Posts in Good News Friday
Manufacturers Rally
Analysts shuddered two months ago when the monthly Business Outlook Survey from the Philadelphia Federal Reserve plummeted unexpectedly, signaling a worrisome slowdown for manufacturers in the region. Although it covers only a corner of the U.S. – eastern Pennsylvania, southern New Jersey and Delaware – the survey provides an early clue to the more widely followed manufacturing index from the Institute for Supply Management. The dismal August reading from the Philly Fed raised fears that the economy was sliding into recession.
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Whole Lot of Good News
First, the September jobs report released this morning by the Bureau of Labor Statistics came in better than expected with payrolls expanding by 103,000 last month while July and August totals were revised higher by a combined 99,000. Government shed 34,000 jobs last month, and private sector employers added 137,000 led by professional and business services (+48,000), education and health services (+45,000) and information (+34,000), although the latter sector was inflated by the return of 45,000 striking Verizon workers to the labor force. Also worth noting: retailers added 13,600 jobs, suggesting they have an optimistic outlook for consumer spending. Other details: the unemployment rate was unchanged at 9.1 percent, average weekly hours rose 0.1 percent and average hourly earnings were up 4 cents. While the September report is good news compared with last month’s preliminary report that zero jobs were created in August, the labor market is still not growing fast enough to begin absorbing the nation’s long-term unemployed.
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High Frequency Good News
One of the big questions hanging over the economy and the financial markets is whether we’re about to enter, or are already in, a recession. Some call it a double-dip and liken it to the 1930s, which consisted of the Great Depression from 1929 to 1933 followed by a smaller recession in 1937 and 1938 caused by premature fiscal and monetary tightening. Economists assign a probability of 40 to 50 percent to a recession beginning late this year or early next year. While it looks like a toss-up, it helps to keep an eye on high-frequency indicators:
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The Recovery Marches On
The July employment data released this morning by the Bureau of Labor Statistics was better than the 90,000 expected and much better than the pessimistic forecasts by some analysts. Employers added 117,000 net new payroll jobs last month including 154,000 in the private sector offset by minus 37,000 in the public sector. The latter included...
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