Manufacturing added 27,000 jobs last month, led by the food manufacturing and motor vehicle industries. Transportation and warehousing added 31,000 jobs, with truck and air transportation contributing 11,000 of those positions. Construction employment ramped up by 17,000 jobs.
Healthcare payrolls expanded by 28,000 jobs, while employment in mining and logging showed little change. The federal government, though, cut 7,000 jobs in November, and over the past 12 months has slashed 92,000 positions.
Short-term unemployment (those jobless for less than five weeks) declined in November, partially reflecting the return to work by government employees who were furloughed in October’s federal shutdown. The number of long-term unemployed (jobless more than 27 weeks) remained unchanged at 4.1 million, but they account for four out of every 10 unemployed in the U.S. The Labor Department said the number of long-term unemployed has dropped by 718,000 over the past 12 months.
The agency also revised its September and October employment numbers, resulting in a net-positive correction of 8,000 jobs. The number of new jobs in September changed from 163,000 to 175,000, and October’s figure was adjusted from 204,000 to 200,000.
October and November marked two straight months where the businesses added at least 200,000 jobs.
CNNMoney quoted Deloitte CFO Frank Friedman as saying there is a continuing momentum in the national job market and an “optimism about 2014.”
However, in Forbes, Jim Baird, CFO of Plante Moran, noted that the job growth “hasn’t been solely driven by the creation of high-paying full-time jobs.”
But the robust numbers have been fueling speculation ahead of the Federal Reserve’s final policy-making meeting this year that it could either begin weaning off its bond-buying economic stimulus program or even propose an end date.
Meanwhile, new jobless claims for the week ending Nov. 30 fell unexpectedly again to 298,000, in the latest Labor Department data. This was the lowest level in more than two months, and it beat economists’ forecasts of a rise in claims.
The four-week moving average was 322,250, a decrease of 10,750 from the previous reading.
October Factory Orders Hampered by Aviation Industry
U.S. factory orders dipped by 0.9 percent in October, to $486.9 billion, according to the latestCommerce Department statistics. The drop was a reversal from September, when new orders for manufactured goods rose by 1.8 percent.
Transportation equipment, namely the drop in aircraft orders, dragged down the new orders report by falling 5.7 percent to $73.2 billion. New durable goods orders dropped by 1.6 percent to $231.4 billion, after two straight months of upswings. New orders for non-durable goods, such as food and chemicals, dipped by 0.2 percent to $255.6 billion.
New orders for machinery, including metalworking, power transmission, and material handling equipment, rose slightly, by 0.7 percent, to $34.6 billion. Primary metals experienced a 1 percent increase. Fabricated metal products fell by 1.2 percent and for the second straight month failed to gain $30 billion in new orders.
Orders for computers and electronic products dipped 0.6 percent to $21.6 billion, heavily weighed down by precipitous drops in defense communications equipment (-11.3 percent) and defense search-and-navigation equipment (-7.4 percent).
October represented relatively good news for white goods makers, as new orders for household appliances increased 2.2 percent to $1.7 billion. Electrical equipment makers fared even better, as they saw new orders worth $3.5 billion, a 3.5 percent rise over September.
But it was a disheartening month for both commercial and defense aircraft manufacturers, as well as for shipmakers. While carmakers saw a 0.4 percent increase in new orders (nearly $20 billion), new orders for nondefense aircraft and parts tumbled by 16 percent. The defense sector fared even worse, seeing a 19 percent dive in orders.
Durable goods manufacturers as a whole raised their level of shipments in October to $233.7 billion, a 4 percent hike. Meanwhile, shipments of non-durable goods were down 0.2 percent to $255.6 billion and for the fourth time in the last five months.
Unfilled orders in October went up by $4.1 billion to over $1 trillion (a 0.4 percent rise), suggesting that manufacturers needed to raise capacity. And inventories also went up, by 0.3 percent to $383.3 billion, for the sixth time in the last seven months leading up to October.
The Commerce Department’s overall down numbers contrast the rosier manufacturing and expectations picture painted by sentiment indicators such as the Institute for Supply Management’s PMI in November, but they do lag by a month, as pointed out by a Reuters report.
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Renewable Energy Production Tax Credit Close to Ending
The pressure for comprehensive federal tax reform might signal the end of a major subsidy for the wind and other clean energy industries.
If the federal renewable electricity production tax credit (PTC) is allowed to expire at the end of the year, future wind, closed-loop biomass, and geothermal facilities could have to operate without the 10-year, 2.3-cent-per-kilowatt-hour tax credit if their construction does not begin by Dec. 31. Other types of facilities, such as hydropower and open-loop biomass, would lose a 1.1-cent-per-kilowatt-hour credit.
A report by The Hill late last week indicated that Dave Camp (R-Mich.), chairman of the House Ways and Means Committee, and Max Baucus (D-Mont.), chairman of the Senate Finance Committee, are adamant in keeping away any last-minute tax-extenders package in favor of dealing with energy tax credits as part of a U.S. tax code rewrite.
In November, 53 bipartisan congressional members wrote a letter to Camp urging him to let the PTC run out. Any extension will suggest a less-than-firm stance by Camp and Baucus on moving toward sweeping tax reform.
“Many on Capitol Hill view tax extenders as being held hostage to the tax reform question,” The Hill quoted one observer.
There are 55 wide-ranging federal tax provisions that will expire at the end of this year, among them the electricity production credit as well as an R&D tax credit. Proponents and renewable energy lobbyists argue that cutting off the PTC will cost the U.S. precious jobs in manufacturing and construction, deplete investment, and stop the nation from weaning off fossil fuel energy.
Detractors counter that the long-subsidized renewable energy industries should start standing on their own and that the PTC hasn’t been sufficiently lowering renewables prices and broadening clean energy use. They say the PTC demotivates the renewable energy industries from operating and competing on market-based principles.
The PTC has existed since 1992. It has expired on three occasions but has been reinstated and modified even more times by being hitched onto larger legislation, including the 2009 federal stimulus package. Last year, the renewable energy industries similarly faced an expiring PTC, but it was extended for 2013 by being in the fiscal-cliff resolution.
While the PTC’s latest termination threat is roughly three weeks away, it can be retroactively extended. However, with Congress facing another debt ceiling deadline, more intense budget battles, and now the tax reform push, it remains to be seen whether the PTC will find a home in upcoming legislation and live at least another year.
U.S. Cuts Trade Gap and Q3 GDP Posts Strong Gain
U.S. gross domestic product growth accelerated in the third quarter, and the country’s trade deficit shrunk by 5.4 percent in October. Third-quarter GDP growth of 3.6 percent beat the Commerce Department’s initial estimate of 2.8 percent. A final recalculation is due from the agency on Dec. 20.
GDP growth from July to September, which outstripped second-quarter growth of 2.5 percent, was driven by rising inventories, an import slowdown, and greater spending by state and local governments. Inventories added 1.68 points to the third-quarter expansion, as businesses raised their stockpiles by $116.5 billion, which was more than twice the $56.6 billion increase in the second quarter.
However, the robust quarter raised concerns of a slower fourth quarter, where firms could have to work off some excess inventories. The New York Times reported that many economists are projecting between 1 and 2 percent GDP growth for the final three months of 2013 in anticipation of this drawdown.
“Either companies thought demand would accelerate and built inventories in anticipation of sales that didn’t happen, or they’re building in anticipation of stronger demand in the fourth quarter,” the Times quoted Ian Shepherdson, chief economist at Pantheon Macroeconomics.
October U.S. exports registered $192.7 billion — $3.4 billion (1.8 percent) more than in September. However, the nation’s exports decelerated precipitously in the third quarter, growing just 3.7 percent, after 8 percent growth from April to June. At the same time, U.S. imports slowed similarly, falling to a 2.7 percent expansion from 6.9 percent second-quarter growth.
The nation continued to slow the pace of its imports in October, which when combined with accelerating exports cut the trade gap to $40.6 billion. It also narrowed its deficit with China from $30.5 million in September to $28.9 million in October.
The robust GDP growth and what appears to be an improving job market are fueling expectations that the Fed will soon reconsider its economic stimulus efforts. According to a new Times report, the central bank’s bond-buying campaign could be on the table for discussion at the year’s final policy-making committee meeting.
This article was originally published on ThomasNet News Industry Market Trends and is reprinted in its entirety with permission from Thomas Industrial Network. For more stories like this please visit Industry Market Trends.