Thursday, July 2, 2015

New Orders Decreased in May

New orders for manufactured durable goods decreased 2.2% to $227.6 billion in May, according to the U.S. Census Bureau. New orders have been down for three of the past four months. Excluding transportation, new orders increased 0.1% in May.

Shipments of manufactured durable goods, down four of the last five months, decreased 0.3% to $239.2 billion, following a 0.3% decrease in April.

Inventories of manufactured durable goods, decreased 0.2% to $400.5 billion, after 23 consecutive monthly increases. Despite the monthly decline, the inventories remain near an all-time high since the series was first published in 1992.

Read the Census release.

223,000 More Jobs in June

Total nonfarm payroll employment rose by 223,000 in June, compared to 254,000 in May. (April and May employment figures were revised down by a combined 60,000 jobs.) The unemployment rate fell to 5.3%. The Federal Reserve has placed its full-employment estimate between 5.0% and 5.2%.

Education and health services have added at least 50,000 jobs in each of the last three months. Leisure and hospitality added 22,000 jobs in June, down from 54,000 in April, while retail trade added 32,900, up from 26,400 in May.

Employment for mining and logging contracted by 3,000 jobs, a much slower rate than in the previous two months where the industry lost a total of 32,000 jobs.

The civilian labor force declined by 432,000 in June, after an increase of similar size in May. The labor force participation rate declined 0.3% to 62.6% — the lowest participation rate since April 2014.

Average hourly earnings were unchanged at $24.95. This figure increased by 2.0% over the prior twelve months.

The number of long-term unemployed, those jobless for 27 weeks or more, declined by 381,000 to 2.1 million. This group accounts for 25.8% of the unemployed. The number of discouraged workers, those not looking for work because they believe no jobs are available, was 653,000 – little changed from a year ago.

Read the BLS release.

Wednesday, July 1, 2015

ISM Manufacturing Index Reports Solid Growth for June

The ISM Manufacturing Index rose to 53.5 points in June, tying the highest reading of the year. Index readings above 50 indicate expansion in the manufacturing economy. Of the 18 component industries, 11 reported growth, down from 14 in May. Some respondents noted that a downturn in oil and gas markets is impacting demand, while others noted that business is soft in Europe and declining in Asia.

The index for new orders increased 0.2 points to 56.0, while inventories rose 1.5 points to 53.0. The difference in these indices closed to 3 points, down from 4.3 points in May, indicating that inventories are beginning to close the gap with current demand.

The employment index rose to 55.5 from 51.7 in May. Of the 18 industries, 10 reported employment growth, down from 14 in May. Three industries – Apparel, Leather & Allied Products; Machinery; and Petroleum & Coal Products – reported decreases in employment.

Export orders for June registered 49.5 points, indicating that the volume of exports decreased for the month. The imports index registered 53.5 points in June, marking the 29th consecutive month of growth in imports.

The prices index registered 49.5, marking the 8th consecutive month of raw material prices decreasing.

Read the ISM release.

Construction Spending Increased in May

Construction spending increased 0.8% in May to a seasonally adjusted annual rate (SAAR) of $1,035.8 billion. April spending was revised up from $1,006.1 billion to $1,027.0 billion. Construction spending during the first five months of 2015 amounted to $382.1 billion, 5.9% higher than in the first 5 months of 2014.

Total private construction rose to $752.4 billion (SAAR), 0.9% higher than the revised April estimate of $745.6 billion.

Private residential construction rose to $359.5 billion (SAAR), 0.3% higher than April’s estimate, as construction of multi-family homes increased for the month.

Private non-residential construction rose to $392.8 billion (SAAR), up 1.5% on the month and 12.7% from a year ago. Growth in commercial construction declined for the month, slowing by 2.0%, while manufacturing construction grew 6.2%.

Public construction spending grew 0.7% to $283.4 billion (SAAR). Growth for educational construction fell 0.7% on the month, while highway spending rose 2.1% to an annual rate of $85.1 billion.

Read the Census release.

ADP: Private Sector Added 237,000 Jobs in June

According to the ADP National Employment report, the private sector added 237,000 jobs in June, as both the goods-producing and service-providing sectors experienced increased job growth. The June report upwardly revised the May and April headline numbers by 2,000 and 14,000 respectively.

Small businesses, companies with fewer than 49 employees, added 120,000 jobs, unchanged from May. Medium businesses, companies with 50 to 499 employees, added 86,000 jobs, up from 63,000 in May. Large businesses, companies with greater than 500 employees added 32,000 jobs, up from 19,000 in May.

Goods-producing employment rose by 12,000 jobs, up 1,000 jobs from the previous month. Manufacturing gained 7,000 jobs after losing 9,000 over the previous three months.

Service-providing sector employment rose by 225,000 jobs, up from 192,000 in May. Professional/business services contributed the largest gain, adding 61,000. Trade/transportation/utilities added 50,000 jobs, and financial activities added 19,000 jobs.

Read the ADP release.

Energy and Retail Sectors Cut Jobs in First Half of 2015

Employers announced plans to shed 44,842 workers from their payrolls in June, following the 41,034 planned job cuts announced in May, according to a report issued by Challenger, Gray & Christmas.

June’s job cuts were 43% higher than the planned layoffs announced in June 2014. In this first 6 months of 2015, employers have announced 287,682 job cuts—the highest midyear total in five years.

The report indicates that the surge in layoffs was largely due to declining oil prices, which drove 69,582 cuts during the first half of the year. The majority of those jobs were in the energy sector, which cut its workforce by 60,500.

Retailers also announced significant layoffs during the first 6 months of the year—45,230 to date, up 68% from a year ago.

“Retailers should be enjoying the benefits of falling oil prices, as consumers have the money they are saving at the gas pump to spend elsewhere. However, it appears that consumers were hording that cash, at least through the first half of the year. The most recent data suggests that consumers are finally starting to loosen up the purse strings,” said John A. Challenger, CEO of Challenger, Gray & Christmas.

Consumer spending increased to 0.9% in May, the largest monthly increase in nearly 6 years, suggesting that retail sales could increase in the second half of the year.

Read the Challenger, Gray & Christmas release.

Tuesday, June 30, 2015

Home Prices Increased in April

The 20-City Case-Schiller Composite gained 4.9% year-over-year in April, slightly lower than March’s gain of 5.0%. The 10-City Composite gained 4.6% in April from the previous year, down from the 4.7% year-over-year gain in March. The National index recorded a 4.2% gain on an annual basis in April, compared to a 4.1% annual gain in March.

On a monthly basis, all three indices posted increases as the 10-City Composite increased 1.0%, and the 20-City Composite and National Index rose 1.1%.

Of the cities reporting month-over month increases, Seattle and San Francisco posted gains of 2.3% and 2.0%.

Denver and San Francisco posted the highest year-over year gains, with respective price increases of 10.3% and 10.0%. Washington DC posted the slowest rate of growth, with prices increasing at an annual rate of 1.1%.

Read the S&P/Case-Schiller release.