Labor Market Continues to Exude Resilience
Coming into the week, financial markets were looking for validation that January's unexpected strength was not a fluke and that the downward slide in economic momentum experienced late last year had stabilized. On balance, this week's indicators supported that notion.
Total nonfarm payrolls increased 311,000 in February, marking the 11th consecutive month payrolls have beaten consensus expectations. Leisure & hospitality led the charge, adding 105K jobs last month. Strong monthly gains were also seen in retail (50K), professional business services (45K), healthcare (44K) and government (46k). In contrast, net hiring losses were reported in information (-25K), manufacturing (-4K) and financial (-1K). The unemployment rate rose to 3.6% in February from 3.4% in January, as the strong 419K increase in the labor force offset a more muted 177K gain in household employment. The labor force participation rate now sits at a fresh cycle high of 62.5%, not too far off the pre-pandemic average of 63.3%. In another encouraging sign for Fed officials, average hourly earnings rose less than expected last month, up just 0.2%. Along with modest downward revisions to December's and January's gains, average hourly earnings growth has slowed to a 3.6% annualized rate—a pace that is getting much closer within the realm of what would be consistent with 2% inflation.
Also released this week, the Job Openings and Labor Turnover Survey (JOLTS) suggested labor demand remained reasonably firm at the start of the year. While job openings fell 3.7% in January to a level of 10.824 million from an upwardly revised December figure, the level remains high, down only 10% from its peak last March and still running about 50% above pre-pandemic levels. The job openings rate (job openings as a percent of total employment plus job openings) fell to 6.5% in January from 6.8% in December, with the ratio of job openings to the number of unemployed slipping slightly to 1.9 from 2.0 in the prior month. Following signs of greater progress last year, the January decline in job openings points to only modest progress in addressing the substantial imbalance between labor demand and supply.
Outside of the labor market, yet still supportive of resilient demand, the trade deficit widened in January as imports and exports both posted strong monthly gains. Exports rebounded 3.4%, marking the first sequential gain in five months, while imports increased 3.0%. While this has been an encouraging start to the year, questions remain over whether these positive trajectories can be maintained. The January trade report puts net exports on track to be a slight negative for GDP growth in the first quarter
This Week's State Of The Economy - What Is Ahead? - 22 July 2022
Wells Fargo Economics & Financial Report / Jul 27, 2022
July\'s NAHB Housing Market Index dropped 12 points to 55, the second largest monthly decline on record behind April 2020\'s pandemic-induced collapse.
This Week's State Of The Economy - What Is Ahead? - 14 October 2022
Wells Fargo Economics & Financial Report / Oct 18, 2022
Highly anticipated Consumer Price Index report surprised to the upside. Headline CPI rose 0.4% in September, and core CPI increased 0.6%.
This Week's State Of The Economy - What Is Ahead? - 23 September 2022
Wells Fargo Economics & Financial Report / Sep 27, 2022
The FOMC raised the target range for the fed funds rate by 75 bps for the third consecutive time. The housing market continues to buckle under the pressure of higher mortgage rates.
This Week's State Of The Economy - What Is Ahead? - 02 December 2022
Wells Fargo Economics & Financial Report / Dec 08, 2022
Total payrolls rose by 263K in November, with the unemployment rate holding steady at 3.7% and average hourly earning rising by 0.6%.
Economic Uncertainty Seems Removed Going Into The New Year 2020
Wells Fargo Economics & Financial Report / Dec 28, 2019
The U.S. economy continues to expand, albeit at a moderate pace. The U.S. Bureau of Economic Analysis reports U.S. gross domestic product (GDP) grew 2.1 percent in Q3/19.
This Week's State Of The Economy - What Is Ahead? - 25 February 2022
Wells Fargo Economics & Financial Report / Feb 27, 2022
What a crazy week. It’s hard to worry about something as relatively unimportant as economic trends when one thinks about what folks in Ukraine are enduring, but economies are nonetheless impacted.
This Week's State Of The Economy - What Is Ahead? - 17 September 2021
Wells Fargo Economics & Financial Report / Sep 23, 2021
While we were picking up tree limbs from the yard, data released this week generally showed a stronger economy in August than many expected in the wake of surging COVID cases.
This Week's State Of The Economy - What Is Ahead? - 11 December 2020
Wells Fargo Economics & Financial Report / Dec 14, 2020
Emergency authorization of the Pfizer-BioNTech COVID vaccine appears imminent, but the virus is running rampant across the United States today, pointing to a grim winter.
This Week's State Of The Economy - What Is Ahead? - 15 January 2021
Wells Fargo Economics & Financial Report / Jan 18, 2021
Retail sales fell 0.7% in December, the third straight monthly decline. Sales are still up 2.9% over the year, however.
This Week's State Of The Economy-What Is Ahead?
Wells Fargo Economics & Financial Report / Aug 03, 2019
How will Fed rates-cut and Trump 10% tariff on $300 Billion Chinese Goods countered by Chinese currency devaluation against Dollar, affect inflation and economic slowdown in US economy?
