Tag Archive for 'Wells Fargo Securities'

Wells Fargo Reports: Housing Construction Continued to Strengthen in November

Housing starts rose 3.3 percent in November to a 1.297 million-unit pace after a downwardly revised 1.256 million-unit pace in October. Strength in the West and South pushed single-family starts to a decade high.

Residential Building Up in the South and West

  •  Revisions pushed some of the building activity first reported in October into November. Housing starts were at a 1.297 million- unit pace in November and single-family building reached a new cycle-high of 930,000 units.
  •  Residential starts were up in the South and West, but declined in the Midwest and Northeast. Multifamily was behind the slowdown in the Northeast, which has seen completions surge.

Residential Investment to Still Boost Q4 GDP

  • Revisions post-storm pushed the bulk of building activity into November. The building trend is clearly on the rise, particularly compared with earlier this year. Solid readings for both October and November bode well for Q4 GDP growth.
  • Construction is likely to strengthen further in coming months. The latest NAHB/Wells Fargo survey of homebuilders posted solid gains in December, reaching its highest level since 1999.

Wells Fargo Reports: New Home Sales Surge in November


New home sales surged 17.5 percent to a 733,000-unit pace. Sales for prior three months were revised lower, however. Even with the revisions, the three-month trend still shows new home sales clearly strengthening.

New Home Sales Are Ramping Up

  • Drawing firm conclusions from the housing data this time of the year are often perilous, as the seasonal adjustment process normally makes huge corrections to the underlying data, which typically slow this time of year. This year, however, sales have risen, reflecting both stronger economic growth and unseasonably mild winter weather. Development activity has also ramped up, giving builders a little more inventory to sell.

Homebuilders Have A Good Reason to be Optimistic

  • The strength in sales is not surprising. Homebuilder confidence has surged, as buyer traffic and sales ramped up.
  • The South and West accounted for the bulk of November’s increase, with sales in the West surging 31.3 percent.
  • The greatest limitation to home sales continues to be a lack of inventory. With few completed homes available, sales of homes not yet started accounted for most of November’s increase.


Wells Fargo Reports: Job Openings at All Time High in June

The number of open positions stood at a record high of 6.16 million at the end of June, up 461,000 from May. There were fewer hires and separations in June, likely due to the shrinking pool of unemployed workers.

Help Really Wanted….

 The number of openings for prospective workers was at its highest point on record at the end of June, underscoring the strong underlying demand for labor. Hiring managers had a harder time in June, as evidenced by the decline in hires on the month. The unexpectedly strong jobs report in July suggests they had better hiring results in early July, and the dearth of available labor likely helped boost wages.

Matching Game Heats Up

  •   The surge in job openings pushed the ratio of available workers per available job even with its lowest point of the series. Hiring managers now have about 1.1 candidates on aggregate to hire from, making competition increasingly fierce for talent, which should be reflected in the quit rate in coming months.
  •   There was a decline in hiring, mostly in the Northeast, which was also the only region with no new net job postings in June.

Wells Fargo Reports Quarterly Census of Employment and Wages (QCEW): Q4 2016

Nonfarm employment growth decelerated slightly more rapidly than the preliminary employment data currently indicate. The U.S. average weekly wage also posted a rare year-to-year decline.

Hard Data Show Slower Job Growth Across the Nation in 2016

Final numbers are in for employment in 2016 and confirm that hiring has slowed across the nation late last year. The Quarterly Census of Employment and Wages (QCEW) is a detailed count of employment and wages derived from the unemployment insurance tax rolls and serve as the basis for the annual revisions to the monthly employment series. The latest data, which are available through December, show hiring slowed a bit more abruptly than previously thought during the second half of last year.

The fourth quarter QCEW data show year-to-year job growth slowing to just 1.2 percent at year-end 2016, or some 0.3 percentage points less than the monthly establishment payroll series. Moreover, the QCEW data show the pace of job growth decelerating more sharply during the second half of last year and shed new light on the slowdown in nonfarm payroll growth over the past three months, which has seen the average gain in nonfarm employment slow to just 120,700 jobs per month. The QCEW series also provide new insights into the lack of wage growth. The U.S. average weekly wage declined 1.5 percent over the past year, which is one of only eight declines in the history of this series, which dates back to 1978.

We usually look to the QCEW data to provide some key insights into local employment developments. Data are available down to the county level. Among the nation’s 344 largest counties, 280 added jobs over the year in December, which is down from 307 counties in September. The fastest growing counties were Williamson, TN (outside Nashville) and York, SC (outside Charlotte). The two counties switched places from September. Lafayette, Louisiana had the largest year-to-year decline, with employment declining 5.1 percent. Counties like Lafayette, which are heavily dependent on natural resources and mining, tended to endure the largest employment declines and job growth in many resource dependent states was either weaker for 2016 as a whole, or, in the case of North Dakota, West Virginia and Oklahoma, declined more than the Current Employment Statistics (CES) survey currently indicates.

Los Angeles County posted the largest absolute over-the-year job gain, with 50,200 net new jobs added since last December. Dallas was second, followed by Maricopa (Phoenix), King (Seattle) and Orange County, California. California is well represented in the top ten, with Santa Clara (San Jose) and San Diego counties also cracking the ten largest job gainers. Fulton County (Atlanta), Clark County (Las Vegas) and Orange County, Florida (Orlando) round out the top ten. The Orlando area is also one of the fastest growing areas in percentage terms, with job growth in the four-county metro area topping 3.4 percent and job growth in neighboring Brevard County, which is home to Cape Canaveral and its burgeoning aerospace industry, rising 4.2 percent year-to-year.

Source: U.S. Department of Labor and Wells Fargo Securities




Wells Fargo Reports That Nonfarm Employment Springs Forward in April

Nonfarm employment bounced back from its weather-induced March slowdown. Payrolls added 211,000 jobs in April and the unemployment rate fell to 4.4 percent. Hours worked and hourly earnings also rose solidly.

A Solid Report

Nonfarm employment rose by 211,000 in April and the unemployment rate fell to 4.4 percent. Net revisions to prior months’ data only deducted about 6,000 jobs, and the average gain for the past three months remains a solid 174,000 jobs. Job gains were fairly broad-based, with just over 60 percent of the industry groups surveyed by the BLS adding jobs in April. The overall quality of jobs being created improved, with a substantial acceleration in hiring for full-time positions and deceleration in part-time jobs.

The employment data through the first four months of this year have been significantly impacted by a number of seasonal influences. Unseasonably mild winter weather in the Northeast and Midwest allowed for construction activity to ramp up a little earlier than usual this year, leading to strong gains in construction jobs in January and February. With hiring rising earlier in the year, there was less of subsequent pick up this spring, leading to smaller-than-usual seasonally-adjusted gains in March and April.

The late Easter also wreaked havoc on employment data at retailers and in hospitality. Easter came at the end of the April survey week, which weighed on retail and hospitality employment in March and set the table for a strong bounce back in April, particularly in the hospitality sector, which added 55,000 jobs. About half the increase in hospitality jobs was in food services & drinking places. By contrast, retailers added just 6,000 jobs, reflecting store closings announced after this past year’s disappointing holiday shopping season and the loss of market share to online retailers.

Average hourly earnings rose 0.3 percent in April and are now up 2.5 percent year-to-year. Hiring in higher-paying industries grew more modestly. Construction added just 5,000 jobs and manufacturers added 6,000 jobs. Hiring in mining & logging rose by 10,000 positions, reflecting increased oil production. Healthcare & social services, professional & business services and financial services all posted solid gains in April. While average hourly earnings rose only modestly, total hours worked rose by a stronger 0.5 percent in April. Taken together, the two gains should produce solid income growth in April and help drive a rebound in consumer spending during the second quarter.

The unemployment rate fell to 4.4 percent in April, as household employment outpaced labor force growth. The labor force participation rate fell slightly during the month but the participation rate for prime-working age workers actually increased. The broader U-6 measure of unemployment fell to 8.6 percent, which in part reflects the recent shift toward more fulltime jobs being created relative to part-time positions. The improved mix of jobs being created should pull more job seekers into the labor force. The acceleration in full-time positions is also consistent with the recent acceleration in household formations and homeownership.

Source: U.S. Department of Labor, U.S. Department of Commerce and Wells Fargo Securities