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Economy

Hispanic Unemployment Rate Fell to Match Record Low

The U.S. Bureau of Labor Statistics (BLS) reported the black unemployment rate fell to a new all-time record low in August at 5.5%. This is the second time the unemployment rate for black or African-Americans set new record lows under Donald Trump.

The record was first set in May 2018 when it fell to 5.9%. As People’s Pundit Daily (PPD) has previously explained, this doesn’t represent the continuation of a trend beginning under the prior administration.

While there are monthly exceptions, the current trend is steady-to-rising participation rates and simultaneous decreases in the unemployment rates.

Meanwhile, the overall unemployment rate held firm at 3.7% in August, marking the eighteenth consecutive month in which unemployment was at or below 4%.

Hispanic unemployment also fell to 4.2%, matching the lowest level ever on record set in April 2019. The unemployment rate for Hispanics first set new record lows in 2018, falling to 4.6% in June and another 0.1% to 4.5% in July.

The black unemployment rate in the U.S.

Economy

Unemployment for African Americans Falls to All-Time Low 5.5%

The U.S. economy added 130,000 jobs in August and the unemployment rate held steady at 3.7%, the Bureau of Labor Statistics reported. This marks the eighteenth straight month in which unemployment is at or below 4%, and unemployment for African American fell to a new all-time low at 5.5% (chart also here).

The job creation forecasts ranged from a low of 150,000 to a high of 180,000. The consensus forecast was 163,000. While that 130,000 number is below expectations, there’s a lot of positives in this report.

PriorConsensus ForecastForecast RangeActual
Nonfarm Payrolls – M/M ∆164,000 163,000 150,000  to 180,000 130,000
Unemployment Rate – Level3.7%3.7%3.6% to 3.8%3.7%
Private Payrolls – M/M ∆148,000 150,000 136,000  to 155,000 96,000
Manufacturing Payrolls – M/M ∆16,000 8,000 1,000  to 8,000 3,000
Participation Rate – level63.0%62.9%62.9% to 63.0%63.2%
Average Hourly Earnings – M/M ∆0.3%0.3%0.2% to 0.4%0.4%
Average Hourly Earnings – Y/Y ∆3.2%3.1%3.0% to 3.4%3.2%
Av Workweek – All Employees34.3 hrs34.4 hrs34.4 hrs to 34.4 hrs34.4 hrs

The labor force participation rate (chart) rose to 63.2% and the employment-population ratio also rose to at 60.9%. The latter is up 0.6% for the year.

In August, average hourly earnings (AHEs) for all employees on private nonfarm payrolls rose by 11 cents to $28.11 after 9-cent gains in both June and July.

Over the past 12 months, average hourly earnings have increased by 3.2% (chart). Wage growth has now exceeded 3% for 11 straight months on a seasonally adjusted annual basis, and hit or exceeded for 13 straight months.

In August, average hourly earnings of private-sector production and nonsupervisory employees rose by 11 cents to $23.59.

For June, the change in total nonfarm payrolls was revised down by 15,000 from +193,000. For July, it was revised down by 5,000 from +164,000 to +159,000, resulting in a net 20,000 change for the two months.

On Thursday, the ADP National Employment Report showed the U.S. private sector added 195,000 jobs in August.

The U.S. economy added 130,000 jobs in

Economy

Pedestrians walk through the Canary Wharf financial district of London January 16, 2009. (Photo: Reuters)
Pedestrians walk through the Canary Wharf financial district of London January 16, 2009. (Photo: Reuters)

The Institute for Supply Management (ISM) Non-Manufacturing Index came in at 56.4, beating the forecast as a sign the U.S. service sector remains solid. According to the NMI, 16 non-manufacturing industries reported growth, while only Wholesale Trade reported a decrease.

For August, forecasts for the NMI ranged from a low of 52.5 to a high of 54.5. The consensus was 54.0.

“The non-manufacturing sector’s rate of growth rebounded after two consecutive months of cooling off,” Anthony Nieves, Chair of the ISM Non-Manufacturing Business Survey Committee. “The respondents remain concerned about tariffs and geopolitical uncertainty; however, they are mostly positive about business conditions.”

The Non-Manufacturing Business Activity Index rose to 61.5%, up 8.4% from 53.1% in July and reflecting growth for the 121st consecutive month. The New Orders Index came in at 60.3%, up 6.2% from the 54.1% reading in July.

The Employment Index fell moderately by 3.1% in August to 53.1% from 56.2% in July. The Prices Index rose 1.7% from the reading of 56.5% in July to 58.2%, indicating prices increased in August for the 27th consecutive month.

The Institute for Supply Management (ISM) Non-Manufacturing

Economy

Durable Goods Beat Expectations for Second Straight Month

New orders for durable goods rose $6.9 billion or 1.4% to $500.3 billion in July, the U.S. Census Bureau reported. This marks two consecutive months of gains and followed a 0.5% increase in June increase.

Forecasts ranged from a low of 0.2% to a high of 1.6%. The consensus forecast was 1.0%.

Shipments, which had been up for two consecutive months, fell $0.9 billion or 0.2% to $504.0 billion. This followed a 0.1% increase in June increase.

Unfilled orders are up slightly after three straight monthly decreases. They gained $0.6 billion to a virtually unchanged $1,161.5 billion after a 0.6% drop in June. The unfilled orders‐to‐shipments ratio came in at 6.67, up from 6.55 in June.

Inventories, which are now up ten of the last eleven months, rose $1.2 billion or 0.2% to $696.5 billion after a 0.1% gain in June. The inventories‐to‐shipments ratio was 1.38, unchanged from June.

New Orders

New orders for manufactured durable goods are now up for two straight months, gaining $5.0 billion or 2.0% to $250.2 billion. While that’s down slightly from the initially reported 2.1%, it follows a 1.8% gain in June.

Transportation equipment drove the increase in new orders and are up for two consecutive months. They rose $5.7 billion or 7.0% to $86.4 billion. New orders for manufactured nondurable goods rose $2.0 billion, or 0.8% to $250.1 billion.

Shipments

Shipments of manufactured durable goods are down after two consecutive monthly gains, falling $2.9 billion or 1.1% to $253.9 billion. That’s unchanged from the previously published decrease after a 0.9% increase in June.

Transportation equipment are also down after two straight monthly gains, and led the decrease falling $1.8 billion or 2.0% to $86.5 billion.

Shipments of manufactured nondurable goods are now up following two consecutive monthly decreases, rising $2.0 billion or 0.8% to $250.1 billion after a 0.7% decline in June.

Petroleum and coal products, which are also up after two consecutive monthly declines, led the increase rising $1.3 billion or 2.4% to $53.4 billion.

Unfilled Orders

Unfilled orders for manufactured durable goods are up following three straight monthly declines, rising $0.6 billion to a virtually unchanged $1,161.5 billion. While that’s down from the previously estimated 0.1% increase, it follows a 0.6% decrease in June.

Fabricated metal products are now up for two consecutive months and led the increase, rising $0.4 billion or 0.5% to $86.5 billion.

Inventories

Inventories of manufactured durable goods are now up twelve of the last thirteen months, rising $1.4 billion or 0.3% to $427.1 billion. That’s down from the advance 0.4% gain and follows a decline of 0.3% in June.

Transportation equipment are also up twelve of the last thirteen months and led the increase, rising $1.4 billion or 1.0% to $141.1 billion.

Inventories of manufactured nondurable goods are down four consecutive months, falling $0.2 billion or 0.1% to $269.4 billion after being virtually unchanged in June.

Chemical products are down after two consecutive monthly gains and fueled drove the decline, decreasing $0.2 billion or 0.3% to $90.7 billion. By stage of fabrication, July materials and supplies in durable goods and nondurable goods rose 0.1% and 0.7%, respectively.

Work in process rose 0.6% in durable goods and nondurable goods rose 0.6% and 0.2%, respectively. Finished goods for durable goods and nondurable goods gained 0.3% and 0.2%, respectively.

The U.S. Census Bureau reported new orders

Economy

Revised Productivity and Costs for Q2 Largely Unchanged from Preliminary Estimates

Nonfarm business labor productivity gained 2.3% in the second quarter (Q2) of 2019, while unit labor costs increased 2.6%, meeting and beating forecasts.

For productivity, forecasts ranged from a low of 2.0% to a high of 2.8%. The consensus was 2.3%. For unit labor costs, forecasts ranged from a low of 2.1% to a high of 2.6%. The consensus was 2.4%.

Productivity

The increase in labor productivity reflects an increase in output of 1.9% and a 0.4% decrease in hours worked.

From Q2 2018 to Q2 2019, productivity rose 1.8%, reflecting a 2.6% gain in output and a 0.9% gain in hours worked. The four-quarter increase in hours is the lowest estimate since the second quarter of 2010, when it was -0.3%.

Labor productivity, or output per hour, is calculated by dividing an index of real output by an index of hours worked by all persons, including employees, proprietors, and unpaid family workers.

Unit Labor Costs

Unit labor costs have increased 2.6% over the last four quarters. BLS calculates unit labor costs as the ratio of hourly compensation to labor productivity.

Increases in unit labor costs indicate gains in hourly compensation, while decreases indicate an increase in output per hour.

Manufacturing

Manufacturing sector labor productivity fell 2.2% in Q2 2019, as output declined 3.0% and hours worked fell 0.8%. That marks the second consecutive quarter with declines in both output and hours for the sector.

In Q1 2019, output fell 1.8% and hours fell 2.9%.

Worth noting, 2017 and 2018 saw a resurgence in the manufacturing sector not seen since since the 1990s.

That said, unit labor costs in the manufacturing sector rose 6.7% in the Q2 2019 and by 4.5% from the same quarter a year ago. That indicates a rise in worker compensation and benefits.

Nonfarm business labor productivity gained 2.3% in

Economy

Labor Demand Strong, Labor Market Tight Ahead of August Jobs Report

The Labor Department said the advance figure for seasonally adjusted initial claims was 217,000 for the week ending August 31, a gain of just 1,000. The 4-week moving average came in at 216,250, an increase of 1,500.

Forecasts ranged from a low of 204,000 to a high of 218,000. The consensus was 215,000.

In lagging data, the advance seasonally adjusted insured unemployment rate was unchanged at a very low 1.2% for the week ending August 24. The advance number for seasonally adjusted insured fell 39,000 to 1,662,000 for the week ending August 24. The 4-week moving average was 1,691,750, a decrease of 6,250.

No state was triggered “on” the Extended Benefits program during the week ending August 17, a Labor Department analyst said.

The highest insured unemployment rates in the week ending August 17 were in New Jersey (2.4), Connecticut (2.2), Puerto Rico (2.1), Pennsylvania (2.0), California (1.8), Rhode Island (1.8), Alaska (1.6), Massachusetts (1.6), Illinois (1.4), and New York (1.4).

The largest increases in initial claims for the week ending August 24 were in New York (+4,452), Texas (+925), Georgia (+537), Illinois (+385), and North Dakota (+329), while the largest decreases were in California (-834), Michigan (-265), Kentucky (-261), Washington (-252), and Pennsylvania (-213).

The Labor Department said the advance figure

Economy

ADP: Rebound Shows Balanced Jobs Growth Across Small, Medium and Large Companies

The ADP National Employment Report found the U.S. private sector added 195,000 jobs in August, easily beating the high end of the forecast range. Total private employment added for July was revised down from 156,000 to 142,000.

Forecasts ranged from a low of 140,000 to a high of 160,000. The consensus was 150,000.

“In August we saw a rebound in private-sector employment,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “This is the first time in the last 12 months that we have seen balanced job growth across small, medium and large-sized companies.”

Small businesses with 1-49 employees added 66,000 private sector jobs, while medium businesses with 50-499 employees led the way adding 77,000. Large businesses with 500 employees or more added 52,000.

“Businesses are holding firm on their payrolls despite the slowing economy. Hiring has moderated, but layoffs remain low,” Mark Zandi, chief economist of Moody’s Analytics, said. “As long as this continues recession will remain at bay.”

The higher-paying goods-producing sector added 11,000 jobs, though manufacturing rebounded with 8,000 additional jobs in August. Construction added 6,000 and natural resources/mining lost (-2,000).

The service-providing sector added 184,000, with education/health services leading the way at +58,000. Leisure/hospitality was +42,000, trade/transportation/utilities was +39,000 and professional/business services was +35,000.

About the ADP National Employment Report

The ADP National Employment Report is a monthly report on the change in total U.S. nonfarm private employment derived from actual, anonymous payroll data of client companies served by Automatic Data Processing, Inc. (NASDAQ: ADP).

The matched sample used to develop the ADP National Employment Report was derived from ADP payroll data, which represents 411,000 U.S. clients employing nearly 24 million workers in the U.S.

The ADP National Employment Report found the

US

ECMWF (Euro), GFS, HWRF Models For September 5 At 7:00AM EST

2:00 PM EDT UPDATE: Hurricane Dorian has been downgraded to a Category 2 on the Saffir-Simpson Hurricane Wind Scale. Maximum sustained winds increased to 110 mph (175 km/h).

It is located about 60 miles (95 km) South of Myrtle Beach, South Carolina, moving North-Northeast or 25 degrees at 8 mph (13 km/h). In relation to North Carolina, Dorian is about 115 miles (185 km) South-Southwest of Wilmington.

ORIGINAL STORY: On Thursday, the ECMWF (Euro), GFS, and HWRF models forecast a reorganized Hurricane Dorian to move North before accelerating North-Northeastward.

The above forecasts — generated via Tropical Tidbits — include the ECMWF (Euro) and GF over the next 120-hour period. The HWRF (Hurricane Weather Research and Forecasting Model) covers a 36-hour period.

The National Hurricane Center (NHC) track forecast continues to show the storm close to the coast of South Carolina through the day, and then move near or over the coast of North Carolina tonight and Friday.

The NHC said the center should move to the Southeast of extreme Southeastern New England Friday night and Saturday morning, and approach Nova Scotia later on Saturday.

Hurricane Dorian reorganized and was upgraded to a Category 3 on the Saffir-Simpson Hurricane Wind Scale. Maximum sustained winds increased to 115 mph (185 km/h).

Minimum central pressure has fallen to 957 mb (28.26 inches) after rising to 963 mb (28.44 inches) on Wednesday. That was up from a low of 911 mb and 922 mb (27.23 inches) on Sunday, 916 mb (27.05 inches) on Monday and 950 mb (28.05) on Tuesday.

As of 5:00 AM EDT, the storm was located roughly 80 miles (130 km) South-Southeast of Charleston, South Carolina.

The Northwestern part of the eye wall is forecast to hit land near Charleston and/or North. Reconnaissance missions Wednesday night showed wind speeds just over 100 mph in that portion of the eye wall.

The storm is moving North at 8 mph (13 km/h). A northeastward motion at a faster forward speed is forecast on Friday.

D: Tropical Depression – wind speed less than 39 MPH
S: Tropical Storm – wind speed between 39 MPH and 73 MPH
H: Hurricane – wind speed between 74 MPH and 110 MPH
M: Major Hurricane – wind speed greater than 110 MPH

On the forecast track, the center of Dorian will continue to move close to the coast of South Carolina through the day, and then move near or over the coast of North Carolina tonight and Friday.

The center should move to the southeast of extreme southeastern New England Friday night and Saturday morning, and approach Nova Scotia later on Saturday.

Expected Weather Conditions

Below are expected weather conditions via the National Hurricane Center (NHC).

Rainfall

  • Coastal Carolinas: 6 to 12 inches of rain, isolated 15 inches
  • Far Southeast Virginia: 3 to 8 inches
  • Coastal Georgia: 1 to 2 inches
  • Extreme Southeastern New England: 2 to 4 inches

Flooding

This rainfall may cause life-threatening flash floods.

Surf

Large swells will affect the northwestern Bahamas, and the entire southeastern United States coast from Florida through North Carolina during the next few days. These swells are likely to cause life-threatening surf and rip current conditions. Please consult products from your local weather office.

Tornadoes

A few tornadoes are possible through this afternoon near the coastal South and North Carolina border area. This threat will expand northeastward across the rest of eastern North Carolina during the afternoon and continue into tonight.

On Thursday, the ECMWF (Euro), GFS, and

Economy

U.S.-China Trade Deficit for Goods Narrows $0.5B to $29.5B

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis announced the U.S. trade deficit for goods and services fell to $54.0 billion in July, down $1.5 billion from a revised $55.5 billion in June.

The forecasts ranged from a high of $-55.4 billion to a low of $-52.9 billion. The consensus forecast just barely missed at $-53.5 billion.

Exports were up $1.2 billion from June to $207.4 billion, while imports fell $0.4 billion to $261.4 billion. The narrowing of the trade gap for goods and services was driven by a $1.6 billion decline in the goods deficit to $73.7 billion and a decrease in the services surplus of $0.1 billion to $19.7 billion.

Still, year-to-date, the trade deficit for goods and services rose $28.2 billion, or 8.2%, from the same period in 2018. Exports fell $3.4 billion, or 0.2%. Imports rose $24.9 billion, or 1.4%.

The average goods and services deficit rose $0.7 billion to $55.1 billion for the three months ending in July. Average exports rose $0.5 billion to $208.0 billion, while average imports increased $1.2 billion to $263.1 billion.

The politically-sensitive trade in goods deficit with China fell $0.5 billion to $29.6 billion in July. Exports for goods fell $0.3 billion to $9.3 billion, but imports fell by a larger $0.8 billion to $39.0 billion.

Overall, the goods and services deficit with China widened $-8,576 billion.

The U.S. trade deficit for goods and

US

ECMWF (Euro), GFS, HWRF Models for September 4 at 6:00AM EST

On Tuesday, the ECMWF (Euro), GFS, and HWRF models forecast Hurricane Dorian moving north before accelerating north-northeastward. While an exact location for landfall is unknown, potential scenarios range from Georgia to North Carolina.

The National Hurricane Center (NHC) track forecast continues to take Dorian dangerously close to the southeastern U.S., threatening northeast Florida, Georgia, South Carolina and North Carolina with destructive winds, flooding rains, and life-threatening storm surge.

The above forecasts — generated via Tropical Tidbits — include the ECMWF (Euro) over the next 120-hour period and the GFS over the next 24 hours. The HWRF (Hurricane Weather Research and Forecasting Model) covers a 72-hour period.

Hurricane Dorian was downgraded to a Category 2 on the Saffir-Simpson Hurricane Wind Scale. Maximum sustained winds as of 5:00 AM EDT were 105 mph (165 km/h).

Minimum central pressure has risen to 963 mb (28.44 inches), up from a low of 911 mb and 922 mb (27.23 inches) on Sunday, 916 mb (27.05 inches) on Monday and 950 mb (28.05) on Tuesday.

A drop in pressure typically indicates a storm is strengthening, while an increase indicates weakening.

D: Tropical Depression – wind speed less than 39 MPH
S: Tropical Storm – wind speed between 39 MPH and 73 MPH
H: Hurricane – wind speed between 74 MPH and 110 MPH
M: Major Hurricane – wind speed greater than 110 MPH

Again, life-threatening storm surge and dangerous winds are expected
along portions of the Florida east coast and the coasts of Georgia,
South Carolina, and North Carolina, regardless of the center track.

The NHC said a flash flood threat will spread up the southeast U.S. coast on Wednesday and Thursday, then across the coastal Mid-Atlantic region on Friday. There is currently a high risk of flash flooding on Thursday across coastal sections from northeast South Carolina into southern North Carolina.

Hurricane Dorian has claimed at least 7 lives in the Bahamas. That number is expected to rise significantly.

On Tuesday, the ECMWF (Euro), GFS, and

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