Employment, manufacturing, and consumer sentiment all bloomed in March. Here are the five things we learned from U.S. economic data released during the week ending April 2.
Payroll growth accelerated in March. Nonfarm payrolls swelled by a seasonally adjusted 916,000 during the month, up sharply from February’s upwardly revised 468,000 gain. Even with the building momentum, the Bureau of Labor Statistics measure remained 8.403 million jobs under its February 2020 peak (just as the pandemic was beginning). (On the flip side, nonfarm payrolls have rebounded by 13.959 million since bottoming out last April). Public sector employment grew by 136,000 jobs (largely from a surge in local and state education), while private-sector payrolls jumped by 780,000. The private sector goods-producing employers added 183,000 jobs, including 110,000 in construction and 53,000 in manufacturing. Service sector employment increased by 597,000 jobs, led by leisure/hospitality (+280,000), education/health services (+101,000), professional/business services (+66,000), and transportation/warehousing (+47,500).
Based on a separate household survey, the unemployment rate fell by 2/10ths of a percentage point to a pandemic low of 6.0 percent. Further, 347,000 people entered the labor force during the month, leading to a 1/10th of a percentage point gain in the labor force participation rate to 61.5 percent (March 2020: 62.6 percent). The same rate for adults 25 to 54 added 2/10ths of a point to 81.3 percent (March 2020: 82.5 percent). The number of part-time workers seeking a full-time job dropped by 262,000 to 5.826 million (March 2020: 5.787 million). The median length of unemployment of 19.7 weeks remained well above that of a year earlier of 5.8 weeks. Also falling to a pandemic low was the broadest measure of labor underutilization: U-6 series shed 4/10ths of a point to 10.7 percent (March 2020: 8.8 percent).
Manufacturing activity increased for a 10th straight month in March. The PMI from the Institute for Supply Management added 3.9 points during the month to a reading of 64.7. The PMI has not had a reading this high since December 1983 and has been above 50.0—indicative of an expanding manufacturing sector—every month since May. PMI components associated with new orders, production, employment, and inventories all improved in March. Seventeen of 18-tracked manufacturing industries indicated they grew during the month, led by textiles, electrical equipment/appliances, and machinery. The press release noted that “labor-market difficulties” continued to “persist” at many companies.
Consumer confidence bloomed in March. The Conference Board’s Consumer Confidence Index rose by 19.3 points to a seasonally adjusted 109.7 (1985=100), its best reading in a full year. The current conditions index jumped by 20.4 points to 110.0, while the expectations index swelled by 18.7 points to 109.6. While only 18.5 percent of survey respondents said that current business conditions were “good,” 40.8 percent anticipate the economy will improve over the next six months. The press release says the results are “an indication that economic growth is likely to strengthen further in the coming months.” (Also showing rising consumer sentiment was the prior week’s report from the University of Michigan.)
Home purchase contracts sharply declined in February. The National Association of Realtors’ Pending Home Sales Index shed 10.6 percent during the month to a seasonally adjusted of 110.3 (2001=100). The index was down in all four Census regions: South (-13.0 percent), Midwest (-9.5 percent0, Northeast (-9.2 percent), and West (-7.4 percent). The index was 0.5 percent under its February 2020 reading, with year-to-year declines in the Midwest (-6.1 percent) and Northeast (-3.9 percent) and advances in the South (+2.9 percent) and West (+1.9 percent). The press release blamed the slowdown in contract signings on the “record-low inventory.”
Construction spending slipped in February. The Census Bureau reports that the value of construction put in place at $1.517 trillion on a seasonally adjusted annualized basis. While a 0.8 percent drop from January, construction spending remained 5.3 percent ahead of the year-ago pace. Private-sector construction expenditures declined 0.5 percent to an annualized 1.166 trillion (+7.1 percent versus February 2020), split for residential and nonresidential by 0.2 percent and -1.0 percent, respectively. Public sector construction spending slowed 1.7 percent to an annualized $351.2 billion, off 0.3 percent from the same month a year earlier.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending March 27, First-Time Claims, seasonally adjusted): 719,000, +61,000 vs. the previous week, -5,266,000 vs. the same week a year earlier). 4-week moving average: 719,000 -69.3% vs. the same week a year earlier).
- Vehicle Sales (March 2021, Light Vehicles, seasonally adjusted annualized rate): 17.75 million (+12.6% vs. February 2021, +103.5% vs. March 2020).
- FHFA House Price Index (January 2021, Purchase-Only Index, seasonally adjusted): +1.0% vs. December 2020, +12.0% vs. January 2020.
- Case-Shiller Home Price Index (January 2021, 20-City Index, seasonally adjusted): +1.2% vs. December 2020, +11.1% vs. January 2020).
- Agricultural Prices (February 2021, Prices Received by Farmers): +6.3% vs. January 2021, +5.6% vs. February 2020.
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What We Learned About the U.S. Economy Last Week 