LAST WEEK

News & Commentary Weekly Highlights:

• Real Clear Markets: The IMF’s Addition of China Is Largely a Symbolic Gesture (Friday)
• The Wall Street Journal: Janet Yellen Emphasizes Slow Pace of Rate Increases (Thursday)
• Bloomberg Business: Good News: Economists Are Getting More Bearish on U.S. Growth (Thursday)
• The Wall Street Journal: ECB’s Stimulus Moves Fall Short of Market Expectations, Hammering Stocks (Thursday)
• Bloomberg Business: There’s a Big Drop in U.S. Treasury Debt Supply Coming in 2016 (Monday)

 

Top Economic Indicator Highlights:

Productivity and Costs (revised, Q3)

Nonfarm Business Sector

• Productivity (output per hour, annual rate): 2.2%, Recovery avg.: 1.1%

• Output: 1.8%
• Hours: -0.3%

• Real hourly compensation: 2.4% annual rate
• Unit labor costs: 1.8%, reflecting a 4.0% increase in nominal hourly compensation and a 2.2% increase in productivity
• Noteworthy: From the third quarter of 2014 to the third quarter of 2015, productivity increased 0.6% and real hourly compensation grew 3.4%. Despite the slight upward revision, the decline in hours worked in the third quarter of 2015 remained the first decline in the series since a 4.8% decrease in the third quarter of 2009. Productivity growth for the second quarter of 2015 remained 3.5% after revision. The preliminary release for productivity and costs for fourth quarter 2015 is scheduled for Thursday, February 4, 2016, at 8:30am.

 

THIS WEEK

Upcoming Economic Reports & Releases:

Major Indicators

• Labor Market Conditions Index (10am, Monday)
• Consumer Credit (3pm, Monday)
• Job Openings and Labor Turnover Survey (10am, Tuesday)
• Wholesale Trade (10am, Wednesday)
• Import and Export Prices (8:30am, Thursday)
• Treasury Budget (2pm, Thursday)
• Producer Price Index for Final Demand (8:30am, Friday)
• Retail Sales (8:30am, Friday)
• Business Inventories (10am, Friday)

 

Chart of the Week: 

The chart above shows the percent composition of the population age 16 and older by labor force status as of November 2015, the latest data released last Friday. In that report, total nonfarm payrolls grew by 211,000, the unemployment rate remained at 5.0%, and the labor force participation rate ticked up 0.1 percentage point from a recovery low to 62.5 percent, a rate that can be seen in the portion of the chart labeled ‘Labor Force.’ Those individuals considered full-time, part-time for non-economic reasons, part-time for economic reasons, unemployed for less than 27 weeks, and unemployed for 27 weeks or more (long-term unemployed) are in the labor force. Those who are out of the labor force include those who don’t want a job and those who do want a job now, who either searched for work in past year but not the last 4 weeks (including those discouraged over job prospects or unable to work now due to family responsibilities, illness, or school) or who simply did not search for work in the past year. Fed Chair Janet Yellen made comments last week suggesting that a stronger labor market may entice even some individuals currently out of the labor force who don’t want a job now to reconsider and begin searching for work.