Weekly Economic Review: December Jobs Report Comes in Below Expectations

Posted by Laine Smith on 1/7/18 11:22 AM

Topics: Economy

In this week’s economic review, mortgage rates fell, December job creation was well below forecast levels, and construction spending expanded.

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Employment Reports

The December ADP Employment Report called for a strong gain of 250,000 in private payrolls, but Friday’s December employment report showed non-farm payrolls rose 148,000. November, though, saw a substantial upward revision from 228,000 to 252,000.

The unemployment rate remained at a 17-year low of 4.1 percent but the pool of unemployed workers actively looking for jobs increased slightly. Hiring cooled throughout the month but employment levels remained very high.

The report showed a hint of wage inflation with the monthly wage data rising 0.3 percent. November’s average hourly earnings, though, were downwardly revised with the year-over-year moving in the right direction at +2.5 percent.

Construction Spending

Construction spending rose a strong 0.8 percent in November with residential construction increasing 1 percent. Amongst residential construction, single-family construction brought in a very welcome 1.9 percent increase as inventory has been wearing thin. Single-family construction is up 8.9 percent year-over-year, while multi-family units have declined 1.7 percent.

This week in the economy:

  • As of January 4th, the 30-year average fixed rate fell to 3.95 percent with 0.5 points, according to Freddie Mac.
  • In the week of December 29th, purchase applications rose a seasonally adjusted 1 percent, but refinance applications fell again by 7 percent. Unadjusted, the purchase index is just 3 percent higher than a year ago.
  • In the week of December 30th, initial jobless claims increased by 3,000 to 250,000. The 4-week average is up 3,500 to 241,750 but is little changed from the month-ago comparison.  
  • Though still near historic highs, the Bloomberg Consumer Comfort Index fell 6 tenths to 51.8 in the week of December 31st.

The economic calendar for the week of January 8th, 2018:

  • Monday – Consumer Credit
  • Tuesday – JOLTS
  • Wednesday – MBA Mortgage Applications
  • Thursday – Jobless Claims, Bloomberg Consumer Comfort Index
  • Friday – Consumer Price Index, Retail Sales

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