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Feb. 1, 2013

Economy Watch: Job Creation Starts 2013 Lackluster

By Dees Stribling, Contributing Editor

The U.S. economy created 157,000 jobs in January, according to the Bureau of Labor Statistics on Friday. That’s down compared with most months in 2012, which averaged about 181,000 jobs created per month, so 2013 is off to a tepid start. The official unemployment rate ticked up 0.1 percentage points to 7.9 percent, more-or-less where it’s been since September 2012.

Employment increased in certain industries, such as retail, construction, health care, and wholesale trade, but edged down in transportation and warehousing. Manufacturing employment didn’t change much in January, and neither did professional and business services, leisure and hospitality, or government.

On Thursday, the U.S. Department of Labor reported that for the week ending Jan. 26, initial unemployment claims were 368,000, an increase of 38,000 from the previous week. The less volatile four-week moving average was 352,000, an increase of 250 from the previous week’s unrevised average of 351,750.

Personal income jumps for accounting reasons

U.S. personal income jumped 2.6 percent in December, an unusually large monthly spike, according to the Bureau of Economic Analysis on Thursday. But the upward movement reflected a mass accounting maneuver more than anything else, as high- income earners brought income forward into 2012 in anticipation of higher taxes in 2013.

The maneuver also had the effect of pushing up personal savings—calculated as a percentage of disposal income—to 6.5 percent in December, compared with 4.1 percent in November. Because the movement takes income from January, it’s entirely likely that the BEA report at the end of February will show a decline in personal income for the first month of 2013, along with a much smaller percentage of personal savings.

Also in December, there was a small 0.2 percent uptick in real personal consumption expenditures (or PCE, as the BEA calls it, meaning people out shopping), down from an increase of 0.6 percent in November. The PCE price index, which counts consumer goods except for food and energy, increased less than 0.1 percent in December, as it did in November.

Mortgage delinquencies up slightly

LPS released its Mortgage Monitor report for December on Thursday, which found that 7.17 percent of U.S. mortgages were delinquent in December, up from 7.12 percent in November, but down from 7.89 percent in December 2011. The report counts mortgages more than 30 days late, but not yet in foreclosure. LPS also reported that 3.44 percent of U.S. mortgages were in the foreclosure process, down from 3.51 percent in November, and down from 4.2 percent a year earlier.

Wall Street ended down somewhat on Friday, with the Dow Jones Industrial Average off 49.84 points, or 0.36 percent, while the S&P 500 lost 0.26 percent. The Nasdaq was down only a microscopic 0.01 percent, however.

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