Tag: JOLTs

Monday Economic Report – August 18, 2014

Here is the summary for this week’s Monday Economic Report:

While geopolitical events continue to provide significant downside risks to the economy, recent data suggest that manufacturers in the United States are faring better this summer. Manufacturing production increased 1.0 percent in July, helping to lift the year-over-year pace of manufacturing output to 4.9 percent, its fastest annual pace since June 2012. Last month’s gain stemmed largely from increased motor vehicle production, with all but three of the major manufacturing sectors notching higher output levels for the month. At the same time, the utilization rate for manufacturers increased to 77.8 percent, nearly reaching pre-recessionary capacity levels.

Similarly, the Empire State Manufacturing Survey reflected strong growth in August, albeit less so than the robust levels observed in July. More importantly, respondents to the New York Fed’s survey were significantly more upbeat, with roughly 60 percent anticipating higher sales and output over the next six months. This study also reported that approximately 30 percent of manufacturers in its district planned to hire more workers and invest in additional capital expenditures in the coming months. This is welcome news, and it was largely consistent with the recent pickup in the labor market. Manufacturing job openings increased in June to their highest level in two years, with net hiring also accelerating. Of course, we already knew that to some extent. The most recent employment data found that manufacturers hired an additional 22,000 workers on average from May to July.

Meanwhile, the European economy has shown signs of backtracking, with real GDP in the Eurozone remaining unchanged in the second quarter. Germany’s economy contracted by 0.2 percent, helping to push the continent’s growth figure lower, but Italy (also down 0.2 percent) and France (flat for the second straight quarter) were also weak. In addition, industrial production has decreased in three of the past four months, with output unchanged year-over-year. We will get our first look at August purchasing managers’ index (PMI) data this week. The Markit Eurozone Manufacturing PMI report in July provided mixed news, with activity expanding for 13 straight months but growth continuing to ease over the course of this year. The latest data suggest that Europe’s economic challenges are still not behind them.

To some extent, that is true in the United States as well. We have seen improvements in a number of economic indicators, and yet, there are also persistent worries about future growth. Some of this could stem from global anxieties, but it could also be a function of disappointment with the lack of growth in the first half of the year. Preliminary consumer sentiment data from the University of Michigan and Thomson Reuters appears to pick up on this nuance, with Americans less confident once again in their forward-looking expectations. Indeed, retail sales data also reflect cautiousness on the part of the consumer, with spending unchanged in June.

This week, we will get additional insights about the health of the manufacturing sector worldwide. In addition to new PMI data for Europe, Markit will also release flash reports for China, Japan and the United States. While China’s economy had begun to stabilize in July, last week we learned that Japan’s real GDP contracted by 1.7 percent in the second quarter, or 6.8 percent year-over-year. Closer to home, the Federal Reserve will release the minutes of its July 29–30 Federal Open Market Committee meeting. Analysts will be looking for clues about when the Fed plans to start normalizing short-term rates. The Fed received good news last week with an easing in producer prices in July from recent highs, and this should help to alleviate some of the immediate pressure from inflation hawks, at least for now. Other highlights this week include the latest data on consumer prices, housing starts and permits, leading indicators and Philadelphia Fed manufacturing sentiment.

Chad Moutray is the chief economist, National Association of Manufacturers. 

manufacturing production - aug2014

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Manufacturing Job Postings Increased in June to Highest Level in Two Years

The Bureau of Labor Statistics said that manufacturing job openings increased for the fourth straight month in June, rising to its highest level since June 2012. After bottoming out at 203,000 job postings in June 2013, the pace has edged upward over the past 12 months, now reaching a two-year high (up from 292,000 in May to 303,000 in June). That is a positive development. With that said, the increase in June stemmed entirely from the durable goods sector (up from 175,000 to 186,000). Job openings in the nondurable goods sector were unchanged for the month at 117,000. Each figure reflected progress from earlier in the year.

The Job Openings and Labor Turnover Survey (JOLTS) data also show an increase in net hiring in June, rising to its fastest pace since November. The number of manufacturing hires rose from 240,000 to 259,000. At the same time, manufacturing separations – including layoffs, quits and retirements – rose from 228,000 to 238,000. Overall, net hiring (or hires minus separations) in the manufacturing sector increased from 12,000 in May to 21,000 in June.

Meanwhile, job postings accelerated strongly in June for the larger economy, as well. Total job openings have risen from 4,577,000 in May to 4,671,000 in June. This was up significantly from the 3,874,000 pace observed in January, and it was the highest level experienced since February 2001. Similarly, net hiring in the overall economy rose from 208,000 in May to 283,000 in June. In June, there were more job postings for construction, government, manufacturing, professional and business services and retail trade.

Chad Moutray is the chief economist, National Association of Manufacturers. 

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Monday Economic Report – July 14, 2014

Here is the summary for this week’s Monday Economic Report:

Just a few data releases came out last week, so our view of the economy changed little from the previous week. Manufacturers continue to wrap their heads around the fact that growth in the early months of 2014 has been more disappointing than originally anticipated, but at the same time, they are cautiously upbeat about the second half of the year. The sharp 2.9 percent drop in real GDP in the first quarter clearly altered perceptions about the economy, with business leaders struggling to try to figure out how that impacts their prospects for the rest of this year. For instance, was the drop in activity mostly due to severe weather, or were there larger doubts about the economy at play?

For their part, business economists have lowered their projections for real GDP growth in 2014, from 2.5 percent in June (before the GDP revision) to 1.6 percent. At the same time, real GDP is expected to bounce back in the second quarter, with a median growth estimate of 3.0 percent, according to the National Association for Business Economics (NABE). (My own projection would be somewhat higher than that, perhaps around 3.5 percent.) Moreover, almost 60 percent of economists surveyed felt that the odds of a recession in 2014 or 2015 were less than 10 percent. In addition, more than half of the NABE respondents felt that the Federal Reserve would start raising short-term interest rates in the first six months of 2015.

Along those lines, the minutes from the June 17–18 Federal Open Market Committee (FOMC) meeting suggest that the Federal Reserve Board continues to also see improvements in the U.S. economy in the months ahead, even as sufficient “slack” remains in the labor market. While the Federal Reserve projects real GDP growth of 3.0 to 3.2 percent in 2015, it also intends to maintain its highly accommodative stance to monetary policy for the foreseeable future.

The FOMC reported plans to end its purchases of long-term and mortgage-backed securities in October, which mainly confirmed existing conventional wisdom, and it devoted a lot of discussion at its meeting to its exit strategy. The timing of the Federal Reserve’s move toward “normalization” in its policies has already become a focus of debate, with the guessing game now being when the increase in federal funds rate will begin. With pricing pressures accelerating of late, some will suggest that the Federal Reserve should move faster in its efforts to raise short-term rates, especially if core inflation starts to consistently exceed the stated FOMC goal of 2 percent on an annual basis.

Meanwhile, the National Federation of Independent Business (NFIB) reported that small business confidence declined somewhat in June on a slightly weakened outlook. The underlying data paint a mixed picture of encouraging news and persistent challenges, with continuing doubts about momentum in the economy and frustration with the political climate. Nonetheless, the small business labor market appears to be improving, both in terms of current job openings and those intended for the next three months. Similarly, the latest Job Openings and Labor Turnover Survey (JOLTS) data show the fastest pace of manufacturing job postings in six months, with an increase in net hiring in May. While hiring has picked up from softness earlier in the year, it continues to remain lower than what was observed in the second half of last year.

This week we will get a better sense of whether the recent pickup in manufacturing activity can be sustained as we move into the summer months. Industrial production is expected to reflect a modest gain in June, with expansion also predicted in surveys from the New York and Philadelphia Federal Reserve Banks. With that said, the pace of sales and output growth is anticipated to ease slightly. Other highlights include the latest data on consumer sentiment, housing starts and permits, producer prices, retail sales and state employment.

Chad Moutray is the chief economist, National Association of Manufacturers. 

VN:F [1.9.22_1171]
Rating: 5.0/5 (1 vote cast)


Manufacturing Job Postings and Net Hiring Improved in May

The Bureau of Labor Statistics said that manufacturing job openings accelerated somewhat, rising from 275,000 in April to 292,000 in May. This was the fastest pace for job postings in six months, with potential hiring rebounding after softness in the winter months. The progress in May stemmed entirely from improvements among nondurable goods firms, with job openings up from 95,000 to 116,000. At the same time, the number of postings from durable goods entities eased slightly, down from 179,000 to 176,000. Each figure reflected progress from earlier in the year.

The Job Openings and Labor Turnover Survey (JOLTS) data also show an increase in net hiring in May. The number of manufacturing hires rose from 238,000 to 240,000, with durable goods hiring increasing (up from 145,000 to 150,000) but nondurable goods adding fewer workers (down from 94,000 to 90,000). At the same time, manufacturing separations – including layoffs, quits and retirements – fell from 236,000 to 230,000. As such, net hiring (or hires minus separations) increased from 2,000 in April to 10,000 in May.

While net hiring has made progress, it is still worth noting that net hiring has averaged just 5,833 over the past six months (December to May). This remains slower than over the four months prior to that (August to November), which averaged a healthy 22,500 each month when demand and production were expanding more robustly.

Meanwhile, job postings accelerated strongly in May for the larger economy. Total job openings have risen from 4,125,000 in March to 4,464,000 in April to 4,635,000 in May. This was the highest level observed since June 2007. It stemmed from increased postings in construction, leisure and hospitality, manufacturing, and professional and business services. Similarly, net hiring in the overall economy rose from 220,000 in April to 223,000 in May.

Chad Moutray is the chief economist, National Association of Manufacturers. 

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Manufacturing Job Postings and Net Hiring Picked Up Slightly in April

The Bureau of Labor Statistics said that manufacturing job openings picked up slightly, rising from 258,000 in February to 264,000 in March to 272,000 in April. This suggests that manufacturers have begun to post more openings over the past couple months, rebounding from winter-related softness in January and February. Nonetheless, overall job postings in the sector remain below their recent peak of 298,000 in November, indicating that there is still room for improvement. For instance, these gains were mixed, with increases in durable goods manufacturing job postings (up from 165,000 to 173,000) but reductions for nondurable goods firms (down from 99,000 to 94,000).

The Job Openings and Labor Turnover Survey (JOLTS) data also show a small bump-up in net hiring in April. Interestingly, this increase on net comes from a decline in both hires and separations for the month. The number of manufacturing hires decreased from 248,000 in March to 243,000 in April. At the same time, manufacturing separations – including layoffs, quits and retirements – fell from 243,000 to 231,000. As such, net hiring (or hires minus separations) increased from 5,000 to 12,000.

Net hiring has averaged 9,000 each month from February to April, which represented progress from the net gains of 6,000 and 2,000 in November and December, respectively. Yet, it also remains well below the 22,500 average experienced between August and November of last year when demand and production were expanding more robustly.

Meanwhile, job postings accelerated strongly in April for the larger economy. Total job openings rose from 4,166,000 in March to 4,455,000 in April. This was the fastest pace for job postings since August 2007. This higher figure stemmed from increased postings in the durable goods manufacturing; leisure and hospitality; professional and business services; state and local government; and trade, transportation and utilities.

Chad Moutray is the chief economist, National Association of Manufacturers. 

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Manufacturing Job Postings and Hiring Data Were Weaker in March

The Bureau of Labor Statistics said that manufacturing job openings declined for the fourth straight month. After peaking at 298,000 in November, the number of job postings in the sector has continued to move lower, with 243,000 openings recorded in March. Weather has negatively impacted overall economic activity over much of this period, and it is possible that winter conditions hampered employment growth, as well.

Nonetheless, we would expect that this trend will reverse in the coming months, particularly if the sector resumes the rebound that was occurring last fall. There had been upward movement in manufacturing job openings from May to November of last year (up from 203,000 to 298,000), for instance. The Job Openings and Labor Turnover Survey (JOLTS) have a bit of a time lag. Fortunately, we already know that manufacturers added 12,000 workers on net in April, providing us with some cautious optimism.

In the March data, net hiring had turned negative for the first time in eight months. Manufacturers added 231,000 workers in March, down from 234,000 in February (and 269,000 in November, its recent peak). At the same time, the number of separations – including layoffs, quits, and retirements – rose from 224,000 to 236,000. As such, net hiring (or hires minus separations) shifted from a net gain of 10,000 workers in February to a decline of 5,000 in March. This was well below the net hiring rate of 41,000 observed in November, illustrating the current softness in the labor market.

Meanwhile, employment numbers in the larger economy softened slightly in March, as well. Total job openings decreased from 4,125,000 in February to 4,014,000 in March. Even with the decrease, this was still a decent figure, representing a 3.5 percent increase year-over-year. Hiring in the nonfarm business sector declined from a net gain of 240,000 in February to an increase of 194,000 in March. Education and health services and government were two major sectors that had increased hiring for the month.

Chad Moutray is the chief economist, National Association of Manufacturers. 

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Monday Economic Report – April 14, 2014

Here is a summary of this week’s Monday Economic Report:

In the minutes of its March Federal Open Market Committee (FOMC) meeting, the Federal Reserve Board highlighted the negative impact of weather events on first-quarter growth. Winter storms hampered business investment, construction, consumer spending and manufacturing production. Nonetheless, the Federal Reserve still anticipates real GDP growth of between 2.8 and 3.0 percent in 2014, faster than last year’s 1.9 percent expansion. While this reflects a slight downgrade in the outlook for the year from the last forecast, it continues to suggest that the economy will regain its momentum moving forward. The Federal Reserve also predicts growth of 3.0 to 3.2 percent in 2015. The International Monetary Fund’s World Economic Outlook, which was released last week, mirrors these figures in its own forecasts for the United States.

The highlight of the FOMC minutes was the background discussion among participants regarding future monetary policy actions. The Federal Reserve largely feels that the U.S. labor market has a lot of “slack” in it, which is not reflected by the 6.7 percent unemployment rate. Despite improvements in the unemployment rate, weaknesses continue, with the participation rate near 30-year lows and high rates of both underemployment and part-time employment. While some FOMC members feel there has been sufficient economic progress to warrant less stimulative monetary policy measures, the majority view the current labor market as sufficiently weak enough to continue the Federal Reserve’s highly accommodative actions for the foreseeable future. The Federal Reserve will continue to reduce its long-term asset purchases, but short-term interest rates will likely not rise until next year at the earliest. Inflationary pressures remain modest, providing the Federal Reserve with some wiggle room to do its stimulative measures.

The most recent Job Openings and Labor Turnover Survey (JOLTS) data suggest the labor market for manufacturers remains soft. The number of manufacturing job openings declined for the third month in a row in February. Postings have been lower since peaking in November, and the December to February time frame mirrored the weather-related weaknesses seen in other data. Net hiring was also lower in those three months, with 2,000 more separations than hires in February. Still, the manufacturing sector has added an average of 12,125 workers each month since August, mirroring the uptick in demand and production that we have seen since that point. We are hopeful that hiring begins to accelerate again in the coming months.

Looking at the sentiment surveys last week, businesses and consumers were more upbeat. The California Manufacturing Survey from Chapman University reported rising expectations for new orders and production for the second quarter, but with employment growth remaining soft. Both durable and nondurable goods activity were anticipated to expand modestly in the current quarter. Likewise, small business owners in the National Federation of Independent Business’ (NFIB) survey were more optimistic about future sales, and those saying the next three months were a good time to expand edged marginally higher. Still, earnings remained weak, and the percentage suggesting they would bring on more workers moved lower. The University of Michigan and Thomson Reuters also noted improved consumer sentiment, a welcome gain after three months of dampened enthusiasm.

This week will be a busy one on the economic front, specifically with new reports on housing starts and industrial production. We hope to move beyond the weather-related weaknesses from earlier this year, and March’s manufacturing output numbers are expected to show a continued rebound. Similarly, housing starts moved slightly higher in February, but permits surpassed the 1 million mark for the first time since November; yet, rising interest rates, financial challenges for potential buyers and low inventory remain concerns. Other highlights this week include new data on consumer prices, leading indicators, manufacturing surveys from the New York and Philadelphia Federal Reserve Banks and state employment.

Chad Moutray is the chief economist, National Association of Manufacturers. Note that General Electric Chief Economist Marco Annunziata will prepare the Monday Economic Report for April 21.

participation rate - apr2014

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Manufacturing Job Postings and Hiring Data Were Weaker in February

The Bureau of Labor Statistics said that manufacturing job openings declined for the third month in a row in February. After peaking at 298,000 in November, the number of job postings in the sector has continued to move lower, with 250,000 openings recorded in February. Weather has negatively impacted overall economic activity over much of this period, and it is possible that winter conditions hampered employment growth, as well. Nonetheless, this is a trend that will hopefully reverse with coming data, and it reverses what had been upward movement from May to November of last year (up from 203,000 to 298,000).

Net hiring has followed a similar pattern and was also lower in February for the third straight month. Manufacturers added 234,000 workers in February, down from 244,000 in January. At the same time, the number of separations – including layoffs, quits, and retirements – fell from 242,000 to 236,000 for the month. As such, net hiring (or hires minus separations) shifted from a net gain of 2,000 in January to a net loss of 2,000 in February. This was well below the net hiring rate of 41,000 observed in November, illustrating the current softness in the labor market.

In contrast, employment numbers in the larger economy improved in February. Total job openings increased from 3,874,000 in January to 4,173,000 in February. This was the fastest pace for job postings since January 2008. Likewise, net hiring in the month in the nonfarm business sector rose from a rather weak 97,000 in January to 203,000 in February. While manufacturers hired fewer workers in the month, there were notable increases for retail trade, leisure and hospitality, and government.

Chad Moutray is the chief economist, National Association of Manufacturers.

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Monday Economic Report – February 18, 2014

Here is the summary for this week’s Monday Economic Report:

A perfectly timed winter storm at the end of last week coincided with news that cold weather has had a negative impact on consumer spending and manufacturing output. Manufacturing production declined 0.8 percent in January, ending five straight months of expanding activity. Poor weather conditions closed some facilities and hampered shipments. Capacity utilization also decreased, down from 76.7 percent in December to 76.0 percent in January. That was the lowest utilization level since July. Yet, to the extent that weather contributed to the fall in manufacturing output, I would expect production to rebound in the coming months. After all, manufacturing production increased 3.0 percent in the second half of 2013, and manufacturers continue to be mostly upbeat about demand for 2014.

Nonetheless, we saw the effects of the weather in other indicators released last week as well. Retail sales fell 0.4 percent in January, extending December’s 0.1 percent decline. Reduced auto sales were a major factor in this decrease, with motor vehicle purchases down 1.8 percent in December and 2.1 percent in January. If you exclude autos from the analysis, retail spending was unchanged.

Although the University of Michigan and Thomson Reuters consumer sentiment measure was unchanged in February, respondents’ view of the current economy has slipped since December. One might surmise that weather impacted labor markets and incomes, lessening current confidence. However, Americans seem more optimistic about the future, with the expectations component rising from 71.2 in January to 73.0 in February.

There were signs that the U.S. economy’s recent improvements continue to bear fruit. Small business leaders have become more confident, with the National Federation of Independent Business’s Small Business Optimism Index edging higher for the third straight month, and January’s data also show an increased willingness to add workers. The net percentage planning to hire in the next three months rose to its highest level since September 2007. Along those lines, the number of manufacturing job postings increased from 283,000 in November to 297,000 in December. We have seen job openings in the sector recover from weaknesses midyear in 2013. Nonetheless, manufacturing net hires eased in December, and there was notable softness in the larger economy, both for new hires and job openings.

This week, we will get new numbers for the housing market and the latest data on manufacturing activity from a number of sources, including surveys from the New York and Philadelphia Federal Reserve Banks and Markit. The latter will report Flash Purchasing Managers’ Index (PMI) findings for the United States, China and the Eurozone. We will be looking for further evidence on the impact weather has had for manufacturers in the United States and for signs of improvement overseas. The Chinese PMI data had contracted in January’s report, but with output continuing to grow modestly. (For more information on worldwide trends, see the Global Manufacturing Economic Update, which was released on Friday.) Other highlights for the week include the latest data on consumer and producer prices, leading indicators and existing home sales.

Chad Moutray is the chief economist, National Association of Manufacturers.

retail sales - feb2014

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


Job Openings in Manufacturing Increased in December, but Net Hiring Eased

The Bureau of Labor Statistics said that the number of manufacturing job openings increased from 283,000 in November to 297,000 in December. This was the second-highest level of 2013 (below the 302,000 observed in October), and we have seen the job postings move upward since bottoming out at 210,000 in June. As such, manufacturing job openings have recovered from weaknesses seen earlier in the year, providing us with some hope that additional hiring might occur in the months ahead.

With that said, net hiring eased from the month before. Manufacturers hired 260,000 additional workers in December, down slightly from 256,000 in November. This was the second-highest pace in the past 18 months, suggesting that November’s increase was mostly sustained. Yet, the number of separations in the sector – including layoffs, quits, and retirements – also rose, up from 229,000 to 240,000. As such, net hiring (or hires minus separations) declined from 31,000 to 16,000. This suggests that employment growth in the manufacturing sector has decelerated a bit, even as it remained positive overall on net.

In the larger economy, total job openings decreased from 4,033,000 in November to 3,990,000 in December. In addition to manufacturing, there were marginal gains in job postings in the accommodation and food services, construction, professional and business services, and retail trade sectors. Net hiring also fell, down from 251,000 to 67,000.

Overall, these data confirm a bit of what we already knew, corresponding with the disappointing jobs reports that we have received for both December and January. At the same time, job openings in the manufacturing sector have generally moved in the right direction since the summer, which is definitely positive. Likewise, the most recent figures have shown that manufacturers averaged 15,500 additional net hires each month from August to January, indicating the pickup in demand and production seen since the beginning of the third quarter led to more hiring for the sector.

Chad Moutray is the chief economist, National Association of Manufacturers.

jolts

VN:F [1.9.22_1171]
Rating: 0.0/5 (0 votes cast)


A Manufacturing Blog

  • Categories

  • Connect With Manufacturers

            
  • Blogroll