U.S. Economy Created 236,000 Jobs in March, Unemployment Rate Remained Steady at 3.5%… The jobs number was just above the estimate of 230,000.
What it means— The U.S. Bureau of Labor Statistics (BLS) revised down the job numbers from the last two months a total of 17,000. The numbers from March were the lowest since the surprise negative print in December 2020. Job growth is slowing across the board, as employment in industries and sectors such as hospitality and leisure climb to nearly pre-pandemic levels. Average hourly earnings rose 0.3% last month and are up 4.2% over the past year, which means workers still are losing ground to inflation. The average work week eased 0.1 hour to 34.4 hours, which also dings paychecks.
Overall, it was a Goldilocks report, not too hot and not too cold, which drove traders to push up their bets that the Fed will raise rates by 0.25% in May. With CPI reported next week and lots of data to analyze before the May meeting, that seems a bit premature. A pause in raising rates is still possible, but households reported employment at three times the 2016-2019 average.
Institute for Supply Management Manufacturing and Services Surveys Both Drop in March… The Institute for Supply Management (ISM) Manufacturing Survey fell from 47.7% to 46.3%, while the ISM Services Survey declined from 55.1% to 51.2%.
What it means— Manufacturing has been easing for more than a year as consumers switched their focus from goods to services, but the latest ISM Manufacturing Survey number is worrisome. It marks the fifth consecutive decline, and any reading less than 50% implies contraction. While the greater economy is not yet in a recession, manufacturing has been in one for months, and it’s getting worse. Unfortunately, we’re now seeing the services part of the economy follow suit.
While the ISM Services Survey remains above 50%, implying growth, it fell much more than the 0.8% expected drop. New orders fell more than 10 points to 52.2%, showing that clients, which include banks, hotels, restaurants, and retailers, are losing momentum with their customers. Perhaps almost three years of real median earnings losing ground finally is weighing on consumers.
The central bankers told us they wanted to destroy demand to bring down inflation. Well, they succeeded. Let’s see if they overshoot the mark and push us into a recession or if they step back from the edge of the economic cliff at their May meeting.
Job Openings Fall Below 10 million, Jobless Claims Climb to 228,000… Job openings fell below 10 million for the first time in almost two years, while jobless claims jumped. Both moves indicate a cooling economy.
What it means— For almost two years, we’ve been talking about the economy having roughly twice as many job openings as unemployed workers. Much of the mismatch was structural and geographic, with employers not finding workers with the right skills or in the right location to fill positions. The situation eased a bit last month when openings finally dropped below 10 million, but employment remains tight. The number of people who quit their jobs rose to four million. That implies strength, because the workers either have found other employment or are confident that they can.
Technically, jobless claims fell from a revised 246,000 to 228,000, but claims rose from the initial, unrevised total of 198,000. The Bureau of Labor Statistics (BLS) revised its seasonal adjustments, which added to the initial jobless claims during the first quarter of the year. Jobless claims bouncing around the range of 200,000 to 250,000 isn’t terrible, especially in a slowing economy. But it’s worth noting that the BLS overstated this weekly metric for months before revising the computation.
Continued claims, which represents those receiving benefits for more than one week, climbed above 1.8 million, the highest level since the end of 2021. Again, we’re still at a pretty low level overall, but it’s worth watching. Taken together, the falling job openings, higher (on an unrevised basis) jobless claims, and higher continued claims all point to the same thing as the falling ISM surveys, a slower economy.
Newlywed Indian Man Killed by Wedding Gift from Bride’s Ex That Was Packed with Explosives… Hemendra Merawi died after plugging in a sound system in his home that was a wedding gift from his new wife’s ex. The explosion collapsed the roof and walls of the home and also killed Merawi’s brother. The ex, Sarju Markum, was mad that the bride refused to marry him. She had left him after finding out that he was already married and wanted her to be his second wife. Markum threatened the woman repeatedly, demanding that she marry him. The explosive event was not the first time Markum had an altercation with Merawi concerning the woman. When questioned, Markum admitted that he planted the explosives and wanted to kill the couple. There’s no word on why the couple would accept a wedding gift from someone who had threatened them often.
Data supplied by HS Dent Research
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