Sunday, April 6, 2014

March employment; February trade, factory orders, construction spending, et al..

We Add 192,000 Mostly Low Paying Jobs in March

it should go without saying that the most important economic release the past week was the March Employment Situation Summary, covering the two surveys taken during the week of the 12th, the establishment survey, aka the Current Employment Statistics (CES), of roughly 26% of all businesses and government agencies nationwide, and the household survey, also known as the Current Population Survey (CPS), of roughly 60,000 representative households...in March, seasonally adjusted data derived from the establishment survey indicated that non-farm payroll employment rose by 192,000 to 137,928,000, a little less than what was expected and close to the slow monthly job creation trend of the past two years; in addition, non-farm payroll gains for February were revised to a seasonally adjusted 197,000 jobs from the previously reported 175,000, and January's job increase was revised upwards again, from 129,000 to 144,000...these changes are all incorporated into the FRED bar graph below, which shows the number of payroll jobs gained monthly above the '0' line and job losses below the line since the beginning of 2008...a number of commentators mentioned that this report finally marks the recovery of all the jobs lost in 2008 and 2009, not withstanding the increases in the working age population over the past 6 years....the unadjusted data indicates 743,000 jobs were added in February and another 941,000 in March to bring actual employment at month end to 137,135,000, as seasonal hiring has begun in some parts of the country...

March 2014 nonfarm payrolls

the seasonally adjusted job gains in March were widespread across most sectors, with only manufacturing showing a net reduction of 1,000 jobs, as non-durable manufacturing industries lost 9,000 jobs, 4,600 of which were in food production...the large professional and business services sector added 57,000 jobs in March, exactly half of which were in temporary help services, with computer systems design also seeing the addition of 6,100 jobs...another 34,000 jobs were added in the broad education and health services category, 27,000 of which were in health care and social assistance; of those, 8,500 were in home health care services, while nursing care facilities cut 5,200...in addition, 29,000 jobs opened up in leisure and hospitality with an increase of 30,400 working at food services and drinking places, while 21,300 jobs were added in retail sales with the addition of 9,000 employees at food and beverage stores...meanwhile, 7,100 jobs were added in wholesale trade as durable goods wholesalers added 10,000 with small job losses elsewhere, and 7,900 were added in transportation and warehousing with the addition of 3.300 truck drivers...construction employment rose by another 19,000, 6,000 of which were in residential specialty trades, and the mining and logging sector also added 7,000 jobs, 5,400 of which were in support activities for mining...elsewhere, the information industry added 2,000 jobs, financial activities added 1,000 as gains in real estate offset jobs losses elsewhere, and overall jobs in government sector were unchanged as federal employment fell by 9,000, state employment fell by 2,000, and local governments added 11,000 workers...

the screenshot of our FRED bar graph below shows the seasonally adjusted monthly change in payroll employment in selected sectors since the beginning of 2013, with the scale on the left indicating the increase of payroll jobs in thousands when the colored bar for that sector extends upwards, and the decrease in jobs in thousands in that sector when its bar points downwards…in each monthly grouping of 8 bars, the monthly change in manufacturing employment for that month is indicated in blue, the change in monthly construction employment is in red, the monthly change in retail employment is in dark green, the monthly change in government jobs is in yellow, the change in employment in the large professional and business services sector, which could be anything from a manager to a janitor, is in grey, while the change in jobs in bars and restaurants is in light green, health care jobs are in orange, with private education jobs shown in violet..a 1000 pixel interactive of this graph should be available at the FRED website, where you'll be able to step through the data for each job type by moving your cursor across the graph, or expand the view with the slider on the bottom to take in more months...

March 2014 selected payroll jobs

other data from the establishment survey indicated that the average workweek for all payroll employees recovered to 34.5 hours in March after falling to 34.3 over January and February while the average workweek for production and nonsupervisory employees similarly recovered to 33.7 hours after previously falling to 33.4 hours....the manufacturing workweek increased by 0.4 hours to 42.0 hours, and factory overtime rose by 0.1 hour to 3.5 hours......the average hourly pay for all workers, however, fell a penny to $24.30, as construction, leisure and hospitality, and education and health service sectors all saw their pay drop by 4 cents an hour or more while the data showed utility workers saw a drop of 41 cents an hour in their pay...excluding management, average pay for nonsupervisory workers was down 2 cents to $20.47, with hourly pay cuts for line employees in those sectors somewhat more modest...

Labor Force Participation up 0.2% in March on 476K Jump in Employed

meanwhile, the returns from the March household survey improved considerably from the weakness we saw in February, as it showed a 476,000 seasonally adjusted increase in those reporting they were employed, while the extrapolated count of the unemployed rose by 27,000...with that corresponding 503,000 increase in the civilian labor force, the labor force participation rate rose 0.2% from 63.0% to 63.2%, and as the working age population rose by 173,000, the employment rate, also known as the employment to population ratio, also rose by 0.1% to 58.9%...thus, the count of those not in the labor force fell by 331,000, it's third consecutive decline after hitting an all time high of 91,808,000 in December... however, with greater participation in the labor force, the unemployment rate remained unchanged at 6.7%, although we should note with the small sampling in this survey, there's a margin of error in the unemployment rate of +/- 0.2%, while the margin of error in the count of the unemployed is +/- 300,000....also note that the unadjusted household data showed a 956,000 increase in those employed, while the count of the unemployed fell 356,000…the screenshot of our FRED graph below shows the track of the two metrics from this survey that we follow since 2000; the labor force participation rate is in red and the employment-population ratio is in blue...it's fairly obvious even without checking the interactive version of this graph that both metrics are off their recent lows...

March 2014 household survey metrics

of the seasonally adjusted total of 145,742,000 of us who counted as being employed in March, 27,695,000 were reported as working part time, or less than 34 hours in the reference week, an increase of 365,000 part time workers over February's count...of those, the count of those working part time who would rather work full time rose by 225,000 to 7,411,000, and thus the alternative measure of unemployment, U-6, which includes those "employed part time for economic reasons", rose by 0.1% to 12.7%...meanwhile, the number of us unemployed for more than 27 weeks fell by 110,000 to 3,739,000 and the average length of time of unemployment for those jobless fell from 37.1 weeks to 36.6 weeks...among the 91,630,000 of us not officially in the labor force and hence not counted as unemployed, 5,891,000 reported that they still want a job, down from 6,091,000 in February; of those, 2,168,000 were categorized as "marginally attached to the labor force" because they had looked for work sometime during the last year, but not during the 30 day period covered by the March survey...698,000 of those were further characterized as "discouraged workers", because they reported that they haven't looked for work because they believe there are no jobs available to them...and of course, those who don't look for work aren't counted as unemployed..

February Trade Deficit Jumps 7.7% on Lower Exports of Gold, Petroleum Products, and Passenger Jets

the other important release of this past week was the report on our International Trade in Goods and Services for February from the Commerce Department, which showed our seasonally adjusted trade deficit jumped $3.0 billion in February to $42.3 billion, while January's trade deficit was also revised upwards from $39.1 billion to $39.0 billion...our seasonally adjusted exports decreased $2.0 billion to $190.4 billion as our exports of goods decreased $2.0 billion to $131.7 billion while our exports of services was nearly unchanged at $58.7 billion, and our imports of goods increased $1.0 billion to $232.7 billion as our imports of good rose $0.2 billion to $193.4 billion, while our imports of services increased $0.8 billion to $39.3 billion; the later was accounted for by an $0.8 billion increase in royalties and license fees, mostly for the rights to broadcast the Winter Olympics...the screenshot of our FRED bar graph below shows the monthly change in exports in blue and the monthly change in imports in red over the past two years, with the net of them resulting in the change in the balance of trade, which is shown in brown...each group of three bars represents one month’s of trade data, with positive changes above the ‘0’ line and negative changes below it; note that when exports (blue) increase in a given month, they add to the trade balance change in brown; and when exports decrease, they subtract from the brown trade balance bar, while the action of imports on the balance is just the reverse, ie, when imports increase in a given month, they subtract from the brown trade balance for the month, but when imports decrease, the balance of trade rises as a result…the interactive version of this bar graph at FRED loads with 20 years of trade data, which you can view monthly by moving your cursor across the graph, or use the sliders across the bottom of the graph to adjust the time period viewed...

Feb 2014 balance of trade 1
end use categories of exports that saw seasonally adjusted decreases in February included industrial supplies and materials, which were down by $2,667 million on $1,207 million less exports of non-monetary gold, $851 million less exports of petroleum products other than fuel oil, and a $277 million decline in exports of fuel oil, and also $894 million less exports of capital goods, which was entirely accounted for by the $904 decrease in exports of civilian aircraft; exports which increased in February included consumer goods, which rose $1,187 million on a $471 million increase in exports of pharmaceuticals, $441 million more gem diamond exports, and $365 million more exports of jewelry, and exports of other goods not categorized by end use rose $636 million...exports of automotive vehicles, parts, and engines also rose by $96 million, while exports of foods, feeds, and beverages rose by just $18 billion as small increases in several line items were offset by a $250 million decrease in soybean exports...

end use categories of imports that saw seasonally adjusted increases for the month included vehicles, parts, and engines, which rose by $1,003 million to $25,886 million, consumer goods, which increased by $122 million on a $572 million increase in imports of pharmaceuticals and a $177 million increase in imports of cotton apparel and household goods, which were partially offset by $184 million lower imports of artwork and antiques, $163 million less imports of furniture and similar household goods, and $162 million lower imports of televisions and video equipment, and other goods not categorized by end use, imports of which rose $58 million...on the other hand, our imports of capital goods decreased by $1,157 million on $596 million less computer imports, $331 less imports of computer accessories, and $204 lower imports of telecommunications equipment, and our imports of industrial supplies were $307 million lower on an $845 million decrease in imports of crude oil, which more than offset increases of $337 million in fuel oil imports and $336 more natural gas imports, and our imports of foods, feeds, and beverages fell $51 million as a $89 million decrease in imports of in alcoholic beverages, $70 million less imports of feedstuffs and foodgrains, and $70 million less of food oils and oilseeds were offset by $149 greater imports of cocoa beans and $74 million more in imported meat products....

in other reports, the week began with a number of manufacturing surveys...on Monday, the Chicago Institute for Supply Management released the results of their survey of Midwest purchasing managers and found their overall Business Barometer decreased 3.9 points in March to 55.9, the lowest reading since last August, led by a decline in new orders, while their employment index fell from 59.3 to 50.0, indicating no growth; for the 1st quarter, the Chicago Business Barometer averaged 58.4, down from 63.3 in the 4th quarter of last year, indicating slower growth...also on Monday, the Dallas Fed reported that Texas Manufacturing Strengthened Further, as their general business activity index rose to a six-month high of 4.9 as their new orders index rose to a nine-month high of 14.7, wherein readings above zero indicated expansion...then on Tuesday, the two national Purchasing Managers' Indexes (PMIs) were released; the Institute for Supply Management (ISM) reported their PMI was at 53.7% in March, up from 53.2% in February, as its components all indicated modest growth; the employment index slipped to 51.1%, down from 52.3%, the new orders index rose to 55.1%, up from 54.5% in February, and the production index rose to 55.9%, a 7.7% jump from February's reading of 48.2%...meanwhile, the Markit US Manufacturing PMI for March (pdf) fell to from 57.1 in February to 55.5, a reading that still indicated expansion, as their output index fell from 57.8 to 57.5 and the new orders index fell from 59.6 to 58.1...on Thursday, the ISM released their Non-Manufacturing Index (NMI) for March, which came in at 53.1%, rebounding from the four year low of 51.6% in February, indicating that a modest expansion of service industries had resumed..

the hard data on manufacturing came from the February Full Report on Manufacturers’ Shipments, Inventories and Orders (pdf) from the Census bureau, more commonly referred to as just "factory orders", which reported that seasonally adjusted new orders for manufactured goods increased $7.5 billion, or 1.6% in February to $488.8 billion, while January's decrease in new orders was revised from 0.7% to 1.0%...like last week's advance report on durable goods, the increase in new orders was driven by the volatile new orders for civilian aircraft, which rose 13.4% in February, revised slightly from the 13.6% gain reported last week, although the 2.2% increase in durable goods orders overall was unrevised ...excluding the transportation sector, new factory orders rose 0.7% for the month, as new orders for non-durable goods rose 1.0% to $259.7 billion...meanwhile, factory shipments increased $4.5 billion or 0.9% to $493.5 billion, nearly recovering the pullbacks of 0.3% in December and 0.7% in January shipments, while factory inventories increased $4.1 billion or 0.7% to a new record high at $642.1 billion; inventories of transportation equipment, which were up $1.9 billion or 1.6% to $125.1 billion, led the increase...and despite the recent weakness in new orders, unfilled orders for manufactured goods rose for the 12th month of the last 13 months by 0.3% to $1,062.5 billion, also a new record high for unfilled factory orders....and in a separate report on Tuesday, light vehicle sales rose to an estimated seasonally adjusted annual rate of 16.38 million in March, a seven year high, 7.2% over February's sales and 7.3% above sales a year ago...the graph below, from Bill McBride’s coverage, shows new vehicle monthly since January of 2006; the slow climb in car sales from an annual rate below 10 million in early 2009 to the precession level currently is readily apparent…

March 2014 vehicle sales

also on Tuesday, the Census bureau reported on Construction Spending for February (pdf), a preliminary report that is often subject to revision... during February, construction spending was estimated to be at a seasonally adjusted annual rate of $945.7 billion, which would be 0.1% (±1.3%)* above the revised January estimate of $944.6 billion, and 8.7 percent (±1.6%) above construction spending estimate of last February...January's construction was revised up more than 0.1% from the originally reported $943.1 billion...both private and public spending increased by the same small fraction of a percent; private construction was at a seasonally adjusted annual rate of $680.0 billion, up 0.1% from the revised January estimate of $679.1 billion, while public construction spending was estimated at a seasonally adjusted annual rate of $265.7 billion, also 0.1% above the revised January estimate of $265.5 billion...private residential construction fell from an annual rate of 363,215 million in February to a $360,352 million rate in March, while private non-residential spending rose from a $315,843 million annual rate to a $319,626 million rate...for the year preceding this report, private residential construction rose 13.5%, private non-residential construction rose 12.5%, and public construction was down 1.0%...

(the above is the commentary that accompanied my regular sunday morning links emailing, synopses which in turn were mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links that accompanies these commentaries, most from the aforementioned GGO posts, contact me…)

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