Your Monthly Update in U.S. Economic Trends
Employers Boost Payrolls by 94,000
U.S. employers added 94,000 jobs to their payrolls maintaining a 4.7% unemployment rate in November, according to the U.S. Department of Labor. Employers added jobs mainly in education, health services, retail and professional services. The labor market is a key factor in determining the health of the economy. The increase in jobs was better than economists expected.
MSNBC.com – Dec. 7, 2007
Service Sector Expands in November
Non-manufacturing industries expanded in November, according to The Institute for Supply Management, a business trade group. However, the service sector index was down from the previous month and below analysts’ expectations. The report showed the index registered at 54.1 in November, down from 55.8 in October. A reading above 50 indicates expansion, while a reading below 50 shows contraction. This is the lowest reading for the service sector since it registered at 52.4 in March 2007.
WashingtonPost.com – Dec. 5, 2007
Productivity at Fastest Clip Since 2003
The U.S. Department of Labor reported an increase in productivity, the amount of output per hour of work, in the third quarter of 2007. The amount of productivity increased at an annual rate of 6.3%, up from a previous estimate of 4.9%, according to the report. This increase is the fastest pace of growth in four years. Unit labor costs dropped 2%, causing wage pressures to slow down. With stronger productivity and a decrease in wage pressures, concerns of inflation from the Federal Reserve should lower, according to analysts.
CNNMoney.com – Dec. 5, 2007
Manufacturing in November
The manufacturing index fell slightly to 50.8 in November from 50.9 in October but still continued to grow, according to The Institute for Supply Management. Manufacturing growth is due to the strength of new orders and exports, and even though the manufacturing index decreased slightly from the previous month, the expansion shows the U.S. economy is still growing. A reading above 50 is considered growth for the sector, while a reading below shows no growth. November was the 10th consecutive month of expansion in the sector.
Forbes.com – Dec. 3, 2007
Factory Orders in U.S. Unexpectedly Rise
Factory orders in the U.S. rose by 0.5% in October, up from 0.3% growth in September, according to a report released from the Commerce Department. The 0.5% rise in factory orders was the best reading since a 3.4% rise in July 2007. The increase was better than economists expected. The report also showed an increase in orders for non-durable goods such as petroleum products, which rose by 1.3% while orders for durable goods fell 0.2%. Durable goods make up over half of total factory demand.
Bloomberg.com – Dec. 5, 2007
Consumer Confidence Lowest in Two Years
The holiday shopping season has started off a little slow due to increasing energy prices, a weak housing market and an unstable financial market, economists reported. According to the Conference Board, the consumer confidence index was 87.3 in November, down from 95.2 in October. The present situation index, which measures consumers’ view of current economic conditions, registered at 115.4 in November, down slightly from 118 in October; however, the expectations index fell to 68.7 in November from 80 in October, reported the Conference Board. The expectations index measures consumers’ thoughts on future economic conditions.
USAToday.com – Nov. 27, 2007
Pending-Home Sales Climb in October
Pending home sales increased 0.6% to 87.2 in October, up from 86.7 in September, according to The National Association of Realtors’ (NAR) index. Prices and sales of homes are expected to rise in 2008, NAR reported. The pending home sales index is intended to measure which way the housing market is heading. The report also showed regional sales across the U.S. In October from September, sales increased 16% in the northeast, in the midwest sales fell 1.4%, the south decreased 7.8% and the west increased 8.4%.
WallStreetJournal.com – Dec. 10, 2007
Retailers Post Sluggish Sales for November
U.S. retailers reported mixed sales results for November as the holiday shopping season began. Retail stores brought in big sales during Thanksgiving weekend; however, consumers slowed their shopping after the weekend discounts were over. Mall-based stores reported disappointing sales. The UBS-International Council of Shopping Centers (ICSC) showed a 3.5% gain in same-store sales in November. Same-store sales are based on sales at stores opened at least a year. The increase in sales in November was helped out by colder weather, and the increase was better than sales in September and October which averaged a 1.6% gain, according to ICSC. However, with higher gas and food prices, a slowing economy and depleting consumer confidence, economists are concerned that the retail industry will continue to struggle.
MSNBC.com – Dec. 6, 2007
Fed Cuts Rates
The U.S. Federal Reserve cut short-term interest rates a quarter of a percentage point to 4.25%, according to the Federal Reserve. Federal chairman, Ben Bernanke, and fellow policy-makers cut its federal funds rate for the third time this fall. Federal funds rates affect how much interest consumers pay on credit cards, home equity loans, and auto loans. Key interest rates may be cut several more times in the first half of 2008 to avoid a recession, economists forecasted.
CNNMoney.com – Dec. 11, 2007
Employers Must Use New Form I-9
According to the U.S. Citizenship and Immigration Services (USCIS), employers are required to use the new Employment Eligibility Verification Form I-9 beginning Dec. 26, 2007. Failure to use the new form will result in fines and penalties as authorized by the Illegal Immigration Reform and Immigrant Responsibility Act of 1996. This act requires employers to verify the identity of all employees. The new form adds a new document to the list of acceptable credentials and removes five documents from the list, the USCIS reported. The new document added states that an applicant must provide an unexpired employment authorization document that contains a photograph (Form I-766, I-688, I-688A or I-688B). The documents that are no longer acceptable are certificate of U.S. citizenship (Form N-560 or N-561), certificate of naturalization (Form N-550 or N-570), alien registration receipt card (I-151), unexpired re-entry permit (Form I-327), and unexpired refugee travel document (Form I-571). Employers were informed of the change on November 8.
Society for Human Resource Management – Nov. 26, 2007
Economic Trends is a publication of Express Services, Inc., Oklahoma City, Oklahoma. © 2007.