Mid-Atlantic Manufacturing Firms Expect Softer Growth Under Potential Biden Administration
Manufacturing Export Wooden Crate, reading Made in Pennsylvania. 3D Illustration. (Photo: AdobeStock)
Philadelphia, Penn. (PPD) — The Philadelphia Federal Reserve’s Manufacturing Business Outlook Survey fell less than expected in November, but growth slowed from October. Most manufacturing firms continue to see future growth, though softer under a Biden Administration, the Federal Reserve Bank of Philadelphia reported.
Forecasts ranged from a low of 20.0 to a high of 40.0. The consensus forecast was 24.5. The headline diffusion index fell 6 points to 26.3 in November, its sixth consecutive positive reading after reaching lows in April and May (see chart).
Forty-two percent (42%) of manufacturing firms reported gains while those reporting decreases came in at 15%. The index for new orders fell 5 points to a reading of 37.9.
Nearly 49% of the firms saw increases in new orders this month, down from 55% last month. The current shipments index fell 22 points to 24.9 in November. Nearly 41% of the firms reported higher shipments juxtaposed to 57% last month.
U.S. initial jobless claims graph on a tablet screen. (Photo: AdobeStock)
Washington, D.C. (PPD) — The U.S. Labor Department (DOL) reported initial jobless claims unexpectedly rose by 31,000 to a seasonally-adjusted 742,000 for the week ending November 14. The previous week was revised up only slightly by 2,000 from 709,000 to 711,000.
Forecasts ranged from a low of 685,000 to a high of 725,000. The consensus forecast was 710,000. The 4-week moving average was 742,000, a decrease of 13,750 from the previous week, which was also revised up only slightly by 500 from 755,250 to 755,750.
Lagging Jobless Claims Data
The advance seasonally adjusted insured unemployment rate crated down to 4.3% for the week ending November 7, a decline of 0.3 from the previous week, which was unrevised at 4.6%. Post-Covid-19 shutdown, the insured unemployment rate first fell to single digits during the week ending August 15 at 9.9%.
Under the Trump Administration, this rate had fallen to an all-time low 1.1% and remained at 1.2% as recently as March 14. But that was before coronavirus (COVID-19) mitigation efforts.
The insured unemployment rate hit the first high of the current crisis at 8.2% for the week ending April 4. The all-time high prior to that was 7.0%, recorded in May of 1975. On April 11, it rose to 11.0% and 12.4% on April 25.
Worth noting, the most strictest lockdown states — which consequently saw the highest number of infections — are disproportionately hurting the labor market and overall economy. Lockdowns were ineffective but their impact on the labor markets have been grave.
The highest insured unemployment rates in the week ending October 31 were in California (8.3), Hawaii (8.3), New Mexico (8.0), Nevada (7.6), Georgia (6.5), Pennsylvania (6.4), Alaska (6.2), Massachusetts (6.2), District of Columbia (6.0), and Illinois (5.7).
Washington, D.C. (PPD) — New residential construction statistics for housing starts and building permits again beat forecasts in October, though it’s unclear how the housing market will react to the election. The new residential construction statistics report below is released jointly by the U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD).
Building Permits
Privately-owned housing units authorized by building permits came in at a seasonally adjusted annual rate of 1,545,000. While that’s essentially unchanged (±1.3%) from the downwardly revised rate of 1,545,000 in September, it is 2.8% (±1.6%) higher than the October 2019 rate of 1,503,000.
Forecasts ranged from a low of 1,520,000 to a high of 1,600,000. The consensus forecast was 1,545,000.
Housing Starts
Privately-owned housing starts came in at a seasonally adjusted annual rate of 1,530,000. This is 4.9% (±11.1%) higher than the revised September estimate of 1,459,000 and an 14.2% (±8.8%) gain from the October 2019 rate of 1,340,000.
Forecasts ranged from a low of 1,430,000 to a high of 1,530,000. The consensus forecast was 1,460,000.
Privately-owned housing completions in October were at a seasonally adjusted annual rate of 1,343,000. This is 4.5% (±9.5%) below the revised September estimate of 1,406,000. That’s 5.4% (±10.7%) above the October 2019 rate of 1,274,000.
Housing, Once Primed to Lead Economic Recovery, Now Uncertain
As People’s Pundit Daily (PPD) recently reported, indicators widely showed the U.S. housing market was “booming”, surpassing pre-pandemic levels and expectations. Experts foresaw housing leading the economic recovery and raised growth forecasts for the sector.
The NAHB Housing Market Index (HMI) reported builder confidence soared another 5 points to 90 in November, smashing the all-time high and beating the consensus forecast. However, the apparent economic firing on all four cylinders is no longer a given following the election, as changing policies will hinder growth.
“Historically low mortgage rates, favorable demographics and an ongoing suburban shift for home buyer preferences have spurred demand and increased new home sales by nearly 17% in 2020 on a year-to-date basis,” said NAHB Chairman Chuck Fowke. “Looking ahead to next year, regulatory policy risk will be a key concern given these supply-side constraints.”
Builder confidence and residential construction, hew homes, housing starts, building permits, depicted on blueprints. (Photo: AdobeStock)
Washington, D.C. (PPD) — The NAHB Housing Market Index (HMI) reported builder confidence soared another 5 points to 90 in November, smashing the all-time high and beating the consensus forecast. A reading above 50 indicates a positive housing market for new single-family dwellings.
Forecasts ranged from a low 82 to a high of 87. The consensus forecast was 85, indicating the continued climb was again stronger than economists expected. The HMI now stands at its highest reading in the 35-year history of the series, exceeding the records set in both September and October, which surpassed the previous record set in December 1998.
“Historically low mortgage rates, favorable demographics and an ongoing suburban shift for home buyer preferences have spurred demand and increased new home sales by nearly 17% in 2020 on a year-to-date basis,” said NAHB Chairman Chuck Fowke. “Though builders continue to sign sales contracts at a solid pace, lot and material availability is holding back some building activity.”
“Looking ahead to next year, regulatory policy risk will be a key concern given these supply-side constraints.”
Worth noting, 69% of the responses were gathered before the election for president was called by the media on November 7. The election results, and their future impacts on housing market conditions, will be more fully reflected in December’s HMI report.
The NAHB/Wells Fargo HMI is derived from a monthly survey that NAHB has been conducting for 30 years. It measures builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.”
“Another record high for the HMI reflects that housing is a bright spot for the economy,” said NAHB Chief Economist Robert Dietz. “However, affordability remains an ongoing concern, as construction costs continue to rise and interest rates are expected to move higher as more positive news emerges on the coronavirus vaccine front.”
“In the short run, the shift of housing demand to lower density markets such as suburbs and exurbs with ongoing low resale inventory levels is supporting demand for home building.”
The HMI index gauging current sales conditions increased six points to 96, while the component measuring sales expectations in the next six months ticked one point higher to 89. The measure charting traffic of prospective buyers gained three points to 77.
All three are the highest levels ever measured.
For the three-month moving averages for regional HMI indices, the Northeast gained two points to 83, the Midwest rose six points to 80, the South increased by four points to 86 and the West by four points to 94.
Group of friends sitting outdoors with shopping bags; several people holding smartphones and tablets. (Photo: AdobeStock/ OneInchPunch/PPD)
Washington, D.C. (PPD) — The U.S. Census Bureau reported advance retail sales came in at $553.3 billion in October, a 0.3% (± 0.5%) gain that missed the consensus forecast. That’s 5.7% (± 0.7%) above October 2019 and total sales for the July 2020 through September 2020 period were up 5.1% (± 0.5%) from the same period a year ago.
Forecasts ranged from a low of -0.1% to a high of 1.1%. The consensus forecast was 0.4%.
U.S. retail sales from August 2020 to September 2020 was revised from up 1.9% (±0.5%) to up 1.6% (±0.3%).
Manufacturing Export Wooden Crate, reading Made in New York. 3D Illustration. (Photo: AdobeStock)
New York, N.Y. (PPD) — The Federal Reserve Bank of New York Empire State Manufacturing Survey has started slow in November, coming in at half the consensus forecast. The headline general business conditions index fell four points to 6.3, the fourth straight positive reading that indicates far slower growth than in October.
Forecasts for the headline index ranged from a low of 12.2 to a high of 16.0. The consensus forecast was 13.5.
Thirty-one percent (31%) of respondents reported that manufacturing conditions improved over the month, while 24% said conditions had worsened.
U.S. initial jobless claims graph on a tablet screen. (Photo: AdobeStock)
Washington, D.C. (PPD) — The U.S. Labor Department (DOL) reported initial jobless claims fell more than expected by 48,000 to a seasonally-adjusted 709,000 for the week ending November 7. The previous week was revised up only slightly 6,000 from 751,000 to 757,000.
Forecasts ranged from a low of 700,000 to a high of 765,000. The consensus forecast was 737,000. The 4-week moving average was 755,250, a decrease of 33,250 from the previous week, which was also revised up only slightly by 1,500 from 787,000 to 788,500.
Lagging Jobless Claims Data
The advance seasonally adjusted insured unemployment rate crated down to 4.6% for the week ending October 31, a decline of 0.3 from the previous week, which was revised down by 0.1 from 5.0 to 4.9%. Post-Covid-19 shutdown, the insured unemployment rate first fell to single digits during the week ending August 15 at 9.9%.
Under the Trump Administration, this rate had fallen to an all-time low 1.1% and remained at 1.2% as recently as March 14. But that was before coronavirus (COVID-19) mitigation efforts.
The insured unemployment rate hit the first high of the current crisis at 8.2% for the week ending April 4. The all-time high prior to that was 7.0%, recorded in May of 1975. On April 11, it rose to 11.0% and 12.4% on April 25.
Worth noting, the labor market indicators are improving again despite the most strictest lockdown states — which consequently saw the highest number of infections — disproportionately hurting the labor market and overall economy.
The highest insured unemployment rates in the week ending October 24 were in Hawaii (9.9), California (8.9), New Mexico (8.5), Nevada (8.2), the Virgin Islands (7.1), Massachusetts (7.0), Puerto Rico (6.9), Georgia (6.8), District of Columbia (6.5), and Alaska (6.1).
A newspaper with the headline “Job Market”. (Photo: AdobeStock)
Washington, D.C. (PPD) — The number of job openings came in at 6.436 million in September, up slightly from a downwardly revised 6.352 million, the U.S. Bureau of Labor Statistics (BLS) reported. While hires came in at 5.871 million after a historically high level around 7.0 million over the last two months, total separations fell to 4.664 million.
Forecasts for job openings ranged from a low of 6.2 million to a high of 6.7 million. The consensus forecast was 6.508 million.
Uncertainty and Politically-Driven State and Local Regulations Shake Small Business Optimism
With cautious optimism a small business owner wearing a face mask and disposable gloves posts safety rules as she reopens her store after the coronavirus (COVID-19)shutdown. (Photo: AdobeStock/JHDT Productions)
Washington, D.C. (PPD) — The NFIB Small Business Optimism Index hit a ceiling amid political uncertainty in October and after returning to historic highs in September. With media and university polls indicating a resounding defeat of President Donald J. Trump, the uncertainty reading was the highest reading since November 2016.
Four of the 10 components improved, 5 declined, and 1 was unchanged. Forecasts ranged from a low of 101.0 to a high of 106.5. The consensus forecast was 104.5.
“Leading up to the presidential election, small businesses continued to focus on stabilizing their businesses but were uncertain about the future economic conditions due to COVID-19 government regulations on all levels,” said NFIB Chief Economist Bill Dunkelberg. “We see solid momentum going into the 4th quarter, and another good quarter could get the GDP back to its 2019 closing levels.”
While all survey data were collected prior to Election Day, the NFIB said the 6-point jump in the NFIB Uncertainty Index to 98 was likely driven by the election and uncertain economic conditions. A victory for Joe Biden almost assuredly would lead to government-mandated shutdowns in future months due to the COVID-19 pandemic and the collapse of further businesses.
Key findings via NFIB:
Earnings trends over the past three months improved 9 points to a net negative 3% reporting higher earnings.
Earnings trends have improved to pre-crisis levels, up 32 points since June.
Inventory investment plans for the next three to six months increased 1 point to a net 12%, a record high.
Real sales expectations in the next three months increased 3 points to a net 11% expecting gains.
Owners expecting better business conditions over the next six months declined 5 points to a net 27%.
Private Sector Payrolls Surge, Wages Continue Historic Trump Era Growth
Series with themes reflecting a certain billionaire politician who won the 2016 presidential election touting a very strong labor market. (Photo: AdobeStock)
Washington, D.C. (PPD) — The U.S. Bureau of Labor Statistics (BLS) monthly jobs report finds the U.S. economy added 638,000 jobs in September and the unemployment rate fell more than expected to 6.9%.
Forecasts for total nonfarm employment ranged from a low of 375,000 to a high of 900,000. The consensus was 575,000. Forecasts for the unemployment rate ranged from a low of 7.0% to a high of 8.0%. The consensus forecast was 7.7%.
The labor force participation rate rose 0.3 to 61.7%, missing the forecast. Forecasts ranged from a low of 61.5% to a high of 61.7%. The consensus forecast was 61.5%. The less-cited employment-population ratio increased 0.8 to 57.4%.
In October, average hourly earnings for all employees on private nonfarm payrolls increased by 4 cents to $29.50. Average hourly earnings of private-sector production and nonsupervisory employees rose by 5 cents to $24.82. The large employment fluctuations over the past several months especially in industries with lower-paid workers—complicate the analysis of recent trends in average hourly earnings.
Forecasts for 12-month wage growth ranged from a low 4.3% to a high of 4.6%. The consensus was 4.6%. Wage growth was 4.5% in October, slightly less than the forecast but still far above average as has historically been the case during the Trump Era.
The change in total nonfarm payroll employment for August was revised up by 4,000 from +1,489,000 to +1,493,000, and the change for September was revised up by 11,000 from +661,000 to +672,000. With these revisions, employment in August and September combined was 15,000 higher.
U-6 is an alternative measure of unemployment defined as the rate for total unemployed, plus all marginally attached workers and total employed part time for economic reasons as a percent of the total civilian labor force, plus all marginally attached workers. In September, the U-6 rate fell significantly from 12.8% to 12.1% and has fallen 10.8% over the last six months.
You have %%pigeonMeterAvailable%% free %%pigeonCopyPage%% remaining this month. Get unlimited access and support reader-funded, independent data journalism.
