NAM: Monday Economic Report
There were 525,000 manufacturing job openings in October, up from 492,000 in September and a new record high. Manufacturers are clearly ramping back up, rebounding from springtime weaknesses. In the larger economy, nonfarm business job openings increased from 6,494,000 in September to 6,652,000 in October, a three-month high.
One sign of improved health is the “churn” seen in the labor market, and the number of quits has rebounded in recent months, a reassuring sign that the labor market is strengthening.
With that said, initial unemployment claims rose to 853,000 for the week ending Dec. 5, the highest level since the week ending Sept. 19. This suggests that the continued spread of COVID-19, along with new restrictions, has resulted in an increased pace of Americans filing for first-time unemployment insurance benefits. Indeed, data from other sources also suggest that the pace of job openings slowed in late November.
The Small Business Optimism Index declined from 104.0 in October to 101.4 in November, with owners continuing to worry about short-term political and COVID-19 uncertainties. Indeed, the net percentage expecting business conditions to improve dropped to the lowest level since March. Despite some slippage in confidence, the headline index continued to reflect overall strength, with workforce challenges topping the “single most important problem” list once again.
Consumer confidence rose in December, according to preliminary data from the University of Michigan and Thomson Reuters, but confidence remains well below the levels seen before the pandemic. There were wide disparities along partisan lines.
U.S. consumer credit outstanding rose 2.1% in October, but revolving credit—which includes credit cards and other credit lines—fell 6.7%, declining for the eighth time year to date. Over the past 12 months, revolving credit has decreased 10.0%, suggesting that Americans are reducing their willingness to take on more credit and likely paying down some of their existing balances.
Consumer and producer prices rose in November, but core inflation remains largely in check for now. Indeed, the Federal Reserve has pursued extraordinary monetary policy measures to help prop up the economy, with little worry about inflation, and it remains committed to its stimulative stance for the foreseeable future. The Federal Open Market Committee meets this week on Dec. 15–16.
There will be important data points released this week on the health of the overall U.S. economy, including November updates on housing starts, industrial production and retail sales and December manufacturing surveys from IHS Markit and the New York and Philadelphia Federal Reserve Banks.