- Surprising payroll gain follows upwardly revised estimates.
- Earnings growth slips.
- Jobless rate increases to seven-month high.
by:Tom Moeller
|in:Economy in Brief
France| Jun 02 2023French Manufacturing IP Makes Second Gain in Two Months
French manufacturing registered a gain of 0.7% in April following a 1.1% decline in March and a 1.3% increase in February. Trends in French manufacturing show output is up by 2.1% over 12 months, rising at a 2.8% annual rate over six months and rising at a 10% annual rate over three months showing steady acceleration in the gains for output.
Trends by sector By sector, the trends are not so clear, but they are largely supportive. For consumer durables, output rises by 9% over 12 months, slows to a 2% gain over six months and then rises at an 8.1% annual rate over three months. Durable goods trends do not support the acceleration hypothesis. Consumer nondurable goods show output lower by 0.8% over 12 months, falling at a slightly reduced 0.5% annual rate over six months and then rising by 1.3% at an annual rate over three months. This progression offers strong support to the acceleration hypothesis. For capital goods, output is up 8.7% over 12 months. It improves slightly to an 8.9% annual rate over six months, and then reverts to an 8.7% annual rate pace over three months. The output for capital goods is strong and firm across all three horizons, but that doesn't support the idea that output is accelerating. It does support the idea that output is strong. Intermediate goods output falls by 2.5% over 12 months, falling at a 2.1% annual rate over six months, then advancing at a 3.5% annual rate over three months. Intermediate goods support the acceleration hypothesis as output swings from declining over six and 12 months to growth over three months.
Auto cross-currents Separately the output of autos shows sequential slowing. Output is up by 35.5% over 12 months, slowing to a 6.6% pace over six months and then slowing further to 2.6% annual rate over three months. Auto production also shows sequential slowing monthly, from February to March to April. The trends in output belie the strength in motor vehicle registrations with registrations firm-to-strengthening showing a gain of 25% over 12 months, slowing slightly to a 20% annual rate over six months, and accelerating sharply to a 65.5% annual rate over three months. But vehicle registrations do slow their growth monthly, from February to March to April; the growth rates for registrations in each of those months erode although each month shows ongoing strength. Sometimes trends simply refuse to be consistent in their messaging.
Quarter to date This is the first month in the new quarter. The quarter-to-date statistics at this point are rather tenuous. The calculation looks at the growth in April compared to the first quarter base of spending on average. By that calculation, industrial production is growing at a 2.1% annual rate in the second quarter to date. This is led by a 12.9% annual rate gain in consumer durable goods, a 6.6% annual rate gain in capital goods, and a 3.3% annual rate gain in intermediate goods. These gains are offset by a 2% decline in the output of consumer nondurable goods. Also in the new quarter, auto output is falling at a 7.7% annual rate while motor vehicle registrations are up by a strong 48.8%.
Global| Jun 02 2023Charts of the Week (June 2, 2023)
The world economy’s underlying vulnerabilities have been in sharp focus over the past few weeks, but more deep-seated wounds with longer-lasting scars have been avoided, at least for now. This applies specifically to the anxiety that had surfaced about the health of the US banking sector and more recently to the willingness of politicians to lift the US debt ceiling. But it applies more generally to the outlook for the world economy, partly thanks to the relief that’s been provided by weaker energy prices. Still, as most of our charts this week suggest, while deeper wounds have been avoided for now, this does not mean that underlying vulnerabilities have been erased. We illustrate, for example, the heightened tendency of incoming data for global growth to disappoint expectations to the downside (in chart 1). Inasmuch as that trend toward disappointment has been rooted in a deteriorating outlook in Europe and Asia (compared with the US) we look next at the renewed upward pressure on the US dollar (in chart 2). The downward pressure on European inflation and on bank credit growth (in Europe and the US) is our next focus (in charts 3 and 4). Then, on labour market issues, we home in on the mixed messages that were conveyed about employment activity in the US from this week’s April JOLTs report (in chart 5). And finally we turn to the worrying trend toward higher youth unemployment that’s established itself in China over the last few months (in chart 6).
by:Andrew Cates
|in:Economy in Brief
USA| Jun 01 2023U.S. Light Vehicle Sales Decline in May
- Light truck sales lead latest downturn.
- Imports' market share eases.
by:Tom Moeller
|in:Economy in Brief
USA| Jun 01 2023U.S. ISM Manufacturing Index Slips in May
- Index remains above March low.
- Orders decline offsets improvement in employment & production.
- Price index decline reverses earlier strength.
by:Tom Moeller
|in:Economy in Brief
USA| Jun 01 2023ADP Employment Remains Strong but Earnings Growth Eases in May
- Pay increases moderate, notably for “job changers.”
- Small business employment firms.
- Natural resource & mining, leisure & construction remain strong.
by:Tom Moeller
|in:Economy in Brief
- Total Apr. construction +1.2% (7.2% y/y), higher than expected.
- Residential private construction rises 0.5% (-9.2% y/y), led by m/m construction gains in home improvement and multi-family but partly offset by a 0.8% drop (-24.7% y/y) in single-family building.
- Nonresidential private construction increases 2.4% (31.2% y/y), up for the 11th time in 12 months.
- Public sector construction grows 1.1% (16.5% y/y), up for the 10th time in 11 months, led by a 1.1% rise (16.8% y/y) in nonresidential public construction.
USA| Jun 01 2023U.S. Q1 Productivity Move Revised To Be Less Negative
- Output revised modestly upward and hours modestly downward.
- Compensation now has more moderate advance in Q1.
- Manufacturing productivity now seen with bigger decline.
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