Yesterday’s ADP report on private-sector payroll employment during November was magnificent. No wonder that consumer confidence rebounded during the month. Chicago’s purchasing managers also had good things to say about business activity in their neighborhood. The evidence continues to demonstrate the resilience of the US economy. It’s doing remarkably well despite all the loco commotion in Europe and Washington. Let’s review the latest batch of happy data:
(1) This may be the third “new normal” jobless recovery in a row that’s starting to morph into an old normal recovery. Sure enough, November’s gain of 206,000 payroll jobs in the private sector, as reported by ADP, is the kind of gain that could start lowering the unemployment rate if it continues. The ADP report was chock full of good news, including an upward revision in October’s gain from 110,000 to 130,000. Especially impressive is that 53% of November’s new jobs were created by small businesses with under 50 employees. Note to Washington: Government doesn’t create jobs; small businesses do as they grow into bigger businesses. Just don’t get in their way.
(2) November’s bounce in consumer confidence confirms that the labor market is improving. The Consumer Confidence Index rebounded 15.1 points during November to 56.0 from 40.9 during October. It was the biggest m/m rebound since April 2003. This index tends to give more weight to consumers’ assessment of the labor markets than the Consumer Sentiment Index, which increased 3.2 points during November.
(3) Chicago’s purchasing managers are showing thumbs up. Chicago’s Institute for Supply Management yesterday reported that its business barometer increased to 62.6 in November from 58.4 the prior month as orders and production strengthened. The group's production gauge increased to a seven-month high of 67.3 from 63.4. Their new orders index rose to 70.2, the highest since March, from 61.3. Manufacturing in the Midwest is benefiting from rising auto sales and the strength in demand for capital goods at home and abroad.