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Economy

Manufacturing Employment Proves Bright Spot, Adding Double the Forecast

Series with themes reflecting a certain billionaire politician who won the 2016 presidential election touting a very strong labor market. (Photo: AdobeStock)
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 661,000 jobs in September and the unemployment rate fell more than expected to 7.9%.

Forecasts for total nonfarm employment ranged from a low of 400,000 to a high of 1,500,000. The consensus was 894,000. Forecasts for the unemployment rate ranged from a low of 7.1% to a high of 8.6%. The consensus forecast was 8.2%.

Manufacturing employment gained 66,000 jobs in September. Durable goods accounted for about two-thirds of it, fueled by motor vehicles and parts (+14,000) and machinery (+14,000). Forecasts ranged from a low of 20,000 to a high of 50,000. The consensus forecast was only 33,000.

While manufacturing has posted large gains over the past 5 months, it is still 647,000 below pre-Covid level. Regional factory activity surveys from Texas to Philadelphia have shown the highest numbers since 2018, indicating the sector is well on its way to recovery.

The labor force participation rate fell 0.3 to 61.4%, missing the forecast. Forecasts ranged from a low of 61.5% to a high of 61.9%. The consensus forecast was 61.8%. The less-cited employment-population ratio ticked slightly higher to 56.6%.

In August, average hourly earnings for all employees on private nonfarm payrolls was $29.47. Average hourly earnings of private-sector production and nonsupervisory employees was $24.79. Wage growth on the 12-month was a very solid 4.7%.

Forecasts for 12-month wage growth ranged from a low 4.5% to a high of 4.9%. The consensus was 4.8%. Wage growth was 4.7% in September.

The change in total nonfarm payroll employment for July was revised up by 27,000, from +1,734,000 to +1,761,000, and the change for August was revised up by 118,000, from +1,371,000 to +1,489,000.

With these revisions, employment in July and August combined was 145,000 more than previously reported.

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 to 12.8% and has fallen 10.0% over the last five months.

The monthly jobs report finds the U.S.

Economy

Construction planning drawings on the table and two yellow pencils to illustrate total construction spending data and projects. (Photo: AdobeStock)
Construction planning drawings on the table and two yellow pencils to illustrate total construction spending data and projects. (Photo: AdobeStock)

Total construction spending was estimated at a seasonally adjusted annual rate of $1,412.8 billion, 1.4% (±1.0%) above the revised July estimate of $1,392.7 billion. It is now up 2.5% (±1.5%) year-over-year, when it was $1,379.0 billion.

Forecasts ranged from a low of 0.5% to a high of 1.3%. The consensus forecast was 0.7%. Year-to-date, construction spending totaled $927.7 billion, 4.2% (±1.2 percent) above the $889.9 billion for the same period in 2019.

Residential construction came in at a seasonally adjusted annual rate of $589.4 billion in August, 3.7% (±1.3%) above the revised estimate of $568.3 billion in July. Nonresidential construction was at a seasonally adjusted annual rate of $472.0 billion in August, 0.3% (±0.7%) below the revised July estimate of $473.4 billion.

Total construction spending was estimated at a

Economy

PHSI, Overall Housing Market Recovering at Historic Rate Post-Covid Shutdown

A photo of a home pending for sale with sale pending on a realty sign. (Photo: AdobeStock)
A photo of a home pending for sale with sale pending on a realty sign. (Photo: AdobeStock)

The National Association of Realtors (NAR) reported pending home sales surged nearly three times the consensus forecast by 8.8% in August, marking the fourth straight month of solid gains. Each of the four major regions posted growth in both month-over-month and year-over-year transactions.

The Pending Home Sales Index (PHSI) — which is a forward-looking indicator of home sales based on contract signings, rose 8.8% to 132.8 in August. That’s a record high and year-over-year contract signings are now up 24.2%.

Forecasts ranged from a low of 2.0% to a high of 4.0%. The consensus forecast was only 3.1%. An index of 100 is equal to the level of contract activity in 2001.

“Tremendously low mortgage rates – below 3% – have again helped pending home sales climb in August,” said Lawrence Yun, NAR’s chief economist. “Additionally, the Fed intends to hold short-term fed funds rates near 0% for the foreseeable future, which should in the absence of inflationary pressure keep mortgage rates low, and that will undoubtably aid homebuyers continuing to enter the marketplace.”

“While I did very much expect the housing sector to be stable during the pandemic-induced economic shutdowns, I am pleasantly surprised to see the industry bounce back so strongly and so quickly.”

As a result of the stronger-than-expected recovery and growth in housing, the NAR raised its forecast for the market.

Pending Home Sales By Region

In the Northeast, the PHSI rose 4.3% to 117.1 in August, soaring 26.0% from a year ago. In the Midwest, the index gained 8.6% to 124.5, up 25.0% from August 2019.

Pending home sales in the South also rose 8.6%, hitting an index of 154.2 in August, up 23.6% year-over-year. The index in the West shot up 13.1% in August to 120.3, up 23.6% from a year ago.

Housing Primed to Lead Economic Recovery

As People’s Pundit Daily (PPD) recently reported, indicators widely show the U.S. housing market is “booming”, surpassing pre-pandemic levels and expectations. Experts now foresee housing leading the economic recovery and have raised growth forecasts for the sector.

The NAHB Housing Market Index (HMI) reported builder confidence unexpectedly rose another 5 points to 83 in September, smashing the all-time high and beating the consensus forecast. The HMI started 2020 at a 20-year high.

The National Association of Realtors (NAR) reported existing home sales in August hit the highest level since December 2006. The stronger-than-expected increase for the third consecutive month followed a record 24.7% gain in July.

The PHSI previously surged more than three times the consensus forecast by 16.6% in June, after soaring a record 44.3% in May. The PHSI rose another 5.9% in July.

New residential construction statistics for housing starts and building permits skyrocketed in July, despite lingering effects due to coronavirus (COVID-19). The former gained 22.6% (±14.7%) and the latter 18.8% (±1.1%), respectively.

Pending home sales surged nearly three times

Economy

ADP National Employment Report Revised Higher for August

A newspaper with the headline "Job Market". (Photo: AdobeStock)
A newspaper with the headline “Job Market”. (Photo: AdobeStock)

Roseland, N.J. (PPD) — Total private sector employment rose 749,000 in September, beating the forecast for the ADP National Employment Report. Forecasts ranged from a low of 400,000 to a high of 1,000,000. The consensus forecast was 650,000.

The goods-producing sector added 196,000 private sector jobs. Construction added 60,000, manufacturing added 130,000 and natural resources/mining added 7,000.

“The labor market continues to recover gradually,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.  “In September, the majority of sectors and company sizes experienced gains with trade, transportation and utilities; and manufacturing leading the way. However, small businesses continued to demonstrate slower growth.”

The service-providing sector added 552,000 private sector jobs. Leisure/hospitality added 92,000, education/health services added 90,000 and professional/business services added 78,000. Trade/transportation/utilities added 186,000 jobs.

The change in total private sector employment for August was revised from 428,000 to 481,000.

Total private sector employment rose 749,000 in

Economy

Consumer confidence 3D gear graphic reporting the Conference Board Consumer Confidence Index.
Consumer confidence 3D gear graphic reporting the Conference Board Consumer Confidence Index.

The Conference Board Consumer Confidence Index (CCI) soared 15.5 points in September and was revised higher for August. The Index now stands at 101.8 (1985=100), up from an upwardly revised reading of 86.3.

The Present Situation Index — a gauge which is based on consumers’ assessment of current business and labor market conditions — increased from 85.8 to 98.5. The Expectations Index — based on consumers’ short-term outlook for income, business, and labor market conditions — increased from 86.6 in August to 104.0 this month.

“Consumer Confidence increased sharply in September, after back-to-back monthly declines, but remains below pre-pandemic levels,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board. “A more favorable view of current business and labor market conditions, coupled with renewed optimism about the short-term outlook, helped spur this month’s rebound in confidence.”

“Consumers also expressed greater optimism about their short-term financial prospects, which may help keep spending from slowing further in the months ahead.”

Consumers’ views of current conditions rebounded strongly in September. The percentage of consumers claiming business conditions are “good” rose from 16.0% to 18.3%, and those claiming business conditions are “bad” fell from 43.3% to 37.4%.

Consumers’ views of the labor market also improved from last month. The percentage of consumers saying jobs are “plentiful” rose from 21.4% to 22.9%, and those claiming jobs are “hard to get” fell from 23.6% to 20.0%.

The Consumer Confidence Survey (CCI) is based on a probability-design random sample and is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was September 18.

The Conference Board Consumer Confidence Index (CCI)

Economy

Manufacturing Export Wooden Crate, reading Made in Texas. 3D Illustration. (Photo: AdobeStock)
Manufacturing Export Wooden Crate, reading Made in Texas. 3D Illustration. (Photo: AdobeStock)

Dallas, Tx. (PPD) — The Texas Manufacturing Outlook Survey easily beat expectations in September, show factory activity soaring to the highest levels in two years. The production index, a key measure of state manufacturing conditions, increased nine points to 22.3, its highest reading since September 2018.

The general business activity index rose six points to 13.6, its highest reading since November 2018. Forecasts ranged from a low of 5.0 to a high of 15.0. The consensus forecast was 8.5.

The new orders index rose five points to 14.7, while the growth rate of orders index was relatively unchanged at 13.2. The capacity utilization index gained from 10.9 to 17.5, and the shipments index was largely unchanged at 21.5.

Indexes gauging the labor market indicated stronger employment growth and a continued increase in workweek length.

The employment index rose from 10.6 to 14.5, a clear indication of stronger higher. Twenty-four percent (24%) of Texas manufacturing firms noted net hiring, while only 10% noted net layoffs. The hours worked index remained positive, but moved down from 10.5 to 6.9.

Prices and wages also rose in September.

The raw materials prices index rose seven points to 26.2, higher than the series average. The finished goods prices index rose to 5.2, its highest reading in 17 months. The wages and benefits index rose to 15.9.

Expectations for future activity were more positive in September. The future production index increased to 47.8, while the future general business activity index shot eight points higher to 28.0.

The Texas Manufacturing Outlook Survey easily beat

Elections

President Donald Trump, flagged by Ron DeSantis, touts "promises kept" A support tries to capture a photo/video of President Donald Trump President Donald Trump jokes with the crowd President Donald Trump touts record low unemployment for minorities during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People's Pundit Daily)
President Donald Trump, flagged by Ron DeSantis, touts “promises kept” A support tries to capture a photo/video of President Donald Trump President Donald Trump jokes with the crowd President Donald Trump touts record low unemployment for minorities during a rally in Tampa, Florida on Tuesday, July 31, 2018. (Photo: Laura Baris/People’s Pundit Daily)

In Florida, Republicans have narrowed the Democratic voter registration edge to a historic low ahead of the 2020 U.S. presidential election. At just 183,596, the Democratic advantage is below 200,000 for the first time since partisan tracking began in 1972.

In August, Republicans added a record 58,000 new voters, which is 41% more new registrations for Democrats statewide. At 5,020,199, Republicans now represent 35.7% of the total 14,065,627 registered voters in Florida. That compares to 5,203,795 Democratic voters, representing 37.0%.

The National Voter File Database also reveals this ongoing trend is no longer the result of older, white voters switching their voter registration. While it certainly was a significant driver during the era of Barack Obama, the explanation is too superficial and outdated.

That’s a significant shift given the statewide turnout advantage the GOP has enjoyed in recent elections.

In 2016 and 2018, exit polls indicated the electorate in Florida was 32/33/34 — or 32% Democrats, 33% Republican and 34% independent. The Democratic registration advantage prior to those two elections were 330,000 and 260,000, respectively.

Florida Republicans bucked the national trend in 2018. With a national mood favoring Democrats by 8.4 points, Republican candidates statewide held the governor’s mansion and defeated a three-term incumbent senator.

The PPD Election Projection Model rated Florida Slightly Republican, while big media competitors predicted a Democratic flip in the gubernatorial election and a hold in the U.S. Senate.

Recent polling in Florida has been all over the place, though Vice President Joseph R. Biden has a slight lead in the average. The projected electorates are driving that disparity.

The ABC News/Washington Post Poll of 613 likely voters conducted from September 15 to 20 found President Donald J. Trump leading Mr. Biden by 4 points, 51% to 47%. The projected electorate was R+4, historically high but perhaps indicative of the trend.

The CNBC/Change Research (D) Poll of 702 likely voters conducted from September 18 to 20 found Mr. Biden leading President Trump by 3 points, 49% to 46%. The projected electorate was D+7, a most unlikely scenario at this point.

The Trafalgar Group (R) Poll of 1022 likely voters conducted earlier in the month found President Trump leading Mr. Biden by 3 points, 49% to 46%. Worth noting, this is the only pollsters out of the three to accurately predict the winners in the 2016 and 2018 elections.

No Democratic presidential candidate has ever carried the Sunshine State with an advantage below 558,272. That was the advantage Democrats held when President Obama defeated Mitt Romney in 2012 by just 0.88%, or only 74,309 votes.

In 2016, President Trump defeated Hillary Clinton 49.02% to 47.82%, or 112,911 votes, when the Democratic voter registration advantage was 330,428. The PPD Election Projection Model rated the state Leans Trump.

As was the case at the start of the year in January, modeling indicates President Trump will be difficult to defeat in November in the Sunshine State. While it’s still early and the state is always close, the data trend indicates the president is favored to carry the state for a second time.

In Florida, Republicans have narrowed the Democratic

Economy

Manufacture of rails for trains and freight wagon, boxcars. Rail manufacturing plant. Stack of steel round bar - iron metal rail lines material for industry construction in warehouse. (Photo: AdobeStock)
Manufacture of rails for trains and freight wagon, boxcars. Rail manufacturing plant. Stack of steel round bar – iron metal rail lines material for industry construction in warehouse. (Photo: AdobeStock)

The U.S. Census Bureau reported new orders for manufactured durable goods rose $1.0 billion or 0.4% to $232.8 billion in August. That less than expected gain comes after three straight months of strong data beating the consensus forecast and the prior month of July being revised higher.

Forecasts for new orders ranged from a low of 0.7% to a high of 11.4%. The consensus forecast was 1.5%. New orders for durable goods were revised higher for July, from 11.2% to 11.7% at $231.8 billion.

Excluding transportation, new orders increased 0.4%. Forecasts ranged from a low of 0.2% to a high of 2.2%. The consensus forecast was 1.2%.

Excluding defense, new orders increased 0.7%. Machinery, which now is also up four consecutive months, led the gain, $0.5 billion or 1.5% to $31.2 billion.

The core capital goods came in at 1.8%. Forecasts ranged from a low of 0.4% to a high of 1.9%. The consensus forecast was 1.7%.

New orders for manufactured durable goods rose

Economy

New Residential Construction, Housing Market Continue to Defy COVID and Forecasts

An exchange showing one hand giving cash to the another for new house and keys, a vector illustration for new home sales. (Photo: AdobeStock)
An exchange showing one hand giving cash to the another for new house and keys, a vector illustration for new home sales. (Photo: AdobeStock)

Washington, D.C. (PPD) — The U.S. Census Bureau and the U.S. Department of Housing and Urban Development (HUD) jointly reported the new residential sales statistics for August 2020. New home sales of single-family houses soared 4.8% (±10.5%) to a seasonally adjusted annual rate of 1,011,000 in August, the highest level since September 2006.

That figure far surpassed the consensus forecast and comes after an upwardly revised seasonally adjusted annual rate of 965,000 in July, up from the initially reported 13.9% gain of 901,000. Forecasts ranged from a low of 820,000 to a high of 950,000. The consensus forecast was 875,000.

The median sales price of new houses sold was $312,800 in August. The average sales price was $369,000. The seasonally-adjusted estimate of new houses for sale at the end of August came in at 282,000, representing a supply of 3.3 months at the current sales rate.

Housing Primed to Lead Economic Recovery

As People’s Pundit Daily (PPD) recently reported, indicators widely show the U.S. housing market is “booming”, surpassing pre-pandemic levels and expectations. Experts now foresee housing leading the economic recovery and have raised growth forecasts for the sector.

The NAHB Housing Market Index (HMI) reported builder confidence unexpectedly rose another 5 points to 83 in September, smashing the all-time high and beating the consensus forecast. The HMI started 2020 at a 20-year high.

The National Association of Realtors (NAR) reported existing home sales in August hit the highest level since December 2006. The stronger-than-expected increase for the third consecutive month followed a record 24.7% gain in July.

The Pending Home Sales Index (PHSI) surged more than three times the consensus forecast by 16.6% in June, after soaring a record 44.3% in May. The PHSI rose another 5.9% in July.

New residential construction statistics for housing starts and building permits skyrocketed in July, despite lingering effects due to coronavirus (COVID-19). The former gained 22.6% (±14.7%) and the latter 18.8% (±1.1%), respectively.

New home sales of single-family houses soared

Economy

U.S. initial jobless claims graph on a tablet screen. (Photo: AdobeStock)
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 rose slightly by 4,000 to a seasonally-adjusted 870,000 for the week ending September 19. The previous week was upwardly revised slightly by 6,000 from 866,000.

Forecasts ranged from a low of 800,000 to a high of 905,000. The consensus forecast was 880,000.

The 4-week moving average was 878,250, down 35,250 from the previous week, which was revised up by 1,500 from 912,000 to 913,500.

Lagging Jobless Claims Data

The advance seasonally adjusted insured unemployment rate came in at 8.6% for the week ending September 12, a decline of 0.1 from the previous week, which was revised higher 0.1 to 8.7. It fell to single digits for the week ending August 15 at 9.9%.

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.

Under the Trump Administration, this rate had fallen to an all-time low 1.1% and remained at 1.2% just weeks ago, as recently as March 14. But that was before coronavirus (COVID-19) mitigation efforts.

The most strictest lockdown states, which consequently saw the highest number of infections, are disproportionately hurting the labor market and overall economy.

The highest insured unemployment rates in the week ending September 5 were in Hawaii (19.8), California (15.7), Nevada (14.9), Puerto Rico (14.1), New York (13.7), Louisiana (13.2), District of Columbia (11.3), Georgia (11.3), the Virgin Islands (11.3), and Massachusetts (10.5).

The largest increases in initial claims for the week ending September 12 were in Indiana (+1,990), Kansas (+1,928), Illinois (+1,906), and Michigan (+1,727), while the largest decreases were in California (-17,400), Texas (-15,905), Louisiana (-8,384), Georgia (-8,235), and Washington (-3,291).

The U.S. Labor Department (DOL) reported initial

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