Demand Outstrips Supply: July 5 – 9

Plenty of job options for those seeking work. Here are the five things we learned from U.S. economic data released during the week ending July 9.


A record number of jobs remained open in May. The Bureau of Labor Statistics reports a record 9.209 million open jobs at the end of the month, just slightly above (+16,000) April’s seasonally adjusted record count. Industries with more than 1 million job openings were retail, professional/business services, health care/social assistance, and accommodation/food services. Manufacturing was not far behind, with 814,000 open positions. Hiring continued to not keep up as the 5.927 million people hired in May were down 85,000 from the prior month. Accommodation/food services added 1.156 million workers in May after adding 1.813 million and 1.813 million employees during the prior two months. 5.318 million people separated from their jobs during the month, down 515,000 from April 3.604 million people quit their jobs (a decline of 388,000 from April), including 706,000 workers leaving jobs in accommodation/food services.

Service industry growth remained strong even after a bit of moderation in June. The Services PMI, the headline index from the Institute for Supply Management’s Services Report on Business, came in at 60.1. While shedding 3.9 points from May, the index has remained above the critical growth/contraction threshold of 50.0 for 13 straight months. All the prominent Services PMI components fell during the month, including those for business activity/production (down 5.8 points), new orders (off 1.8 points), employment (falling by 6.0 points), and inventories (decreasing by 1.6 points). Sixteen of 18-tracked service sector industries reported growth in June, led by arts/entertainment/recreation, transportation/warehousing, and wholesale trade. Survey respondents noted “challenges with materials shortages, inflation, logistics, and employment resources.”

Manufacturing activity also cooled (slightly) in June. The PMI, also from the Institute for Supply Management, lost 6/10ths of a point to a reading of 60.6. Like above, the PMI has remained above a reading of 50.0 for 13 consecutive months. While production and inventories measure improved from their May marks, the employment and new orders indices each declined. Seventeen of 18-tracked manufacturing industries expanded in June, led by furniture, machinery, and electrical equipment/appliances. The press release noted that “[l]abor challenges across the entire value chain continue to be the major obstacles to increasing growth.”

Wholesale inventories rose in May. The Census Bureau indicates that merchant wholesaler inventories grew 1.3 percent during the month to a seasonally adjusted $708.8 billion (+8.2 percent versus May 2020). Durable goods inventories expanded 1.2 percent to $411.1 billion (+5.2 percent versus May 2020), while stocks of nondurables rose 1.5 percent to $292.7 billion (+12.7 percent versus May 2020). Wholesaler sales rose 0.8 percent to $576.5 billion, with a 1.7 percent surge for durable goods that more than counterbalanced a 0.1 percent drop for nondurables. The inventory-to-sales (I/S) ratio inched up by a basis point to 1.23, with a one-point gain for nondurables (to 0.99) and a one-point drop for durables (to 1.48).

Consumers were starting to tap their credit cards in May. The Federal Reserve estimates consumers held a seasonally adjusted $4.279 trillion in outstanding non-real estate backed debt at the end of the month. This was a $35.8 billion increase from April and 3.7 percent from a year earlier (its largest 12 month comparable since March 2020). Revolving credit balances (i.e., credit cards) swelled by $9.2 billion to $907.6 billion (its only fourth increase over the past 15 months). Nonrevolving credit balances, including auto and college loans, rose by $26.1 billion to $3.305 trillion.

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

  • Jobless Claims (Week ending June 26, 2021, First-Time Claims, seasonally adjusted): 373,000, +2,000 vs. the previous week, -1,025,000 vs. the same week a year earlier). 4-week moving average: 394,500 (-72.6% vs. the same week a year earlier).

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

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