Employers continued filling jobs in April. Here are the five things we learned from U.S. economic data released during the week ending May 5.
Payrolls continued growing in April. Nonfarm payrolls grew by a seasonally adjusted 253,000 jobs. April’s gain followed February and March job creation of 248,000 and 165,000, respectively. The Bureau of Labor Statisticsdownwardly revised those two months by a combined 149,000. Private sector employers added 230,000 jobs (up from 123,000 in March). Service sector employment rose by 197,000, while the goods-producing side of the economy added 33,000 workers. Industries with the most jobs added were health care/social assistance (+64,200), professional/business services (+43,000), and leisure/hospitality (+31,000). The average weekly earnings of $1,147.58 were up 3.8 percent from a year earlier.
A separate survey of households has the unemployment rate decreasing by 1/10th of a percentage point to 3.4 percent (matching its lowest reading since 1969). While the labor force contracted by 43,000, the labor force participation rate held steady at 62.6 percent. The 25-54 labor force participation rate rose by 2/10ths of a percentage point to a 15-year high of 83.3 percent. The median length of unemployment—8.4 weeks—was slightly above that of a year earlier (8.4 weeks). The number of part-time workers seeking a full-time job fell by 199,000 to 3.903 million (April 2023: 3.878 million). The broadest measure of labor underutilization—the U-6 series—declined by 1/10th of a percentage point to 6.6 percent.
The Fed raised rates again, but it may be for the final time (for now). The statement released following the past week’s Federal Open Market Committee (FOMC) meeting noted that the economy grew “at a modest pace, the labor market was “robust,” and the banking system was “sound and resilient.” At the same time, it warns that “tighter credit conditions” (which it has promoted) were “likely to weigh on economic activity, hiring, and inflation.” Nonetheless, the committee voted unanimously to raise the fed funds rate by a quarter point to a range of 5.00 to 5.25 percent. The statement suggested that it would be more intentional with any future rate hikes, “taking into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.” At the same time, it reaffirmed its two-percent inflation rate target.
While still substantial, the count of open jobs fell again in March. The Bureau of Labor Statistics estimates that there were a seasonally adjusted 9.560 million open jobs at the end of the month, down 384,000 from February and 20.3 percent from a year earlier. The private sector was responsible for 8.541 million open jobs, including professional/business services, health care/social assistance, and accommodation/food services that each had more than a million unfilled positions. March’s hiring matched February’s at 6.149 million, including 5.752 million in the private sector. (March 2022 hiring: 6.577 million.) Separations edged up 91,000 to 5.932 million (-4.2 percent versus March 2022). 1.805 million workers left their job due to a layoff (February 2023: 1.557 million; March 2022: 1.395 million), while 3.851 million people quit their jobs (down 129,000 for the month and 13.5 percent from a year earlier).
Manufacturing contracted, while the service sector expanded in April. The Manufacturing PMI, the headline index from the Institute for Supply Management’s Manufacturing Report on Business, added 8/10ths of a point during the month. Nonetheless, the measure’s reading of 47.1 was its sixth straight month below 50.0, indicative of a slowing manufacturing sector. Measures for new orders, production, and employment all improved (although only that for employment was above 50.0). The inventories measure slipped. Only five of 18 tracked manufacturing industries reported growing during the month, led by printing, apparel, and petroleum/coal.
The ISM’s Services PMI increased by 7/10ths of a point in April to 51.9, its fourth consecutive month above 50.0. The improvement was despite dropped in business activity/production, employment, and inventories. The new orders index rose during the month. Fourteen of 18 tracked service sector industries expanded, led by arts/entertainment/recreation, real estate, and accommodation/food services. The press release noted that most survey respondents were “mostly positive about business conditions,” although some expressed concerns about “inflation and an economic slowdown.”
Civilian aircraft boost March factory orders. New orders for manufactured goods gained 0.9 percent to a seasonally adjusted $539.0. The Census Bureau measure has declined for two consecutive months but was up 2.4 percent in 2023 compared to the same three months in 2022. Transportation goods orders surged 9.0 percent, boosted by a 78.3 percent rise for civilian aircraft and a 9.6 percent gain for defense aircraft. Net of transportation goods, new orders fell 0.7 percent. Durable goods orders bloomed 3.2 percent, while those for nondurables stumbled 1.4 percent. Shipments slowed for the fourth time in five months, slipping 0.1 percent to $539.9 billion. Unfilled orders grew 0.4 percent to $1.160 trillion and inventories shrank 0.8 percent to $799.4 billion.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending April 29, 2023, First-Time Claims, seasonally adjusted): 242,000, +13,000 vs. the previous week, +25,000 vs. the same week a year earlier). 4-week moving average: 239,250 (+10.8% vs. the same week a year earlier).
- International Trade (March 2023, Goods and Services Deficit, seasonally adjusted): -$64.2 billion (-9.1% vs. February 2023; -39.7% vs. March 2022.
- Vehicle Sales (April 2023, Automobiles and Light Trucks, seasonally adjusted annualized rate): 15.194 million (+7.2% vs. March 2023; +11.4% vs. April 2022).
- Construction Spending (March 2023, Value of Construction Spending Put in Place, seasonally adjusted annualized rate): $1.834 trillion (+0.3% vs. February 2023; +3.8% vs. March 2022).
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What We Learned About the U.S. Economy Last Week 