Americans filing for first time unemployment benefits are hovering near seven-year lows as employers are slowing the pace of layoffs. The Labor Department reported that Weekly Initial Jobless Claims came in at 304,000, below the 312,000 that was expected. The 304,000 is up from 302,000 in the prior week, which was the lowest level since September of 2007. The four-week moving average of claims, which irons out seasonal abnormalities, dropped by 4,750 to 312,000.
Manufacturing in the Philadelphia region picked up this month and comes after a weak reading from New York State released earlier in the week. The Philly Fed Index surged to 16.6 this month, well above the 8.6 that was expected and up from the 9.0 registered in March. Within the report it showed that the employment component rose to 6.9 from 1.7, while the average workweek also increased.
Oil prices continue to move higher due to the ongoing tensions in Ukraine and as a brighter looking U.S. economy signaled an uptick in demand for energy. Higher oil prices are pushing prices higher at the pump and with the onset of the spring and summer driving season, the national average price for a regular gallon of gasoline is at $3.65, up from $3.52 a month ago.
Consumers across the nation stepped up spending in March after dismal spending in the beginning of the year, due to the severely harsh winter weather. Retail Sales rose by 1.1% last month, the biggest gain since September 2012, while February’s 0.7% rise was revised up from 0.3%. Retail Sales account for 1/3 of consumer spending and consumer spending accounts for about 2/3s of the U.S. economy.
Home loan lending declined in the first quarter of 2014 due to rising interest rates and home prices. Total lending came in at about $226 billion, the lowest level since 1997 and less than one-third of the 2006 average. Home loan rates are up from the best levels seen early in 2013 after the Federal Reserve began to taper its massive stimulus program. Wells Fargo recently reported that its home-loan originations fell to $36 billion in the first quarter after it exceeded $100 billion for seven straight quarters through June 2013.
Banking giant Citigroup reported first quarter earnings of $3.9 billion or $1.30 per share, easily beating the $1.14 per share estimated by Thomson Financial Research. The gains were due in part to solid performances from its consumer and international businesses. In addition, the bank also grew both loans and deposits, while holding the line on its expenses.
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The National Federation of Independent Business (NFIB) reported this morning that its small business optimism index rose 2 points to 93.4. The gains reversed the declines seen in February, but has failed to breach the 95 level that has capped the Index during the economic recovery. Six of the components improved, two were unchanged and two were lower. A spokesman for the NFIB said “the economy is at least crawling forward and not heading in reverse.”
The spring home buying season is underway and recent data has showed that the housing market has softened a bit. However, Fannie Mae released its National Housing Survey for March yesterday showing that consumer attitudes have continued to move in a positive direction in the past year, which could signal a pickup in home buying and selling activity this spring. The survey revealed that respondents who say it is a good time to sell rose to 38% from 26% at the same time last year.
The Bureau of Labor Statistics (BLS) reported its JOLTS (Job Openings and Labor Turnover Survey) today showing that there were 4.2 million job openings on the last day of business in February, up from the 3.9 million in January. The BLS went on to say that there were 4.6 million hires in February, little changed from January. Over the 12 months ending in February, the number of hires (not seasonally adjusted) changed little for total nonfarm, total private, and government.
The employment picture got a little clearer this morning after the Labor Department reported that there were 192,000 new jobs created in March, which was just below the 195,000 that was expected. The harsh winter weather kept job creations low in December, January and early February averaging 144,000 per month. Now that spring is in the air, employers may begin to ramp up hiring efforts.
The March Jobs Report also revealed that the Unemployment Rate held steady at 6.7% as more people tried to enter the labor force. The Labor Force Participation Rate (LFPR), which measures the proportion of working-age Americans who have a job or are looking for one, rose to 63.2% from 63.%. The report said that every industry except manufacturing added jobs.
With the spring home buying season upon us, the market is seeing too few people are selling homes, and too few buyers can afford the homes that are for sale. In addition, higher home prices and all cash buyers are squeezing first time home buyers. The one bright point in the equation – lenders are easing the tight money lending standards that have been seen in the past few years as qualifying for a home loan could get a little easier.