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:
November Payroll Report
178,000 payroll jobs were created in November, which was a hair below economists’ consensus estimate of 180,000. Meanwhile, October payrolls were revised to 142,000 jobs, down from an initial estimate of 161,000; September payrolls were revised to 208,000 jobs, up from 191,000 previously.
The big news was that the unemployment rate declined to 4.6%, the lowest rate in nine years. This was due largely to the fact that 400,000 people dropped out of the workforce. Interestingly, the labor participation rate declined to 62.7% in November, down from 62.8% in October. The only bad news in the November payroll report was that average hourly earnings declined by $0.03 to $25.89 per hour. Over the past 12 months, average hourly earnings have risen by 2.5%, down from the 2.8% annual pace in October. Overall, though, the November payroll report was positive.
ADP’s Payroll Report
On Wednesday, ADP reported the 216,000 private payroll jobs were added in November, which was well above economists’ consensus estimate of 160,000. Interestingly, ADP also revised October’s private payrolls down to 119,000, compared with the initial estimate of 147,000 job. This big downward revision for ADP was a bit unusual, but it was likely caused by seasonal job hiring.
Q3 GDP (Revised Estimate)
The Commerce Department announced that the U.S. economy rose at a 3.2% annual pace in the third quarter. This is up from the initial estimate of 2.9% annual GDP growth. The primary reason for this upward revision was a 2.8% jump in consumer spending, up from 2.1% initially estimated. Meanwhile, corporate profits soared 6.6% in the third quarter; this bodes well for business spending in the fourth quarter. Strong exports, especially soybeans, also boosted third-quarter GDP growth. Overall, GDP is now growing at the fastest pace in more than two years. The fact that consumers are spending more is a good sign that GDP growth should continue to grow at a robust pace.
The Conference Board also reported that consumer confidence soared to 107.1 in November, up from 100.8 in October. Consumer confidence is now at the highest level in nine years! The present situation component surged to 130.3 in November, up from 123 in October, while the future expectations component rose to 91.7 in November, up from 86 in October. Interestingly, consumers were surveyed before the Presidential election, so the post-election euphoria did not seem to have a significant impact. As a result, consumer confidence may rise even more in the coming months.
That’s all I have for you this week; I’ll be back online on Monday with your weekly ratings changes.
Have a great weekend,