Posts for January 10, 2011

January 10, 2011

Last week's economic indicators provided more evidence that the economy gained positive momentum toward the end of the year. Of the seven major reports, only one declined, while five accelerated and one moderated, but continued grow. (To see all of last week's reports, see the Latest Economic Reports section below.)

A number of manufacturing reports showed that conditions in the industrial sector improved at the end of the year after the recovery decelerated for much of the second half of 2010.
The most important report last week was the December employment report released by the Labor Department. While the number of jobs created last month (103,000) was not especially encouraging, some important milestones were achieved in December:

1) More than offsetting the increases that took place from July to November, the unemployment rate fell from 9.8 percent in November to 9.4 percent in December -- the biggest monthly improvement in a dozen years. Also, for the first time in this recovery, the unemployment rate now stands below where it was (9.5 percent) when the recession ended in June 2009 (see black line in the chart above).

2) While December's increase of 113,000 in private-sector employment was less than expected, it is important to highlight that this was the 12th consecutive monthly gain in private-sector employment (See brown bars in the chart). The last year in which there were 12 months of positive private payroll employment was 2006.

Still, the employment growth to date in this recovery has been sluggish. From December 2009 to December 2010, private payroll employment rose by 1.3 million, a 1.3-percent increase. This is a slower increase than the first 12 months of employment growth following the 2001 recession (1.5-percent increase from July 2003 to July 2004), the 1990-1991 recession (1.7-percent increase from February 2002 to February 2003) and the 1981-1982 recession (5.8-percent increase from February 1983 to February 1984).

For the manufacturing sector, 2010 ended on a somewhat positive note. After declining for four consecutive months, employment edged up 10,000 in December. For the year overall, factory employment rose by 136,000 to 11,670,000. While this was the largest gain since 1997, the 2010 increase represented just 6.2 percent of the 2.2 million manufacturing jobs lost during the recession. In addition, given the fact that 85 percent of the 2010 gain took place during the first five months of the year, the manufacturing recovery clearly lost momentum when the bulk of the fiscal stimulus measures were spent out.

On the positive side, uncertainty regarding taxes on small businesses and individuals has been put on the back burner for several years. This week's report, along with recent weekly Monday Economic Reports, provides solid evidence that the economic recovery is starting to strengthen.

Dave Huether

Chief Economist

National Association of Manufacturers

UTAH'S GAS PRICES WENT TO EXTREMES IN 2010

Utah Business
The story of Utah’s average gasoline prices in 2010 was one of extremes. According to a new analysis from AAA Utah, which tracks gas prices as a service to consumers, prices in late spring were some of the highest in the country, but by the final days of December Utah’s average price was the cheapest in the U.S.
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