Greetings!
Could the Employment Situation report for December be another case of delayed gratification? For the last several months, job creation has come in below expectations but has been revised substantially higher over the following two months. In September, the 194,000 jobs originally reported was eventually revised to 379,000. This month, November’s 210 jobs were upgraded to 249,000. October came in ahead of expectations, but has also moved higher on revision. From September through November the unemployment rate ratcheted down from 4.6% to 4.2%
Whether that will happen with the December report, released this week, remains to be seen. However, it was again a disappointing one. There were 199,000 jobs created, almost exactly half the consensus estimate. The unemployment rate fell 0.3 percentage points to 3.9% even as the participation rate, the number of people looking for work, was unchanged from the revised November rate of 61.9%.
The CPI (inflation rate) rose an annual 7.0% in December, the largest gain since June 1982. However, the monthly increase, 0.5%, was less than the 0.9% and 0.8% gains reported for October and November. Prices for used cars, shelter, and food drove the inflation rate, up 3.5%, 0.4% and 0.5%, respectively. Increases for both food and energy slowed from earlier rates, especially energy (all types) which dropped to 0.4% from 3.5% in November, the first decline since April. Gasoline and natural gas prices both retreated.
While rising inflation is scary, the jobs report indicated that wages are picking up. They rose 0.6% in December, twice expectations, and were 4.7% higher year-over-year.
Bad Behavior
The nation’s credit bureaus are at it again. The Consumer Financial Protection Bureau issued a scathing report this week about responses to consumer complaints from TransUnion, Experian, and Equifax. The three reported resolution to CFPB of less than 2% of complaints about inaccuracies in their files last year, down from 25% in 2019. The three accounted for more than 700,000 complaints to CFPB, more than half the total filed with the agency. In some cases, the companies flatly refused to respond to complaints submitted by third parties although consumers have the right to authorize others to act on their behalf.
More than 200 million consumers have credit data on file. CFPB says this information, which is also the basis for credit scores, impacts not only the availability and price of financial products, but employment, insurance premiums, and access to essential utilities. This is a story worth watching. We’ll keep you posted.
