In economics, there’s a sublime beauty when a benchmark statistic is reached then bettered. That’s important, because we live in a world where everybody is afraid of everything: the news; not knowing the news; pesticides; drinking water from the tap; the other guy on the street; neighbors; religious fanatics of all stripes; oil and gas pipelines; weight gain; weight loss; sports injuries; our own genes, if not our own shadows; and the sun, to name just a few.
1. Over the past month, key benchmarks have been exceeded in stock markets indices and housing starts. Dow Jones Industrials have set a new all-time record above 15,000 and the Standard & Poor’s index has crossed above 1600, also establishing a fresh peak.
2. In new housing, March’s level exceeded one million units (i.e., 1.036 seasonally adjusted and annualized) for the first time since July 2008. The market will be back at its historical “norm” when the monthly number is between 1.5 million and 1.7 million units SAAR.
3. U.S. employment numbers are climbing nicely. Including revisions to earlier data, the total number of jobs is ahead by nearly 800,000 since the beginning of this year. April’s gain was 165,000, but that paled compared with February’s upwardly revised +332,000.
4. The U.S. needs to reach 138.0 million jobs for employment to return to its pre-recession peak. The current figure is 135.5 million. Employment in the private services sector, which accounts for 70% of the total, is already higher than before. Construction and manufacturing employment levels are improving, but they’re still in deep holes.
5. Through the first four months of this year, the average monthly gain in American employment has been almost 200,000. At the current pace of increase, the U.S. will back to its previous employment zenith just over a year from now, in early summer 2014.
6. The weekly initial jobless claims numbers are strongly encouraging. The level for the latest week, May 4, was only 323,000. By way of comparison, the number of first-time unemployment insurance seekers during the downturn soared to 667,000 in March 2009.
7. Canada’s labor report for April showed a net job gain of only 12,000, but that was better than March’s 54,000 decline. Manufacturing jobs rose by 20,000 (leaving them -51,000 year to date), while construction employment stayed flat (yielding +25,000 year to date).
8. The U.S. unemployment rate in April dropped slightly to 7.5%, moving it closer to Canada’s 7.2%, which stayed the same in the month. Canadian home starts in April fell to 175,000 units SAAR. How does this stack up with recent history? Annually, new home starts north of the border have been 200,000 units or higher in seven of the last 10 years.
9. On a year-over-year percentage-change basis, the U.S. is beating Canada in the four major categories of employment: total (+1.6% versus +0.9%); services (+2.1% versus +1.6%); manufacturing (+0.6% versus -2.9%); and construction (+2.7% versus +0.8%).
10. U.S. total retail sales in April were +0.1% month to month and +3.7% year over year. The benchmark for good retail sales (in current dollars) is +5.0% year over year. Motor vehicle and parts dealers are maintaining strong sales, +1.0% month to month and +7.7% year over year. Non-store retailer sales (i.e., over the Internet and through catalogues), however, are the standout, +1.4% month over month and +15.4% year over year.
11. Internationally, central banks in Europe, Mexico and Australia have been lowering their policy-setting interest rates. The Bank of Japan is buying bonds, in effect printing money.
12. Speaking of benchmarks, scientists have released data showing the amount of carbon dioxide in the air has reached the highest in three million years. The reading of 400 parts per million as an average daily dose was taken by the National Oceanic and Atmospheric Administration at a site in Hawaii. It’s one more thing to be worried about. Is “the end” at hand? What can we do to avoid it? Personally, I’m keeping my fingers crossed.
A monthly analysis of construction start activity across Canada and by region, the construction starts product provides accurate and complete information, ahead of government statistics, on square footage totals, number of units, dollar value and percentage change over the year.