Economic Roundup – December 6, 2010
by Robert T. Boyer, Ph.D. on Dec.17, 2010, under General
Labor productivity for the third quarter jumped by a 2.3 percent annual rate over the last period, nearly keeping pace with analyst predictions of a 2.4 percent gain.
Productivity is measured as output compared to hours worked, and according to last week’s report from the Bureau of Labor Statistics, non-farm labor output increased 3.7 percent and hours worked increased 1.4 percent in the third quarter. Non-farm business productivity increased 2.5 percent from the third quarter of 2009 to the third quarter of 2010, as output increased 4.3 percent and hours worked rose 1.7 percent.
These gains are moderate, which could point to a future uptick in hiring as businesses realize they have hit a productivity ceiling, even though the unemployment rate inched up to 9.8 percent for November, according to the Bureau of Labor Statistics report from last week. The Department of Labor reported last week that for the week ending November 27, the advance figure for seasonally adjusted initial claims was 436,000, an increase of 26,000 from the previous week’s revised figure of 410,000.
It also noted that the four-week moving average was 431,000, a decrease of 5,750 from the previous week’s revised average of 436,750. Initial claims for the same period a year ago were 475,000. “We are starting to get some self-sustaining momentum in the economy,” Nigel Gault, chief U.S. economist at IHS Global Insight, told the Associated Press. “As jobs pick up, that is making consumers a bit more confident and willing to spend.”
U.S. consumers were certainly willing to release the purse strings in November when it came to cars. November sales of cars and light trucks hit 873,323 units, according to last week’s figures from Autodata Corp. This marked a nearly 17 percent increase from November 2009. November’s sales continued October’s healthy auto sales activity, and could be an indicator that the period between Christmas and New Year’s — the most important and typically strongest period for car sales — will demonstrate a rebound for the auto industry.
“That’s when you’ll really get a sense if there’s been an improvement in consumer behavior,” Earl Hesterberg, chief executive of dealership chain Group 1 Automotive Inc., told the Wall Street Journal.
Next week’s financial news kicks off with October’s consumer credit statistics from the Federal Reserve, which tracks both revolving and non-revolving debt. While consumer credit notched up by $2.1 billion in September, market watchers are expecting the Fed to report a $3.3 billion decline for October.
Thursday will see initial jobless claims for the week starting December 4, as well as wholesale inventory data for October from the Census Bureau. September’s wholesale inventories showed a 1.5 percent increase, and October is expected to show a 0.8 increase.
On Friday, the Census Bureau also reports the balance of trade for October. September showed a drop of $44 billion, and experts are expecting the same size drop for October.
[This report is sponsored by the Martial Arts Uniforms Store.]
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