Nationally, the economy seems to be trending positively. The Fed Beige Book indicates moderate growth, consumer confidence is up, construction spending is increasing, and the service sector is expanding. On the state level, New Jersey is still struggling to create and retain jobs. The number of private sector jobs lost in December eroded most of the gains made during the previous year.
Fed Beige Book
Economic growth in the Second District continued at a moderate pace in late 2013. Contacts note that cost pressures have increased somewhat, while selling prices are mixed but generally stable. A growing proportion of business contacts cross the District–in both manufacturing and other sectors–report increased activity. Labor market conditions have continued to improve modestly since the last report. General merchandise retailers indicate that holiday season sales were mixed but moderately strong, on balance, with steeper discounting than last year. New auto sales remained fairly robust in November but there were preliminary signs of slowing in December. Tourism activity showed some signs of slowing in late 2013. Home sales activity picked up in the final months of 2013, while commercial real estate markets have been mixed. Finally, banks in the District report declining loan demand–particularly for residential mortgages–as well as widespread reductions in delinquency rates.
In Northern New Jersey, Westchester and Fairfield counties, and across upstate New York, office availability rates were little changed at or near multi-year highs. Asking rents for office space were generally steady across the District and little changed from a year earlier.
New Jersey Employment
For the second consecutive month, New Jersey’s unemployment rate dropped significantly, reaching 7.3 percent in December, which represents a 0.5 percentage point drop from November 2013, according to preliminary data released by the United States Bureau of Labor Statistics (BLS).
Private sector drops were posted in eight of nine major industry sectors, including leisure and hospitality (-8,000), education and health services (-6,900), construction (-6,500), trade, transportation and utilities (-5,400) and manufacturing (-2,500). Contractions also were reported in financial activities (-2,100), other services (-1,900), and information (-900). Gains were reported in professional and business services (1,000).
The drop followed an historic 0.6 percentage point drop in the rate between October and November 2013. However, preliminary data released by the BLS through its monthly employer survey also indicates total non-farm employment in December contracted by 36,300, including 33,200 in the private sector and 3,100 in the public sector, to a seasonally adjusted total of 3,942,300.
Department of Commerce Construction Spending
The U.S. Census Bureau of the Department of Commerce announced today that construction spending during December 2013
was estimated at a seasonally adjusted annual rate of $930.5 billion, 0.1 percent (±1.2%)* above the revised November estimate
of $929.9 billion. The December figure is 5.3 percent (±1.5%) above the December 2012 estimate of $883.6 billion.
The value of construction in 2013 was $898.4 billion, 4.8 percent (±1.3%) above the $857.0 billion spent in 2012.
Conference Board Consumer Confidence Survey
The Conference Board Consumer Confidence Index Increases Again
The Conference Board Consumer Confidence Index, which had rebounded in December, increased again in January. The Index now stands at 80.7 (1985=100), up from 77.5 in December. The Present Situation Index increased to 79.1 from 75.3. The Expectations Index increased to 81.8 from 79.0 last month.
November 2013 Non-Manufacturing ISM Report On Business
Business Activity Index at 55.2%
New Orders Index at 49.4%
Employment Index at 55.8%
(Tempe, Arizona) — Economic activity in the non-manufacturing sector grew in December for the 48th consecutive month, say the nation’s purchasing and supply executives in the latest Non-Manufacturing ISM Report On Business®.