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…
Unemployment Rate Report
It’s the first Friday of the month, so we’ll go over the payroll report from last month. Today, the Labor Department reported that December’s unemployment rate held steady at 4.1%, unchanged from October and November, and sticking to a 17-year low. The number of new payroll jobs created in December totaled 148,000, coming in below economists’ forecasts for an addition of roughly 190,000 new jobs. Last month, average hourly earnings for employees increased 0.3%, or by nine cents to $26.63. The labor force participation rate was unchanged for the third-straight month at 62.7%. Though job gains were lower than expected, December’s findings bring the total number of jobs created last year to 2.1 million. Overall, the details in the report are very encouraging.
I should also add that earlier this week, the ADP Research Institute reported an addition of 250,000 jobs in December, up from their reported addition of 190,000 jobs in November. According to ADP, midsized companies with between 50 employees and 499 employees added 99,000 jobs, while small companies with less than 50 employees added 50,000 jobs. Large companies with more than 500 employees added 41,000 jobs. So the strongest job growth can be seen among midsized companies.
Factory Goods Orders
On Friday, the Commerce Department said that factory goods orders rose 1.3% in November to $488.1 billion. Economists were calling for a 1.4% increase, so results came in a hair below expectations. This follows the upwardly revised October report, where orders rose 0.4%. Orders for non-defense capital goods excluding aircraft—commonly used as a proxy for business spending plans—slipped 0.2%, after dipping 0.1% in October. These orders include items such as farm and construction machinery, as well as computers and medical supplies. Also, shipments of core capital goods—used to calculate business equipment spending in the GDP report—fell 0.1%, compared to the 0.3% increase in the prior report.
However, orders for transportation equipment rebounded strongly, jumping 4.1% after decreasing 4.0% in October. Overall, with factory goods orders increasing for the fourth-straight month, this is another positive report. 2017 orders appear to be growing at a relatively healthy pace. Additionally, corporate tax reform will likely boost business spending in the coming months.
That’s all I have for you this week. I’ll be in touch again next week with the latest ratings out of Portfolio Grader.
Have a great weekend,