The labor market continued heating up in the winter. Here are the five things we learned from U.S. economic data released during the week ending March 8.
Payroll growth accelerated in February. Nonfarm payrolls swelled by a seasonally adjusted 275,000, per the Bureau of Labor Statistics. This followed gains of 290,000 and 229,000 in December and January, respectively. (Those two months’ job gains saw downward revisions totaling 167,000). Private sector payrolls grew by 223,000, including 204,000 in the service sector. Industries adding the most workers were health care/social assistance (+90,700), leisure/hospitality (+58,000), government (+52,000), and construction (+23,000). The average weekly earnings of $1,185.75 was up 3.7 percent from a year earlier.
The household survey finds the unemployment rate rising 2/10ths of a percentage point to 3.9 percent. The labor force expanded by 150,000, while the labor force participation rate held steady at 62.5 percent. The 25-54 labor force participation rate added 2/10ths of a percentage point to 83.5 percent (its highest reading in 22 years). The typical length of unemployment was 9.3 weeks (February 2023: 8.9 weeks). The number of part-time workers seeking full-time work shrank by 46,000 to 4.376 million (February 2023: 4.070 million). The broadest measure of labor underutilization (the U-6 series) added 1/10th of a percentage point to 7.3 percent. It was at 6.8 percent one year ago.
Hiring slowed (slightly) but the count of unfilled jobs held steady in January. The Bureau of Labor Statistics indicates that there were a seasonally adjusted 8.863 million open jobs at the end of January, down 26,000 from the previous month and 15.0 percent from a year earlier. The private sector had 7.963 million unfilled jobs, including at least a million open jobs in professional/business services, health care/social assistance, and leisure/hospitality. Employers hired 5.687 million workers, including 5.323 million in the private sector. The former is down 100,000 from December and 10.8 percent from a year ago. 5.341 million people separated from their jobs, down 78,000 from the prior month and 11.2 percent from January 2023. This included 3.385 million people quitting their jobs (-54,000 from December and 12.8 percent from a year earlier) and 1.572 million people laid off (-35,000 from December and -15.8 percent from a year earlier).
The service sector wobbled in February. The Institute for Supply Management’s Services PMI lost 8/10ths of a point to 52.6. The Services PMI has remained above 50.0—the threshold between an expanding and contracting service sector—for 44 of the past 45 months. While measures for business activity/production and new orders improved and were above 50.0, those for employment and inventories deteriorated and were below 50.0. Fourteen of 18 service sector industries reported growing in February, led by construction, retail, and public administration. The press release notes that survey “respondents remain concerned about inflation, employment and ongoing geopolitical conflicts.”
Factory orders slowed in January. New orders for manufactured goods declined for the third time in four months, shedding 3.6 percent to a seasonally adjusted $569.7 billion. The Census Bureau report finds durable and nondurable goods orders declining 6.2 percent and 1.1 percent, respectively. Shipments decreased 1.0 percent to $572.4 billion (its fourth drop in five months), with drops for both durables (-0.9 percent) and nondurables (-1.1 percent). Unfilled orders grew 0.2 percent to $1.395 trillion (its 13th increase in 14 months), while inventories contracted 0.1 percent to $855.8 billion.
The trade deficit swelled in January. The Census Bureau and the Bureau of Economic Analysis report that exports inched up 0.1 percent to a seasonally adjusted $257.2 billion and imports rose 1.1 percent to $324.6 billion. The resulting deficit of -$67.4 billion was up 5.1 percent from December and 1.2 percent from a year earlier. The goods deficit grew $3.0 billion to -$91.6 billion, while the services surplus narrowed $0.3 billion to +$24.2 billion. The former resulted from increased imports of automobiles and capital goods (including computers). The U.S. had its largest goods deficits with China, the European Union, and Mexico.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending March 2, 2024, First-Time Claims, seasonally adjusted): 217,000, Unchanged vs. the previous week, -28,000 vs. the same week a year earlier). 4-week moving average: 212,500 (-5.6% vs. the same week a year earlier).
- Vehicle Sales (February 2024, Automobiles and Light Trucks, seasonally adjusted annualized rate): 15.810 million (+6.0% vs. January 2024; +6.3% vs. February 2023).
- Wholesale Trade (January 2024, Merchant Wholesalers Inventories, seasonally adjusted): $895.1 billion (-0.3% vs. December 2023; -2.5% vs. January 2023).
- Productivity (2023Q4-Revised, Nonfarm Labor Productivity, seasonally adjusted annualized rate): +3.2% vs. 2023Q3; +3.2% vs. 2022Q4.
- Consumer Credit (January 2024, Outstanding Non-Real Estate Back Consumer Debt, seasonally adjusted): $5.039 trillion (+$11.1 billion vs. December 2023; +2.5% vs. January 2024).
- Beige Book
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What We Learned About the U.S. Economy Last Week 