The U.S. economy has improved to the point where the Federal Reserve said it might soon begin to “taper” bond purchases. This indication of reduced monetary stimulus was enough to raise long-term interest rates, not just in the U.S. but around the world. Higher American yields have also provided lift to the greenback, leaving a multitude of other currencies behind. Chairman Bernanke has since offered reassurance that the Fed won’t take too-early unwarranted action. Stock market investors have been ecstatic and the major indices have climbed to new all-time highs. Against this backdrop, there are the following additional economic nuggets to consider.

1. U.S. employment growth in June was +195,000 jobs, but that’s not the whole story. There were upward revisions to April (+50,000) and May (+70,000), bringing the grand total change versus what had earlier been reported for the month before to +315,000.

2. During the recession, the total number of jobs in the U.S. economy contracted by 8.7 million. Since then, 6.6 million have been recovered, still leaving a shortfall of 2.1 million. If the pace of employment over the past three months (+200,000 on average) is maintained, the pre-recession level of peak employment will be reached in May 2014.

3. Industry sub-sectors recording the largest month-over-month employment gains in June were: leisure and hospitality, +75,000 (“food services and drinking places” went on a hiring binge, +52,000); business and professional services, +53,000; retail trade, +37,000; and financial services, +17,000. The jobless rate stayed the same as in May at 7.6/%.

4. In June, the number of jobs in U.S. manufacturing declined by 6,000. But employment in construction rose by 13,000. The unemployment rate in construction eased back into single digits for the first time in many years, to sit at 9.8% versus June 2012’s 12.8%.

5. Year-over-year employment changes in some key professions were as follows: accounting and bookkeeping, +2.8%; architectural and engineering services (a “lead” indicator for on-site construction activity), +2.6%; but legal services, only +0.1%.

6. In the public sector, the number of wage earners paid by Washington fell by 5,000. State payrolls shed 15,000. Local government hiring rose by 13,000. The net was -7,000.

7. In June, the Conference Board’s index of consumer confidence (81.4) rose to its highest level in more than five years. The expectations index also improved dramatically to 89.5.

8. U.S. light motor vehicle sales in June were 16.0 million units, seasonally adjusted and annualized (SAAR). That was a 4.2% gain month to month and an 11.0% increase year over year. Prior to the recession, the monthly “norm” for car sales was 17.0 million units. The shares of North American-based car companies are “lighting up” the stock markets.

9. Canada’s total employment level stayed flat in June after advancing by an outsized +95,000 in May. The unemployment rate also didn’t budge, remaining stuck slightly above 7.0%. The construction unemployment rate north of the border (not seasonally adjusted) is now 6.0%. Provincially, construction unemployment rates are lowest in the resource-rich western provinces of Manitoba, Saskatchewan and Alberta, all under 4.0%. 

10. Average hourly and weekly earnings in both the U.S. and Canada in June were in a range of +2.0% to +2.2%. Incomes are moving higher and this is a plus for consumer spending.

11. Canadian home starts in the latest month were 200,000 units (SAAR), a significantly strong number. Year-to-date starts, however, are -15%. In the most worrisome market, Toronto’s possibly overbuilt condo segment, multi-unit starts so far this year are -43%.

12. The “loonie” has retreated to 95 cents U.S. Fear of the unrest in Egypt spreading to other Arab nations has raised the price of oil. Both will help Canada’s foreign trade position. 

13. A stationary and unmanned MM&A (Montreal, Maine & Atlantic) freight train recently mysteriously started up and ran off the tracks in the town of Lac-Mégantic Quebec. The resulting explosion and fire caused numerous deaths. Tanker cars were full of oil being shipped from North Dakota to a refinery in Saint John, New Brunswick. The debate over which is the safer means to transport fuels, pipelines or railways, will become intense.

14. In 2000, the number of Americans (1.3 million) employed in making motor vehicles was the same as in the “amusement, gambling and recreation” sector. During 2009’s trough, the respective numbers were 600,000 and 1.4 million. By June of this year, the number of auto sector workers improved to 800,000, but there were 1.5 million toiling in the “fun” industry. Over the past 13 years, the gaming-versus-autos jobs ratio has shifted from 1:1 to almost 2:1. Are the nation’s puritanical founding fathers rolling over in their graves?

Alex Carrick

Find Canadian construction-related economic articles in Canadian Construction Market News and in the Economic Outlook section of Daily Commercial News.