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.

One More Look at September Labor Market Trends: November 6 – 10

The latest Job Openings and Labor Turnover report finds hiring slowed during September. Here are the five things we learned from U.S. economic data released during the week ending November 10.

#1The pace of hiring slowed a bit in September even with the number of job openings remaining at record highs. The Bureau of Labor Statistics indicates that employers had a seasonally adjusted 6.093 million job openings at the end of September, up a mere 3,000 from August but 7.5 percent ahead of the year-ago count. Industries with substantially large year-to-year percentage gains in job openings included wholesale trade (+31.4 percent), manufacturing (+30.4 percent), transportation (+21.8 percent), and health care/social assistance (+9.8 percent). On the other hand, both the federal government (-20.6 percent) and retailers (-2.7 percent) reported having fewer open positions than they did back in September 2016. Employers hired a seasonally adjusted 5.273 million workers during September, down 147,000 from August but still up 1.8 percent from the September 2016 count. Hiring rose over the past year in manufacturing (+20.2 percent), construction (+18.9 percent), financial activities (+9.6 percent), and health care/social assistance (+6.8 percent). Hiring fell versus a year earlier in retail (-9.2 percent) and the government (-4.6 percent). 5.240 million people left their jobs during September, off 33,000 from August but still 6.0 percent ahead of the year-ago pace. The number of people who had quit their job increased by 89,000 during the month to 3.182 million (+3.4 percent versus September 2016) while layoffs slowed by 78,000 to 1.703 million (+12.3 percent versus September 2016).job openings and hiring-2003-2017 111017

#2Wholesalers added to their inventories add a slower rate during September as sales jumped. The Census Bureau reports that merchant wholesaler inventories grew 0.3 percent during the month to a seasonally adjusted $609.5 billion. While this was down from August’s 0.8 percent gain, it leaves wholesale inventories up 4.6 percent from September 2016 levels. Stockpiles of durables expanded 0.3 percent during September while those of nondurables increased 0.4 percent. Wholesaler sales surged 1.3 percent during September—following a 1.9 percent gain in August—to a seasonally adjusted $480.5 billion (+8.5 percent). Durable goods sales jumped 0.7 percent during the month while those of nondurables rose 1.8 percent (including a 12.6 percent surge in petroleum sales).

#3Layoff activity remained muted during the first days of November. The Department of Labor estimates there were a seasonally adjusted 239,000 first-time claims made for unemployment insurance benefits during the week ending November 4. This was up 10,000 from the prior week but down 11,000 from the same week a year ago. The four-week moving average of first-time claims slipped by 1,250 to 231,250. The four-week moving average was 9.7 percent below that of the same week a year ago. During the week ending October 21, 1.639 million people were receiving some form of unemployment insurance benefits, 8.1 percent below the count receiving the same during the same week a year earlier.

#4Consumers added to their debt load in September. Per the Federal Reserve, consumers had a seasonally adjusted $3.788 trillion in outstanding consumer debt (not including mortgages and other real estate backed debt) at the end of September, this was up $20.8 billion from August and 5.6 percent from a year earlier. Nonrevolving debt balances (e.g., auto and college loans) jumped by $14.4 billion to $2.782 trillion (+5.6 percent versus September 2016). Revolving debt balances (e.g., credit cards) crossed over the trillion dollar mark for the first time at $1.006 trillion. This represented a $6.4 billion bump up from August and was 5.6 percent ahead of year-ago levels.

#5Bankers report easing leading standards to their commercial customers during Q3. A “modest net percentage” of banks responding to the Federal Reserve’s October 2017 Senior Loan Officer Opinion Survey on Bank Lending Practices indicated that they had eased lending standards for the commercial and industrial (C&I) loans in recent months. These “eased” standards took the form of expanded credit lines, lower costs for credit lines, narrowed spreads of loan rates over the banks’ cost of funds, eased loan covenants, and lower interest spreads. Increased competition among lenders was the most significant driver for the relaxed lending standards to commercial borrowers. Banks were more likely to have maintained their current lending standards for their residential real estate loan offerings while tightening standards and terms on credit cards and car loans. Demand for residential real estate loans, credit cards, and auto loans all have weakened during the past quarter.

Other U.S. economic data released over the past week:
University of Michigan Index of Consumer Sentiment (November 2017-preliminary, Index (1966Q1=100, seasonally adjusted):  97.8 (vs. October 2017: 100.7; November 2016: 93.8).

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

Americans’ Confidence Higher Now Than It Has Been in Over a Decade: What We Learned During the Week of December 26 – 30

The final holiday gift was a report that consumer sentiment surged during the last 2 months of 2016. Here are the 5 things we learned from U.S. economic data released during the week ending December 30.

#1Another measure of consumer sentiment jumped in December. The Conference Board’s Consumer Confidence Index added 4.3 points during the month to a seasonally adjusted reading of 113.7 (1985 = 100). This follows an 8.5 point bump in November and puts the measure at its highest reading in nearly 15 years. The expectations index surged by 11.1 points during the month to a reading of 105.5 (its highest point in 13 years) while the present conditions index shed 5.9 points to a reading of 126.1. The percentage of survey respondents who expect business conditions will improve over the short-term surged from 16.4% in November to 23.6% in December. Only 8.7% of survey respondents anticipate economic conditions will deteriorate in the coming months. The press release noted that older survey respondents were more likely to have had a “post-election surge in optimism for the economy, jobs and income prospects” while also pointing out that the high level of confidence will continue depending “on whether or not their expectations are realized.” Last week we learned that another confidence survey–the University of Michigan’s Index of Consumer Sentiment–also has surged in the time since the election. That measure hit a 13-year high in December.

#2One reason: the pace of layoffs remained slow for all of 2016. The Department of Labor reports that there were a seasonally adjusted 265,000 first-time claims made for unemployment insurance benefits during the week ending December 24. This was down 10,000 claims from the week before and 20,000 claims under the count from the same week a year earlier. First-time jobless claims have been below 300,000 for an impressive 95 consecutive weeks, a streak not seen for more than 45 years. The 4-week moving average for first-time jobless claims slipped by 750 to 263,000 claims, 5.1% below the moving average of a year ago. 2.140 million people were receiving some form of unemployment insurance benefits during the week ending December 10, 8.4% below the count from the same week in 2015.jobless-claims-123016

#3Increasing interest rates may have sapped home sales activity in November. The National Association of Realtors’ Pending Home Sales Index (PHSI) lost 2.7 points during the month to a seasonally adjusted reading of 107.3 (2001 = 100). This was only off 0.4% from its November 2015 reading. The index fell in 3 of 4 Census regions during the month: West (-6.7%), Midwest (-2.5%), and South (1.2%). The PHSI edged up 0.6% during the Northeast.  There was a similar pattern for the 12-month comparables. That is, the index was below its November 2015 readings in the Midwest (-2.4%), South (-1.3%), and the West (-1.0%). The index, which measures home purchase contract signings, was up 5.7% in the Northeast versus its November 2015 mark. The press release blamed the decline in sales to a “quick ascension of [interest] rates immediately after the election” and tight inventories of homes “in the affordable price range.”

#4Home prices continued to rise in October. The 20-city Case-Shiller Home Price Index jumped 0.6% on a seasonally adjusted basis during the month following a 0.5% gain during September. Prices increased in all 20 metro areas tracked, led by Atlanta (+1.4%), Cleveland (+1.3%), Tampa (+1.2%), Dallas (+1.0%), and San Francisco (+1.0%). The index has grown 5.1% over the past year but remained 7.1% under the measure’s peak value attained back in July 2006. The national Case-Shiller index gained 0.9% on a seasonally adjusted basis and was 5.6% above its October 2015 reading. This measure of home prices was 0.2% above its pre-recession peak value from June 2006. The press release noted higher interest rates and home prices that are expected to “outpace gains in wages and personal income” could end up cooling off the housing market.

#5Wholesalers tightened inventories during October. The Census Bureau reports that inventories of merchant wholesalers contracted 0.4% during the month to a seasonally adjusted $587.7 billion. This was also 0.4% smaller than that reported for October 2015. Durable goods inventories contracted 0.3% during the month to $352.9 billion (-2.2% vs. October 2015), led by declines in inventories for machinery (-1.0%), metals (-1.0%), and hardware (-0.8%). Inventories of furniture jumped 1.6% during the month. Inventories of nondurables shrank 0.4% during the month to $235.8 billion (+2.5% vs. October 2015). Falling were inventories of drugs (-3.2%) and chemicals (-1.1%) while growing were inventories of petroleum (+1.9%) and alcohol (+1.0%). The inventory-to-sales (I/S) ratio slipped by 2-basis points to 1.30. The I/S ratio for October 2015 was 1.33. The I/S ratios for both durable (1.63) and nondurable (1.00) goods fell by 2-basis points during the month.

Other U.S. economic data released over the past week:
Agricultural Prices (November 2016, Prices Received by Farmers (Index: 2011 = 100), seasonally adjusted): 83.6 (+3.5% vs. October 2016, -8.9% vs. November 2015).

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