A lack of qualified candidates weighed on hiring during April. Here are the 5 things we learned from U.S. economic data released during the week ending June 9.
Even with a record number of job openings, hiring slowed in April. The Bureau of Labor Statistics estimates there were a seasonally adjusted 6.044 million job openings at the end of the month, up 259,000 for the month, 7.1 percent from a year earlier, and the highest count ever recorded in the 16+ year history of the data series. The private sector had 5.464 million jobs available, up 240,000 from March and 6.7 percent from April 2016. Among the industries reporting significant year-to-year percentage gains in job openings were professional/business services (+15.0 percent), accommodations/food services (+13.3 percent), financial activities (+11.0 percent), leisure/hospitality (+10.6 percent), and construction (+10.3 percent). Employers continued to experience significant difficulty in filling these jobs. Employers hired 5.051 million people during April, down 253,000 from March and up a measly 0.3 percent from a year earlier. Private sector companies brought 4.718 million people onto their payrolls during the month, up 0.7 percent from a year earlier. Also slowing during the month were the number of job separations with 4.973 million people leaving their jobs during the month, a 225,000 decline from March. This included voluntary quits sinking by 109,000 to 3.027 million (+4.3 percent vs. April 2016). Layoffs decreased by 71,000 to 1.590 million, 4.7 percent below the year ago levels.
New factory orders contracted during April for the first time in 2017. Census Bureau data indicate that new orders for manufactured goods declined 0.2 percent during the month to a seasonally adjusted $469.0 billion. This was up 3.8 percent from a year earlier. April’s decline following month-to-month increases of 0.8 percent and 1.0 percent in February and March, respectively. Transportation goods orders fell 1.4 percent as a 9.1 percent drop civilian aircraft orders outweighed a 0.6 percent gain in orders of automobiles. Net of transportation goods, new orders edged up 0.1 percent during April to $390.6 billion (+6.0 percent vs. April 2016). Orders for computers/electronic products jumped 1.6 percent during the month while falling were orders of electrical equipment/appliances (-2.0 percent), fabricated metals (-1.0 percent), primary metals (-0.7 percent), machinery (-0.7 percent), and furniture (-0.2 percent). Orders of civilian nonaircraft capital goods (a proxy for business investment) inched up 0.1 percent during the month and was 3.0 percent above year earlier levels.
The service sector hummed along at a slightly slower growth rate in May. The headline index from the Institute for Supply Management’s Report on Business for the nonmanufacturing sector of the economy decreased by 6/10ths of a point to 56.9. The NMI has been above a reading of 50.0—indicative of an expanding service sector—for 89 consecutive months. Three of the four index components declined during the month: new orders (down 5.5 points to 57.7), business activity (down 1.7 points to 60.7), and supplier deliveries (down 1.5 points to 51.5). On the flipside, the employment index surged 6.4 points to 57.8. Seventeen of the 18 tracked nonmanufacturing sectors expanded during the month, led by real estate, construction, and accommodation/food services. The press release noted that survey respondents were “continu[ing] to indicate optimism about business conditions and the overall economy.”
Productivity gains were nonexistent during Q1, but that is an improvement from a previous estimate. The Bureau of Labor Statistics raised its previously published estimate of labor productivity from saying it had shrunk 0.6 percent on a seasonally adjusted annualized rate (SAAR) to now reporting it had held steady during the quarter. This was the result of output and the number of hours worked both having grown at an annualized rate of 1.7 percent during the quarter. Over the past year, labor productivity increased an anemic 1.2 percent with output expanding 2.5 percent and hours worked growing 1.3 percent. Also increasing was productivity in the manufacturing sector, with the previously reported 0.4 percent bump raised to a 0.5 percent increase during Q1. Productivity gained 2.7 percent for nondurable goods manufacturing but contracted 0.7 percent for durable goods manufacturing.
Consumer debt levels grew at a slower pace during April. Per the Federal Reserve, outstanding consumer debt balances (net of mortgages and other real estate-backed debt) totaled $3.821 trillion at the end of April, up $8.2 billion for the month and 5.8% from a year earlier. This was the smallest single-month gain in credit balances since December 2015. Nonrevolving credit balances grew by $6.7 billion to $2.810 trillion. While this also was their smallest single-month increase since late 2015, nonrevolving credit balances (e.g., college loans, car loans) have expanded 5.7 percent over the past year. Revolving credit balances (e.g., credit cards) grew at its slowest pace in three months (+$1.5 billion) to $1.010 trillion (+5.7 percent vs. April 2016).
Other U.S. economic data released over the past week:
– Jobless Claims (week ending June 3, 2017, First-Time Claims, seasonally adjusted): 245,000, -10,000 vs. previous week; -20,000 vs. the same week a year earlier). 4-week moving average: 242,000 (-10.2 percent vs. the same week a year earlier).
– Wholesale Trade (April 2017, Wholesale Inventories, seasonally adjusted): $591.0 billion (-0.5% vs. March 2017, +1.6% vs. April 2016).
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What We Learned About the U.S. Economy Last Week 