Still Hiring: May 29 – June 2

Employers continued to add workers and post new job listings. Here are the five things we learned from U.S. economic data released during the week ending June 2.

Payrolls swelled in May. According to the Bureau of Labor Statistics, nonfarm payrolls grew a seasonally adjusted 339,000, per the Bureau of Labor Statistics. May’s increase followed gains of 217,000 and 294,000 during the prior two months, which reflected a combined upward revision of 93,000 additional jobs. The private sector added 283,000 jobs, including 257,000 in the service sector. Industries with the largest payroll gains were health/social assistance (+74,600), professional/business services (+64,000), government (+56,000), and leisure/hospitality (+48,000). Average hourly earnings of $33.44 were up 4.3 percent from a year earlier. 

A separate survey of households has the unemployment rate rising 3/10^ths of a percentage point to a still-low 3.7 percent. The civilian labor force expanded by 130,000. The median length of unemployment grew by 2/10^ths of a week to 8.6 weeks (May 2022: 8.7 weeks), while the count of part-time workers “for economic reasons” declined by 164,000 to 3.793 million (May 2022: 4.317 million). The broadest measure of labor underutilization—the U-6 series—added 1/10^th of a percentage point to 6.7 percent (still near its historical low). 

The number of unfilled jobs rose in April. The Bureau of Labor Statistics estimates there were a seasonally adjusted 10.103 million open positions, up 358,000 from March but off 14.1 percent from a year earlier. The private sector had 9.140 job openings, with health care/social assistance, professional/business services, and accommodation/food services, with more than a million unfilled jobs. Hiring inched up by 49,000 to 6.115 million. A year earlier, employers had hired 6.572 million workers. 5.708 million people left their jobs in April, down 288,000 from the previous month. The decline was partially the result of a 264,000 drop in layoffs to 1.581 million (+17.8 percent). Voluntary quits edged down by 49,000 to 3.793 million. A year earlier, 4.497 million people had quit their jobs. 

Consumer sentiment wobbled in May. The Conference Board’s Consumer Confidence Index lost 1.4 points to a seasonally adjusted 102.3 (1985=100). A year earlier, the same measure was at 103.2. The current conditions index fell by 3.2 points to 148.6, while the expectations measure had a more modest 2/10^ths of a point drop to 71.5. The latter has been below 80—a harbinger of a pending recession—every month (except one) since February last year. The press release described consumers’ expectations for the future as “gloomy.” Consumers expect prices will rise 6.1 percent over the next 12 months. 

Purchasing managers indicate that manufacturing struggled in May. The Manufacturing PMI from the Institute for Supply Management (ISM) slipped by 2/10^ths of a point to 46.9. The Manufacturing PMI has been below 50—the threshold between an expanding and contracting manufacturing sector—for seven consecutive months. Measures for new orders and inventories declined, while those for production and employment improved. Only four of 18 tracked manufacturing industries expanded in May: nonmetallic mineral products, furniture, transportation equipment, and fabricated metal products. Among the 14 declining industries were wood products, primary metals, and apparel. The press release noted that “May performance was clearly weaker compared to April.”

Construction spending rose in April. The seasonally adjusted annualized value of construction put in place jumped 1.2 percent to $1.908 trillion. The Census Bureau estimate was up 7.2 percent from a year earlier. Private construction increased 1.3 percent during the month to an annualized $1.501 trillion. Private residential expenditures advanced 0.5 percent, thanks to a 0.6 percent bump in multi-family construction (single-family home construction slumped 0.8 percent). Private nonresidential spending surged 2.4 percent during the month and 31.2 percent compared to a year earlier. Public construction expenditures rose 1.1 percent to an annualized $407.7 billion (+16.5 percent versus April 2022). 

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

• Jobless Claims (Week ending May 27, 2023, First-Time Claims, seasonally adjusted): 232,000, +2,000 vs. the previous week, +30,000 vs. the same week a year earlier). 4-week moving average: 229,500 (+8.1% vs. the same week a year earlier). 
• Productivity (2023Q1-revised, Nonfarm Business Labor Productivity, seasonally adjusted annualized rate): -2.1% vs. 2022Q1; -0.8% vs. 2022Q1
• Vehicle Sales (May 2023, Automobiles and Light Trucks, seasonally adjusted annualized rate): 15.045 million (-6.5% vs. April 2023; +19.6% vs. May 2022). 
• S&P Case-Shiller Home Price Index (March 2023, National Index, seasonally adjusted): +0.4% vs. February 2023; +0.7% vs. March 2022).
• FHFA House Price Index (March 2023, Purchase-Only Index, seasonally adjusted): +0.6% vs. February 2023; +3.6% vs. March 2022.
• Agricultural Prices (April 2023, Prices Received by Farmers, not seasonally adjusted): +1.9% vs. March 2023; -2.2% vs. April 2022. 
• Beige Book

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