This Week's Economic Update

It’s Friday and that means it’s time to review the latest economic data and identify which pockets of the economy are heating up and which are slowing down. Don’t worry about catching every headline and every report throughout the week—I recap all of the most important news impacting your wealth right here every Friday. Let’s take a look at this week’s big headlines:

Construction Spending Rises

During the month of October, total construction spending jumped 1.0%, above economists’ estimates of a 0.6% increase. Breaking it down, private residential construction rose 1% to the highest level it’s been since December 2014. Public construction spending also rose 1.4%, bringing it to a five-year high. Construction spending has risen every month this year. Federal, public and private sectors have all contributed to this increase, suggesting that the economy remains on firm ground.

Initial Claims for Unemployment Increase

For the week ending November 28, initial claims for unemployment rose 9,000 to 269,000. This was a larger increase than expected; economists had expected jobless claims to rise to 264,000. Meanwhile, the four-week moving average fell by 1,750 to 269,250–an 8.5% decrease from this time last year.

Factory Goods Orders Rise

On Wednesday, The Commerce Department reported a 1.5% increase in factory orders for October. This exceeded economists’ projections of a 1.2% increase. More importantly, it represented a turnaround from the revised 0.8% decrease in factory orders in September. I suspect that this significant improvement is due to commercial airplane and vehicle orders.

Unemployment Rate Consistent; Number of Jobs Increases

For November, the unemployment rate stayed at 5%, as expected. Meanwhile, the labor force participation rate rose to 62.5% (up from 62.4%). The average workweek slipped to 34.5 hours (down from 34.6 hours), and average hourly earnings rose $0.04 to $25.25 per hour. The Labor Department also reported that 211,000 jobs were created in November–which was better than economists’ estimate of 200,000 new jobs. The best news was that both September and October payroll numbers were revised higher. September’s figure is now 145,000 (up from 137,000) and October’s is 298,000 (up from 271,000).

Balance of Trade Widens

In October, the U.S. trade gap widened slightly to $43.9 billion. Breaking it down, exports of goods and services decreased by $2.7 billion, from $186.8 billion to $184.1 billion. Meanwhile, imports decreased by $1.3 billion, from $229.2 billion to $228.0 billion. September’s trade deficit was revised from $40.8 billion to $42.5 billion.

Have a great weekend,

Louis Navellier

Louis Navellier

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