It’s the Consumers Turn

Popular Economics Weekly

We know that consumers will continue to push economic growth this fall and winter for several reasons. Firstly, the Bureau of Labor Statistics monthly JOLTS report showed 3.6 million job openings (yellow line), and more than 4 million hires (blue line), which is slightly more than the red and blue blocks that show total layoffs and quits. That is why payrolls are increasing some 157,000 per month in 2012, according to the BLS.


Graph: Calculated Risk

And consumers know this, which is why they are spending more. Another big increase in student loans drove consumer credit higher, up $11.4 billion vs. August’s very large revised gain of $18.4 billion. The non-revolving component, home to the student loan category, rose $14.3 billion in the month on top of August’s $14.1 billion gain. Revolving credit card debt actually fell $2.9 billion for the third decrease in four months.


Graph: Calculated Risk

And in spite of Hurricane Sandy, the advance figure for seasonally adjusted initial jobless claims was down to 355,000 for the week ending November 3, a decrease of 8,000 from the previous week’s unrevised figure of 363,000. The 4-week moving average was 370,500, an increase of 3,250 from the previous week’s unrevised average of 367,250, according to Calculated Risk. Claims may spike up, though, if Sandy causes many jobs to be lost in coming weeks. But the recovery—reconstruction efforts should more than make up for the losses.


Graph: Calculated Risk

If we look at the long term in this graph that goes back to the 1970s, with gray shaded areas showing recessions, we see that claims are following normal trends. The lows seem to be 300,000 claims per week in each business cycle. So as long as the trend is downward, employment is increasing and consumers will feel more secure about their finances.

Harlan Green © 2012

About populareconomicsblog

Harlan Green is editor/publisher of, and content provider of 3 weekly columns to various blogs--Popular Economics Weekly and The Huffington Post
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