The first week of the month is typically heavy with employee/consumer data. This month is no exception. While it’s good to have lots of data, not all of the data is good. This first #MoneyConscious Mash Up of 2015, though, is better than what 2014’s would’ve been.
The week and year were kicked off on Monday with Gallup’s December U.S. Consumer Spending Measure. Asked, “How much money did you spend yesterday?”, the average consumer said, “$98”, $3 over November’s $95. While up, November-to-December increases are usually as pronounced as Justin Bieber’s feigned phallus. We can’t forget that this past October-to-November’s increase was significant at $9.
This suggests that though most economic indicators have improved, Christmas may not have been the boon retailers had hoped and consumers are still spending cautiously. Come Friday, we’ll see that consumers aren’t as easily confused as Fido will be hearing his owner speak from his collar.
Wednesday brought us ADP’s December Employment Report, which showed that 241,000 workers were hired in December. This is the most hires since June and follows an upwardly revised increase of 227,000 in November. Businesses of all shapes and sizes showed gains and December’s report rounded out a solid year.
Then, Gallup’s December U.S. Job Creation Index, dropped one point to 27 from November’s 28. It’s still eight points higher than January 2014, but the index has been as flat as Idina Menzel’s New Year’s Eve performance for the last eight months. The December report showed that 39 percent of employees said their employers were hiring, while 12 percent said their’s were laying off. Private sector employment was more robust than the government sector, a similar trend seen in Friday’s Employment Situation Report.
Brittany and Iggy? Is that you?
First on Thursday was the Challenger December Job-Cut Report. It showed layoffs dropped in December to 32,640 from November’s 35,940. Layoffs were heaviest in auto (contrary to increased auto-sales), health care (contrary to Obamacare benefits) and energy (contrary to the U.S. energy boom). All 2014 layoffs totaled 483,171, the lowest annual layoff total since 1997.
Finally, on Thursday, Gallup’s December U.S. Payroll to Population Report (a.k.a. P2P) showed an increase to 44.3 from November’s 44.2. Contrary to 2012 and 2013, 2014 didn’t see a steep end-of-the-year decline just as we didn’t see the new trend in male nail art. Gallup’s participation rate decreased slightly to 66.3 from November’s 66.9. Its underemployment rate remained steady at 15.1
On Friday, came the Labor Department’s December Employment Situation Report, which was more interesting than the pending Mitt Romney “I Told You So Tour”. 252,000 new jobs were created last month. This is the eleventh straight month with jobs totaling 200,000+ and caps the strongest year since 1999 with a total of 2.95 million jobs added.
The official U3 unemployment rate dropped to 5.6 percent from 5.8 percent, while the participation rate dropped proportionally from 62.9 percent to 62.7 percent. This is the lowest participation rate since 2008. Enough to make us want to put paper bags over our heads, hourly earnings fell by 0.2 percent to $24.57 after November’s sharp increase. This is the largest decline since 2006 and upset both us and yesterday’s stock market. For the year, wages were up 1.7 percent.
Do you ever feel like a paper bag drifting through the wind?
The economy is improving, though moving as slow as an ex-NFLer’s nine mile swim, because inflation-adjusted wages are flat. It’s tough being the engine of the economy (you) with no oil (money). Also of concern, and as surprising as looking stupid on Dr. Phil, deflation risk has now spread from Europe to China. Deflation can spread fast and the U.S. is not immune.
That being said, we remain steadfast with our recommendations to spend less than you make, pay off debt, save and invest as much as possible. Make up for past mistakes and prepare for future headwinds.
To help you pay off debt, buy our new book, 4: The Four Principles of a Debt Free Life. This book, available in hard-copy and e-version, was released last Friday, January 2nd. In fact, today is our book release party here in Denver where we’ll celebrate several years of hard ass work. We believe strongly that this tool can help you improve their financial situation. Spread the word.
That’s this week’s Money Conscious Mash Up. Come back every Saturday for fun highlights of what we think you need to know to most effectively manage your money.