Jobs Report, Other Macro Data Positive, But…

The U.S. economy added another 203,000 non-farm payroll jobs in November, the Bureau of Labor Statistics

reported Dec. 6. Gains now have averaged more than 200,000 a month for the past four months. The gains were broad-based with good gains in construction and manufacturing. Even government added 7,000 jobs. Foodservices and drinking places added another 18,000 jobs and has averaged a monthly increase of 28,000 for the past 12 months.

But the positive numbers mask the bifurcated nature of the U.S. economy. While the top-line unemployment number fell to 7% from 7.3% in October, much of the decline came as work-force participation dropped yet again.

In a separate report released Dec. 5, unemployment claims dropped 23,000 from the previous week’s report, to 298,000.

Among other economic news affecting foodservice:

—Consumers shrugged off the remnant of the federal government shutdown in late November, according to final November reading of consumers by the Thomson Reuters/University of Michigan Surveys of Consumers. The group’s Consumer Sentiment Index rose nearly two points to 75.1 from 73.2 in October. The Expectations Index also gained, increasing to 66.8 from 62.5 in October. Gains were most apparent among wealthier households benefiting from equities market increases. Households in the bottom third of income reported declines in both income and net worth. Noting that consumers expect growth in 2014 will be far short of the economy’s potential, Surveys of Consumers Chief Economist Richard Curtin said, “The term that best fits the outlook of consumers is stagnation.”

—After moderate gains during November, gasoline and diesel prices have stabilized the past few weeks. According to AAA, the price for a gallon of regular gas stood at $3.264 on Dec. 8, down from $3.272 the week prior. Prices are running almost 10 cents less than a year ago.

—The growth estimate of U.S. real gross domestic product in the third quarter was revised sharply upward to 3.6%, the fastest rate since the first quarter 2012. But most economists, including the head of the Atlanta branch of the Federal Reserve, discounted the jump, which was fueled by increased inventories. Consumer spending fell to its lowest level during the quarter since the last quarter of 2009. Many estimates for real GDP growth in the fourth quarter remain below 2%.