Posted on December - 24 - 2010

A pleasingly aromatic potpourri for the economy’s year-end

The year 2010 is concluding in a mostly pleasing manner with respect to recent economic data.

For example, U.S. initial jobless claims for the week ending December 18 were 420,000 as reported by the Department of Labor. That’s well under the benchmark figure of half a million.  Below 500,000, more people are being newly hired than just released from their positions.

The level of new unemployment insurance seekers has been in the lower 400,000 range for the past three weeks. This augurs well for the next labor market report scheduled for January 7. A significant gain in employment (on the order of 100,000+) should be recorded for December.

Employment in the private sector is returning to life. The worry during the first half of next year will shift to the public sector. Revenue shortfalls at the state and municipal levels will necessitate major public sector job cuts, acting as a drag on the economy at a most unfortunate time.

November’s personal income and outlays report was released on December 23 by the Bureau of Economic Analysis (BEA). It contains good news for the household sector. Consumer spending occupies by far the largest position (70%) in total U.S. gross domestic product (GDP).

In current dollars, U.S. personal consumption expenditures advanced 0.4% in November after an even stronger 0.7% gain in October. The October increase was the greatest since August 2009.

Real disposable income (i.e., after taxes and adjusted for prices) advanced 0.3% month over month in November, the same rate of increase as for personal consumption expenditures. These are levels consistent with a 3.0%-plus gain in real GDP, indicating recovery is taking firm hold.

In other good news, several sources are estimating Yuletide spending this year will be 3% to 5% higher than last year And motor vehicle sales in the U.S. have climbed above 12 million units in the latest several months after falling as low as 10 million units during the recession’s depths.

Canada’s industry-based GDP growth in November was 0.2% according to Statistics Canada. This is welcome after a 0.1% decline in October. Mining and oil and gas extraction have really picked up the pace. Bad weather in September reduced drilling rig activity earlier this year.

Statistics Canada particularly notes that copper, nickel, lead and zinc mines have ramped up their production. This is a function of emerging market demand and an end to some labour disputes.

Similar Posts:

Share
No Comments
Read More

Post a comment