Payroll employment rose by 148,000 in December, which on the surface looked like a miss but the fourth quarter was the strongest of the year with the addition of 611,000 new jobs; it was the second-strongest quarter for employment in the last two years. Read More »
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Payroll employment is expected to rise by 160,000 in January, close to the pace in December. Our forecast shows private payrolls coming in a little shy of 150,000. We expect the unemployment rate to hold at 4.7%.
Fed Ready to Raise Rates
Retail sales jumped 0.8% in October after being revised up for the month of September. Gains were driven by a surge in vehicle sales, which is not likely to persist. Vehicles damaged by heavy flooding in the South needed to be replaced. Gasoline station sales rose more than expected on higher gas prices; it also looks like consumers decided to drive more.
Core retail sales, which exclude spending on vehicles and gasoline stations and building material stores, saw a bigger-than-expected surge, underlining that the consumer is still in the driver’s seat for this expansion. Several spending shifts are worth noting.
Employment Data Is not Bad News
Payroll employment rose a less-than-expected 160,000 in April, with marginal downward revisions to the last two months. Gains, however, were concentrated in some of the highest paid jobs in the professional and business services sector. Most of the surge in professional and business services was full-time, not temporary jobs, including college graduates. Much of that was due to increases in management and technical consulting hires, which include older as well as younger workers.