Fact Pack!
By Hightower Las Vegas and RCG Economics on November 3, 2023
With the 2024 election about a year out (Tuesday, Nov. 5), we note two incongruent facts: Many voters are not happy about the economy (this CNN poll from August showed 51 percent of Americans thought the economy was in a downturn and getting worse), and as a whole, the U.S. economy is strong (view the nation’s GDP trend line here).
Biden’s overall approval rating was just 41 percent in the CNN survey, but his approval dropped to 37 percent when Americans were asked about his handling of the economy — and dipped to 30 percent on his handling of inflation. Among political independents, just 26 percent approved of Biden’s handling of inflation.
Real Clear Politics has a list of all the most recent polls asking about Biden’s handling of the economy. Note that the highest recent approval rating on the American economy was 42 percent and the average is 38 percent, just a point higher than CNN’s August findings:
As of October 2023
As for how the economy is actually doing? Economist Justin Wolfers said it pretty well, as reported today by the L.A. Times:
Suppose you had fallen asleep in August 2019 and didn’t wake up for four years. On awakening, if you were an economist, the first thing you’d want to know is what the latest data show.
You’d be happily surprised: Unemployment, which was at a historic low when you fell asleep, has remained near that point — 3.8% in September. The economy has grown significantly, even adjusting for inflation, meaning the country has gotten richer. And perhaps most surprisingly, for the first time since before the Great Recession, income distribution has become a bit more equal as the biggest gains have gone to low-wage workers.
In all, you would find that the economy was doing better than most of your colleagues in 2019 had predicted.
“You would wonder what really good thing had happened while you were sleeping,” added Wolfers, a professor at the University of Michigan’s Gerald R. Ford School of Public Policy.
That’s not the whole picture, of course. Hightower wealth management advisor C.J. Neff:
Price increases have been a problem for the U.S. economy since 2021, leading the Federal Reserve to sharply increase interest rates. Inflation has started to subside, and U.S. stocks rallied Wednesday after the Fed indicated it may not need to pump the brakes any harder on Wall Street and the economy — but with the carefully worded caveat that the central bank still isn’t sure rates are high enough to ensure inflation dip to its 2 percent target.
Specifically, the S&P 500 index rose 1.1 percent in its first trading day (Nov. 1) coming off a third straight monthly loss. The Dow Jones industrial average gained 0.7 percent, and the Nasdaq composite jumped 1.6 percent.
The gap between poll results on Biden’s performance and the economic statistics may close in the months to come, of course. As Americans note lower inflation and some benefit from higher wages, surveys on Biden’s performance and the economy may show opinions softening. It also could be the case that because prices remain higher than Americans became accustomed to paying — including at the gas pump and in the grocery store — they will remain unhappy with the White House.
Jobs
Total nonfarm payroll employment in the U.S. increased by 150,000 in October, and the unemployment rate changed little at 3.9 percent, per the U.S. Bureau of Labor Statistics (BLS).
As of 11/3/2023
By sector:
- Health care added 58,000 jobs in October, in line with the average monthly gain of 53,000 over the prior 12 months. Biggest gains by type:
- Ambulatory health care services (+32,000)
- Hospitals (+18,000)
- Employment in government increased by 51,000 in October and has returned to its pre-pandemic February 2020 level.
- Monthly job growth in government had averaged 50,000 in the prior 12 months.
- Employment continued to trend up in local government (+38,000).
- Construction employment continued to trend up (+23,000), following an average monthly gain of 18,000 over the prior 12 months.
- On a year-over-year basis, construction industry employment has increased by 219,000 jobs, an increase of 2.8 percent.
- However, the construction unemployment rate increased to 4.0 percent in October.
Economist and Fact Pack co-publisher John Restrepo:
Demand for labor in the construction sector remains fairly robust, but the rising cost of labor is an ongoing issue for the industry. Average hourly earnings for construction workers increased at more than twice the rate of average wages for all sectors in October. With industry surveys showing more than half of the country’s construction contractors planning to hire workers in the next six months and fewer than 7 percent intending to downsize, labor shortages will likely continue to push wages higher over at least the next few quarters.”
Construction employment table from the Associated Builders and Contractors:
As of October 2023
- Employment in leisure and hospitality (+19,000) was less robust after adding an average of 52,000 jobs per month over the prior 12 months.
- Employment in manufacturing decreased by 35,000 in October, reflecting a decline of 33,000 in motor vehicles and parts that was largely due to strike activity. However, the ISM orders-to-inventories index indicates an upswing in factory activity is on the horizon:
As of Nov. 2023
Unemployment
The number of unemployed persons in the U.S., at 6.5 million, changed little in October — but since the recent low in April, was up by 849,000.
The number of persons employed part time for economic reasons, at 4.3 million, also changed little. These individuals, who would have preferred full-time employment, were working part-time either because their hours had been reduced or they were unable to find full-time jobs.
Among the unemployed, the number of permanent job losers increased by 164,000 over the month to 1.6 million. The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 1.3 million. The long-term unemployed accounted for 19.8 percent of all unemployed persons.
In October, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents, or 0.2 percent, to $34.00. Over the past 12 months, average hourly earnings have increased by 4.1 percent, per BLS.
In October, average hourly earnings of private-sector production and nonsupervisory employees rose by 10 cents, or 0.3 percent, to $29.19.
Nevada Jobs Flash Report
Nevada’s seasonally adjusted “headline” (minimum) unemployment rate stayed flat in September. Relative to September 2022, the state gained 50,800 total payroll jobs (up 3.4 percent). Of those, 44,300 were private payroll jobs (a 3.3 percent increase).
As of September 2023
Average weekly hours decreased by 0.2 hours YOY (year-over-year) and average weekly inflation-adjusted wages decreased 3.3 percent compared to September 2022. Of note, the Leisure & Hospitality sector has grown for the past 5 consecutive months and has generated 18,500 jobs YOY followed by Professional & Business Services with 13,600 jobs added YOY.
As of September 2023
Click here for RCG’s close look at Las Vegas metro and Reno-Sparks metro area data.
Median Income by Profession, Gender
From the WSJ’s Daily Shot Newsletter, based on 2021 Census Bureau data:
Takeaway: It’s good to be an American male working in the legal profession.
Rents
Nationwide rents fell another 0.7 percent in October, the third consecutive month of decline. A relatively weak rental market has now persisted for well over a year, characterized by increasing vacancy rates that are keeping rent growth in check.
Year-over-year rent change has stabilized at -1.2 percent and is negative in 66 of the nation’s 100 largest cities.
For all the latest data, see Apartment List’s full October Rent Report here. Highlights for Las Vegas include:
- Rents in Las Vegas fell 0.6 percent in October.
- Year-over-year rent growth in Las Vegas now stands at -3.7 percent, down from -1.4 percent one year ago.
- Since the start of the COVID-19 pandemic in March 2020, though, citywide rents have still risen 28 percent.
As of October 2023
Today the median rent in Las Vegas is $1,076 for a one-bedroom unit and $1,376 for a two-bedroom unit. The citywide apartment vacancy rate stands at 6.9 percent, up 0.7 percentage points from this time last year.
As of October 2023
Declining Hotel Occupancy
The latest U.S. hotel industry profit-and-loss data from CoStar shows that normalizing demand for hotels and declining occupancy are leading to a reduction in profitability.
As of August 2023
Highlights (excerpted and lightly edited from CoStar):
- U.S. hotel demand declined for the third consecutive month and occupancy was down for the fourth consecutive month in August. Growth in the total revenue per available room hovered at 4 percent or below over the prior five months compared to the same period last year.
- Compared to 2019, TRevPAR — total revenue per available room — is down 2 percent. This is mainly because, along with reduced occupancy, total operating expenses continue to grow.
- The monthly growth rate of operating expenses slowed to 0.3 percent, however, indicating that hotels have done a reasonably good job trying control the rise in expenses, but they are fighting an uphill battle. Average operating costs per available room are $6 higher than they were in 2019, with 53 percent of that expense coming from labor increases.
- Total labor costs continue to grow, but also at a somewhat slower pace. Labor costs per available room through year-to-date August are only $1.15 higher than over the same period in 2019. Total labor costs per operating room grew by 8.3 percent as of August, compared with 9.5 percent in 2023 through July. Labor costs per operating room have slowed by an average of 2.3 percent per month. (With inflation slowing, more contract work being used, and continued operational changes — i.e., many hotels no longer offer daily cleaning — and labor itself at the levels required to run the business, hoteliers are not increasing wages.)
- There is one bright spot: After a slow summer, group demand has started to pick up into the fall conference season such that food-and-beverage departments were up 9.9 percent in August compared to 2019. Though much of that was due to inflation, one good sign is that other food-and-beverage revenues, which include room rental and audio/visual fees, are up 16.6 percent compared to 2019 when adjusted for inflation.
Best Selling Cars Trucks by State
From Visual Capitalist (Americans love trucks):
As of December 2022
Middle East Exports
Think the Middle East only has oil to offer? Not so, per this Visual Capitalist graphic:
As of 2021
Animation: Stock Market vs. GDP Share, by Country (1900-2022)
We wrap today’s content with a truly fascinating animated infographic from Visual Capitalist. Here’s a screen shot of the 2022 data (click here to watch the 122-year progression from 1900 forward):
As of 2022
On the Horizon
Mike PeQueen: No economic metrics of note will be reported next week. Carry on.
