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 that means we have the payroll report from the prior month to review. Today, the Labor Department reported that January’s unemployment rate remained unchanged at 4.1%, a 17-year low. This is consistent with the past three months. The number of new payroll jobs created in January totaled 200,000, topping economists’ expectations for an addition of 180,000 new jobs. And in line with December, average hourly earnings for employees increased 0.3% in January, or by nine cents, to $26.74. Interestingly, wage growth climbed 2.9% for the year, the strongest year-over-year growth recorded since June 2009. The labor force participation rate held steady for the fourth-straight month at 62.7%. All-in-all, the details in the report are very encouraging.
I would be remiss if I didn’t note that Wednesday’s report from the ADP Research Institute showed an addition of 234,000 jobs in January, surpassing economists’ forecasts for 185,000 new jobs. Based on both reports, it’s clear that job growth has gotten off to a strong start this year.
On Monday, The Conference Board reported that the Consumer Confidence Index jumped 2.3 points to 125.4 in January, after declining to 122.1 in December. January’s reading surpassed economists’ expectations for a 123.1 reading. Consumers’ assessment of the present situation fell modestly, from 156.5 to 155.3. However, optimism about the short-term outlook improved from 100.8 in December to 105.5 in January. Overall, these are very promising results, as it suggests that consumers will continue to reinvest their cash right back into the economy. And I’d be remiss if I didn’t note that January’s reading is just shy of last November’s 17-year high of 128.6.
I should add, however, that on Friday, the University of Michigan’s Consumer Sentiment Index drew back a bit in the preliminary January reading to 94.4. This is the weakest showing in six months, and it hints at an overall weak month for January as a whole. However, only time will tell.
Factory Goods Orders
December turned out to be the fifth straight monthly increase in Factory Goods Orders. In fact, overall, Friday’s report was even better than expected for the month of December. We saw a 2.9% rise in durable goods, while we also saw a 1.5% consensus call for factory orders including nondurable goods. Vehicles and aircraft once again led the strength in durable goods. However, core capital goods orders (nondefense ex-aircraft) monthly decline of 0.6% revealed a slight bit of weakness in this report.
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.
Until next week,