December employment and the week’s other economic reports; a Keystone XL update

the December Employment Situation Summary – essentially delayed a week due to the New Years holiday – was released on Friday; the establishment survey indicated an addition of 252,000 jobs in December, and a upward revision of 50,000 more jobs to the count of jobs previously reported for October and November…as a result, 2014 will go into the record books as seeing the greatest job creation since 1999, and the greatest private job creation since 1997…furthermore, there were less layoffs in 2014 than in any year since 1997, and there were fewer first time claims for unemployment rations per capita in the fourth quarter than in any quarter in US history…add to that the fact that the 3rd quarter saw the fastest economic growth since 2003, and that without an inventory buildup, and it looks like we’re at the top of the economic cycle; believe it or not, it doesn’t get any better than this…the standard of living for the masses may improve slightly if lower energy prices persist, but it’s hard to imagine job creation or the economy getting any stronger than it is now, so we’ve essentially slipped down into an economy that’s creating a lot more crappy jobs than it was before the recession…the upside for those still looking for work is that job creation tends to continue well after the economy has peaked..

the BLS press release itself is very readable, so you can get the basic details on the employment report from there…excellent summary charts are provided in the two posts covering the report from Bill McBride, here and here; Robert Oak includes 24 FRED charts in his post on the household survey alone….and as usual, selections from the blog posts offering the most detailed coverage of this report will be included at the beginning of our main section of links below….at the bottom of the press release there are links to roughly 30 tables which give us the statistical data behind what’s covered in the two surveys; with these two tables summarizing the lot: 

the 16 ” A” tables that follow are household data tables, while the 9 “B” tables are developed from the establishment survey…there’s a summary in the press release with a basic outline of the types of jobs created; that’s broken down into well over 100 job categories here: Table B-1. Employees on nonfarm payrolls by industry sector and selected industry detail, a table which we’ve often summarized…we’ve also often covered the weekly hours and weekly pay by industry, which are enumerated in detail in the tables here: Table B-2, Table B-3., Table B-7 and Table B-8; what appeared to be decent wage gains in November were reversed in December…the household survey showed that the unemployment rate fell from 5.8% to 5.6%; however, most of that was due to an increase of 456,000 to a total of 92,898,000 of us not counted in the labor force, a new record high, while the labor force participation rate dropped to a 38 year low at 62.7%

other than the employment summary, the other key reports this week included the November report on our International Trade in Goods and Services from the Commerce Department and the Full November Report on Manufacturers’ Shipments, Inventories, & Orders (pdf, aka Factory Orders) from the Census Bureau…the International Trade report was notable in that both exports and imports fell (on a seasonally adjusted basis), with the imports dropping more, partially due to lower oil prices, resulting in a $3.2 billion improvement in the trade deficit to $39.0 billion….the international trade news release itself is very readable, while Robert Oak at the Economic Populist covers it in detail with several graphs here: Trade Deficit Declines 7.7% on Crude Oil Imports…for more details, the Full Release & Tables (PDF) linked on the sidebar, is very useful; Exhibit 7 and Exhibit 8 on pages 12 through 15 of the pdf provide a itemized breakdown of the dollar value of several hundred goods categories traded in October, November and for the year…

the ‘Factory Orders’ report includes 4 tables, for shipments, new orders, unfilled orders and inventories, with each listing dollar amounts for up to 50 different types of factories, over the last 3 months and annually, both seasonally adjusted and adjusted…i know of no blog or media site other than possibly trade publications that covers this report in detail; instead, the focus is almost always on the nearly meaningless monthly new orders, which can be extremely volatile (for instance, they fell by more than 10% in August after rising the same amount in July on the rollout of a new Boeing jet), but it’s the other figures that count; as both shipments and inventories are included in GDP; shipments of course indicating goods that have been manufactured, sold and shipped, and inventories representing completed products still in the warehouse…and as we’ve pointed out repeatedly, the most important indicator of the health of the manufacturing sector in this report is the unfilled orders data; if that’s rising, as it rose 0.4% in November, and as it has risen for 18 out of the last 19 months, that means the current factory operating rate is not keeping up with the new orders coming in, irregardless of whether the new orders fell from the prior month or not…

other reports released this week included the Monthly Wholesale Trade: Sales and Inventories report for November from the Census Bureau and the report on Consumer Credit for November from the Fed…the wholesale trade report surprised in that wholesale sales fell by 0.3%, while wholesale inventories rose by 0.8%; the weakness in sales was mostly in non-durable goods, which fell 0.8%, while inventories of both durable goods and non durable wholesale goods rose equally…the 2nd page of the wholesale trade pdf provides an itemized table of both sales and inventories, both seasonally adjusted and unadjusted…meanwhile, the consumer credit report showed a slowing expansion of credit, with overall credit up at a 5.1% rate in November, with non revolving credit (ie, for cars and student loans) up at a 7.5% annual rate, while revolving credit fell at a 1.3% rate…remember that the main paragraphs from all these reports, including the pdfs, and a number of other reports we dont cover can be viewed on one regular webpage at the Research Economics page at

it now seems certain that Congress will pass a bill mandating approval of the Keystone XL pipeline, and that Obama will veto it…the house passed just such a bill on Friday by a vote of 266-153, and indications are that at least nine Democrats will join the Senate Republican majority in passing the same bill and sending it to Obama next week…communiqués from the White House have indicated that a veto will be forthcoming; all that remains to be seen now is if those favoring construction of the pipeline can get enough support to override the veto; one tally counts at least 64 votes in favor of the pipeline in the new Senate…also clearing the way for construction, the Nebraska Supreme Court reversed a lower court’s decision that blocked the pipeline route through the state, once again giving the pipeline a legal go ahead…however, even if Obama’s veto is overridden, it’s not certain or even likely that the pipeline would be built anymore…as we pointed out in November, the Canadian Energy Research Institute estimated that oil-sands projects need a price of $85 a barrel to be profitable in the current cheapest (in situ) method, and that new mines will require $105 a barrel oil to be profitable; other estimates of costs for tar sand extraction are similar…terminal prices for West Canada Select (heavy) crude oil prices have been below $35 per barrel all week, and Canadian projects are shutting down even faster than those in the US, and some of that started even before prices fell; Norwegian oil giant Statoil pulled out of their tar sands project in September…in the past year, Shell, the French oil giant Total, and SunCor of Canada all cancelled their tar sands projects…even China’s CNPC International pulled out of the oil sands and withdrew its support for Enbridge’s Gateway project to deliver tar sands oil to the west coast…and with current tar sands production already flowing into the US through the Alberta Clipper pipeline to Wisconsin and the Flanigan South pipeline through Illinois & points south, there may not be enough additional tar sands output to justify construction of another redundant pipeline…so if approval from the US is forthcoming, and there is no tar sands oil to be shipped, it now seems quite likely that TransCanada would either delay or cancel the Keystone XL project altogether…

(the above is the synopsis that accompanied my regular sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most from the aforementioned GGO posts, contact me…)

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