Job Openings Outpaces Unemployment Again: July 9 – 13

Employers continue to struggle to fill their job openings. Here are the five things we learned from U.S. economic data released during the week ending July 13.

#1There remain more job openings than people unemployed. The Bureau of Labor Statistics estimates there were a seasonally adjusted 6.638 million job openings at the end of May. While down 202,000 from the prior month, the count of job openings was not only 16.7 percent larger than that of a year earlier but also higher than the 6.065 million people the BLS had reported being jobless in last week’s employment report. Private sector job openings have grown 16.6 percent over the past year, with some of largest year-to-year percentage gains seen for construction (+32.8 percent), transportation/warehousing (+28.9 percent), manufacturing (+24.6 percent), and professional/business services (+20.6 percent). During the same month, hiring grew by 268,000 to 5.754 million (+4.9 percent versus June 2017). Private sector hiring has risen 5.2 percent over the past year, with substantial year-to-year percentage gains seen in transportation/warehousing (+11.6 percent), health care/social assistance (+9.7 percent), accommodation/food services (+9.6 percent), professional/business services (+5.3 percent), and manufacturing (+4.2 percent). 5.468 million people left their jobs during June, an increase of 44,000 for the month and up 3.8 percent from a year earlier. This included a record 3.561 million people voluntarily quitting their jobs (increasing 212,000 for the month and 10.4 percent over the past year), reflecting the robust employment opportunities for workers.Job Openings Unemployment 071318.png

#2Consumer prices grew at a slower rate in June, thanks to lower electricity and natural gas prices. The Consumer Price Index (CPI) increased 0.1 percent on a seasonally adjusted basis, following two consecutive 0.2 percent monthly gains, as reported by the Bureau of Labor Statistics. Energy prices fell 0.3 percent (its first drop since March), thanks to lower electricity and natural gas prices. Meanwhile, gasoline prices grew 0.5 percent. Food CPI increased 0.2 percent. Net of energy and food, core CPI expanded 0.2 percent for the fourth time in five months. Growing during June were prices for used cars/trucks (+0.7 percent), medical care services (+0.5 percent), new vehicles (+0.4 percent), transportation services (+0.2 percent), and shelter (+0.1 percent). On the other end of the spectrum, apparel prices slumped 0.9 percent. CPI has risen 2.9 percent over the past year, while core CPI has a 12-month comparable of +2.3 percent.

#3Meanwhile, wholesale prices firmed further. The Producer Price Index (PPI) for final demand jumped 0.3 percent on a seasonally adjusted basis in June, down from May’s 0.5 percent bounce. The Bureau of Labor Statistics’ core measure for wholesale prices—final demand PPI net of energy, food and trade services—grew by a more modest 0.1 percent. Energy PPI blossomed 0.8 percent, with prices for fuels and lubricants surging 21.8 percent. Food PPI, however, fell 1.1 percent as vegetable prices plummeted 13.8 percent. Net of energy and food, core goods PPI increased 0.3 percent. PPI for final demand services grew 0.4 percent, its largest single-month rise since January. Trade services PPI (a measure of retailer and wholesaler margins) jumped 0.7 percent in June after rising 0.9 percent during May. Over the past year, PPI has increased 3.4 percent, with the core measure of wholesale prices growing 2.7 percent over the past 12 months.

#4Even with a slight pullback, small business owners remained confident in June. The Small Business Optimism Index from the National Federation of Independent Business lost 6/10ths of a point during the month to a seasonally adjusted 107.2 (1986=100). Even with the decline, the index has been above a reading of 100 for 19 consecutive months. Five of the index components improved during the month (including those for current inventories and current job openings) while the other five lost ground (including those for expected real sales and whether it is a good time to expand). The press release argued that the “first six months of the year have been very good to small business thanks to tax cuts, regulatory reform, and policies that help them grow.”

#5The U.S. budget deficit continued to pace ahead of that from last year. Per the Department of the Treasury, the federal government ran a budget deficit of -$74.9 billion. Receipts totaled $316.3 billion for the month (down 6.6 percent from the same month a year earlier) while expenditures were $391.1 billion (8.8 percent smaller than that of June 2017). Over the first nine months of FY2018, the U.S. government has run up a -$607.1 billion trade deficit, up 16.1 percent from the same nine months during the previous fiscal year. Receipt collected over these nine months—$2.540 trillion—was pacing 1.3 percent ahead of that from the same period in FY2018. Over this same time period, personal income tax collections were 8.9 percent larger than that of a year earlier while corporate taxes were down 27.6 percent. Expenditures totaled $3.148 trillion, up 3.8 percent from the nine-month total of a year earlier.

Other U.S. economic data released over the past week:
Jobless Claims (week ending July 7, 2018, First-Time Claims, seasonally adjusted): 214,000 (-18,000 vs. previous week; -30,000 vs. the same week a year earlier). 4-week moving average: 223,000 (-9.2% vs. the same week a year earlier).
Import Prices (June 2018, All Imports, not seasonally adjusted): -0.4% vs. May 2018, +4.3% vs. June 2017. Nonfuel imports: -0.3% vs. May 2018, +1.5% vs. June 2017.
Export Prices (June 2018, All Exports, not seasonally adjusted): +0.3% vs. May 2018, +5.3% vs. June 2017. Nonagricultural exports: +0.4% vs. May 2018, +5.4% vs. June 2017.
University of Michigan Consumer Sentiment (July 2018-preliminary, Index of Consumer Sentiment, seasonally adjusted): 97.1 (vs. June 2018: 98.2, vs. July 2017: 93.4).
Consumer Credit (May 2018, Outstanding Consumer Credit-net of real estate-backed loans, seasonally adjusted): $3.898 trillion (+$24.5 billion vs. April 2018, +4.8% vs. May 2017). 

The opinions expressed here are not necessarily those of Kevin’s current employer. No endorsements are implied.

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