CHICAGO — THE NATION’S UNEMPLOYMENT RATE fell in November to the lowest rate in five years. Employers added 203,000 jobs, which dropped the rate to 7%, down 0.3% from the previous month, and the number of unemployed dropped to 10.9 million, all according to the Bureau of Labor Statistics.
Other economic news was also optimistic, though some warned that the numbers were boosted by sequestered government workers returning after the shutdown, as well as a late start to the holiday season.
“The November employment report continues the 45-month trend of private-sector job growth, with 8.1 million new jobs created over that time,” says Secretary of Labor Thomas E. Perez. “In the last 12 months alone, American businesses have added 2.3 million new private-sector jobs.”
A NEW MINIMUM WAGE of $10.10 per hour, as proposed by Sen. Tom Harkin, D-Iowa, and Rep. George Miller, D-Calif., would allow a family of three to finally live above the poverty line, something that hasn’t been true since 1968. The proposal also adds an automatic increase to the minimum wage to account for inflation, helping workers to remain above the poverty line, according to the Economic Policy Institute.
THE BEIGE BOOK REPORT, issued Dec. 4 by the Board of Governors of the Federal Reserve System, described economic expansion at a modest to moderate rate in all 12 districts. New York, Cleveland, Richmond, Atlanta, St. Louis, Minneapolis and Dallas saw moderate growth rate, while Philadelphia, Chicago and Kansas City reported modest growth, and Boston saw continued expansion. Manufacturing continued to grow, with gains in the automobile and high-tech industries, and manufacturers continue to be optimistic about future prospects. The districts also reported increased tourism and strong real estate activity.
THE NATIONAL ASSOCIATION OF REALTORS’ October report showed that pending home sales were down 0.6% from September and down 1.6% from October 2012. The lower numbers were expected, says Lawrence Yun, chief economist for the association. “The government shutdown in the first half of last month sidelined some potential buyers. In a survey, 17% of Realtors® reported delays in October, mostly from waiting for IRS income verification for mortgage approval.”
To go along with those numbers, the Mortgage Bankers Association’s Weekly Mortgage Applications Survey showed lower mortgage applications, down 12.8% for the last week of November. Refinance activity was down 18%, to only 63% of the total applications. The average interest rate for a 30-year fixed mortgage was up to 4.51%, as were points, which increased from 0.31 to 0.38.
THE HOLIDAY SEASON’S opening shopping numbers were down for the week ending Nov. 30. Spending was down 2.8%, although sales were up 2.5% from last year, according to the International Council of Shopping Centers.
CONSUMERS SHOOK OFF the federal shutdown to increase their rate of confidence in late November, according to the Surveys of Consumers from Thomson Reuters and the University of Michigan. Most gains were among upper-income households, while households in the bottom third of income reported an income decline and negative changes in net worth.
“Consumers expressed lingering concerns over the upcoming Congressional deadline for reaching a settlement on the federal budget and debt ceiling,” says Richard Curtin, chief economist for the Surveys of Consumers. “Consumers expect the growth rate in 2014 will be far short of the economy’s potential. The term that best fits the outlook of consumers is stagnation.”