- Preliminary 1Q Non-farm Productivity rose 1.7% versus estimates of a .7% gain and an upwardly revised 2.1% increase in 4Q.
- Preliminary 1Q Unit Labor Costs rose .6% versus estimates of a 3.8% gain and a downwardly revised 6.2% increase in 4Q.
- Initial Jobless Claims fell to 305K versus estimates of 325K and 326K the prior week.
- Continuing Claims fell to 2495K versus estimates of 2550K and 2588K prior.
- ISM Non-Manufacturing for April rose to 56.0 versus estimates of 53.0 and a reading of 52.4 in March.
BOTTOM LINE: US worker productivity last quarter grew faster than forecast and labor costs moderated, raising speculation the labor market won’t fuel inflation, Bloomberg said. As well, manufacturing productivity rose at a 2.7% pace and non-financial corporate productivity rose at a 1% pace during the fourth quarter, which was just reported today. Unit labor costs, the main driver of inflation, are now rising below the 20-year average of 1.9%, which is a big positive. I continue to believe the job market will remain healthy over the intermediate-term without generating substantial unit labor cost increases.
The number of US workers filing first-time claims for unemployment benefits fell to a three-month low last week, signaling the jobless rate may not rise in coming months, Bloomberg said. The four-week moving-average of jobless claims fell to 328,750 from 333,250 the prior week. The unemployment rate among those eligible for benefits, which tracks the US unemployment rate, fell to 1.9% from 2.0% the prior week. I suspect Friday’s jobs report will show non-farm payrolls came in around estimates of 100,000, which should be viewed positively by investors.
Growth in US service industries accelerated more than forecast last month, a sign the economy may be picking up after slowing in the first quarter, Bloomberg said. The New Orders component of the index rose to 55.5 versus 53.8 the prior month. The Prices Paid component was 63.5 versus 63.3 the prior month. The Employment Component of the index rose to 51.9 from 50.8 the prior month. Strength in this index, which measures sectors that account for almost 90% of economic growth, is surprising and a big positive. After today’s data, the imminent US recession hypothesis has lost all credibility, in my opinion. I continue to believe that after a sluggish 1Q, US growth is in the beginning stages of accelerating back to around average rates.
2 comments:
fantastic content!There is an interesting debate in the blogosphere exploring the reasons for the persistent high unemployment rates in the US and elsewhere. Conservatives lay the blame on the structural skills mismatch and argue that this cannot be resolved through any stimulus spending measures. Liberals claim that the massive slump in aggregate demand from the boom, means that there are massive idling resources which can be brought to work with an appropriately structured stimulus program.
Glad I drop by!
The male aged 25 to 54 year old employment ratio is 81.3% in september 2009, the second lowest reading on record (starting 1948).
This means 100 - 81.3 = 18.7% jobless rate.
Of all the five years age range, the best situation is for males aged 35 to 39 where the employment ratio is 84.3, so 15.7% jobless rate.
15.7% is currently the *smallest* jobless rate of all 5-years segment of the USA population.
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