The labor market heated up as autumn chilled the air. Here are the five things we learned from U.S. economic data released during the week ending October 6.
Payroll growth accelerated in September. Nonfarm payrolls swelled by a seasonally adjusted 336,000, per the Bureau of Labor Statistics. This was up from gains of 236,000 and 227,000 in July and August, respectively, and above the 267,000 monthly average of the past year. Private sector employers added 263,000 workers, with the service sector responsible for 234,000 of the gain. Industries adding the most workers were leisure/hospitality (+96,000) and health care/social assistance (+65,900). Average weekly earnings of $1,165.47 was up 3.6 percent from a year earlier.
Based on a separate household survey, the unemployment rate remained at 3.8 percent. The labor force expanded by 90,000 people. The overall labor force participation rate and that for 25-54 adults held steady at 62.8 percent and 83.5 percent, respectively. The typical length of unemployment grew by a half week to 9.2 weeks, while the count of part-timers desiring full-time work declined by 156,000 to 4.065 million. The broadest measure of labor underutilization (the U-6 series) slipped by 1/10th of a percentage point to 7.0 percent.
Employers had more jobs to fill in August. The Bureau of Labor Statistics reports that there were a seasonally adjusted 9.610 million open jobs. This represented an increase of 690,000 from July and a 5.8 percent drop from a year earlier. The private sector had 8.558 million open positions, with professional/business services, health care/social assistance, and accommodation/food services reporting more than a million available jobs. Employers hired 5.857 million workers during the month, up 35,000 from July but off 9.6 percent from the year earlier. The private sector hired 5.499 million people. 5.676 million people separated from their jobs, up 38,000 for the month but down 9.1 percent from August 2022. Layoffs held steady at 1.680 million (+3.3 percent versus August 2022) and voluntary quits inched up 19,000 to 3.638 million (-14.2 percent versus August 2022).
Purchasing managers report a slight decline in manufacturing and growth in the service sector. The Manufacturing PMI added 1.4 points in September to 49.0. The Institute for Supply Management’s measure has failed to cross 50—the threshold between a growing and shrinking manufacturing sector—for 11 consecutive months. Improving were indices for new orders, production, employment, and inventories. Five of 18 tracked manufacturing industries reported growth, led by nonmetallic mineral products, food/beverages, and textiles. Survey respondents indicated that “[d]emand remains soft.”
Meanwhile, the Services PMI lost 9/10ths of a point to 53.6. The Institute for Supply Management measure has stayed about the critical 50 mark for nine straight months. While the business activity/production index improved, measures for new orders, employment, and inventories fell. Thirteen of 18 service sector industries expanded in September, led by real estate, retail, and utilities. While most survey respondents were “positive” about current conditions, “some respondents indicated concern about potential headwinds.”
Factory orders grew in August. New orders for manufactured goods rose 1.2 percent to a seasonally adjusted $586.1 billion (its fifth increase over the past six months). The Census Bureau data series has totaled $4.630 trillion over the first eight months this year, up 0.5 percent over the comparable 2022 months. Nondurable goods orders surged 2.1 percent, while those for durables edged up 0.1 percent. Shipments advanced 1.3 percent to $586.0 billion, its fourth straight gain. Unfilled orders swelled 0.4 percent to $1.336 trillion, while inventories expanded 0.3 percent to $855.4 billion.
The U.S. trade deficit narrowed in August. The Census Bureau and the Bureau of Economic Analysis report exports jumped 1.6 percent to a seasonally adjusted $256.0 billion and imports slowed 0.7 percent to $314.3 billion. The resulting trade deficit of -$58.3 billion was down 9.9 percent from a year earlier. The trade deficit over the first eight months of 2023 was -$528.3 billion, 20.7 percent below the comparable 2022 months. The goods deficit narrowed by $5.5 billion to -$84.5 billion, while the service surplus grew by $1.0 billion to +$26.2 billion. The former improved because of more exports of crude & fuel oil, capital goods, and consumer goods and fewer imports of cell phones, semiconductors, and electric apparatus. The U.S. had its largest services deficits with China, the European Union, and Mexico.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending September 30, 2023, First-Time Claims, seasonally adjusted): 207,000, +2,000 vs. the previous week, +2,000 vs. the same week a year earlier). 4-week moving average: 208,750 (+9.4% vs. the same week a year earlier).
- Construction Spending (August 2023, Value of Construction Put in Place, seasonally adjusted annualized rate): $1.984 trillion (+0.5% vs. July 2023; +7.4% vs. August 2022).
- Vehicle Sales (September 2023, Automobiles and Light Trucks, seasonally adjusted annualized rate): 15.667 million (+2.1% vs. August 2023; +14.3% vs. September 2022)
- Consumer Credit (August 2023, Outstanding Non-Real Estate Back Consumer Credit Balances, seasonally adjusted): $4.969 trillion (-$15.6 billion vs. July 2023; +4.0% vs. August 2022.
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What We Learned About the U.S. Economy Last Week 