Job Openings Rise to Another Record: May 7 – 11

Employers continue having trouble filling open positions. Here are the five things we learned from U.S. economic data released during the week ending May 11.

#1Job openings hit an (at least) 17-year high during March while growth in hiring lagged. The Bureau of Labor Statistics estimates that there were a seasonally adjusted 6.550 million available jobs at the end of March, up 472,000 for the month, 16.8 percent above the year-ago count, and the most since the launch of the data series back in December 2000. Private sector employers had 5.928 million job openings, up 16.5 percent from a year earlier. Some of the largest year-to-year percentage increases in job openings were in construction (+38.5 percent), trade/transportation/utilities (+26.4 percent), retail (+24.0 percent), state/local government (+23.9 percent), professional/business services (+20.6 percent), financial activities (+17.2 percent), and leisure/hospitality (+17.0 percent). Employers had difficulty finding people to fill these positions as the 5.425 million hired workers during the month was down 86,000 from February and up a more modest 2.4 percent from a year earlier. Industries with strong year-to-year percentage gains in hiring included arts/entertainment/recreation (+26.0 percent), professional/business services (+13.5 percent), manufacturing (+12.7 percent), transportation/warehousing (+7.0 percent), and wholesale trade (+6.9 percent). 5.291 million people left their jobs during March, up 118,000 from February and 2.3 percent from a year earlier. This included 3.344 million people who quit their jobs (+6.4 percent from a year earlier) and 1.278 million people who were subject to a layoff (down 7.1 percent from March 2017).Job Openings and Hiring 2008-2018 051118

#2Consumer prices grew at a moderate rate in April. The Bureau of Labor Statistics reports that the Consumer Price Index (CPI) increased 0.2 percent on a seasonally adjusted basis during the month, up from a 0.1 percent decline in March and leaving the measure 2.5 percent ahead of its year-ago mark. Energy prices rebounded 1.4 percent during April following a 2.8 percent pullback in March (gasoline prices increased 3.0 percent). Food prices grew at their fastest rate in 13 months with a 0.3 percent advance (fruits/vegetables, eggs, beer, and dairy products leading the way). Net of energy and food, core CPI saw its smallest gain since last November with a 0.1 percent increase. Helping keep the core measure in check were declining prices for used cars/trucks (-1.6 percent), new vehicles (-0.5 percent), transportation services (-0.4 percent), and medical care commodities (-0.2 percent). Rising were prices for shelter (+0.3 percent), apparel (+0.3 percent) and medical care services (+0.2 percent).

#3Lower food prices lead to the smallest increase in wholesale prices of the year. The final demand measure of the Producer Price Index (PPI) grew a seasonally adjusted 0.1 percent during April following a 0.3 percent increase in March, per the Bureau of Labor Statistics. The core measure of wholesale prices—final demand PPI net of energy, food, and trade services—increased 0.1 percent following three monthly 0.4 percent gains. Final demand prices were unchanged during April as energy prices edge up 0.1 percent and food prices fell 1.1 percent (including a 17.8 percent drop in vegetable prices). Core final demand goods prices (net of energy and food) grew 0.3 percent for the third time in four months. Final demand PPI for services gained 0.2 percent, reflecting a 0.2 percent gain in trade services PPI and a 0.6 percent jump in transportation/warehousing prices. Over the past year, final demand PPI has grown 2.6 percent while the core measure (net of energy, food, and trade services) has increased 2.5 percent.

#4Small business owner confidence held firm in April. The Small Business Optimism Index eked out a 1/10th of a point gain to a seasonally adjusted reading of 104.8 (1986=100). This was the 17th consecutive month in which the National Federation of Independent Business’s measure was above a reading of 100. Four of ten index components gained during the month: earnings trends (up three points), plans to make capital outlays (up three points), current inventories (up two points), and expected real sales. Three measures declined from their March readings: plans to increase employment (down four points), expected economic conditions (down two points), and whether it is a good time to expand (off a single point). The press release claims that “[n]ever in the history of this survey have we seen profit trends so high.”

#5Consumers took on debt at a slower pace in March. The Federal Reserve reports that outstanding consumer credit balances (net of mortgages and other real estate backed debt) grew by $11.7 billion during the month to a seasonally adjusted $3.875 trillion. This was smaller than the $13.6 billion advance during February and left outstanding debt balances up 5.0 percent over the past year. Revolving credit balances (e.g., credit cards) contracted by $2.6 billion to $1.027 trillion (+4.8 percent versus March 2017). Nonrevolving credit balances (including college and auto loans) increased by $14.2 billion to $2.848 trillion. This represented a 5.1 increase from the same month a year earlier.

Other U.S. economic data released over the past week:
Jobless Claims (week ending May 5, 2018, First-Time Claims, seasonally adjusted): 211,000 (Unchanged vs. previous week; -26,000 vs. the same week a year earlier). 4-week moving average: 216,000 (-11.7% vs. the same week a year earlier).
Import Prices (April 2018, All Imports, not seasonally adjusted): +0.3% vs. March 2018, +3.3% vs. April 2017. Nonfuel Imports: +0.2% vs. March 2018, +1.8% vs. April 2017.
Export Prices (April 2018, All Exports, not seasonally adjusted): +0.6% vs. March 2018, +3.8% vs. April 2017. Nonagricultural Exports: +0.7% vs. March 2018, +4.0% vs. April 2017.
U. of Michigan Consumer Sentiment (May 2018-preliminary, Index of Consumer Sentiment, seasonally adjusted): 98.8 (vs. April 2018: 98.8, vs. May 2017: 97.1).
Wholesale Inventories (March 2018, Inventories of Merchant Inventories, seasonally adjusted): $627.4 billion (+0.3% vs. February 2018, +5.5% vs. March 2017).
Monthly Treasury Statement (April 2018, Federal Government Budget Surplus/Deficit): +$214.3  Billion (vs. April 2017: +$176.3 billion).  The deficit over 1st 7 months of FY2018: -$385.4 billion (vs. 1st 7 months of FY2017: -$344.4 billion).
Senior Loan Officer Opinion Survey (April 2018).

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

Job Openings Fall, Remain Near Record High: April 9 – 13

There were fewer available jobs in February, although employers continued struggling to fill openings. Here are the five things we learned from U.S. economic data released during the week ending April 13.  

#1The number of job openings shrinks from its all-time high while hiring slightly edged down. The Bureau of Labor Statistics estimates that there were a seasonally adjusted 6.052 million job openings on the final day of February, down 176,000 from January’s 6.228 million openings (itself a data series record) but still 7.7 percent ahead of its February 2017 count. Private sector employers were searching to fill 5.476 million jobs at the end of February, 7.0 percent more than they had been seeking a year earlier. Industries with large percentage year-to-year increases in job openings included transportation (+46.0 percent), state/local governments (+24.0 percent), retail (+21.9 percent), manufacturing (+21.0 percent), construction (+16.0 percent), and finance/insurance (+12.8 percent). Employers hired 5.507 million people during February, down 33,000 from January but still up 4.6 percent from a year earlier. Private sector employers expanded payrolls by 5.161 million workers, a 5.0 percent improvement from a year earlier. Industries with large year-to-year percentage gains in payrolls included manufacturing (+27.9 percent), finance/insurance (+19.2 percent), professional/business services (+12.4 percent), and health care/social assistance (+6.4 percent). Fewer workers left their jobs during February, declining 127,000 from the prior month to 5.192 million (+3.2 percent versus February 2017). This included 3.210 million people who quit their jobs (+6.4 percent versus February 2017) and 1.647 million who were laid off (-0.6 percent versus February 2017).job openings and hiring 041318

#2Core consumer prices remained on target even as gasoline prices fell in March. The Bureau of Labor Statistics’ Consumer Price Index (CPI) slipped 0.1 percent on a seasonally adjusted basis during the month but was still 2.4 percent ahead of year-ago levels. Energy prices slumped 2.9 percent as gasoline prices dropped 4.7 percent. Food prices eked out a 0.1 percent gain. Netting out both energy and food, core CPI increased 0.2 percent during March and has risen 2.1 percent over the past year. Rising were prices for medical care services (+0.5 percent), shelter (+0.4 percent), transportation services (+0.2 percent), and medical care commodities (+0.1 percent). Prices fell during the month for apparel (-0.6 percent) and used cars/trucks (-0.3 percent).

#3Wholesale prices had a sizable gain for the second time in three months. The final demand Producer Price Index (PPI) grew by a seasonally adjusted 0.3 percent during March following a 0.2 percent bump in February and a 0.4 percent increase in January. Final demand PPI net energy, food, and trade services (a measure of core wholesale prices) rose 0.4 percent for a third consecutive month. Food PPI jumped 2.2 percent while energy PPI slumped 2.1 percent. Net of energy and food, core wholesale goods prices increased 0.3 percent. PPI for final demand services gained 0.3 percent, with rising wholesale prices for in transportation/warehousing (+0.6 percent) and trade services (+0.3 percent). Over the past year, final demand PPI has jumped 3.0 percent while wholesale prices net of energy, food, and trade services have risen 2.9 percent.

#4Small business owner optimism chilled slightly in the March winds. The Small Business Optimism Index from the National Federation of Independent Business lost 2.9 points during the month to a seasonally adjusted 104.7 (1986=100). Even with the decline, this was the 16th straight month in which the measure was above a reading of 100.0. Eight of ten components to the index lost ground from their February readings, including significant drops for future expectations for the economy, expected real sales, and whether it was a good time to expand. Only two index components—plans to increase employment and current job openings—improved in March. The press release noted that March index reading was “among the 20 best in survey history.”

#5Wholesale inventories swelled in February. Merchant wholesalers expanded their inventories 1.0 percent during the month to a seasonally adjusted $625.6 billion, per the Census Bureau. Wholesale inventories have grown 5.5 percent over the past year. Inventories of durable goods jumped 1.7 percent during February to a seasonally adjusted $240.5 billion (+8.6 percent versus February 2017), including gains for furniture (+4.5 percent), metals (+4.4 percent), machinery (+3.9 percent), and automobiles (+1.4 percent). Nondurable goods inventories expanded by a more modest 0.4 percent to $255.4 billion (+5.2 percent versus February 2017), including sizable gains for apparel (+5.0 percent), farm products (+3.3 percent), alcohol (+2.4 percent), and chemicals (+2.0 percent). The wholesale inventory-to-sales (I/S) ratio held firm during the month at 1.26. This I/S ratio for durable goods shrank by one basis point to 1.58 while that for nondurables inched up by a basis point to 0.96.

Other U.S. economic data released over the past week:
Jobless Claims (week ending April 7, 2018, First-Time Claims, seasonally adjusted): 233,000 (-9,000 vs. previous week; -3,000 vs. the same week a year earlier). 4-week moving average: 230,000 (-7.0% vs. the same week a year earlier).
Import Prices (March 2018, All Imports, not seasonally adjusted): Unchanged vs. February 2018, +3.6% vs. March 2017. Nonfuel imports: +0.2% vs. February 2018, +2.1% vs. March 2017.
Export Prices (March 2018, All Exports, not seasonally adjusted): +0.3% vs. February 2018, +3.4% vs. March 2017. Nonagricultural exports: -0.1% vs. February 2018, +3.4% vs. March 2017.
Monthly Federal Treasury Statement (March 2018, Budget Surplus/Deficit): -$208.7 billion. First 6 months of FY2018: -$599.7 billion (vs. First 6 months of FY2017: -$526.9 billion).
University of Michigan Consumer Sentiment (April 2018-preliminary, Index of Consumer Sentiment, seasonally adjusted): 97.8 (vs. March 2018: 101.4, vs. April 2017: 97.0).
FOMC Minutes

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

Manufacturing Grows, Retail Sales Pause: March 12 – 16

Moderate winter weather appears to have boosted manufacturing in February, less so for retail. Here are the five things we learned from U.S. economic data released during the week ending March 16.  

#1Manufacturing grew at its fastest pace in four months during February. The Federal Reserve reports that manufacturing output increased a seasonally adjusted 1.1 percent during the month, after having contracted 0.2 percent during the prior month. Manufacturing production has expanded 2.5 percent over the past year. The rebound in manufacturing was widespread with durable goods output jumping 1.8 percent in February while that for nondurables gaining 0.7 percent in February. There were output jumps of at least one percent in orders for business equipment, defense/space equipment, and construction supplies. Overall industrial production increased 1.1 percent during February as mining jumped 4.3 percent (due to improvements in gas/oil extraction and coal mining) and utilities output slumped 4.7 percent (with more moderate weather lessening the demand for heating). Overall capacity utilization hit a three-year high at 78.1 percent (up 7/10ths of a percentage point for the month) while utilization in manufacturing jumped by 9/10ths of a percentage point to 76.9 percent.Capacity Utilization 031618.png

#2Retail sales sputtered for a third straight month. The Census Bureau estimates retail and food services sales slipped 0.1 percent during February to a seasonally adjusted $492.0 billion. This was 4.0 percent ahead of the year-ago sales pace. Dragging down the headline number were slumping sales at auto dealers and parts stores (-0.9 percent). Net of vehicles/parts, retail sales increased 0.2 percent during the month and were 4.4 percent ahead of February 2017 sales. Sales grew at retailers focused on sporting goods/hobbies (+2.2 percent), building materials (+1.9 percent), and apparel (+0.4 percent). Sales also inched up 0.2 percent at restaurants/bars. Falling were sales at gas stations (-1.2 percent), department stores (-0.9 percent), furniture retailers (-0.8 percent), health/personal care retailers (-0.4 percent), and grocery stores (-0.2 percent). Immune from the sluggish activity were nonstore retailers (e.g., web retailers) where sales gained 1.0 percent during February and have risen 10.1 percent over the past year.

#3Inflation cooled off in February. The Consumer Price Index (CPI) gained 0.2 percent on a seasonally adjusted basis after having risen 0.5 percent in January, per the Bureau of Labor Statistics. The slower pace of inflation resulted from lower prices for gasoline (-0.9 percent) and fuel oil (-3.6 percent) after having surged during the previous month. As a result, energy CPI grew by only 0.1 percent after a 3.0 percent bump in January. Food CPI was unchanged for the month. Net of energy and food, core CPI increased 0.2 percent (after a 0.3 percent gain in January). Rising were prices for apparel (+1.5 percent), transportation services (+1.0 percent), and shelter (+0.2 percent) while losing stream were prices for new vehicles (-0.5 percent), used cars (-0.3 percent), and medical care commodities (-0.3 percent). Over the past year, consumer prices have risen 2.2 percent while core CPI has grown 1.8 percent.

The Producer Price Index (PPI) for final demand sliced in half its increase from January with a 0.2 percent gain during February. Net of food, energy and trade services, core PPI increased 0.4 percent, matching its January gain. Reversing course was PPI for final demand goods, dropping 0.1 percent after having surged 0.7 percent during the previous month. Wholesale prices for both energy (-0.5 percent) and food (-0.4 percent) declined, but PPI net of energy and food grew 0.2 percent. PPI for final demand services gained 0.3 percent (matching January’s increase), featuring a 0.9 percent bump in prices for transportation/warehousing services. Final demand PPI has risen 2.8 percent over the past year with a still robust +2.7 percent 12-month comparable after removing the impact of energy, food, and trade services.

#4The number of unfilled job openings grew ever larger in January. There were a seasonally adjusted 6.312 million job openings on the final day, surging by 645,000 from December and 15.9 percent from a year earlier. This is the greatest number of job openings measured since the start of the Bureau of Labor Statistics measure in 2000. The report shows that there were 5.751 private sector job openings at the end of January, up 608,000 from December and 15.7 percent from January 2017. Industries with the largest year-to-year percentage increases in job openings included transportation (+63.1 percent), construction (+57.2 percent), retail (+28.6 percent), leisure/hospitality (+20.8 percent), government (+18.4 percent), professional/business services (+17.2 percent), wholesale trade (+17.2 percent), and manufacturing (+17.0 percent). Hiring grew at a far more modest pace, increasing by 59,000 to 5.583 million jobs (+2.3 percent versus January 2017) while private sector hiring gained 71,000 to 5.244 million jobs (+2.7 percent versus January 2017). Industries with the greatest percentage year-to-year gains in hiring included manufacturing (+16.9 percent), professional/business services (+6.5 percent), health care/social assistance (+4.8 percent), and retail (+4.2 percent). More people left their jobs during January, growing by 95,000 during the month to 5.409 million people (+3.5 percent versus January 2017). The number of people quitting their jobs slipped by 69,000 to 3.271 million workers (+3.2 percent versus January 2017) while layoffs grew by 107,000 to 1.762 million (+6.2 percent versus January 2017).

#5Housing starts slowed in February, especially for multifamily units. The Census Bureau places the seasonally adjusted annualized rate of housing starts at 1.236 million units, down 7.0 percent from the prior month and 4.0 percent behind the year-ago pace. The decline was solely on the multifamily side of the market (e.g., condos), where starts plummeted 28.0 percent during February. Single-family home starts increased 2.9 percent during the month (and from a year earlier) to 902,000 units. Less sanguine was the count of issued building permits, which dropped 5.7 percent during the month to an annualized rate of 1.298 million (+6.5 percent versus February 2017). Permits for multifamily units slumped 14.6 percent during the month while the decline for single-family home permits was a much more modest 0.6 percent. Rising was the annualized count of completed homes, jumping 7.8 percent to 1.319 million homes. This was 13.6 percent ahead of its February 2017 pace. 

Other U.S. economic data released over the past week:
Jobless Claims (week ending March 10, 2018, First-Time Claims, seasonally adjusted): 226,000 (-4,000 vs. previous week; -20,000 vs. the same week a year earlier). 4-week moving average: 221,500 (-9.1% vs. the same week a year earlier).
Import Prices (February 2018, All Imports, not seasonally adjusted): +0.4% vs. January 2018, +3.5% vs. February 2017. Nonfuel imports: +0.5% vs. January 2018, +2.1% vs. February 2017.
Export Prices (February 2018, All Exports, not seasonally adjusted): +0.2% vs. January 2018, +3.3% vs. February 2017. Nonagricultural exports: +0.2% vs. January 2018, +3.6% vs. February 2017.
Small Business Optimism (February 2018, Optimism Index (1986=100), seasonally adjusted): 107.6 (highest since 1983) (vs. January 2018: 106.9; February 2017: 105.3).
Housing Market Index (March 2018, Index (>50=”Good” Housing Market, seasonally adjusted): 70 (February 2018: 71, March 2017: 71).
Monthly Treasury Statement (February 2018, Surplus/Deficit): -$215.2 billion (vs. February 2017: -$192.0 billion). First 5 months of FY18: -$391.0 billion (vs. first 5 months of FY17: -$350.6 billion).
Business Inventories (January 2018, Manufacturers’ and Trade Inventories, seasonally adjusted): $1.917 trillion (+0.6% vs. December 2017, +3.7% vs. January 2017).
University of Michigan Consumer Sentiment (March 2018-preliminary, Index (1966Q1=100), seasonally adjusted): 102.0 (vs. February 2018: 99.7, vs. March 2017: 96.9).
Treasury International Capital Flows (January 2018, Net Foreign Purchases of Domestic Securities, not seasonally adjusted): +$63.2 billion (vs. December 2017: +$31.0 billion, vs. January 2017: +$17.1 billion.
State Employment (January 2018, Change in Nonfarm Payrolls, seasonally adjusted):  Vs. December 2017: 3 states had significant increases in payrolls 1 had a significant decrease. Vs. January 2017: 21 states had payrolls increases.

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