Economy Watch: Employment Continues Tepid Growth
- Oct 05, 2012
The U.S. economy created 114,000 jobs in September, according to Bureau of Labor Statistics on Friday. The number was roughly in line with expectations, which aren’t very high right now. Employment increased in a few industries, such as health care and transportation and warehousing, but saw little changed in most other major industries. Job creation in August, previously reported as a net of 96,000 jobs, was revised upward to 142,000.
The unemployment rate, which hasn’t varied much at all this year, dropped to 7.8 percent after being stuck between 8.1 percent and 8.3 percent for most of this year. But that’s nothing to cheer about, since the drop means that a lot of people have given up looking for work all together.
On Thursday, the U.S. Department of Labor reported that for the week ending September 29, initial claims were 367,000, an increase of 4,000 from the previous week’s revised figure of 363,000. The less jumpy four-week moving average was 375,000, unchanged from the previous week’s revised average.
Retail vacancies edge down
Reis Inc. reported on Thursday that the U.S. vacancy rate for regional malls dropped from 8.9 percent during the second quarter of 2012 to 8.7 percent during the third, which is the fourth quarterly drop in a row. The rate is also down from its most recent peak of 9.4 percent in 3Q11. Asking rents for regionals was up 0.3 percent quarter-over-quarter.
Strip centers didn’t do quite as well, with vacancies not changing at all during the third quarter, remaining at 10.8 percent, as they were during 2Q12. During the third quarter of 2011, strip-center vacancies were 11 percent, so the market for that kind of retail space has been essentially stagnant for the last year. Asking rents for strip centers edged up only by 0.1 percent quarter-over-quarter in 3Q12.
Since demand is weak, it’s little wonder that new retail-space supply is weak, too. Reis also reported that only 569,000 square feet came on line nationwide during the third quarter, compared with 805,000 square feet during 2Q12. Compared with a year ago (the third quarter of 2011), and a slowdown is really apparent: a shade over 2 million square feet of retail space was delivered during that quarter.
FOMC minutes focus on QE3
The Federal Open Market Committee released the minutes of its September 12-13 meeting on Thursday, and naturally much of the talk was about large-scale asset purchases. QE3, that is, and according to the minutes, “Many participants anticipated that such a program would provide support to the economic recovery by putting downward pressure on longer-term interest rates and promoting more accommodative financial conditions.” In other words, Fed-speak for “time to prime the pump again.”
Not everyone was on board, however: “A few expressed skepticism that additional policy accommodation could help spur an economy that they saw as held back by uncertainties and a range of structural issues,” the minutes noted. The central bank, of course, went on to announce a rolling stimulus based on asset-buying, with economists and other observers disagreeing (as do members of the FOMC) about the usefulness of the policy.
Wall Street edged up a little on Thursday, with the Dow Jones Industrial Average gaining 80.75 points, or 0.6 percent, while the S&P 500 was up 0.72 percent and the Nasdaq advanced 0.45 percent.