Tom Moeller

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The Bureau of Labor Statistics reported that the total
 job openings rate held at 4.7% during April, unchanged m/m but up from
 4.6% twelve months earlier. It remained on the expansion's rising trend.
 The job openings rate is the job openings level as a percent of total
 employment plus the job openings level. Finding workers to fill openings
 became easier. The hiring rate rose to a record 3.9%. Employers became
 somewhat more willing to let people go, as shown by the layoff &amp;
 discharge rate which increased to 1.2% from the record low of 1.1% in
 March. Individuals remained ready to find new work. The quits rate held
 steady at a near-record 2.3% where it's been since June of last year.
 The private-sector job openings rate held steady m/m at
 5.0%, but remained below the 5.2% record reached in November. The rate was
 increased from 4.6% early last year and from the 2.0% average at the
 recession low in 2009. In professional &amp; business services, the rate
 fell sharply to 5.5% from the near-record 6.2% in March. In leisure &amp;
 hospitality, the rate eased to 5.7 and was below December's high of 6.2%.
 In education &amp; health services, the rate edged higher to a near-record
 5.4%, up from 2.6% in 2010. In trade, transportation &amp; utilities, the
 rate increased to 5.0% after depressed readings during the prior two
 months. The rate surged to another record of 5.1% in the construction
 sector.&nbsp; In manufacturing, it returned to a record of 3.8%, up from
 3.4% twelve months earlier. The government sector job openings rate also
 surged to a record 3.1%, remaining up sharply from the 2009 low of 1.2%.
 The level of job openings eased 0.3% (+4.8% y/y) to 7.449
 million after a 4.6% w/w rise. Private-sector openings rose 3.5% y/y while
 government sector job openings surged 18.7% y/y.
 The private-sector hiring rate rose slightly to 4.3%
 and was below the expansion high of 4.4% reached last May. The rate in
 leisure &amp; hospitality improved to 6.7%. In professional &amp; business
 services, the hiring rate increased sharply to 5.8% but remained below the
 June 2017 high of 6.1%. The construction sector's hiring rate improved to
 5.4%. The hiring rate in trade, transportation &amp; utilities rose
 slightly to 4.1%, but was down sharply from 4.4% in November. In education
 &amp; health services, the rate held steady for a fourth month at 3.0%,
 the high end of the recovery's range. In manufacturing, the steady 2.8%
 hiring rate was reduced from July's high of 3.1%. The hiring rate in
 government rebounded to 1.7% from 1.6%.
 Total hiring rose 4.2% (4.3% y/y) to 5.937 million.
 Hiring in the private sector also rose 4.3% y/y while government sector
 hiring gained 4.5% y/y.
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 The overall job separations rate held steady at 3.7%
 and was slightly below October's expansion high of 3.8%. The private
 sector separations rate rose slightly to 4.1%, but remained below the
 cycle high of 4.2% reached in July. It was increased, however, from the
 recession low of 3.4%. The separations rate in government held steady at
 1.5%.
 &nbsp;The total level of separations increased 2.0% y/y. In the private
 sector, the 2.1% y/y rise reflected a 13.6% y/y surge in the construction
 sector. In the financial sector, separations jumped 12.5% y/y and roughly
 equaled the recovery's high. Separations in the information sector rose
 3.2% y/y and in professional &amp; business services they increased 3.4%
 y/y. In educational and health services, separations rose 1.2% y/y, but
 separations in trade, transportation &amp; utilities were little changed
 y/y. Leisure &amp; hospitality job separations increased 1.5% y/y and in
 manufacturing, they rose 1.7% y/y.&nbsp; Separations in the government
 sector increased 1.5% y/y.
 The level of quits rose 4.3% y/y to 3.482 million in
 April. The quits rate has been stable for nearly a year at 2.3%, up
 sharply from 1.3% at the beginning of the expansion. The private-sector
 quits rate held at 2.6% and remained up from 1.4% in the fall of 2009. The
 government sector quits rate was stable at 0.8%.
 The level of layoffs declined 2.0% y/y. In the private
 sector, layoffs fell 2.9% y/y, and the layoff rate remained near the
 record low at 1.3%, down from the 2009 high of 2.2%. Layoffs rose 14.3%
 y/y in the government sector and layoff rate rose slightly to 0.5%.
 The Job Openings &amp; Labor Turnover Survey (JOLTS)
 dates to December 2000 and the figures are available in Haver's USECON
 database.
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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>
 <thead>
 <tr>
 <th class="firstcol" scope="col" ><a href="http://www.haverselect.com/dlx/USECON/@EB/@EB14/@EB14.HTM">JOLTS
 (Job Openings &amp; Labor Turnover Survey, SA)</a></th>
 <th scope="col" >Apr</th>
 <th scope="col" >Mar</th>
 <th scope="col" >Feb</th>
 <th scope="col" >Apr'18</th>
 <th scope="col" >Apr'17</th>
 <th scope="col" >Apr'16</th>
 </tr>
 </thead>
 <tbody>
 <tr class="grey3">
 <td class="firstcol" colSpan="7" >Job Openings, Total</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Rate (%)</td>
 <td >4.7</td>
 <td >4.7</td>
 <td >4.5</td>
 <td >4.6</td>
 <td >4.0</td>
 <td >3.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Total (000s)</td>
 <td >7,449</td>
 <td >7,474</td>
 <td >7,142</td>
 <td >7,106</td>
 <td >6,157</td>
 <td >5,872</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="7" >Hires, Total</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Rate (%)&nbsp;</td>
 <td >3.9</td>
 <td >3.8</td>
 <td >3.8</td>
 <td >3.8</td>
 <td >3.6</td>
 <td >3.7</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Total (000s)</td>
 <td >5,937</td>
 <td >5,697</td>
 <td >5,695</td>
 <td >5,694</td>
 <td >5,292</td>
 <td >5,304</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="7" >Layoffs &amp;
 Discharges, Total</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Rate (%)</td>
 <td >1.2</td>
 <td >1.1</td>
 <td >1.2</td>
 <td >1.2</td>
 <td >1.2</td>
 <td >1.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Total (000s)</td>
 <td >1,752</td>
 <td >1,693</td>
 <td >1,784</td>
 <td >1,788</td>
 <td >1,719</td>
 <td >1,783</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="7" >Quits, Total</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Rate (%)</td>
 <td >2.3</td>
 <td >2.3</td>
 <td >2.3</td>
 <td >2.2</td>
 <td >2.1</td>
 <td >2.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Total (000s)</td>
 <td >3,482</td>
 <td >3,461</td>
 <td >3,447</td>
 <td >3,339</td>
 <td >3,030</td>
 <td >2,952</td>
 </tr>
 </tbody>
 </table>
 
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The Bureau of Labor Statistics reported that the total job openings rate held at 4.7% during April, unchanged m/m but up from 4.6% twelve months earlier. It remained on the expansion's rising trend. The job openings rate is the job [...]

U.S. JOLTS: Job Openings Stabilize; Hiring Strengthens

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The labor market weakened during May. Nonfarm payrolls
increased 75,000 (1.5% y/y) following a 224,000 April rise, revised from 263,000.
The March increase also was revised lower to 153,000 from 189,000. The May rise
in payrolls fell short of expectations for a 189,000 gain in the Action
Economics Forecast Survey. Average hourly earnings in the private sector
increased 0.2% for the third straight month and missed expectations for a 0.3%
rise. The April improvement was unrevised. Growth during the last twelve months
dropped to 3.1%.
The unemployment rate held steady at an expected 3.6% and
equaled the lowest rate since December 1969. Employment in the household survey
rose 113,000 and the labor force increased 176,000. The overall jobless rate,
including those who were marginally attached or working part-time for economic
reasons, fell to 7.1%, the lowest level since December 2000.
From the payroll employment survey, the overall increase of
75,000 was held back by broad-based weakening amongst sectors. The number of
construction jobs rose 4,000 following double-digit increases in the prior two
months. Factory sector employment edged 3,000 higher following a 5,000 gain.
Employment in the mining &amp; logging sectors inched just 1,000 higher, with
y/y growth falling to 4.0%, half last year's growth. 


Private service sector jobs increased 82,000 (1.7% y/y)
following gains of 170,000 and 140,000 in the prior two months. The number of
professional &amp; business services jobs rose a firm 33,000 (2.3% y/y), but was
roughly half the prior month's increase The number of temporary help jobs gained
5,100 (0.9% y/y) on the heels of a 9,900 gain.&nbsp; Education &amp; health
services employment increased 27,000 (2.5% y/y) after a 73,000 gain. Financial
activities employment rose 2,000 (1.1% y/y) following a 13,000 rise. Employment
in the trade, transportation &amp; utilities sector was unchanged (0.5% y/y)
after edging 1,000 higher. This figure was held back by a 7,600 decline (-0.7%
y/y) in retail sector jobs which was the fourth monthly decline this year.
Information sector jobs moved lower by 5,000 (-1.6% y/y) after a 10,000
decrease. It also was the fourth monthly decline this year following minimal
growth in 2018 and 2017. Improvement in employment growth was evident in the
leisure &amp; hospitality sector where jobs rose 26,000 (2.5% y/y) following a
17,000 increase.
Public sector employment declined 15,000 reflecting a 10,000
cutback (-0.1% y/y) in the number of state government jobs, the third
consecutive monthly decline. Local government employment eased 9,000 (+0.5% y/y)
after a 17,000 increase. Federal government jobs rose 4,000 (0.9% y/y), half the
prior month's gain.
&nbsp;The 0.2% increase in average hourly earnings reflected
a 0.3% rise in factory sector earnings which raised y/y growth to 2.2%, its best
since late 2017. Construction sector pay also improved 0.3%, but the 2.2% rise
is half what it was as of the end of last year. Private service sector earnings
rose 0.2%&nbsp; and the 3.2% y/y rise is below the peak 3.6% gain last summer.
Professional &amp; business services earnings gained 0.5% (3.4% y/y) Information
sector earnings also rose 0.5% (6.4% y/y). These gains where offset by a 0.1%
decline (+3.6 y/y) in financial sector earnings and no change in leisure &amp;
hospitality (3.0% y/y) pay.



The length of the length of the average workweek was stable m/m at 34.4 hours. Mining &amp; logging sector hours slipped to 46.3
and factory sector hours held steady at 40.6% hours. Construction sector hours
also were unchanged m/m at 39. 1 hours. Each of these figures is below the
earlier high. The length of the private service sector workweek held steady at
33.3 hours, where it's been since last July. The workweek in financial
activities eased to 37.6 hours as did financial activities hours. Information
services hours rose to 36.4, up from the early-2018 low of 35.8 hours. Trade,
transportation &amp; utilities hours fell to 34.2 hours, down sharply versus the
late-2017 peak. Leisure &amp; hospitality workweek fell sharply to 25.9 hours,
and has been trending lower since the end of 2015.&nbsp;&nbsp;&nbsp;&nbsp; 
From the household employment survey, the stable 3.6%
unemployment rate reflected a decline in the teenage jobless rate to 12.7% but a
rise for those aged 20-24 to 7.0%. The unemployment rate for individuals between
25 and 54 years old fell to the 2000 low of 2.9%, but or those 55 and over it
edged up to 2.7%. The labor force participation rate held steady at an average
32.8%, but for men aged&nbsp; 25-54 it fell to 88.8%, its lowest level since
September. For women aged 25-54 years old it held steady m/m at 75.5%. The
employment-to-population ratio held at 60.6% and remained up from the&nbsp; 2011
low of 58.2%. The number of people not in the labor force rose 0.5%
y/y. 
The unemployment rate for individuals without a high school
diploma&nbsp;held steady at 5.4%. For high school graduates but no college, it
held at 3.5% and for those without a college degree, it was 2.8%. For college
graduates, the unemployment rate was stable at 2.1%. 
The teenage unemployment rate slipped to 12.7%. For
individuals age 20-24, it was 7.0% and for those aged 25-54, the unemployment
rate was 2.9%. For those over age 55, the unemployment rate was 2.7%.&nbsp; 
The labor market data are contained in Haver's USECON
database. Detailed figures are in the EMPL and LABOR databases.
The expectations figures are in the AS1REPNA database.
Has U.S. Monetary Policy Gone Off Track? from the
Federal Reserve Bank of Dallas is available here <a href="https://www.dallasfed.org/research/economics/2019/0606.aspx">https://www.dallasfed.org/research/economics/2019/0606.aspx</a>
&nbsp;
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 <col>
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 </colgroup>
</table>
<table width="1871" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="960">Employment: (SA, M/M Change,
 000s)</th>
 <th scope="col" width="129">May</th>
 <th scope="col" width="129">Apr</th>
 <th scope="col" width="129">Mar</th>
 <th scope="col" width="130">May Y/Y</th>
 <th scope="col" width="130">2018</th>
 <th scope="col" width="130">2017</th>
 <th scope="col" width="130">2016</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="960">Payroll Employment</td>
 <td align="center" width="129">75</td>
 <td align="center" width="129">224</td>
 <td align="center" width="129">153</td>
 <td align="center" width="130">1.5%</td>
 <td align="center" width="130">1.7%</td>
 <td align="center" width="130">1.6%</td>
 <td align="center" width="130">1.8%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="960">&nbsp;Previous Estimate</td>
 <td align="center" width="129">--</td>
 <td align="center" width="129">263</td>
 <td align="center" width="129">189</td>
 <td align="center" width="130">--</td>
 <td align="center" width="130">--</td>
 <td align="center" width="130">--</td>
 <td align="center" width="130">--</td>
 </tr>
 <tr>
 <td class="firstcol" width="960">&nbsp; Manufacturing</td>
 <td align="center" width="129">3</td>
 <td align="center" width="129">5</td>
 <td align="center" width="129">-3</td>
 <td align="center" width="130">1.5</td>
 <td align="center" width="130">2.0</td>
 <td align="center" width="130">0.7</td>
 <td align="center" width="130">0.1</td>
 </tr>
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 <td class="firstcol" width="960">&nbsp; Construction</td>
 <td align="center" width="129">4</td>
 <td align="center" width="129">30</td>
 <td align="center" width="129">15</td>
 <td align="center" width="130">2.8</td>
 <td align="center" width="130">4.6</td>
 <td align="center" width="130">3.6</td>
 <td align="center" width="130">4.1</td>
 </tr>
 <tr>
 <td class="firstcol" width="960">&nbsp; Private Service-Producing</td>
 <td align="center" width="129">82 </td>
 <td align="center" width="129">170</td>
 <td align="center" width="129">140</td>
 <td align="center" width="130">1.7</td>
 <td align="center" width="130">1.7</td>
 <td align="center" width="130">1.8</td>
 <td align="center" width="130">2.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="960">&nbsp; Government</td>
 <td align="center" width="129">-15</td>
 <td align="center" width="129">19</td>
 <td align="center" width="129">0</td>
 <td align="center" width="130">0.4</td>
 <td align="center" width="130">0.4</td>
 <td align="center" width="130">0.6</td>
 <td align="center" width="130">0.9</td>
 </tr>
 <tr>
 <td class="firstcol" width="960">Average Weekly Hours - Private Sector</td>
 <td align="center" width="129">34.4</td>
 <td align="center" width="129">34.4</td>
 <td align="center" width="129">34.5</td>
 <td align="center" width="130">34.5</td>
 <td align="center" width="130">34.5</td>
 <td align="center" width="130">34.4</td>
 <td align="center" width="130">34.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="960">Private Sector Average Hourly Earnings
 (%)</td>
 <td align="center" width="129">0.2</td>
 <td align="center" width="129">0.2</td>
 <td align="center" width="129">0.2</td>
 <td align="center" width="130">3.1</td>
 <td align="center" width="130">3.0</td>
 <td align="center" width="130">2.6</td>
 <td align="center" width="130">2.6</td>
 </tr>
 <tr>
 <td class="firstcol" width="960">Unemployment Rate (%)</td>
 <td align="center" width="129">3.6</td>
 <td align="center" width="129">3.6</td>
 <td align="center" width="129">3.8</td>
 <td align="center" width="130">3.8</td>
 <td align="center" width="130">3.9</td>
 <td align="center" width="130">4.4</td>
 <td align="center" width="130">4.9</td>
 </tr>
 </tbody>
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The labor market weakened during May. Nonfarm payrolls increased 75,000 (1.5% y/y) following a 224,000 April rise, revised from 263,000. The March increase also was revised lower to 153,000 from 189,000. The May rise in payrolls fell [...]

U.S. Payroll Growth Slows Significantly; Wage Gain Eases Y/Y

Gerald D. Cohen

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Consumer credit outstanding increased $10.27 billion (5.0%
y/y) during March...........



The consumer credit data are available in Haver's USECON
database. The Action Economics figures are contained in the AS1REPNA database.


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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Consumer Credit
 Outstanding (M/M Chg, SA)</th>
 <th scope="col" >Mar</th>
 <th scope="col" >Feb</th>
 <th scope="col" >Jan</th>
 <th scope="col" >Mar y/y</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td>$10.27 bil.</td>
 <td>$15.47 bil.</td>
 <td>$17.17 bil.</td>
 <td>5.0</td>
 <td>4.7</td>
 <td>5.0</td>
 <td>6.8</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; &nbsp;Nonrevolving</td>
 <td>12.45</td>
 <td>12.38</td>
 <td>14.36</td>
 <td>5.6</td>
 <td>5.3</td>
 <td>4.8</td>
 <td>6.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; &nbsp;Revolving</td>
 <td>-3.18</td>
 <td>3.08</td>
 <td>2.80</td>
 <td>3.5</td>
 <td>3.1</td>
 <td>5.6</td>
 <td>6.8</td>
 </tr>
 </tbody>
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Consumer credit outstanding increased $10.27 billion (5.0% y/y) during March........... The consumer credit data are available in Haver's USECON database. The Action Economics figures are contained in the AS1REPNA database. Consumer [...]

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Wholesale inventories increased 0.8% in April (7.6% year-over-year), following no change in March (revised up from a 0.1% decline). The Informa Global Markets Survey anticipated a 0.7% rise. Wholesale inventory swings can have a meaningful impact on GDP. In the first quarter, inventories provided a 0.6 percentage point boost to GDP growth.

Durable goods inventories increased 1.0% (11.0% y/y) in April after a 0.3% rise in March. Machinery inventories, the largest sector, grew 0.6% (14.2% y/y), while vehicles, the second largest, advanced 3.8% (13.1% y/y). Electrical equipment was up 0.4% (9.6% y/y). Inventories of nondurable goods gained 0.5% (2.5% y/y) after declining 0.6% in March. Drug inventories, which make up a quarter of nondurable inventories, rose 1.5% (7.0% y/y). Groceries, the second largest category, gained 0.9% (2.0% y/y).

Wholesale sales declined 0.4% during April (+2.7% y/y) following a 1.8% gain. The Action Economics Forecast Survey looked for an unchanged reading.

Durable goods sales fell 1.1% (+1.6% y/y) after a 0.6% increase. Electrical equipment, the largest sector, dropped 3.2% (-0.2% y/y). Professional and commercial equipment, which includes computers, declined 1.8% (+2.4% y/y). These decreases were somewhat offset by 0.5% growth in wholesale vehicle sales (3.1% y/y). Nondurable product sales rose 0.2% (3.8% y/y) after a 3.0% gain. Petroleum products edged down 0.1% (8.0% y/y) after jumping 8.5% in March. This is likely the result of the leveling off of oil prices in the early spring after a substantial increase in the first quarter. Drug sales, which vie with petroleum to be the largest category of nondurable sales, were unchanged (+4.6% y/y) while groceries gained 0.9% (4.9% y/y).

The inventory-to-sales (I/S) ratio at the wholesale level edged up to 1.34. I/S ratio has been range-bound during 2019 after rising during the second half of last year, The Durable goods I/S ratio increased to 1.75, the highest level since the end of the Great Recession. The machinery ratio declined to 2.69, while motor vehicles rose to 1.80, a ten year high. The I/S ratio for nondurable goods increased to 0.97. The petroleum industry I/S ratio edged up to 0.34 from March’s four-and-a-half year low of 0.34. The drug industry I/S rose to 1.10.

The wholesale trade figures and oil prices are available in Haver's USECON database.
The expectations figure for inventories is contained in the MMSAMER database. Expectations for sales are
in the AS1REPNA database.

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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Wholesale Sector - NAICS
 Classification&nbsp;(%)</th>
 <th>Apr</th>
 <th>Mar</th>
 <th>Feb</th>
 <th>Apr Y/Y</th>
 <th>2018</th>
 <th>2017</th>
 <th>2016</th>
 </tr>
 </thead>
 <tbody>
 <tr class="odd">
 <td class="firstcol" >Inventories</td>
<td >0.8</td>
<td >0.0</td>
<td >0.4</td>
<td >7.6</td>
<td >7.1</td>
<td >3.3</td>
<td >1.9</td>
 </tr>
 <tr>
 <td class="firstcol" >Sales</td>
<td >-0.4</td>
<td >1.8</td>
<td >0.3</td>
<td >2.7</td>
<td >6.5</td>
<td >6.7</td>
<td >-1.3</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >I/S Ratio</td>
<td >1.34</td>
<td >1.33</td>
<td >1.35</td>
<td >1.28 (Apr '18)</td>
<td >1.29</td>
<td >1.30</td>
<td >1.35</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

Wholesale inventories increased 0.8% in April (7.6% year-over-year), following no change in March (revised up from a 0.1% decline). The Informa Global Markets Survey anticipated a 0.7% rise. Wholesale inventory swings can have a [...]

Wholesale Inventories Rise as Sales Decline

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Consumer credit outstanding increased $17.49 billion (5.1% year-on-year) to $4.070 trillion in April, following an upwardly revised $11.0 bil. in March (was $10.3 bil,). A $12.3 billion gain had been expected by the Action Economics Forecast Survey.

Nonrevolving credit usage grew $10.53 billion (5.6% y/y) during April, down from $13.0 bil. in March. Borrowing from the federal government, which issues over 40% of nonrevolving credit, grew 7.3% y/y. Depository institutions (25% of credit) gained 5.0% y/y. Meanwhile finance company balances edged up 0.1% y/y and credit union loans jumped 11.6% y/y. Each of these sectors provide roughly 15% of nonrevolving credit.

Revolving consumer credit balances grew $6.95 billion (3.9% y/y) in April, after falling $2.0 billion in March. Credit provided by depository institutions, which makes up 90% of revolving balances, grew 5.3% y/y. Borrowing from credit unions (6% of the issuance) was up 8.3% y/y.

During Q1'19, student loan debt increased 4.9% y/y, a slowdown from the 5.3% rate in Q4'18. Motor vehicle financing grew 3.9% y/y, the fastest pace since mid-2017.
These Federal Reserve Board figures are break-adjusted and calculated by Haver Analytics.
The breaks in the series in 2005, 2010 and 2015 are the result of the incorporation of the Census and Survey
of Finance Companies, as well as changes in the seasonal adjustment methodology.

The consumer credit data are available in Haver's USECON
database. The Action Economics figures are contained in the AS1REPNA database.


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<table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Consumer Credit
 Outstanding (M/M Chg, SA)</th>
 <th scope="col" >Apr</th>
 <th scope="col" >Mar</th>
 <th scope="col" >Feb</th>
 <th scope="col" >Apr y/y</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td>$17.49 bil.</td>
 <td>$11.05 bil.</td>
 <td>$15.47 bil.</td>
 <td >5.1</td>
 <td >4.7</td>
 <td >5.0</td>
 <td >6.8</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; &nbsp;Nonrevolving</td>
 <td>10.53</td>
 <td>13.02</td>
 <td>12.30</td>
 <td >5.6</td>
 <td >5.3</td>
 <td >4.8</td>
 <td >6.9</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; &nbsp;Revolving</td>
 <td>6.95</td>
 <td>-1.99</td>
 <td>3.19</td>
 <td>3.9</td>
 <td>3.1</td>
 <td>5.6</td>
 <td>6.8</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

Consumer credit outstanding increased $17.49 billion (5.1% year-on-year) to $4.070 trillion in April, following an upwardly revised $11.0 bil. in March (was $10.3 bil,). A $12.3 billion gain had been expected by the Action Economics [...]

Faster Than Expected U.S. Consumer Credit Growth

Carol Stone, CBE

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Total borrowing in U.S. financial markets was $3,504 billion in Q1 2019, more than double the Q4 2018 amount of $1,633 billion, according to the Federal Reserve's Financial Accounts data, which were published Thursday, June 6. The borrowing amounted to 16.6% of GDP in Q1, compared to just 7.8% in Q4. The Q1 ratio to GDP was relatively high in recent history, but can be seen in the context of the relatively small amount in Q4; clearly it will be important to see whether any heavier borrowing trend develops in the near future. Note that all the numbers quoted here are seasonally adjusted annual rates.

Every major sector except households participated in the Q1 borrowing increase, and even the reduction in household borrowing was quite modest. The federal government borrowed $1,531 billion, and that must be compared to the relatively small amount in Q4 of $444 billion. Indeed, a four-quarter moving average is seen to decrease from $1.258 billion in Q4 to $1.085 billion in Q1.

Nonfinancial corporate business borrowing also rose substantially in Q1, totaling $737 billion, more than double the Q4 amount of $323 billion. In Q1, there were sizable increases in two major forms of corporate borrowing; net new bond issuance was $303 billion, up from just $85 billion in Q4, and commercial paper issuance was $107 billion after a net paydown of $143 billion in Q4. Net new loans to businesses, by contrast, saw a modest decrease to $314 billion in Q1 from $367 billion in Q4. The overall increase in corporate debt represented 33.4% of corporate capital outlays in Q1; this is the largest share since the middle of 2017, but is still in a range that otherwise prevailed during the post-Great-Recession period. What is more likely is that the tax reform law that took effect at the beginning of 2018 reduced the amount of borrowing companies had to do then to finance capital expenditures.

Financial institutions borrowed $535 billion in Q1, up from $438 billion in Q4. This represents 2.5% of GDP and remains close in line with the magnitude of those institutions’ funding needs over the last five or six years.

Regarding households, the decrease in Q1 borrowing took place in consumer credit, specifically in revolving credit (credit cards) and student loans. Household borrowing totaled $174 billion in Q1, down from $215 billion in Q4. Revolving credit increased just $16 billion in Q1, less than one-third of the $52 billion in Q4. Student loans increased $60 billion in Q1, slightly less than the $84 billion in Q4. Auto loans and “other” credit had marginally larger increases in Q1 than in Q4. Home mortgages picked up slightly in Q1, increasing $251 billion versus $229 billion the quarter before. All together, household borrowing amounted to 1.6% of disposable personal income in Q1, barely more than the 1.5% in Q4; for comparison, the pre-Great-Recession period saw as much as 12.5% and in 2007, it was still 6.8%.

The Fed’s press release of these Financial Accounts and the associated press reports highlight household balance sheets and net worth. Household net worth rebounded in Q1, as the stock market came back from its late autumn decline. Net worth was $108.6 trillion on March 31 (amount outstanding, not seasonally adjusted), compared to $104.0 trillion at year-end. The Q1 amount was 684% of disposable personal income, up from 660% at year-end. In Q1, households' holdings of corporate equities and mutual fund shares rose by $2.823 trillion (not seasonally adjusted quarterly change) after falling $4.329 trillion in Q4, while holdings of debt securities and money fund shares increased $215 billion, actually a bit less that Q4’s $452 billion. Real estate holdings and other nonfinancial assets gained $459 billion in Q1 after $327 billion in Q4. Household liabilities were virtually flat, rising just $6 billion after a $132 billion increase in Q4. Home mortgage liabilities were $10.356 trillion, which represents 39.6% of household real estate holdings, down from 40.0% at the end of Q4; the Q1 amount is the smallest fraction since Q1 2002 and contrasts with 63.3% in Q1 2009 in the midst of the Great Recession financial crisis.

Net wealth of the total U.S. economy recovered $5.078 trillion in Q1 after the stock-market-driven drop of $5.864 trillion in Q4. It amounted to $98.3 trillion on March 31, up from $93.2 billion at year-end 2018 (levels, not seasonally adjusted). The associated market value of domestic corporations rose $4.486 trillion in Q1 after the $6.462 trillion drop in Q4. Net financial claims on the "rest of the world" were -$6.596 trillion on March 31, a bit larger than the -$6.393 trillion deficit on December 31. The remainder of the net wealth measure consists of nonfinancial assets held by households, noncorporate business and governments; these totaled $65.434 trillion on March 31, up $796 billion from December 31.


The Financial Accounts data are in Haver's FFUNDS database. Associated information is compiled
in the Integrated Macroeconomic Accounts produced jointly with the Bureau of Economic Analysis (BEA);
these are carried in Haver's USNA database as well as in FFUNDS.

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	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col">Financial Accounts (SAAR, Bil.$)</th>
 <th>Q1'19</th>
 <th>Q4'18</th>
 <th>Q3'18</th>
 <th>2018</th>
 <th>2017</th>
 <th>2016</th>
 <th>2015</th>
 </tr>
 </thead>
 
 <tr>
 <td class="firstcol" scope="col">Total Borrowing*</td>
 <td>3504</td>
 <td>1633</td>
 <td>2773</td>
 <td>2752</td>
 <td>2677</td>
 <td>2537</td>
 <td>2100</td>
 </tr>
 <tr class="odd">
 <td class="firstcol">Federal Government</td>
 <td>1531</td>
 <td>444</td>
 <td>1180</td>
 <td>1258</td>
 <td>599</td>
 <td>843</td>
 <td>725</td>
 </tr>
 <tr>
 <td class="firstcol">Households</td>
 <td>363</td>
 <td>437</td>
 <td>534</td>
 <td>488</td>
 <td>583</td>
 <td>463</td>
 <td>316</td>
 </tr>
 
 <td class="firstcol">Nonfinancial Corporate Business</td>
 <td>737</td>
 <td>323</td>
 <td>436</td>
 <td>299</td>
 <td>530</td>
 <td>305</td>
 <td>582</td>
 <tr>
 <td class="firstcol">Financial Sectors</td>
 <td>535</td>
 <td>438</td>
 <td>269</td>
 <td>340</td>
 <td>325</td>
 <td>468</td>
 <td>185</td>
 </tr>
 
 
 
 *Previously called "credit market borrowing" and includes debt securities plus loans. The total here includes borrowing by noncorporate business, state & local governments and foreign sectors, not shown separately.
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Total borrowing in U.S. financial markets was $3,504 billion in Q1 2019, more than double the Q4 2018 amount of $1,633 billion, according to the Federal Reserve's Financial Accounts data, which were published Thursday, June 6. The [...]

U.S. Financial Accounts Show Q1 Rebound in Borrowing

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The labor market weakened during May. Nonfarm payrolls
increased 75,000 (1.5% y/y) following a 224,000 April rise, revised from 263,000.
The March increase also was revised lower to 153,000 from 189,000. The May rise
in payrolls fell short of expectations for a 189,000 gain in the Action
Economics Forecast Survey. Average hourly earnings in the private sector
increased 0.2% for the third straight month and missed expectations for a 0.3%
rise. The April improvement was unrevised. Growth during the last twelve months
dropped to 3.1%.

The unemployment rate held steady at an expected 3.6% and
equaled the lowest rate since December 1969. Employment in the household survey
rose 113,000 and the labor force increased 176,000. The overall jobless rate,
including those who were marginally attached or working part-time for economic
reasons, fell to 7.1%, the lowest level since December 2000.

From the payroll employment survey, the overall increase of
75,000 was held back by broad-based weakening amongst sectors. The number of
construction jobs rose 4,000 following double-digit increases in the prior two
months. Factory sector employment edged 3,000 higher following a 5,000 gain.
Employment in the mining &amp; logging sectors inched just 1,000 higher, with
y/y growth falling to 4.0%, half last year's growth.

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Private service sector jobs increased 82,000 (1.7% y/y)
following gains of 170,000 and 140,000 in the prior two months. The number of
professional &amp; business services jobs rose a firm 33,000 (2.3% y/y), but was
roughly half the prior month's increase The number of temporary help jobs gained
5,100 (0.9% y/y) on the heels of a 9,900 gain. Education &amp; health
services employment increased 27,000 (2.5% y/y) after a 73,000 gain. Financial
activities employment rose 2,000 (1.1% y/y) following a 13,000 rise. Employment
in the trade, transportation &amp; utilities sector was unchanged (0.5% y/y)
after edging 1,000 higher. This figure was held back by a 7,600 decline (-0.7%
y/y) in retail sector jobs which was the fourth monthly decline this year.
Information sector jobs moved lower by 5,000 (-1.6% y/y) after a 10,000
decrease. It also was the fourth monthly decline this year following minimal
growth in 2018 and 2017. Improvement in employment growth was evident in the
leisure &amp; hospitality sector where jobs rose 26,000 (2.5% y/y) following a
17,000 increase.

Public sector employment declined 15,000 reflecting a 10,000
cutback (-0.1% y/y) in the number of state government jobs, the third
consecutive monthly decline. Local government employment eased 9,000 (+0.5% y/y)
after a 17,000 increase. Federal government jobs rose 4,000 (0.9% y/y), half the
prior month's gain.

The 0.2% increase in average hourly earnings reflected
a 0.3% rise in factory sector earnings which raised y/y growth to 2.2%, its best
since late 2017. Construction sector pay also improved 0.3%, but the 2.2% rise
is half what it was as of the end of last year. Private service sector earnings
rose 0.2% and the 3.2% y/y rise is below the peak 3.6% gain last summer.
Professional &amp; business services earnings gained 0.5% (3.4% y/y) Information
sector earnings also rose 0.5% (6.4% y/y). These gains where offset by a 0.1%
decline (+3.6 y/y) in financial sector earnings and no change in leisure &amp;
hospitality (3.0% y/y) pay.

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The length of the length of the average workweek was stable m/m
at 34.4 hours. Mining &amp; logging sector hours slipped to 46.3
and factory sector hours held steady at 40.6% hours. Construction sector hours
also were unchanged m/m at 39. 1 hours. Each of these figures is below the
earlier high. The length of the private service sector workweek held steady at
33.3 hours, where it's been since last July. The workweek in financial
activities eased to 37.6 hours as did financial activities hours. Information
services hours rose to 36.4, up from the early-2018 low of 35.8 hours. Trade,
transportation &amp; utilities hours fell to 34.2 hours, down sharply versus the
late-2017 peak. Leisure &amp; hospitality workweek fell sharply to 25.9 hours,
and has been trending lower since the end of 2015.

From the household employment survey, the stable 3.6%
unemployment rate reflected a decline in the teenage jobless rate to 12.7% but a
rise for those aged 20-24 to 7.0%. The unemployment rate for individuals between
25 and 54 years old fell to the 2000 low of 2.9%, but or those 55 and over it
edged up to 2.7%. The labor force participation rate held steady at an average
32.8%, but for men aged 25-54 it fell to 88.8%, its lowest level since
September. For women aged 25-54 years old it held steady m/m at 75.5%. The
employment-to-population ratio held at 60.6%and remained up from the 2011
low of 58.2%. The number of people not in the labor force rose 0.5% y/y.

The labor market data are contained in Haver's USECON
database. Detailed figures are in the EMPL and LABOR databases.
The expectations figures are in the AS1REPNA database.
Has U.S. Monetary Policy Gone Off Track? from the
Federal Reserve Bank of Dallas is available <a href="https://www.dallasfed.org/research/economics/2019/0606.aspx">here</a>.

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 <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Employment: (SA, M/M Change,
 000s)</th>
 <th scope="col" >May</th>
 <th scope="col" >Apr</th>
 <th scope="col" >Mar</th>
 <th scope="col" >May Y/Y</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Payroll Employment</td>
 <td>75</td>
 <td>224</td>
 <td>153</td>
 <td>1.5%</td>
 <td>1.7%</td>
 <td>1.6%</td>
 <td>1.8%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Previous Estimate</td>
 <td>--</td>
 <td>263</td>
 <td>189</td>
 <td>--</td>
 <td>--</td>
 <td>--</td>
 <td>--</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Manufacturing</td>
 <td>3</td>
 <td>5</td>
 <td>-3</td>
 <td>1.5</td>
 <td>2.0</td>
 <td>0.7</td>
 <td>0.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Construction</td>
 <td>4</td>
 <td>30</td>
 <td>15</td>
 <td>2.8</td>
 <td>4.6</td>
 <td>3.6</td>
 <td>4.1</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Private Service-Producing</td>
 <td>82</td>
 <td>170</td>
 <td>140</td>
 <td>1.7</td>
 <td>1.7</td>
 <td>1.8</td>
 <td>2.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Government</td>
 <td>-15</td>
 <td>19</td>
 <td>0</td>
 <td>0.4</td>
 <td>0.4</td>
 <td>0.6</td>
 <td>0.9</td>
 </tr>
 <tr>
 <td class="firstcol" >Average Weekly Hours - Private Sector</td>
 <td>34.4</td>
 <td>34.4</td>
 <td>34.5</td>
 <td>34.5</td>
 <td>34.5</td>
 <td>34.4</td>
 <td>34.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Private Sector Average Hourly Earnings
 (%)</td>
 <td>0.2</td>
 <td>0.2</td>
 <td>0.2</td>
 <td>3.1</td>
 <td>3.0</td>
 <td>2.6</td>
 <td>2.6</td>
 </tr>
 <tr>
 <td class="firstcol" >Unemployment Rate (%)</td>
 <td>3.6</td>
 <td>3.6</td>
 <td>3.8</td>
 <td>3.8</td>
 <td>3.9</td>
 <td>4.4</td>
 <td>4.9</td>
 </tr>
 </tbody>
 </table>
 
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The labor market weakened during May. Nonfarm payrolls
increased 75,000 (1.5% y/y) following a 224,000 April rise, revised from 263,000.
The March increase also was revised lower to 153,000 from 189,000. The May rise
in payrolls fell short of expectations for a 189,000 gain in the Action
Economics Forecast Survey. Average hourly earnings in the private sector
increased 0.2% for the third straight month and missed expectations for a 0.3%
rise. The April improvement was unrevised. Growth during the last twelve months
declined to 3.1%.

The unemployment rate held steady at an expected 3.6% and
equaled the lowest rate since December 1969. Employment in the household survey
rose 113,000 and the labor force increased 176,000. The overall jobless rate,
including those who were marginally attached or working part-time for economic
reasons, fell to 7.1%, the lowest level since December 2000.

From the payroll employment survey, the overall increase of
75,000 was held back by broad-based weakening amongst sectors. The number of
construction jobs rose 4,000 following double-digit increases in the prior two
months. Factory sector employment edged 3,000 higher following a 5,000 gain.
Employment in the mining &amp; logging sectors inched just 1,000 higher, with
y/y growth falling to 3.6%, half last year's growth.

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 <a href="/comment/190607u.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/190607u.png"></a>

Private service sector jobs increased 82,000 (1.7% y/y)
following gains of 170,000 and 140,000 in the prior two months. The number of
professional &amp; business services jobs rose a firm 33,000 (2.3% y/y), but was
roughly half the prior month's increase The number of temporary help jobs gained
5,100 (0.9% y/y) on the heels of a 9,900 gain. Education &amp; health
services employment increased 27,000 (2.5% y/y) after a 73,000 gain. Financial
activities employment rose 2,000 (1.1% y/y) following a 13,000 rise. Employment
in the trade, transportation &amp; utilities sector was unchanged (0.5% y/y)
after edging 1,000 higher. This figure was held back by a 7,600 decline (-0.7%
y/y) in retail sector jobs which was the fourth consecutive monthly decline.
Information sector jobs moved lower by 5,000 (-1.6% y/y) after a 10,000
decrease. It also was the fourth monthly decline this year following minimal
growth in 2018 and 2017. Improvement in employment growth was evident in the
leisure &amp; hospitality sector where jobs rose 26,000 (2.5% y/y) following a
17,000 increase.

Public sector employment declined 15,000 reflecting a 10,000
cutback (-0.1% y/y) in the number of state government jobs, the third
consecutive monthly decline. Local government employment eased 9,000 (+0.5% y/y)
after a 17,000 increase. Federal government jobs rose 4,000 (0.9% y/y), half the
prior month's gain. Only temporary census workers were hired in May.


The 0.2% increase in average hourly earnings reflected a 0.3% rise in factory sector
earnings which raised y/y growth to 2.2%, its best since late 2017. Construction
sector pay also improved 0.3%, but the 3.2% rise is down from 3.8% as of the end
of last year. Private service sector earnings rose 0.2% and the 3.2% y/y rise is
below the peak 3.6% gain in October. Professional & business services earnings
gained 0.2% (3.1% y/y). Information sector earnings held steady (5.3% y/y).
These gains were accompanied by a 0.3% rise (3.6% y/y) in financial sector
earnings and a 0.4% rise in leisure & hospitality (3.8% y/y) pay.

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The length of the average workweek was stable m/m at 34.4 hours. Mining &amp; logging sector
hours slipped to 46.3 and factory sector hours held steady at 40.6% hours. Construction sector
hours also were unchanged m/m at 39.1 hours. Each of these figures is below cyclical highs.
The length of the private service sector workweek held steady at 33.3 hours, where it's been
since last July. The workweek in financial activities eased to 37.6 hours. Information services
hours rose to 36.4, up from the early-2018 low of 35.8 hours. Trade, transportation & utilities
hours fell to 34.2 hours, down sharply versus the late-2017 peak. The leisure & hospitality workweek
edged down to 25.9 hours, and has been trending lower since the end of 2015.

From the household employment survey, the stable 3.6%
unemployment rate reflected a decline in the teenage jobless rate to 12.7% but a
rise for those aged 20-24 to 7.0%. The unemployment rate for individuals between
25 and 54 years old fell to the 2000 low of 2.9%, but or those 55 and over it
edged up to 2.7%.

The labor force participation rate held steady at an average
62.8%, but for men aged 25-54 it fell to 88.8%, its lowest level since
September. For women aged 25-54 years old it held steady m/m at 75.5%. The
employment-to-population ratio held at 60.6%--well above the 2011 low of 58.2%.
The number of people not in the labor force rose 0.4% y/y.

The unemployment rate for individuals without a high school
diploma held steady at 5.4%. For high school graduates but no college, it
remained at 3.5% and for those without a college degree, it was 2.8% down from 3.1% in April.
For college graduates, the unemployment rate was stable at 2.1%.

The labor market data are contained in Haver's USECON
database. Detailed figures are in the EMPL and LABOR databases.
The expectations figures are in the AS1REPNA database.

Has U.S. Monetary Policy Gone Off Track? from the
Federal Reserve Bank of Dallas is available <a href="https://www.dallasfed.org/research/economics/2019/0606.aspx">here</a>.

<a href="/comment/190607v.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/190607v.png"></a>
 <a href="/comment/190607w.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/190607w.png"></a>

 <table class="centered" width="100%" border="0" cellspacing="0">
	<colgroup><col><col><col><col><col><col><col><col></colgroup>

 <thead>
 <tr>
 <th class="firstcol" scope="col" >Employment: (SA, M/M Change,
 000s)</th>
 <th scope="col" >May</th>
 <th scope="col" >Apr</th>
 <th scope="col" >Mar</th>
 <th scope="col" >May Y/Y</th>
 <th scope="col" >2018</th>
 <th scope="col" >2017</th>
 <th scope="col" >2016</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Payroll Employment</td>
 <td>75</td>
 <td>224</td>
 <td>153</td>
 <td>1.5%</td>
 <td>1.7%</td>
 <td>1.6%</td>
 <td>1.8%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Previous Estimate</td>
 <td>--</td>
 <td>263</td>
 <td>189</td>
 <td>--</td>
 <td>--</td>
 <td>--</td>
 <td>--</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Manufacturing</td>
 <td>3</td>
 <td>5</td>
 <td>-3</td>
 <td>1.5</td>
 <td>2.0</td>
 <td>0.7</td>
 <td>0.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Construction</td>
 <td>4</td>
 <td>30</td>
 <td>15</td>
 <td>2.8</td>
 <td>4.6</td>
 <td>3.6</td>
 <td>4.1</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Private Service-Producing</td>
 <td>82</td>
 <td>170</td>
 <td>140</td>
 <td>1.7</td>
 <td>1.7</td>
 <td>1.8</td>
 <td>2.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; Government</td>
 <td>-15</td>
 <td>19</td>
 <td>0</td>
 <td>0.4</td>
 <td>0.4</td>
 <td>0.6</td>
 <td>0.9</td>
 </tr>
 <tr>
 <td class="firstcol" >Average Weekly Hours - Private Sector</td>
 <td>34.4</td>
 <td>34.4</td>
 <td>34.5</td>
 <td>34.5</td>
 <td>34.5</td>
 <td>34.4</td>
 <td>34.4</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Private Sector Average Hourly Earnings
 (%)</td>
 <td>0.2</td>
 <td>0.2</td>
 <td>0.2</td>
 <td>3.1</td>
 <td>3.0</td>
 <td>2.6</td>
 <td>2.6</td>
 </tr>
 <tr>
 <td class="firstcol" >Unemployment Rate (%)</td>
 <td>3.6</td>
 <td>3.6</td>
 <td>3.8</td>
 <td>3.8</td>
 <td>3.9</td>
 <td>4.4</td>
 <td>4.9</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

Incoming data surprising on downside in US; positive surprises elsewhere

FOMC expects more inflation and less growth than in March

With escalation of Israel/Iran conflict, geopolitical risk has recently surged while US trade policy uncertainty has ebbed

Renewed supply chain pressures point to a rebound in global inflation ahead

Apart from Japan, Blue Chip forecasters look for further significant monetary policy easing

Apart from the US, productivity is moribund

Financial market concerns ebb even though policy uncertainty continues to soar

US tariff revenues nearly doubled in April

Even with expected tariff-induced increases in inflation, BCFF forecasters look for a more aggressive round of monetary easing

USD/EUR exchange rate uncoupling from interest rate differential

Widespread downgrading of 2025 GDP outlook

Trade and fiscal policy uncertainty has exploded with the new administration

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

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Nonfarm payrolls increased 147,000 (1.1% y/y) during June after rising 144,000 in May, revised from 139,000, and 158,000 in April, revised from 147,000. Expectations had been for a 113,000 rise in the Action Economics Forecast Survey. The three-month average change of 150,000 in June compared to 232,000 in January.

Average hourly earnings rose 0.2% during June after an unrevised 0.4% May gain, and a 0.2% April increase. Earnings growth of 3.7% y/y is down from a high of 4.2% last November, and has been trending lower from the 5.9% high in March 2022. A 0.3% increase expected for June.

The unemployment rate, measured in the household survey, fell m/m to 4.1%. It compared to 4.2% in May where it had been for three straight months. A rise to 4.3% was expected. It reached a low of 3.4% in April 2023. The unemployment rate, including employees working part-time for economic reasons plus all marginally-attached workers, eased to 7.7% last month from 7.8% In May. It was 6.6% in April 2023.

In the **establishment survey**, private-sector employment in June rose 74,000 (1.0% y/y) after a 137,000 May increase. Factory sector jobs declined 7,000 (-0.7% y/y) for the second consecutive month. Construction sector employment increased 15,000 (1.4% y/y), after rising 6,000 in May.

Private service-producing sector employment increased 68,000 (1.2% y/y) in June after improving 141,000 in May. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 51,000 (3.3% y/y) last month while leisure & hospitality employment rose 20,000 (1.4% y/y). Trade, transportation & utilities employment gained 3,000 (0.6% y/y) and financial activities employment improved 3,000 (1.0% y/y).

Government sector payrolls strengthened 73,000 (1.5% y/y) last month following a 7,000 rise in May. State government employment increased 47,000 (2.8% y/y) while the number of local government jobs rose 33,000 (1.7% y/y). Federal government payrolls fell 7,000 (-2.1% y/y), the fifth straight monthly decline.

Private-sector average hourly earnings rose 0.2% (3.7% y/y) in June following unrevised increases of 0.4% in May and 0.2% in April. Earnings in the goods-producing sector edged 0.1% (3.6% y/y) higher. In construction earnings rose 0.4% (3.9% y/y) but factory sector earnings eased 0.1% (+3.5% y/y). In the private services-sector, earnings rose 0.2% (3.7% y/y) in June.

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The length of the average workweek shortened to 34.2 hours in June from 34.3 hours in May. The workweek in the goods-producing sector was unchanged at 39.8 hours. The construction sector average workweek eased to 38.9 hours while the factory sector workweek held steady at 40.1 hours. The average workweek in the private service sector eased to 33.1 hours.

In the **household survey**, the unemployment rate dipped to 4.1% in June from 4.2% in May as employment rose 96,000 and the size of the labor force declined 130,000, off for the second straight month. The labor force participation rate eased to 62.3% last month and remained below the high of 63.3% early in 2020. The rate for teenagers plunged to 35.1%, a five-year low. For workers aged 20-24, the rate declined to 71.0%. For workers aged 25-54, the participation rate edged up to 83.5%. For individuals 55 and over, the rate eased to nearly a 20-year low of 38.0% in June.

The employment/population ratio for all workers held steady at 59.7% last month. It remained below the peak reading of 61.1% in February, 2020 just prior to the pandemic.

The employment and earnings data are collected from surveys taken each month during the week containing the 12th day of the month. The labor market data are contained in Haver's **USECON** database. Detailed figures are in the **EMPL** and **LABOR** databases. The expectations figures are in the **AS1REPNA** database.

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- Job growth improves with strength in state & local gov’t hiring.
- Earnings gain decelerates.
- Jobless rate falls to four-month low.

U.S. Job Growth Firms in June, While Earnings Growth & Jobless Rate Decline

Sandy Batten

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The U.S. trade deficit in goods and services (BOP basis) widened to $71.5 billion in May from a downwardly revised $60.3 billion in April (previously -$61.6 billion), according to the U.S. Census Bureau. The actual widening met the Action Economics Forecast Survey expectation. Exports fell 4.0% m/m (+5.3% y/y), the first monthly decline in five months, led by a 5.7% m/m decline in goods exports. Imports edged down 0.1% m/m (+3.3% y/y) in May after a 16.3% m/m plunge in April. Imports of goods have cooled markedly in the past two months after surging during Q1 as importers attempted to front run expected increases in tariffs.

The real (inflation adjusted) goods trade deficit widened to $92.5 billion (2017$) in May from $84.4 billion in April. The real trade deficit had widened to record levels during the first quarter with net exports subtracting 4.6%-points from Q1 GDP. The April/May figures put the real balance on course to narrow by roughly $150 billion in Q2 (at a quarterly rate), which would mean that net exports in the national accounts could add 2-1/2 to 3%-points to Q2 GDP.

The trade deficit in goods widened to $97.5 billion in May from $86.3 billion in April. Goods exports fell 5.7% m/m, the first monthly decline in five months. Exports of nonmonetary gold fell $5.5 billion (-56.4% m/m) while exports of finished metal shapes (which includes other forms of nonmonetary gold) fell $1.0 billion (-10.0% m/m). Both of these had surged in April, reflecting re-exports of previous nonmonetary gold imports that had risen markedly in Q1 in an attempt to front run expected tariff increases. More generally, exports of industrial supplies and materials slumped 13.3% m/m in May after a 16.1% m/m jump in April. Capital goods ex autos declined 3.1% m/m, and food exports fell 2.5% m/m, the fifth monthly decline in the past six months. In contrast, auto exports rebounded, rising 3.6% m/m, but failed to come close to reversing the 21.5% plunge in April. Exports of nonfood consumer goods ex autos posted a solid 6.9% monthly gain after having declined in each of the preceding two months.

Imports of goods edged down 0.1% m/m (+2.8% y/y) in May on top of a 19.9% monthly plunge in April, indicating that the surge in imports in Q1 ahead of expected tariff hikes has run its course. Auto imports jumped 10.3% m/m after a 19.9% monthly decline in April. Imports of “other” goods rebounded 8.4% m/m in May following a 3.3% m/m decline in April. In contrast, imports of industrial supplies and materials fell 1.8% m/m, the fourth consecutive monthly decline. Imports of nonfood consumer goods ex autos fell 5.7% m/m on top of a 32.0% drop in April. Food imports posted a small monthly decline while imports of capital goods ex autos posted a small increase.

The services trade surplus narrowed marginally to $25.99 billion in May from $26.05 billion in April. Exports of services slid 0.2% m/m after a 2.2% monthly increase in April. Exports of transport services fell 2.0% m/m, the third monthly decline in the past four months. Travel exports declined 1.8% m/m, the fourth monthly decline in the past five months. In contrast, maintenance services exports rose 2.1% m/m; exports of insurance services increased 1.5% m/m; exports of intellectual property rose 0.9% m/m; and construction service exports gained 1.4% m/m. Services imports declined 0.2% m/m in May, the first monthly decline in three months. Imported transport services fell 3.3% m/m, the fourth monthly decline in the past five months. Travel imports declined 1.0% m/m, also the fourth monthly decline in the past five months. In contrast, imported construction services jumped 3.9% m/m and imported intellectual property rose 1.6% m/m.

The U.S. goods trade deficit with China narrowed markedly to a seasonally adjusted $14.0 billion from $19.7 billion in April and $24.2 billion March. This is the smallest monthly deficit with China in the history of the series, which dates back to 2009. Exports to China plunged 19.9% m/m while imports from China plummeted 26.3% m/m. The trade deficit with the European Union widened to $22.5 billion from $17.9 billion in April. The trade deficit with Japan narrowed marginally to $5.77 billion in May from $5.81 billion in April.

The international trade data, including relevant data on oil prices, can be found in Haver’s **USECON** database. Detailed figures on international trade are available in the **USINT** and **USTRADE** databases. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Trade deficit widened in May on decline in goods exports.
- Still, the real deficit in April/May points to net exports making a meaningful positive contribution to Q2 GDP.
- Both exports and imports declined in May.
- Series low trade deficit with China.

U.S. Trade Deficit Widened in May

Kathleen Stephansen, CBE

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Initial claims for unemployment insurance were 233,000 in the week of June 28, down 4,000 from 237,000 in the week ending June 21, revised from 236,000. The Action Economics Forecast Survey expected 240,000. These data are seasonally adjusted by the Department of Labor. The 4-week moving average was 241,500, a decrease of 3,750 from the previous week’s average of 245,250, revised from 245,000.

The total number of unemployment insurance beneficiaries – also known as “continuing claims” – in the week ended June 21 was 1.964 million, unchanged from the prior week’s level, which was revised down from 1.974 million. The 4-week moving average was 1.954 million, up from 1.938 million in the previous week, revised from 1.941 million. This is the highest level for this average since November 20, 2021, when it was 2.004 million.

The insured unemployment rate for the week ending June 21, that is, the number of unemployment beneficiaries as a % of covered employment, was unchanged at 1.3% for the fourth consecutive week.

Economic conditions vary widely across states and territories. In the week ended June 14, the highest unemployment rates were in New Jersey (2.23%), Minnesota (2.22%), Puerto Rico (2.20%), California (2.16%), Washington (1.98%), and Rhode Island (1.95%). The lowest rates were in South Dakota (0.27%), Florida (0.41%), North Carolina (0.47%), and Alabama (0.48%). Rates in other notable states include Pennsylvania (1.71%), Illinois (1.67%), New York (1.55%), and Texas (1.26%). These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor itself, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

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- Initial claims for unemployment insurance declined by 4,000 in the week ended June 28.
- Total number of beneficiaries was unchanged in the week of June 21 week.
- The insured unemployment rate was unchanged at 1.3%.

U.S. Initial Jobless Claims Decreased in Latest Week

Andrew Cates

**The Blue Chip interest rate consensus**
The latest Blue Chip Financial Forecasts survey suggests that monetary policy across most major advanced economies is expected to loosen modestly over the next six months. Central banks in the US, Canada, UK, Australia, and the euro area are all forecast to cut rates to varying degrees, with Australia expected to deliver the largest reduction. In contrast, Japan continues to stand out as the only major economy where forecasters see scope for a slight increase in rates, highlighting its unique position in the global policy cycle. Overall, the chart reflects a broad but uneven tilt towards monetary easing as policymakers respond to softer inflation and growth signals.

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**The US dollar and data surprises** 
This next chart shows that the recent bout of US dollar weakness has coincided with a period in which US economic data surprises have turned more negative relative to the euro area. The surprise index differential between the US and euro area —measuring US growth surprises minus euro surprises—has declined, pointing to a run of weaker-than-expected US data and stronger euro area outturns. Historically, this has tended to pull the euro higher relative to the dollar. However, the scale of the dollar’s recent slide appears larger than the data surprises alone would imply, suggesting that other forces are potentially weighing on the currency as well.

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**US stagflation risk**
Latest ISM manufacturing survey data highlight a worrying decoupling between input costs and underlying demand that points to potential stagflation pressures in the US economy. Historically, the ISM New Orders Index and the Prices Paid Index have tended to move broadly in sync, reflecting cycles where stronger demand drives both production and cost pressures higher. However, the chart shows that while prices paid have recently rebounded sharply, new orders have remained subdued and stuck near contractionary territory. This breakdown suggests that firms are facing rising input costs without a corresponding pickup in demand—an imbalance that could be amplified by US tariff measures, which tend to push up costs for imported materials and components while weighing on new orders through weaker trade flows.

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**US Supply Chain Risks** 
Added to this, the number of vessels queuing at the Los Angeles and Long Beach harbours has climbed to elevated levels in recent weeks, highlighting supply chain bottlenecks on the US West Coast. While various factors may be driving this congestion—including seasonal trade patterns and shifts in global shipping routes—recent tariff measures could be contributing as well. New or increased tariffs sometimes distort normal trade flows by prompting importers to front-load shipments ahead of cost increases or reroute sourcing strategies in ways that strain particular ports.

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**Global warming** 
Pivoting to more structural issues, the next chart highlights the persistent upward trend in global surface temperature anomalies over the past century, with both land and ocean temperatures now averaging well over one degree Celsius. This long-term warming signal continues to manifest in extreme weather events and record-breaking heat waves, including the unusually high temperatures that have swept parts of Europe in recent days, pushing June readings to historic highs in several regions.

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**Climate change and productivity** 
This final chart illustrates the projected impact of heat stress on labour productivity in Europe under current climate policy scenarios, highlighting how rising temperatures could steadily erode worker efficiency over the coming decades. As shown, the median estimates from the Climate Analytics group suggest that productivity losses could deepen from around 0.3 percentage points today to nearly 0.9 percentage points by mid-century if climate conditions remain unchanged. These figures reflect the physical limits of the human body’s capacity to perform work in increasingly hot and humid environments, a challenge that will become more acute if climate change continues on its current path. With recent record-high June temperatures across parts of Europe underscoring the reality of more frequent heat extremes, these projections serve as a clear reminder of the economic stakes involved in addressing climate risks and investing in adaptation measures to protect labour productivity and economic resilience.

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Financial markets have remained generally buoyant in recent days, with global equity indices advancing on the back of relatively upbeat global growth data, benign European inflation readings and the prospect of further policy easing from major central banks. At the same time, the US dollar has continued to weaken, reflecting a run of disappointing US economic data and rising investor concerns about the fiscal outlook, even as European growth surprises have turned more positive. This divergence, combined with the prospect of lower US policy rates relative to some (though not all) peers, has added to the dollar’s drift lower (charts 1 and 2). Supply chain strains—highlighted by elevated vessel queues at US West Coast ports—also feed into the narrative that US tariff measures may be contributing to sticky input costs and stagflation risks (charts 3 and 4). Meanwhile, record temperatures in parts of Europe this week have reinforced the climate challenge facing policymakers, with the final two charts illustrating how rising global temperatures and heat stress could increasingly weigh on productivity and growth potential if left unchecked. With trading volumes light ahead of the July 4th holiday and markets awaiting tomorrow’s US non-farm payrolls report, the interplay between softer US data, resilient equities, a weaker dollar, and climate-related risks remains firmly in focus.

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/4FbchGEedK33LetfD77kHD?utm_source=generator" width="100%" height="152" frameBorder="0" allowfullscreen="" allow="autoplay; clipboard-write; encrypted-media; fullscreen; picture-in-picture" loading="lazy"></iframe>

Charts of the Week: Headwinds and Heatwaves

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The ADP National Employment Report reported that nonfarm private sector payrolls declined 33,000 (+1.1% y/y) during June after rising 29,000 in May, revised from 37,000 and increasing an unrevised 60,000 in April. It was the first monthly decline since March 2023. A 110,000 June rise had been expected in the in the Action Economics Forecast Survey.

Small business hiring (less than 50 employees) declined 47,000 (+0.4% y/y), after falling 13,000 in May. These were the first back-to-back monthly declines since the end of 2023. Employment at medium-sized firms (50-499,000 employees) declined 15,000 (1.1% y/y), after rising 46,000 in May, revised from 49,000. Large business hiring (500+ employees) increased 30,000 (2.7% y/y) after easing 4,000 in May.

Goods-producing employment rose 32,000 (1.4% y/y) in June after falling a minimally revised 3,000 in May. Manufacturing jobs increased 15,000, unchanged y/y, following a 6,000 decline in May. The number of construction sector jobs rose 9,000 (2.8% y/y) after increasing 6,000 in May. Natural resources & mining jobs rose 8,000 (4.3% y/y) in June after falling 3,000 in May.

The decline in payrolls overall reflected weakness in the service sector where the number of service-producing jobs declined 66,000 last month (+1.1% y/y) after increasing 32,000 in May, revised from 36,000. Professional & business services employment fell 56,000 (+0.2% y/y), after declining 13,000 in May. These weak readings came after a 1,000 April gain and a 46,000 March increase. Education & health services employment declined 52,000 (+0.8% y/y), the third consecutive month of decline. Employment in the financial industry weakened 14,000 (+1.8% y/y) last month, after rising 17,000 in May.

Offsetting these declines, leisure & hospitality employment increased 32,000 in June (3.2% y/y), following a 43,000 May gain. Monthly increases have averaged 36,000 this year. Trade, transportation & utilities employment increased 14,000 (0.3% y/y) after falling 8,000 in May. Information sector employment rose 5,000 (0.2% y/y) after a 4,000 May increase and a 10,000 April decline. Employment in “other” services sectors rose 5,000 in June (2.9% y/y), the same as in May.

Growth in median annual pay for "job stayers" slipped to 4.4% y/y in June, down from a high of 7.8% in September 2022. Manufacturing sector pay grew 4.6% y/y, steady with May. Construction sector pay also rose a steady 4.6% y/y. Natural resource & mining sector pay grew 4.5% y/y last month. Financial sector earnings rose an improved 5.2% y/y, while education & health services pay rose a lessened 4.6% y/y. Leisure & hospitality pay increased 4.7% y/y in June. Professional & business service sector pay increased a lessened 4.2% y/y as did trade, transportation & utilities pay, up 4.2% y/y. Information pay rose a lessened 4.1% y/y. Median annual pay for “job changers” rose 6.8% y/y in June, down from a high of 16.1% y/y in April 2022.

By region, employment in the Midwest declined 24,000 (+1.3% y/y) to 28,761 million after a 17,000 rise in May. Employment in the West, declined 20,000 to 31,363 million (+0.5% y/y) last month, and reversed a 31,000 rise during May. Employment in the Northeast fell 3,000 to 24,116 million (+1.4% y/y) in June, following a 23,000 decline in May. Partially offsetting these declines, in the South employment increased 13,000 to 50,092 million (1.0% y/y) in June, after rising 2,000 in May.

The ADP National Employment Report and Pay Insights data can be found in Haver's **USECON** database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's **AS1REPNA** database.

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- Employment declines in several service industries; factory & building industry jobs rise.
- Wage growth moderates further.
- Small- & medium-sized shed jobs.

Economy in Brief: June 2019

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U.S. JOLTS: Job Openings Stabilize; Hiring Strengthens

U.S. Payroll Growth Slows Significantly; Wage Gain Eases Y/Y

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Wholesale Inventories Rise as Sales Decline

Faster Than Expected U.S. Consumer Credit Growth

U.S. Financial Accounts Show Q1 Rebound in Borrowing

U.S. Payroll Growth Slows Significantly; Wage Gain Eases Y/Y

U.S. Payroll Growth Slows Significantly; Wage Gain Eases Y/Y