Hiring Held Firm, Service Sector Bloomed: October 5 – 9

Employers continued rehiring workers in August, but the number of job openings shrank. Here are the five things we learned from U.S. economic data released during the week ending October 9.


Hiring held steady while the number of job openings declined slightly in August. Per the Bureau of Labor Statistics, there were a seasonally adjusted 6.493 million job openings on the final day of the month, off 196,000  from July and 9.4 percent from a year earlier. Private-sector job openings slowed by 242,000 to 5.637 million (August 2019: 6.429 million). Nonfarm employers hired 5.919 million workers during the month, up 16,000 from July and 80,000 from August 2019. Private-sector hiring decelerated by 180,000 to 5.349 million (August 2019: 5.443 million). Government hiring bloomed by 569,000 (versus 334,000 in July and 396,000 in August 2019), reflecting added temporary workers to support the 2020 Census. Separations plummeted by 394,000 to 4.594 million (August 2019: 5.660 million) with layoffs down 130,000 to 1.565 million and voluntary quits off by 139,000 to 2.793 million.

The service sector expanded for a fourth straight month in September. The Services PMI, the headline index from the Institute for Supply Management’s Services Report on Business, added 9/10ths of a point during the month to a reading of 57.8. A reading above 50.0 is indicative of an expanding service sector. Advancing in September were measures for business activity/production (up 6/10ths of a point to 63.0), new orders (up 4.7 points to 61.5), and employment (up 3.9 points to 51.8). Sixteen of 18 tracked service sector industries reported growth, led by arts/entertainment/recreation, utilities, and companies/support services management. The press release noted survey respondents’ overall optimism but also stated that “[t]here continues to be capacity and logistic issues.”

The trade deficit jumped to a 14-year high in August. The Census Bureau and the Bureau of Economic Analysis reports exports jumped 2.2 percent to a seasonally adjusted $171.9 billion and imports rose 3.2 percent to $239.0 billion. The resulting trade deficit had not been this massive (-$67.1 billion) since August 2006. The goods deficit widened by $3.0 billion to -$83.9 billion while the services surplus narrowed by $0.7 billion to +$16.8 billion. Boosting the former were increased imports for consumer goods, pharmaceutical preparations, and automobiles. Exports swelled for industrial supplies/materials and soybeans.  The U.S. had its biggest goods deficits with China (-$26.4 billion), the European Union (-$15.7 billion), and Mexico (-$12.5 billion).

Wholesale inventories and sales grew in August. The Census Bureau places merchant wholesalers’ sales at a seasonally adjusted $486.6 billion, up 1.4 percent for the month but off 2.3 percent from a year earlier. Wholesale durable goods sales gained 1.3 percent (including a 1.7 percent bump for automobiles) while those of nondurable sales advanced 1.6 percent. Merchant wholesalers’ inventories widened 0.4 percent to $635.5 billion, which was nevertheless down 5.2 percent from a year earlier. The inventory-to-sales ratio of 1.31 was off a basis point from July and four-basis points from August 2019.

Consumer credit card balances fell again in August. The Federal Reserve estimates outstanding non-real estate-backed consumer credit balances shrank by $7.2 billion to a seasonally adjusted $4.144.7 trillion. Credit balances have risen by a mere 0.4 percent over the past year.  Revolving credit balances—i.e., credit cards—declined by $10.6 billion in August and 10.3 percent since February to $985.3 billion. Nonrevolving credit balances, including car and student loans, inched up by $2.2 billion to $3.159.4 trillion (+3.8 percent versus August 2019).

Other U.S. economic data released over the past week:

  • Jobless Claims (Week ending October 3, First-Time Claims, seasonally adjusted): 840,000 (-9,000 vs. the previous week, +628,000 vs. the same week a year earlier). 4-week moving average: 857,000 (+300.5% vs. the same week a year earlier).
  • FOMC Minutes

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

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