5 percent increase over the comparable 2022 months. Falling were both durable (-5.4 percent) and nondurable (-1.9 percent) orders. Pulling down the former were drops for transportation goods, primary metals, machinery, and electrical equipment/appliances. Shipments declined 1.4 percent to $577.8, with a year-to-date total of $5.784 trillion up 0.3 percent from the same 2022 months. Unfilled orders grew 0.3 percent to $1.357 trillion and inventories expanded 0.1 percent to $857.0 billion.
December and moderating inflation concerns bring cheer to consumers. The University of Michigan’s Index of Consumer Sentiment surged by 8.1 points to a seasonally adjusted 69.4 (1966Q1=100), its best reading since July. The index was up 16.1 percent from a year earlier. The current conditions index added 5.7 points to 74.0 (December 2022: 59.8), while the expectations measure rose by 9.6 points to 66.4 (December 2022: 60.0). The key driver was falling inflationary expectations. Consumers anticipate prices will rise 3.1 percent over the next year, its lowest reading since March 2021. Long-term inflationary expectations fell by 4/10ths of a percentage point to +2.8 percent. Look for a revision to the index later this month.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending December 2, 2023, First-Time Claims, seasonally adjusted): 220,000, +1,000 vs. the previous week, +4,000 vs. the same week a year earlier). 4-week moving average: 220,750 (+2.8% vs. the same week a year earlier).
- Vehicle Sales (November 2023, Automobiles and Light Trucks, seasonally adjusted annualized rate): 15.323 million (-0.7% vs. October 2023; +7.4% vs. November 2022).
- International Trade (October 2023, Goods and Services Trade Deficit, seasonally adjusted): -$64.3 billion (+5.1% vs. September 2023; -18.0% vs. October 2022).
- Wholesale Inventories (October 2023, Merchant Wholesaler Inventories, seasonally adjusted): $897.1 billion (-0.4% vs September 2023; -2.3% vs. October 2022).
- Productivity (2023Q3-Revised, Nonfarm Business Labor Productivity, seasonally adjusted annualized rate): +5.2% vs. 2023Q2; +2.4% vs. 2022Q3.
- Consumer Credit (October 2023, Consumer Credit Outstanding (Non-Real Estate), seasonally adjusted): $4.990 trillion (+$5.2 billion vs. September 2023; +3.1% vs. October 2022).
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What We Learned About the U.S. Economy Last Week 