November jobs report tops light week of economic news
After a couple of months of hurricane-related volatility, this week’s report on November payrolls could provide the first largely untainted reading of the labor market since summer.
A relatively light week of economic news also features data on the service sector and consumer credit.
In October, a closely-watched index of service-sector activity reached the highest level on records dating to 2008, reflecting an economy that has been firing on all cylinders lately. Services — such as construction, mining, transportation, retail, insurance and real estate — make up about 80% of the economy. The strong October performance was partly inflated by weather-related disruptions that increased supplier delivery times, and so a modest pullback is likely, Nomura economist Lewis Alexander says. Economists estimate the Institute for Supply Management will announce
Tuesday that its non-manufacturing index fell modestly in November to a level that still signifies robust growth.
Consumers have been reaching for their credit cards more frequently over the past year or two as a result of solid job and income growth. That has added to steady increases in auto and stu- dent loans. The trend has slowed somewhat recently, possibly because rising delinquencies by less credit-worthy borrowers have prompted some lenders to tighten their standards. Still, Alexander says credit levels “remain in healthy territory.” Economists expect the Federal Reserve on Thursday to report outstanding consumer credit grew by $16.8 billion in October, following a $20.8 billion increase the prior month.
Hurricanes Harvey in Texas and Irma in Florida pummeled employment in September, with the U.S. economy adding just 18,000 jobs. October brought the inevitable rebound, with 261,000 jobs gained, but that was significantly less than the 313,000 projected. Payroll growth averaged just 140,000 for the two months, below the pace of 176,000 for the first eight months of the year. It’s possible that not all of the idled workers in Texas and Florida were back on the job by the time the Labor Department conducted its survey in early October. Their subsequent return could provide some extra boost to the November tally, economist Jim O’Sullivan of High Frequency Economics says, though the report should mostly be free of weatherrelated distortions. Economists figure Labor on Friday will report that employers added a sturdy 210,000 jobs last month despite a tight labor market that’s making it tougher to find workers.