Economic Data July 2011


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  • Source: July jobs report: Hiring picks up By: Chris Isidore The job market strengthened in July, a welcome piece of good news that sharply contrasted other recent data pointing toward an economic slowdown. Employers added 117,000 jobs last month, easily topping the 75,000 gain economists surveyed by CNNMoney had predicted. And the unemployment rate improved slightly to 9.1%. After a shockingly weak jobs number from June and a spate of other negative economic reports, many economists had been bracing for the worst from Friday's report, and took the news as a positive surprise. "What a relief!" said Mark Vitner, senior economist at Wells Fargo Securities. "The modest rise allays some fears. The data still show the economy losing momentum, however.“ While July's growth alleviated some worries, it was not enough to make a significant improvement in the struggling labor market. Economists estimate the economy needs to add about 150,000 jobs a month just to keep pace with population growth. 10 job killing companies So far, the economy has recovered only 1.9 million of the 8.7 million jobs lost since the recession began. Two years after it officially ended, 13.9 million Americans remain unemployed, 44% of which have been out of work for six months or longer. About 1.1 million people have become so discouraged they've stopped looking for work altogether and are no longer counted as unemployed. The drop in the number of people in the labor force is what produced the slight improvement in unemployment, not the pick-up in hiring. In fact the complement to the unemployment rate -- percentage of the population with a job -- fell to 58.1%, a 28-year low for that reading. But the report contained plenty of positive news. Weak job reports for both May and June were both revised higher, adding a combined 56,000 jobs for the year, bringing the total to 930,000 jobs added so far in 2011. Businesses were busy hiring in July, adding 154,000 workers in the month, topping forecasts of 100,000 new jobs. But those gains were tempered by a loss of 37,000 government jobs, mostly from state and local governments, where budget shortfalls led to layoffs in July, especially in Minnesota where the government briefly shut down. The gains were also widespread across various industries, as nearly six in 10 added jobs during the month. Among the gainers were the long-battered construction industry, business and professional services, retailers, leisure and hospitality and manufacturing. Average hourly wages ticked up 0.4% in the month to $23.13, more than doubling the expected increase. The index of aggregate weekly payrolls also rose 0.6% after dropping the previous month. Both those things could help pump money into the struggling economy. "We're treading water," said Tig Gilliam, president of the North American unit of job placement firm Adecco "Companies are very happy being very thin. They don't want to scale back up until it's absolutely essential. And we don't have a consumer spending pace that suggests that is going to significantly change.“ In just the last week, data on consumer spending, manufacturing, job cuts and gross domestic product, have all raised concerns that the slowing economy could fall back into recession. The White House said that more needs to be done to bring down the unemployment rate. Austan Goolsbee, chairman of the Council of Economic Advisors, called for bipartisan support of a number of measures, including extension of the payroll tax holiday and unemployment benefits, a public works bill and pending free trade agreements. Republicans were unified in their criticism of the jobs data and the Obama administration's economic policies, as most of the GOP presidential candidates issued statements attacking the president's record.
  • Source: The Wall Street Journal Payrolls Grow as Unemployment Ticks Down By: Luca di Leo and Jeffrey Sparshott The U.S. economy added more jobs than expected in July and the unemployment rate edged down, a move that should help ease concerns that a new recession may be around the corner. Nonfarm payrolls rose by 117,000 last month as private-sector employers added 154,000 jobs, the Labor Department said Friday. Payroll data for the previous two months were revised up by a total 56,000 to show increases of 46,000 jobs in June and 53,000 in May. The unemployment rate, which is obtained from a separate household survey, dropped to 9.1% last month from 9.2% in June. That still leaves almost 14 million Americans who would like to work without a job. Economists surveyed by Dow Jones Newswires had forecast payrolls would rise by 75,000 in July and that the jobless rate would remain at 9.2%. President Barack Obama spoke after the payrolls report, saying he welcomed the increase in job creation but that it was nowhere near enough to make up for more than eight million positions lost during the recession. “ My concern right now, my singular focus is the American people–getting the unemployed back on the job, lifting their wages, building that sense of security that the middle class has felt slipping away,” Mr. Obama said Friday as he announced a plan to spur hiring of veterans, who face particular challenges finding work. The plan would offer tax credits for companies that hire veterans as well as enhanced training for those leaving the military. He said he wanted the American people and the nation’s allies to know “we are going to get through this. Things will get better.” The economy slowed sharply in the first half, heightening concerns it could fall back into recession two years after the end of the downturn that followed the financial crisis. The jobs report takes some pressure off the Federal Reserve and the Obama administration to take immediate steps to boost the economy. Policy makers’ tools are limited by an already high public debt and interest rates close to zero. Friday’s report showed private-sector employers, which account for about 70% of the work force, added 154,000 jobs in July, up from 80,000 in June. Several major industries showed job gains. Manufacturing employment increased by 24,000 in July, more than double the gain from the previous month. Economists had been expecting a bounce as disruptions to production stemming from Japan’s earthquake have been easing. Even the battered construction sector showed a gain, with employment rising by 8,000. However, the housing sector remains a drag on the economy. Meanwhile, government employment continued to fall–by 37,000–for the ninth month in a row. State and local governments, which are struggling to close budget gaps, showed job losses. Even though the jobs report was better than expected, the labor market remains weak. Facing re-election in 15 months, Mr. Obama this week called on Congress to extend unemployment benefits and a payroll-tax credit after lawmakers approved a deal to raise the nation’s debt limit. But he is likely to face stiff opposition from Republicans worried about government spending. Even the Fed’s options are limited. Donald Kohn, the Fed’s no. 2 official until Sept. 2010, said in an interview this week that the central bank should consider a third round of bond purchases to spur the economy, but only if unemployment stays high and inflation comes down. The jobs report Friday showed 44.4% of unemployed Americans, or 6.2 million people, were out of work for than six months in July. The longer someone is without a job, the harder it is to find work. The report showed that Americans’ incomes, which are crucial to fuel spending needed to boost the economy, rose but remained moderate. Average hourly earnings of all employees rose by $0.10 to $23.13. Over the past year, earnings have increased by only 2.3%.
  • For more information, please read’s “July jobs report: Hiring picks up” article, which is available on Slide Two.
  • Source: July Employment Report: 117,000 Jobs, 9.1% Unemployment Rate The U.S. economy added 117,000 jobs in July and an even larger 154,000 in the private sector while the unemployment rate fell to 9.1% from 9.2%, partly because 193,000 people dropped out of the labor force, according to the latest government data. Job gains in May and June were also revised up by a combined 56,000, the Labor Department reported Friday. Average hourly wages rose 10 cents, or 0.4%, to $23.13. The workweek was unchanged at 34.3 hours. This graph shows the unemployment rate. The unemployment rate decreased to 9.1%. Note: The BLS website crashed - I'll add the Participation rate and Employment to population ratio soon. This graph shows the job losses from the start of the employment recession, in percentage terms aligned at the start of the recession. The dotted line is ex-Census hiring. The current employment recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only the early '80s recession with a peak of 10.8 percent was worse). This was still weak, but better than expectations for payroll jobs, and the unemployment rate. The 154,000 private sector jobs - and 56,000 in upward revisions to May and June are improvements. I'll have much more soon...
  • Source: No double dip, but economy’s stuck in low gear By: John W. Schoen The U.S. may have dodged the double-dip bullet with the latest jobs data, but there is little more the government can do to rev up an economy stuck in first gear. As the impact of trillions of dollars of government stimulus continues to fade, Congress and President Barack Obama have few tools left to revive growth. Federal Reserve policymakers meet next week, but their toolbox may contain little more than bubble gum and wire. The government's monthly job report pointed to a surprise uptick in hiring in July. Payrolls expanded by 117,000, the Labor Department said on Friday, as private employers added 154,000 workers. That offset the continuing shrinkage of federal, state and local government payrolls, which cut 37,000 positions in July, a ninth straight month of government job losses. The gains helped the unemployment rate edge down to 9.1 percent from 9.2 percent in June. Job counts for May and June were revised to show 56,000 more jobs added than previously reported. "This is a fabulous number," said Mark Zandi, chief economist at Moody's Analytics. "We're not out of the woods yet, but this is a good sign that we are going to avoid recession." Recession fears have risen in the past few weeks as economic data have pointed to a recovery losing steam. The nation's gross domestic product, the broadest measure of economic activity, grew at a sluggish 1.3 percent annual rate in the second quarter, according to initial estimates, and only 0.4 percent in the first three months of the year, according to the latest revision. Private economists have been slashing growth forecasts for the second half of the year. Most still expect a modest pickup as the impact of higher oil prices fades and the auto industry shakes off a slowdown in shipments from Japan following March's earthquake. That overall outlook masks a very uneven recovery: Job growth varies widely from one industry to the next. Two years after recession technically ended, the housing and construction industries remain at deep recessionary levels. On the other hand, as businesses invest in more equipment and technology to boost productivity, computer engineers and IT consultants are in high demand. Companies are still hiring, according to Tig Gilliam, head of the North American region for Adecco Group, a global human resources company "If we were going into the double-dip recession, we would see companies cutting temporary employees in large numbers," he said. "That's the first place they go — it's the first reaction to reduce costs. They're not doing that." Gilliam said most large companies have plenty of cash to keep workers on the payroll as they look for new business. Then they can hire selectively. A closer look at Friday's jobs data reveals continued underlying weakness in the labor market. While the payroll survey provided good news, a separate survey of households showed a drop of 38,000 jobs in July, the third decline in four months. The jobless rate fell because 193,000 people left the work force. Measured against the total working-age population, employment fell in July to 58.1 percent, a 28-year low, according to Paul Dales, senior economist at Capital Economics. Bigger picture "The bigger picture, then, is that two years after the recession ended the labor market has not really recovered at all, and may even have gone backwards," he said. The recent slowdown in recovery coincides with the fading impact of the government's massive stimulus package following the worst financial collapse since the Great Depression. To jump-start the economy after a virtual shutdown in lending, the government devoted roughly $1.5 trillion to bail out the banking system and boost government and consumer spending. In addition, the Federal Reserve has purchased roughly $2.3 trillion in bonds to pump cash back into the financial system. The central bank's latest round of $600 billion worth of bond-buying ended in June. A series of weak economic data in July prompted speculation the Fed might start buying another round of bonds to pump even more cash into the system. But with companies already hoarding cash, it's not clear that would have much impact. "We have $600 billion of stimulus already out there, and it has made a marginal difference," said former Fed governor Mark Olson. "You add another trillion to the $600 billion and then you look at the difficulty of unwinding that, and I think there will be real reservations to move forward. " As the bitter battle over the debt ceiling showed, there is no appetite in Congress for any additional spending to stimulate the economy. "There are very few cushions available," said Mohamed El-Erian CEO of PIMCO, the giant investment firm. "The policy responses are limited both by ineffective tools and dysfunctional politics." Even with the best policy tools and the most favorable political climate, the damage from the financial collapse of 2008 would take years to repair. Unlike prior cyclical downturns in demand, the Great Recession was caused by the aftermath of the worst financial collapse since the 1930s. After a decade of unsustainable government and consumer borrowing, the economy is slowly working off the trillions of dollars of debt that remains. Some analysts believe the process could take years to complete. "The aftermath of those rare, financially driven recessions is slow, painful, and protracted," said Roger Altman, an investment banker and former Treasury official. "That's exactly what we're seeing. It's going to take a while for us to rebuild ourselves."
  • Source: Length of Unemployment Continues to Break Records By: Catherine Rampell The average worker who is unemployed has been searching for a job for 40.4 weeks, or more than nine months, according to new Labor Department figures. That is the longest average unemployment duration on record. This pattern is especially worrisome because unemployment begets unemployment — that is, for a whole host of reasons, people who are already out of work for a long period of time have very slim chances of finding new work in the near future. Just consider the catch-22 some employers are creating by stating that they’ll only hire workers who already have jobs. In other words, what started out as a cyclical problem could morph into a structural one — particularly if the country allows the nation’s 14 million jobless workers to become a sort of underclass like the one many European countries have struggled with.
  • Source: Private Sector Up, Government Down By: David Leonhardt As weak as the economy has been in recent months, the private sector has still been adding jobs at a faster rate than the adult population has been growing. Over the last 12 months, the private-sector employment has grown by 1.7 percent, while the adult population has grown about 1 percent, according to Haver, a research firm, and the Bureau of Labor Statistics. Yet the percentage of adults with jobs has been falling. How could this be? Because the government — especially state and local government — is cutting jobs.
  • Source: For more information, please read’s “Private Sector Up, Government” article, which is available on Slide Eight.
  • Source: For more information, please read’s “Private Sector Up, Government” article, which is available on Slide Eight.
  • Based on Metropolitan Area Employment and Unemployment Summary published August 3, 2011
  • Source: WhiteHouse.Gov The Employment Situation in July By: Austan Goolsbee Today’s employment report shows that private sector payrolls increased by 154,000 in July and the unemployment rate ticked down to 9.1 percent. The economy has added 2.4 million private sector jobs over the past 17 months, despite a slowdown in economic growth from substantial headwinds in the first half of the year. While the better than expected report is welcome news, the unemployment rate remains unacceptably high and faster growth is needed to replace the jobs lost in the downturn. Bipartisan action is needed to help the private sector and the economy grow – such as measures to extend both the payroll tax cut and unemployment insurance, as well as passing the pending free trade agreements with re-employment assistance for displaced workers, the patent reform bill, and a bipartisan infrastructure bill to help put Americans back to work. This week we averted an economic catastrophe by avoiding a default and putting in place an important down payment on long term deficit reduction. We will continue to work with Congress to build on these efforts to achieve a broader balanced deficit reduction agreement that instills confidence and allows us to live within our means without shortchanging future growth. In addition to the increases last month, payroll survey estimates of private sector job growth for May (now +99,000) and June (now +80,000) were revised up. Overall payroll employment rose by 117,000 in July. The growth was broad based. Sectors with employment increases included professional and business services (+34,000), health care (+31,300), retail trade (+25,900), manufacturing (+24,000), leisure and hospitality (+17,000), and construction (+8,000). Sectors with employment declines included government (-37,000) and financial activities (-4,000). Manufacturing has added 289,000 jobs since the beginning of 2010, the best period of manufacturing job growth in over a decade. Meanwhile, state and local governments lost 39,000 jobs in July and have shed more than 400,000 jobs since the start of 2010. The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.
  • Source: Moody’s Analytics/ Annual inflation in Brazil increased for the 12th consecutive month, influenced by the low comparison base of last year. Consumer prices reported a monthly increase of 0.16% in July, after 0.15% in June. Annual inflation went up to 6.87%, from 6.71% in June. Lower global commodity prices caused inflation to increase more slowly and will persuade the central bank to keep monetary tightening on hold.
  • Source: Moody’s Analytics/ Economic growth in the euro zone accelerated in the opening quarter of 2011. Real GDP rose by 0.8% from the fourth quarter, when it expanded by 0.3%. On a year-ago basis, GDP grew 2.5% in the first quarter after jumping 1.9% in the previous stanza. Construction rebounded from an earlier slump, helping to boost capital spending. Exports also supported economic activity. High-frequency data suggest growth will ease in the second quarter of 2011.
  • Source: Moody’s Analytics/ The German unemployment rate held at 7% in July; while the number of people out of work fell by 11,000, this follows a decline of 8,000 in June. The German labour market improved strongly at the start of the year, but gains are expected to be more muted in the second half of 2011 as economic growth weakens. German households are therefore not likely to provide a notably stronger contribution to GDP this year as hoped.
  • Source: Moody’s Analytics/ Indonesia’s second quarter GDP grew 6.5% y/y, unchanged from the opening quarter of the year. Solid private consumption and robust exports were the drivers behind sturdy second quarter growth. Growth is likely to strengthen on the back of strong energy exports to Asia and accommodative monetary policy settings.
  • Source: Moody’s Analytics/ New Zealand’s unemployment rate remained flat at 6.5% in the second quarter, after the unemployment rate was revised to 6.5% in the opening quarter of the year. While the unemployment rate remains fairly high, the strengthening New Zealand recovery, the reconstruction of Christchurch, and increasing business sentiment should further strengthen the labour market and lower unemployment in the near term.
  • Source: Moody’s Analytics/ Spanish industrial production fell in June. Industrial output contracted 2% in year-ago terms adjusted for working days following a drop of 0.4% in May. Industry will be under pressure for most of 2011 from the government’s austerity measures. The manufacturing purchasing managers' index remained in contractionary territory in July.
  • Source: Moody’s Analytics/ Consumer price inflation in Taiwan grew 1.3% on a year-ago basis in July, after expanding 1.9% in June. Inflation is expected to pick up in coming months as Taiwan is heading into monsoon season. The difficult weather could cause damage to crops and push up food prices. Monetary tightening through 2011 will help to curb demand-side pressures driven by a steady decline in unemployment and an uptick in wage growth encouraging households to spend more freely.
  • Source: Moody’s Analytics/ U.K. house prices nudged 0.3% m/m higher in July. In annual terms, prices fell 2.6%. This follows a 1.5% m/m jump and 3.5% y/y contraction in June. As anticipated the property market has picked up somewhat during the summer months. However, sustained price gains are unlikely. Demand will remain relatively weak as U.K. households face a number of headwinds.
  • Source: Moody’s Analytics/ Inflation accelerated in July amid higher food prices. The consumer price index for the Caracas metro area increased 2.5% m/m in July, up from 2.2% in the previous month and 1.6% a year ago. As a result, annual inflation accelerated from 25.1% in June to 26.2% by July. After declining early in the year, inflation has reaccelerated since May as shortages have prompted the government to authorize price adjustments on many basic goods and services. Monthly inflation figures normally depended on the magnitude of those adjustments. Meanwhile, monetary fundamentals point to higher inflation in the medium term.
  • Economic Data July 2011

    1. 1. US Economic Data As of August 2011 Reflective of the Bureau of Labor Statistics’ “ The Employment Situation – July 2011”
    2. 2. Employment Increases Surprise Nationwide Economists EMPLOYMENT INCREASES SURPRISE NATIONWIDE ECONOMISTS JOBS GAINED IN JULY UNEMPLOYMENT RATE WORST UNEMPLOYMENT RATE SINCE 117,000 9.1% 1983 *Current recession excluded
    3. 3. Unemployment Rate Declines to 9.1% Source: BLS UNEMPLOYMENT RATE DECLINES TO 9.1%
    4. 4. Source: The Job Market Improves Considerably as 117,000 Jobs are Added in July THE JOB MARKET IMPROVES CONSIDERABLY AS 117,000 JOBS ARE ADDED IN JULY
    5. 5. July Unemployment Rates Remain Near 30-Year High Source: JULY UNEMPLOYMENT RATES REMAIN NEAR 30-YEAR HIGH
    6. 6. 8.7 Million Jobs Lost in 2008…117,000 Jobs Created in July 2011. Progress Must Continue – And for the Long Run Sources: Bureau of Labor Statistics & 8.7 MILLION JOBS LOST IN 2008…117,000 JOBS CREATED IN JULY 2011. PROGRESS MUST CONTINUE – AND FOR THE LONG RUN
    8. 8. Sources: Bureau of Labor Statistics via Haver Analytics & Private-sector Job Growth (Blue) vs. Population Growth (Red), August 2009 – July 2011 PRIVATE SECTOR EMPLOYMENT INCREASES AT FASTER RATE THAN U.S. ADULT POPULATION GROWTH
    9. 9. Sources: Bureau of Labor Statistics, via Haver Analytics & Employment-population Ratio Figures, August 2009 – July 2011 UNITED STATES EMPLOYMENT – POPULATION RATIO REACHES 28-YEAR LOW
    10. 10. State and Local Governments Continue to Cut Jobs Sources: Bureau of Labor Statistics, via Haver Analytics & Government Employment Figures, August 2009 – July 2011 STATE AND LOCAL GOVERNMENTS CONTINUE TO CUT JOBS
    11. 11. Sector Changes Observed in July Source: BLS SECTOR CHANGES OBSERVED IN JULY
    14. 14. Source: WhiteHouse.Gov PRIVATE PAYROLL EMPLOYMENT FIGURES JULY 2008 – JULY 2011
    15. 15. <ul><li>Job growth improves, unemployment rate decreases… </li></ul><ul><li>Opportunities </li></ul><ul><ul><li>117,000 jobs were generated throughout the nation in July alone. </li></ul></ul><ul><ul><li>The unemployment rate dropped from 9.2% to 9.1% . </li></ul></ul><ul><ul><li>Average hourly earnings for all employees increased by 0.4 percent to $23.13 , as earnings have increased by 2.3 percent during the last year. </li></ul></ul><ul><ul><li>In July, private employers hired 154,000 professionals throughout the United States. </li></ul></ul><ul><li>Weaknesses </li></ul><ul><ul><li>Only 1.9 million of 8.7 million jobs lost since 2008 have actually been recovered . </li></ul></ul><ul><ul><li>13.9 million Americans are currently unemployed – more than 40 percent of such individuals have been without work for more than six months. </li></ul></ul><ul><ul><li>The nation’s Employment-population Ratio Figure is currently 58.1% , the lowest rate in 28 years . </li></ul></ul>In Summary IN SUMMARY
    16. 16. Global Economic Data As of July 2011
    18. 18. Source: EURO ZONE GDP
    20. 20. Indonesia’s GDP Source: INDONESIA’S GDP
    23. 23. Taiwan’s Consumer Price Index Source: TAIWAN’S CONSUMER PRICE INDEX
    24. 24. United Kingdom’s Halifax Housing Price Index Source: UNITED KINGDOM’S HALIFAX HOUSING PRICE INDEX
    25. 25. Venezuela’s Consumer Price Index Source: VENEZUELA’S CONSUMER PRICE INDEX