U.S. JOLTS: Job Openings Rate Strengthens but Hiring Fails to Keep Pace

The emerging labor shortage was evidenced by the job openings rate during April. It gained m/m to 3.7%, up from the recession low of 1.6%. It was just below the series' high of 3.8% early in 2001. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings. Failing to keep pace, however, was the hires rate. It fell to 3.5% and has been trending sideways for the last year. The hires rate is the number of hires during the month divided by employment. The Bureau of Labor Statistics reports these figures in its Job Openings & Labor Turnover Survey (JOLTS).

The actual number of job openings surged 21.7% y/y to 5.376 million versus 5.109 million in March, revised from 4.994 million. Hiring was less strong as it posted a 4.5% y/y increase to 5.007 million. That was down from 5.088 million in March, revised from 5.067 million.  

The private-sector job openings rate jumped to 3.9% and was improved from the recession low of 1.7%. The rate in professional & business services rose to a recovery high of 5.1% while the rate in leisure & hospitality held at 4.7%, nearly the cycle high. In health care & social services, the rate jumped m/m to an eight year high of 4.7% and in trade, transportation & utilities, it surged to a record high of 3.5%. The rate in the factory sector held steady for the third month at an elevated 2.6% but the construction sector's rate fell to 2.3%. The job openings rate in the government sector remained at 2.2%, higher than the 2009 low of 1.1%.

The private sector hires rate slipped to 3.9% and has been trending sideways for a year. Amongst leisure & hospitality firms, the rate continued its sideways trend with a slip to 6.1%. The rate in professional & business services did the same with a drop to 5.3%. The construction sector rate gained marginally to 5.1% but remained down from its December high of 7.0%. In retail trade it fell to 4.6%, nearly its lowest since early last year. The hiring rate in education & health services continued moving sideways at 2.7% and in the factory sector, it held at 2.1%. In the government sector, the hiring rate held at 1.5%.

The number of hires declined 1.6% m/m (+4.5% y/y). Private sector hires fell 1.9% (+3.8% y/y). Trade, transportation & utilities jobs declined 1.1% y/y. That was offset by a 7.2% rise in construction employment and a 7.8% increase in leisure & hospitality hiring. Health care & social services employment improved 0.6% y/y while professional & business services jobs increased 4.9% y/y. Factory sector jobs improved 2.0% y/y while government sector hiring jumped 16.1% y/y.

The job separations rate slipped from its recovery high to 3.5% but the actual number of separations increased 7.9% y/y. Separations include quits, layoffs, discharges, and other separations as well as retirements. The private sector separations rate fell to 3.8% while the government sector's rate held at the five year high of 1.5% for the fourth straight month. The layoff & discharge rate held at 1.3%, the highest level since July. The private sector layoff rate slipped to 1.4% but the government's rate held at 0.5% for the sixth consecutive month.

The JOLTS survey dates to December 2000 and the figures are available in Haver's USECON database.

JOLTS (Job Openings & Labor Turnover Survey, SA)	Apr	Mar	Feb	Apr '14	2014	2013	2012
Job Openings, Total
Rate (%)	3.7	3.5	3.5	3.1	3.4	2.8	2.6
Total (000s)	5,376	5,109	5,144	21.7%	22.6%	9.3%	3.2%
Hires, Total
Rate (%)	3.5	3.6	3.6	3.5	42.2	39.8	38.8
Total (000s)	5,007	5,088	5,011	4.5%	8.4%	3.4%	4.2%
Layoffs & Discharges, Total
Rate (%)	1.3	1.3	1.2	1.2	14.5	14.6	15.5
Total (000s)	1,817	1,894	1,688	6.7%	2.4%	-4.9%	1.1%

 

U.S. Small Business Optimism Improves to Five-Month High, Despite a Labor Shortage
by Tom Moeller  June 9, 2015

The National Federation of Independent Business reported that its Small Business Optimism Index increased to 98.3 during May from an unrevised 96.9 in April. The reading was the highest since December.

The percentage of firms expecting the economy to improve rose to -3 but remained down from the November high of +13%. Gaining slightly to 12% was the percentage planning to increase employment. That remained below, however, December's high of 15%. Discouragement about the labor supply continued as the percent with positions not able to be filled right now jumped to 29%, a recovery high. The percentage with few or no qualified applicants for job positions rose m/m to 47%, a three-month high. The percentage indicating now was a good time to expand the business recovered to 14%, the highest level this year. 

The percentage expecting higher real sales in six months fell, however, to 7%, the most pessimistic reading since September. The percentage indicating that credit was harder to get declined to a recovery low of 3%, down from the 2009 high of 16%. The percentage planning capital expenditures in the next 3 to 6 months slipped m/m to 25% and remained below December's recovery high of 29%.

On the pricing front, 6% of firms were raising average selling prices last month, the most since October. The percentage planning price increases, however, held steady at 17%. Labor's pricing power increased as the percentage of firms raising worker compensation gained to 25%, matching the highest level since early 2008, up from none early in the recovery. The percentage planning to raise compensation held steady m/m at 14%, up from none at the end of the recession.

The most important problems faced by small business were government requirements (23%), taxes (23%), quality of labor (13%), poor sales (11%), insurance cost & availability (7%), competition from large businesses (7%), cost of labor (6%), inflation (3%) and financial & interest rates (2%).

Roughly 24 million small businesses exist in the U.S. and they create 80% of all new jobs. The typical NFIB member employs 10 people and reports gross sales of about $500,000 a year. The NFIB figures can be found in Haver's SURVEYS database.

National Federation of Independent Business	May	Apr	Mar	May '14	2014	2013	2012
Small Business Optimism Index (SA, 1986=100)	98.3	96.9	95.2	96.6	95.6	92.4	92.2
Firms Expecting Higher Real Sales In Six Months (SA, Net %)	7	10	13	15	11	4	2
Firms Expecting Economy To Improve (SA, Net %)	-3	-6	-7	0	-5	-15	-9
Firms Planning to Increase Employment (SA, Net %)	12	11	10	10	10	6	4
Firms With Few or No Qualified Applicants For Job Openings (SA, %)	47	44	42	46	43	39	35
Firms Reporting That Credit Was Harder To Get (SA, Net %)	3	4	5	6	6	6	8
Firms Raising Average Selling Prices (SA, Net %)	6	2	2	12	8	2	4

 

U.S. Wholesale Inventory Accumulation Picks Up in April; Trend Increase Slows
by Tom Moeller  June 9, 2015

Inventories at the wholesale level increased 0.4% during April (4.5% y/y) following two months of 0.2% increase. Despite the monthly rise, y/y growth decelerated to 4.5%, its slowest since early last year. Durable goods inventories ticked just 0.1% higher (6.6% y/y). Motor vehicle inventories increased 1.8% (13.2% y/y) and machinery inventories advanced 0.7% (6.8% y/y). Electrical equipment inventories declined 1.2% (+7.2% y/y) and furniture inventories slipped 0.2% (+6.2% y/y). Nondurable goods inventories increased 0.8% (1.1% y/y). Petroleum inventories gained 2.3% (-20.7% y/y) and apparel inventories rose 2.7% (8.6% y/y). Chemical inventories gained 2.2% (0.2% y/y) while paper inventories jumped 3.9% (3.5% y/y).

Wholesale sales improved 1.6% (-3.3% y/y) following declines during each of the prior eight months. Durable goods sales improved 1.2% (2.4% y/y) as electrical equipment sales increased 3.2% (8.7% y/y). Motor vehicle sales gained 3.2% (8.1% y/y). In the nondurable goods area, sales increased 2.0% (-8.2% y/y). The gain was paced by a 4.9% rise (-37.3% y/y) in petroleum sales. Chemical sales declined 1.4% (-5.0% y/y) and apparel sales were off by 1.5% (+5.6% y/y). Sales of paper & paper products increased 1.1% (1.9% y/y).

The inventory-to-sales ratio slipped m/m to 1.29. The ratio nevertheless remained near its highest level since 2009. The durable goods I/S ratio fell to 1.64, but still it was higher than its 2010 low of 1.48. The nondurable ratio slipped m/m to 0.95 but that was up from 0.87 last year.

The wholesale trade figures are available in Haver's USECON database.

Wholesale Sector - NAICS Classification (%)	Apr	Mar	Feb	Y/Y	2014	2013	2012
Inventories	0.4	0.2	0.2	4.5	6.7	4.2	6.6
Sales	1.6	-0.3	-0.6	-3.3	4.3	3.1	5.9
I/S Ratio	1.29	1.30	1.30	1.19 (Apr.'14)	1.20	1.18	1.16

 

U.S. Gasoline Prices Remain Steady; Crude Oil Strengthens
by Tom Moeller  June 8, 2015

Gasoline prices remained unchanged last week at an average $2.78 per gallon at the pump (-24.3% y/y). They were at the highest level since early-December, roughly one-third higher versus the low of $2.04 late in January. Haver Analytics constructs factors adjusting for the seasonal variation in pump prices. The seasonally adjusted price also was steady at $2.64 per gallon which was 17.8% higher than the early-February low, less of an increase than at the pump since prices typically rise during the summer driving season. Spot market gasoline prices increased to an average $2.10 per gallon (-25.6% y/y).

WTI crude oil costs improved to an average $59.66 per barrel (-42.2% y/y) and remained up versus the March low of $44.39. Yesterday, prices declined to $58.14 per barrel. These prices compare to a June 2014 high of $107.95. The seasonally adjusted price, generated by Haver Analytics, increased last week to $59.12 per barrel. Brent crude oil prices jumped last week to $63.97 per barrel but backed off to $61.90 yesterday.

Natural gas prices declined to 2.60 per mmbtu last week (-43.4% y/y) and were $2.67 yesterday.

Gasoline inventories grew 4.0% y/y while inventories of all petroleum products increased 8.5% y/y. Gasoline demand increased 1.1% y/y and demand for all petroleum products rose 4.3% y/y.

The energy price data are reported by the U.S. Department of Energy. The petroleum demand and inventory figures are from the Oil & Gas Journal Weekly. These data can be found in Haver's WEEKLY database. The daily figures are in DAILY and greater detail on prices, demand and production, along with regional breakdowns, are in OILWKLY.

Weekly Energy Prices	06/08/15	06/01/15	05/26/15	Y/Y%	2014	2013	2012
Retail Gasoline ($ per Gallon, Regular)	2.78	2.78	2.77	-24.3	2.30	3.33	3.30
Light Sweet Crude Oil, WTI ($ per bbl., WSJ)	59.66	58.19	58.95	-42.2	93.64	97.96	94.20
Natural Gas ($/mmbtu, LA, WSJ)	2.60	2.76	2.98	-43.4	4.37	3.73	2.7