Nonfarm employers added 155,000 jobs, the unemployment rate held steady at 3.7 percent, and hourly wages posted continued growth in November. With a modest downward revision to the job growth reported for the prior two months, the three-month average was 170,000 jobs, a clear slowing from the 204,000 average monthly rate over the last year.
Job gains occurred across a select group of sectors in November including health care, manufacturing, professional and business services, and transportation and warehousing. Health care added 32,000 jobs. Employment in manufacturing increased by 27,000, with durable goods dominating. Professional and business services continued its growth trend, adding 32,000 jobs. Transportation and warehousing added 25,000 jobs in November. Professional and business services (adding 561,000 jobs over the last 12 months) and health care (328,000) continued to be the biggest drivers of job growth; with solid gains over the year coming from manufacturing (288,000) and transportation and warehousing (192,000).
While the unemployment rate was unchanged in November, the strong labor market is pulling more people into the labor market. The employment rate—or employment-to-population ratio (EPOP or the percentage of adults with jobs) remained unchanged in November at 60.6, a high for the recovery. The increased EPOP showed particular strength for prime-age workers (ages 25-54) with a gain of one full percentage point over a three-month average.
The tighter labor market is showing some dividends in wage growth. The average hourly wage is up 3.1 percent over the last year; over the last three months (September, October and November), the annualized rate was up 3.3 percent. With the core rate of inflation at 2.2 percent, increased hourly wages translate to modest real wage gains. .
In sum, this is mostly a positive jobs report. The pace of job growth that began seven years ago is continuing, with the economy adding 2.3 million jobs during the first 11 months of the year. This growth rate is pulling more workers into the labor market, which is now tight enough to produce wage gains. However, there is some evidence of weakness including a slight drop in hours worked and a low share of voluntary quits.
The full BLS press release on the November 2018 employment situation can be accessed in the link below:
The next employment situation report for December 2018 will be released on Friday, January 4, 2019.
Lisa Ventriss, President of Vermont Business Roundtable (VBR) and Jeffrey Carr, President, Economic & Policy Resources (EPR), announced the Q4 of 2018 outlook results of their joint initiative, the VBR/EPR Business Conditions Survey and Index. The latest survey, which was conducted during October and November of 2018, achieved a response rate of 65 percent overall.
More than 80 percent of respondents shared negative outlooks specifically with ease of hiring for available positions (83%); an increase from the previous survey (77%). A majority of respondents expressed a neutral outlook about the state’s overall business climate (57%); a decrease from the previous survey (53%). However, expected demand for the next three months was improved over the previous quarter among a slight majority (51%). When asked, “Are you more or less optimistic about the general business climate in your sector compared to three months ago?”, the responses were largely neutral. However, the Finance and Insurance sector expressed the most optimism (54%), while the Education sector had the most pessimistic outlook (50%).
The next survey will be conducted in January 2019.
On November 20, 2018, Vermont Secretary of Administration Susanne Young announced October revenue results for the State of Vermont. The month of October was predictably a bounce-back month for state revenues. Monthly revenue collections in the State’s General Fund and Transportation Fund both exceeded their respective consensus cash flow targets during October. Receipts in the State’s Education Fund lagged consensus monthly expectations during the month October because of disappointing receipts in the Sales & Use Tax. Overall, combined receipts in all three funds through October were above the cumulative $657.58 million consensus cash flow target by $18.69 million (or +2.84%) over the first four months of fiscal year 2019.
Real gross domestic product (GDP) increased at an annual rate of 3.5 percent in the third quarter of 2018, according to the "second" estimate released by the Bureau of Economic Analysis. In the second quarter, real GDP increased 4.2 percent.
The GDP estimate released today is based on more complete source data than were available for the "advance" estimate issued last month. In the advance estimate, the increase in real GDP was also 3.5 percent. With this second estimate for the third quarter, the general picture of economic growth remains the same; upward revisions to nonresidential fixed investment and private inventory investment were offset by downward revisions to personal consumption expenditures (PCE) and state and local government spending.
The deceleration in real GDP growth in the third quarter primarily reflected a downturn in exports and decelerations in nonresidential fixed investment and in PCE. Imports increased in the third quarter after decreasing in the second. These movements were partly offset by an upturn in private inventory investment.
The Consumer Price Index report, released by the U.S. Bureau of Labor Statistics, provides the latest evidence that inflation is more or less in line with where the Federal Reserve Bank wants it to be. The Consumer Price Index for all urban consumers (CPI-U) increased 0.3 percent in October on a seasonally adjusted basis after rising 0.1 percent in September. Over the last 12 months, the all items index rose 2.5 percent before seasonal adjustment. The monthly increase was nudged higher by gasoline prices, but there was broad based support from other categories, principally shelter, used cars and trucks, and electricity. In contrast, food slightly declined in October.
Core inflation—all items minus food and energy—rose 0.2 percent in October following a 0.1 percent rise in September. Along with indexes for shelter, used cars and trucks and electricity, medical care, household furnishings increased in October; in contrast, communications, new vehicles, and recreation declined during the month.
Core inflation increased 2.1 percent over the last 12 months ending in October. The energy index increased 8.9 percent, while the food index increased more modestly, advancing 1.2 percent over the last 12 months.
The full press release can be found via the link below.
Next release is Wednesday, December 12, 2018, for the November 2018 Consumer Price Index.