Tom Moeller

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

<a href="/comment/160809a_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160809a.png"></a>
 <a href="/comment/160809b_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160809b.png"></a>

Nonfarm output per hour during Q2'16 declined at a 0.5% annual rate (-0.4%
y/y) following an unrevised 0.6% Q1 shortfall. It was the third consecutive
quarterly decline and compared to expectations for a 0.5 rise in the Action
Economics Forecast Survey. Revisions raised growth last year to 0.9% from 0.7%.
Growth in 2014 was left at 0.8%, but the 2013 increase was raised to 0.3% from
no change. The latest decline occurred as output increased 1.2% (1.1% y/y) and
hours worked rose 1.8% (1.5% y/y). Compensation per hour increased 1.5% (1.7%
y/y) after a 0.8% decline, revised from a 3.9% increase. The combination of
faster compensation growth and declining productivity raised unit labor costs
2.0% (2.1 y/y) following a 0.2% dip, previously reported as a 4.5%
increase. A 1.8% increase had been expected.

In the manufacturing sector, productivity eased 0.2% (+0.9% y/y) after a 1.5%
increase, revised from 1.3%. Output fell 0.8 (+0.3% y/y), while hours-worked
declined 0.7% (-0.6% y/y). Compensation growth rebounded 2.9% (2.6% y/y) after a
4.6% decline, revised from a 2.5% rise. The rise pushed unit labor costs up 3.1%
(1.7% y/y) following a 5.9% drop, revised from a 1.1% rise.

The productivity &amp; cost figures are available in Haver's USECON
database. The expectations figures are from the Action Economics Forecast Survey
and are found in the AS1REPNA database.

<a href="/comment/160809c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160809c.png"></a>
 <a href="/comment/160809x_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160809x.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" >Productivity &amp; Costs
 (SAAR, %)</th>
 <th>Q2'16</th>
 <th>Q1'16</th>
 <th>Q4'15</th>
 <th>Q2'16 Y/Y</th>
 <th>2015</th>
 <th>2014</th>
 <th>2013</th>
 </tr>
 </thead>
 <tbody>
 <tr class="grey3">
 <td class="firstcol" colSpan="8" >Nonfarm Business Sector</td>
 </tr>
 <tr>
 <td class="firstcol" >Output per Hour (Productivity)</td>
 <td >-0.5</td>
 <td >-0.6</td>
 <td >-2.4</td>
 <td >-0.4</td>
 <td >0.9</td>
 <td >0.8</td>
 <td >0.3</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Compensation per Hour</td>
 <td >1.5</td>
 <td >-0.8</td>
 <td >3.1</td>
 <td >1.7</td>
 <td >2.9</td>
 <td >2.8</td>
 <td >1.2</td>
 </tr>
 <tr>
 <td class="firstcol" >Unit Labor Costs</td>
 <td >2.0</td>
 <td >-0.2</td>
 <td >5.7</td>
 <td >2.1</td>
 <td >2.0</td>
 <td >2.0</td>
 <td >0.9</td>
 </tr>
 <tr class="grey3">
 <td class="firstcol" colSpan="8" >Manufacturing Sector</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Output per Hour (Productivity)</td>
 <td >-0.2</td>
 <td >1.5</td>
 <td >-1.1</td>
 <td >0.9</td>
 <td >0.3</td>
 <td >0.1</td>
 <td >0.2</td>
 </tr>
 <tr>
 <td class="firstcol" >Compensation per Hour</td>
 <td >2.9</td>
 <td >-4.6</td>
 <td >8.2</td>
 <td >2.6</td>
 <td >2.5</td>
 <td >2.8</td>
 <td >0.2</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Unit Labor Costs</td>
 <td >3.1</td>
 <td >-5.9</td>
 <td >9.5</td>
 <td >1.7</td>
 <td >2.2</td>
 <td >2.7</td>
 <td >0.0</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

Nonfarm output per hour during Q2'16 declined at a 0.5% annual rate (-0.4% y/y) following an unrevised 0.6% Q1 shortfall. It was the third consecutive quarterly decline and compared to expectations for a 0.5 rise in the Action [...]

U.S. Productivity Declines for Third Straight Quarter

Robert Brusca

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>

	 
 
 
 
 

<a href="/comment/160809e_big.png" name="modal"><img class="large" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160809e.png" align="left"></a>
The German trade surpluses remain large. While Germany's surplus ticked lower in June, the last four months show surpluses much higher than over the previous seven months. Goods export did tick higher month-to-month in June as imports rose by 1%. But over three months exports are falling at a 5.2% pace and over 12 months they are falling at a 0.7% annual rate.

Imports in comparison showed some life in June, but not much life as they rose for only one month in a row but did make a gain of 1%. Imports are up at a tepid 2.7% annual rate over three months but are net lower over both six months and 12 months.

There is not much here on which to build an optimistic outlook either for German domestic demand or for German exports and the prospects for demand overseas. Real export orders fell in June and are falling at a 14.1% annualized rate over three months as well as falling by 6.4% over 12 months.

More detailed data show that German exports are up by 2.3% over 12 months to EU members but only by 0.1% to EMU members. German exports to EU members (a group that has an important contribution from the U.K. where future flows may be challenged) are up by a strong 6%. German exports to countries outside the EU area fell by 0.4%. Germany's exports are strongest where they are apt to encounter the biggest challenge in the next 12 months as the Brexit reset could alter trade dynamics between the U.K. and EU/EMU members. On top of that, the pound sterling has been declining sharply and that will alter the German-U.K. competiveness balance. At the same time, German imports from EMU nations are up by 3.0% over 12 months, a bit weaker than the 3.9% for non-EMU members of the EU. Imports from outside the EU are off by 5.4%. That reflects weaker oil import prices to some degree.

These trade data are consistent with the weak picture that continues to emerge from the global PMI indices that are now up-to-date through July. Global weakness remains in force and export and import flows continue to show the effect of that ongoing weakness. In July, weakness in emerging markets let up just a bit, but the overall conditions of weakness lingers.


<img border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160809.png" width="660" height="310">
</html>

The German trade surpluses remain large. While Germany's surplus ticked lower in June, the last four months show surpluses much higher than over the previous seven months. Goods export did tick higher month-to-month in June as imports [...]

German Trade Flows Languish

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

 <a href="/comment/160808b_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160808b.png"></a>
 <a href="/comment/160808a_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160808a.png"></a>

The Labor Market Conditions Index from the Federal Reserve Board includes 19
indicators of labor market activity, covering the broad categories of
unemployment and underemployment. These include jobs, workweeks, wages,
vacancies, hiring, layoffs, quits and other surveys of consumers and businesses.
Because the trends in the index are slow-moving, Haver presents only the changes
in the index. All are measured monthly and have been seasonally adjusted.

During July, the index was positive for the first time since December. Nonfarm
payroll employment growth over three months strengthened; the gain in average
hourly earnings increased; and the number of initial unemployment claims fell.
Also improving weres the labor force participation rate, aggregate hours worked
and the number of temporary help jobs. Other labor market indicators were
weaker, however, including a lower ISM jobs figure, higher unemployment for 27
weeks and fewer small businesses with positions they were unable to fill right
now. The LMCI data are available in Haver's SURVEYS database.

<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" >Labor Market Conditions
 Index (SA)</th>
 <th scope="col" >Jul</th>
 <th scope="col" >Jun</th>
 <th scope="col" >May</th>
 <th scope="col" >Jul'15</th>
 <th scope="col" >2015</th>
 <th scope="col" >2014</th>
 <th scope="col" >2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Monthly Index Change</td>
 <td >1.0</td>
 <td >-0.1</td>
 <td >-3.4</td>
 <td >1.8</td>
 <td >1.9</td>
 <td >5.1</td>
 <td >3.9</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The Labor Market Conditions Index from the Federal Reserve Board includes 19 indicators of labor market activity, covering the broad categories of unemployment and underemployment. These include jobs, workweeks, wages, vacancies, [...]

U.S. Labor Market Conditions Index Turns Positive

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>

	 
 
 
 
 

<a href="/comment/160808e_big.png" name="modal"><img class="large" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160808e.png" align="left"></a>
The chart and table offer a pretty good perspective on German industrial trends. Overall German industrial production is still struggling. Despite a strong gain in June, it still leaves industrial output net lower over two months and falling in the just-completed second quarter. Year-on-year trends (see Chart) show deteriorating trends for intermediate and consumer goods output but with capital goods reviving. Capital goods remain the brightest spot in IP with consistent gains in place even over one year. Intermediate goods show declines in output on all horizons and with overall deepening drops. Consumer goods output has built momentum, but it is still weak over 12 months with a gain of less than 1%.

Construction has picked up with a very strong 1.4% rise in June, but in the wake of a 3.7% plunge in April, construction output is still collapsing over three months and down at nearly a 20% annual rate in Q2.

Manufacturing orders do not brighten the picture for German prospects either. Orders are lower in two of the most recent three months and are falling at a 1.9% pace in Q2 and at an 8.3% annual rate pace over the last three months. It's hard to tell too bright of a story from this set of data. Germany appears to be growing but not prospering and taking nothing for granted.

Other European countries reporting IP through June are Italy, the Netherlands, Spain, Portugal and Norway. Only the Dutch and Portuguese have output rising in June although over three months Spain joins them with output rising as well.

The Dutch and Portuguese show steady and accelerating growth progressing from 12-month to six- month to three-month. Spain's output on this sequence of dates is moderate and oscillating between up and down. Italy shows a year-on-year drop as well as a current month drop and drop over three months as well as in the second quarter as a whole. Norway shows output declines on all horizons with a worsening trend to boot. Not all Europeans are on the same page when it comes to the industrial sector.

These data seem to make the case that the ECB has been arguing, that global growth risks remain. In a weekend exchange, Jens Weidmann held that there is no reason for any change in ECB policy because the Brexit risk has been so well handled by markets. But in an ECB statement, the point is made that Brexit aside there is still weak global growth and risk. The Bundesbank seems again to be flexing its muscle to oppose any more ECB easing. Meanwhile, recent stress tests have highlighted the problems at Italian banks and with the new `bail-in' rules that is certainly a policy conundrum for Italy and for the ECB and policy in general.

Germany seems ready to pack up the stimulus game and prepared for the onset of normalcy despite its own uneven progress. Is that really the road we are on? Or is the Bundesbank being a bit pre-mature with its drive to invoke normalcy? This will bear watching.


<img border="0" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160808.png" width="665" height="280">
</html>

The chart and table offer a pretty good perspective on German industrial trends. Overall German industrial production is still struggling. Despite a strong gain in June, it still leaves industrial output net lower over two months and [...]

German IP Rebounds But Drops in Quarter

<html>

<head>
<meta http-equiv="Content-Type" content="text/html; charset=windows-1252">
<meta name="GENERATOR" content="Microsoft FrontPage 4.0">
<meta name="ProgId" content="FrontPage.Editor.Document">
<title>Chicago Purchasing Managers Index Recovers Sharply by Tom Moeller&nbsp;
July 29</title>
</head>

<body>

 

The job market remained on firm footing during July. Nonfarm payroll
employment grew 255,000 (1.7% y/y) following upwardly revised gains of 292,000
and 24,000 during the prior two months. A 180,000 increase had been expected in
the Action Economics Forecast Survey. The three-month average change in payrolls
of 190,000 was the strongest since March, but was below the peak 259,000
three-month change averaged last July. The unemployment rate remained at 4.9%. A
4.8% rate was expected. The unemployment rate including marginally attached
workers and those working part-time for economic reasons ticked up to 9.7%.
Average hourly earnings gained 0.3% (2.6% y/y) versus expectations for a 0.2%
rise.
Payroll employment improvement was broad-based. It included a 14,000
rise (3.3% y/y) in construction employment which followed three straight months
of decline. Factory sector employment increased 9,000 (-0.3% y/y), though that
was below June's 15,000 increase. Mining sector employment declined 6,100
(-16.8% y/y), moderate versus the 17,600 jobs lost in February.
In the private service-producing sector, payrolls increased 201,000 (2.2%
y/y) following a 254,000 increase. Three-month average growth of 166,000 was
improved versus the prior two months, but well below December's cycle high of
238,000. Professional &amp; business&nbsp; services employment grew 70,000 (2.6%
y/y), the firmest gain in nine months. The increase included a 17,000 rise (0.9%
y/y) in temporary help jobs. Employment in leisure &amp; hospitality grew 45,000
(2.7% y/y) after a similarly strong 52,000 June rise. The two gains together
were at the high end of increases averaged during the recovery. Education &amp;
health services employment improved 36,000 (2.8% y/y), the weakest gain in six
months. Trade, transportation &amp; utilities employment improved 29,000 (1.4%
y/y), though retail jobs rose just 14,700 (1.9% y/y), well off the 66,500 pace
six months earlier. Employment in financial activities improved 18,000 (2.0%
y/y), one of the stronger gains this cycle. Information sector employment
remained unchanged (1.1% y/y). Government sector payrolls increased 28,000 (0.7%
y/y) as local government jobs rose 30,000 (0.8% y/y). State government jobs
increased 5,000 (0.5% y/y) and federal government employment rose 3,000 (1.2%
y/y).&nbsp; 
The length of the average workweek improved to 34.5 hours, up from 34.4 hours
in each of the prior five months. It remained down, however, from the 34.6 hour
peak for this cycle. Hours worked in the goods producing sector was steady at
40.3 hours, but down from the 2014 peak of 40.6 hours. Private service sector
hours were steady at 33.3. Within that total, however, there were sharp
divergences. Hours worked in financial activities returned to the cycle peak of
37.7, while hours in the information sector of 36.1 were down from the 2014 high
of 36.9 hours. Hours worked in the leisure &amp; hospitality sector eased to
26.1 hours. 
The 0.3% gain in average hourly earnings was the strongest rise in three
months. It raised y/y growth to 2.6% which equaled the strongest increase for
this cycle, and was up from 1.9% during all of 2012. Earnings in service
industries improved 0.3% (2.6% y/y), paced by a 1.0% increase (3.0% y/y) amongst
financial activities. Leisure &amp; hospitality earnings rose 0.4%, but y/y
growth jumped to 4.0%, the largest increase since 4.6% early in 2008. This
strength was offset by a 0.1% rise (2.5% y/y) in trade, transportation &amp;
utilities which included a 0.3% decline (+2.1% y/y) in retail trade.
The household survey revealed a stable 4.9% unemployment rate which
reflected a 420,000 rise (1.8% y/y) in employment and a 407,000 (1.4% y/y)
increase in the labor force. The labor force participation rate improved to
62.8% versus the cycle low of 62.4% in September, but remained well below the
67.1% averaged from 1997 to 2000. 
The teenage unemployment rate eased to 15.6%, its low for the economic
recovery. For those aged 25 and over, the rate was stable at 4.0%; for
individuals aged 35-44, it fell to 3.5%.
By educational attainment, the unemployment rate for those with less than a
high school diploma fell sharply to a cycle low of 6.3%. High school graduates
with no college encountered a stable 5.0% unemployment rate, while those with
some college but no degree were 4.3% unemployed. College graduates met with the
lowest unemployment rate at 2.5%.
The labor market data are contained in Haver's USECON database.
Detailed figures are in the EMPL and LABOR databases. The
expectations figure is in the AS1REPNA database.
<table width="1782" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="987">Employment: (SA, M/M Change,
 000s)</th>
 <th scope="col" align="center" width="113">Jul</th>
 <th scope="col" align="center" width="113">Jun</th>
 <th scope="col" align="center" width="113">May</th>
 <th scope="col" align="center" width="113">Jul Y/Y</th>
 <th scope="col" align="center" width="113">2015</th>
 <th scope="col" align="center" width="113">2014</th>
 <th scope="col" align="center" width="113">2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="987">Payroll Employment</td>
 <td align="center" width="113">255</td>
 <td align="center" width="113">292</td>
 <td align="center" width="113">24</td>
 <td align="center" width="113">1.7</td>
 <td align="center" width="113">2.1%</td>
 <td align="center" width="113">1.9%</td>
 <td align="center" width="113">1.6%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="987">&nbsp;Previous</td>
 <td align="center" width="113">--</td>
 <td align="center" width="113">287</td>
 <td align="center" width="113">11</td>
 <td align="center" width="113">--</td>
 <td align="center" width="113">--</td>
 <td align="center" width="113">--</td>
 <td align="center" width="113">--</td>
 </tr>
 <tr>
 <td class="firstcol" width="987">&nbsp;Manufacturing</td>
 <td align="center" width="113">9</td>
 <td align="center" width="113">15</td>
 <td align="center" width="113">-17</td>
 <td align="center" width="113">-0.3</td>
 <td align="center" width="113">1.1</td>
 <td align="center" width="113">1.4</td>
 <td align="center" width="113">0.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="987">&nbsp;Construction</td>
 <td align="center" width="113">14</td>
 <td align="center" width="113">-3</td>
 <td align="center" width="113">-18</td>
 <td align="center" width="113">3.3</td>
 <td align="center" width="113">4.8</td>
 <td align="center" width="113">5.0</td>
 <td align="center" width="113">3.7</td>
 </tr>
 <tr>
 <td class="firstcol" width="987">&nbsp;Private Service-Producing</td>
 <td align="center" width="113">201</td>
 <td align="center" width="113">254</td>
 <td align="center" width="113">44</td>
 <td align="center" width="113">2.2 </td>
 <td align="center" width="113">2.5</td>
 <td align="center" width="113">2.1</td>
 <td align="center" width="113">2.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="987">&nbsp;Government</td>
 <td align="center" width="113">38</td>
 <td align="center" width="113">33</td>
 <td align="center" width="113">25</td>
 <td align="center" width="113">0.7</td>
 <td align="center" width="113">0.5</td>
 <td align="center" width="113">0.0</td>
 <td align="center" width="113">-0.3</td>
 </tr>
 <tr>
 <td class="firstcol" width="987">Average Weekly Hours - Private Sector</td>
 <td align="center" width="113">34.5</td>
 <td align="center" width="113">34.4</td>
 <td align="center" width="113">34.4</td>
 <td align="center" width="113">34.6</td>
 <td align="center" width="113">34.5</td>
 <td align="center" width="113">34.5</td>
 <td align="center" width="113">34.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="987">Private Sector Average Hourly Earnings
 (%)</td>
 <td align="center" width="113">0.3</td>
 <td align="center" width="113">0.1</td>
 <td align="center" width="113">0.2</td>
 <td align="center" width="113">2.6</td>
 <td align="center" width="113">2.3</td>
 <td align="center" width="113">2.1</td>
 <td align="center" width="113">2.1</td>
 </tr>
 <tr>
 <td class="firstcol" width="987">Unemployment Rate (%)</td>
 <td align="center" width="113">4.9</td>
 <td align="center" width="113">4.9</td>
 <td align="center" width="113">4.7</td>
 <td align="center" width="113">5.3</td>
 <td align="center" width="113">5.3</td>
 <td align="center" width="113">6.2</td>
 <td align="center" width="113">7.4</td>
 </tr>
 </tbody>
</table>

&nbsp;
U.S. Consumer Credit Usage Softens to Four Year Low 
by <a href="http://haver.com/comment/Moeller.html">Tom Moeller</a>&nbsp;&nbsp;August
5, 2016
Consumer credit outstanding increased $12.3 billion during June following a
$17.9 billion May gain, revised from $18.6 billion. The 4.1% m/m increase was
the smallest since July 2012. A $15.0 billion increase had been expected in the
Action Economics Forecast Survey. During the last ten years, there has been a
46% correlation between the y/y growth in consumer credit and y/y growth in
personal consumption expenditures.
Nonrevolving credit borrowing grew $4.6 billion (5.9% y/y) after a
little-revised $16.1 billion gain. It was the smallest dollar increase since
December as trend growth has been softening. The 2.1% rise, however, was the
smallest since a decline in August 2011. Federal government loans (36% of the
total) increased 11.0% y/y. Finance company balances (24% of the total) eased 1.8%
y/y. Borrowing at depository institutions (25% of the total) improved 5.7% y/y,
and borrowing at credit unions (11% of the total) jumped 11.4% y/y. Nonprofit
&amp; educational institution loans (2% of the total) declined 10.2% y/y, and
nonfinancial business loans (1% of the total) remained unchanged y/y.
Revolving consumer credit increased $7.7 billion after a $1.8 billion rise,
revised from $2.4 billion. It was the largest increase in three months and left
y/y growth strong at 5.4%. Balances at depository institutions (84% of the
total) grew 8.2% y/y. Finance company holdings (6% of the total) fell 10.2% y/y,
while borrowing from credit unions (5% of the total) advanced 7.8% y/y.
Nonfinancial business credit (2% of the total) fell 11.7% y/y, and securitized
credit card balances (3% of the total) declined 16.2% y/y.
Student loans during Q2 increased 6.6% y/y while motor vehicle loans rose 7.0%
y/y.
These Federal Reserve Board figures are break-adjusted and calculated by
Haver Analytics. There is a break in the credit outstanding data from November
2010 to December 2010 due to the Fed's benchmarking process. Benchmark estimates
are based on the Census of Finance Companies (CFC) and the Survey of Finance
Companies (SFC) conducted in 2010 and 2011, respectively.
The consumer credit data are available in Haver's USECON database. The
Action Economics figures are contained in the AS1REPNA database.
<table width="1782" class="centered" border="0" cellSpacing="0">
 <thead>
 <tr>
 <th class="firstcol" scope="col" width="900">Consumer Credit
 Outstanding (M/M Chg, SA)</th>
 <th scope="col" width="125">Jun</th>
 <th scope="col" width="125">May</th>
 <th scope="col" width="125">Apr</th>
 <th scope="col" width="125">Y/Y</th>
 <th scope="col" width="126">2015</th>
 <th scope="col" width="126">2014</th>
 <th scope="col" width="126">2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" width="900">Total</td>
 <td align="center" width="125">$12.3 bil.</td>
 <td align="center" width="125">$17.9 bil.</td>
 <td align="center" width="125">$17.0 bil.</td>
 <td align="center" width="125">5.8%</td>
 <td align="center" width="126">6.6%</td>
 <td align="center" width="126">7.2%</td>
 <td align="center" width="126">6.0%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" width="900">&nbsp; &nbsp;Revolving</td>
 <td align="center" width="125">7.7</td>
 <td align="center" width="125">&nbsp;1.8</td>
 <td align="center" width="125">1.0</td>
 <td align="center" width="125">5.4</td>
 <td align="center" width="126">5.2</td>
 <td align="center" width="126">3.9</td>
 <td align="center" width="126">1.4</td>
 </tr>
 <tr>
 <td class="firstcol" width="900">&nbsp; &nbsp;Nonrevolving</td>
 <td align="center" width="125">4.6</td>
 <td align="center" width="125">16.1</td>
 <td align="center" width="125">15.9</td>
 <td align="center" width="125">5.9</td>
 <td align="center" width="126">7.1</td>
 <td align="center" width="126">8.4</td>
 <td align="center" width="126">7.9</td>
 </tr>
 </tbody>
</table>


</body>

</html>

The job market remained on firm footing during July. Nonfarm payroll employment grew 255,000 (1.7% y/y) following upwardly revised gains of 292,000 and 24,000 during the prior two months. A 180,000 increase had been expected in the [...]

U.S. Payroll Growth is Surprisingly Strong

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

<a href="/comment/160805p_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805p.png"></a>
 <a href="/comment/160805q_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805q.png"></a>

Consumer credit outstanding increased $12.3 billion during June following a
$17.9 billion May gain, revised from $18.6 billion. The 4.1% m/m increase was
the smallest since July 2012. A $15.0 billion increase had been expected in the
Action Economics Forecast Survey. During the last ten years, there has been a
46% correlation between the y/y growth in consumer credit and y/y growth in
personal consumption expenditures.

Nonrevolving credit borrowing grew $4.6 billion (5.9% y/y) after a
little-revised $16.1 billion gain. It was the smallest dollar increase since
December as trend growth has been softening. The 2.1% rise, however, was the
smallest since a decline in August 2011. Federal government loans (36% of the
total) increased 11.0% y/y. Finance company balances (24% of the total) eased 1.8%
y/y. Borrowing at depository institutions (25% of the total) improved 5.7% y/y,
and borrowing at credit unions (11% of the total) jumped 11.4% y/y. Nonprofit
&amp; educational institution loans (2% of the total) declined 10.2% y/y, and
nonfinancial business loans (1% of the total) remained unchanged y/y.

Revolving consumer credit increased $7.7 billion after a $1.8 billion rise,
revised from $2.4 billion. It was the largest increase in three months and left
y/y growth strong at 5.4%. Balances at depository institutions (84% of the
total) grew 8.2% y/y. Finance company holdings (6% of the total) fell 10.2% y/y,
while borrowing from credit unions (5% of the total) advanced 7.8% y/y.
Nonfinancial business credit (2% of the total) fell 11.7% y/y, and securitized
credit card balances (3% of the total) declined 16.2% y/y.

Student loans during Q2 increased 6.6% y/y while motor vehicle loans rose 7.0% y/y.

These Federal Reserve Board figures are break-adjusted and calculated by
Haver Analytics. There is a break in the credit outstanding data from November
2010 to December 2010 due to the Fed's benchmarking process. Benchmark estimates
are based on the Census of Finance Companies (CFC) and the Survey of Finance
Companies (SFC) conducted in 2010 and 2011, respectively.

The consumer credit data are available in Haver's USECON database. The
Action Economics figures are contained in the AS1REPNA database.

<a href="/comment/160805r_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805r.png"></a>
 <a href="/comment/160805s_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805s.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" >Consumer Credit
 Outstanding (M/M Chg, SA)</th>
 <th scope="col" >Jun</th>
 <th scope="col" >May</th>
 <th scope="col" >Apr</th>
 <th scope="col" >Y/Y</th>
 <th scope="col" >2015</th>
 <th scope="col" >2014</th>
 <th scope="col" >2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Total</td>
 <td >$12.3 bil.</td>
 <td >$17.9 bil.</td>
 <td >$17.0 bil.</td>
 <td >5.8%</td>
 <td >6.6%</td>
 <td >7.2%</td>
 <td >6.0%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp; &nbsp;Revolving</td>
 <td >7.7</td>
 <td >1.8</td>
 <td >1.0</td>
 <td >5.4</td>
 <td >5.2</td>
 <td >3.9</td>
 <td >1.4</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; &nbsp;Nonrevolving</td>
 <td >4.6</td>
 <td >16.1</td>
 <td >15.9</td>
 <td >5.9</td>
 <td >7.1</td>
 <td >8.4</td>
 <td >7.9</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

Consumer credit outstanding increased $12.3 billion during June following a $17.9 billion May gain, revised from $18.6 billion. The 4.1% m/m increase was the smallest since July 2012. A $15.0 billion increase had been expected in the [...]

U.S. Consumer Credit Usage Softens to Four Year Low

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

 <a href="/comment/160805f_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805f.png"></a>
 <a href="/comment/160805g_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805g.png"></a>

The job market remained on firm footing during July. Nonfarm payroll
employment grew 255,000 (1.7% y/y) following upwardly revised gains of 292,000
and 24,000 during the prior two months. A 180,000 increase had been expected in
the Action Economics Forecast Survey. The three-month average change in payrolls
of 190,000 was the strongest since March, but was below the peak 259,000
three-month change averaged last July. The unemployment rate remained at 4.9%. A
4.8% rate was expected. The unemployment rate including marginally attached
workers and those working part-time for economic reasons ticked up to 9.7%.
Average hourly earnings gained 0.3% (2.6% y/y) versus expectations for a 0.2% rise.

Payroll employment improvement was broad-based. It included a 14,000
rise (3.3% y/y) in construction employment which followed three straight months
of decline. Factory sector employment increased 9,000 (-0.3% y/y), though that
was below June's 15,000 increase. Mining sector employment declined 6,100
(-16.8% y/y), moderate versus the 17,600 jobs lost in February.

In the private service-producing sector, payrolls increased 201,000 (2.2%
y/y) following a 254,000 increase. Three-month average growth of 166,000 was
improved versus the prior two months, but well below December's cycle high of
238,000. Professional &amp; business services employment grew 70,000 (2.6%
y/y), the firmest gain in nine months. The increase included a 17,000 rise (0.9%
y/y) in temporary help jobs. Employment in leisure &amp; hospitality grew 45,000
(2.7% y/y) after a similarly strong 52,000 June rise. The two gains together
were at the high end of increases averaged during the recovery. Education &amp;
health services employment improved 36,000 (2.8% y/y), the weakest gain in six
months. Trade, transportation &amp; utilities employment improved 29,000 (1.4%
y/y), though retail jobs rose just 14,700 (1.9% y/y), well off the 66,500 pace
six months earlier. Employment in financial activities improved 18,000 (2.0%
y/y), one of the stronger gains this cycle. Information sector employment
remained unchanged (1.1% y/y). Government sector payrolls increased 28,000 (0.7%
y/y) as local government jobs rose 30,000 (0.8% y/y). State government jobs
increased 5,000 (0.5% y/y) and federal government employment rose 3,000 (1.2% y/y).

<a href="/comment/160805h_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805h.png"></a>
 <a href="/comment/160805i_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805i.png"></a>

The length of the average workweek improved to 34.5 hours, up from 34.4 hours
in each of the prior five months. It remained down, however, from the 34.6 hour
peak for this cycle. Hours worked in the goods producing sector was steady at
40.3 hours, but down from the 2014 peak of 40.6 hours. Private service sector
hours were steady at 33.3. Within that total, however, there were sharp
divergences. Hours worked in financial activities returned to the cycle peak of
37.7, while hours in the information sector of 36.1 were down from the 2014 high
of 36.9 hours. Time worked in the leisure &amp; hospitality sector eased to 26.1 hours.

<a href="/comment/160805x_big.png" name="modal"><img class="large" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805x.png" align="left"></a>
The 0.3% gain in average hourly earnings was the strongest rise in three
months. It raised y/y growth to 2.6% which equaled the strongest increase for
this cycle, and was up from 1.9% during all of 2012. Earnings in service
industries improved 0.3% (2.6% y/y), paced by a 1.0% increase (3.0% y/y) amongst
financial activities. Leisure &amp; hospitality earnings rose 0.4%, but y/y
growth jumped to 4.0%, the largest increase since 4.6% early in 2008. This
strength was offset by a 0.1% rise (2.5% y/y) in trade, transportation &amp;
utilities which included a 0.3% decline (+2.1% y/y) in retail trade.
The household survey revealed a stable 4.9% unemployment rate which
reflected a 420,000 rise (1.8% y/y) in employment and a 407,000 (1.4% y/y)
increase in the labor force. The labor force participation rate improved to
62.8% versus the cycle low of 62.4% in September, but remained well below the
67.1% averaged from 1997 to 2000.

The teenage unemployment rate eased to 15.6%, its low for the economic
recovery. For those aged 25 and over, the rate was stable at 4.0%; for
individuals aged 35-44, it fell to 3.5%.

By educational attainment, the unemployment rate for those with less than a
high school diploma fell sharply to a cycle low of 6.3%. High school graduates
with no college encountered a stable 5.0% unemployment rate, while those with
some college but no degree were 4.3% unemployed. College graduates met with the
lowest unemployment rate at 2.5%.

The labor market data are contained in Haver's USECON database.
Detailed figures are in the EMPL and LABOR databases. The
expectations figure is in the AS1REPNA database.

<a href="/comment/160805j_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805j.png"></a>
 <a href="/comment/160805k_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805k.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" >Jul</th>
 <th scope="col" >Jun</th>
 <th scope="col" >May</th>
 <th scope="col" >Jul Y/Y</th>
 <th scope="col" >2015</th>
 <th scope="col" >2014</th>
 <th scope="col" >2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" >Payroll Employment</td>
 <td >255</td>
 <td >292</td>
 <td >24</td>
 <td >1.7</td>
 <td >2.1%</td>
 <td >1.9%</td>
 <td >1.6%</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Previous</td>
 <td >--</td>
 <td >287</td>
 <td >11</td>
 <td >--</td>
 <td >--</td>
 <td >--</td>
 <td >--</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Manufacturing</td>
 <td >9</td>
 <td >15</td>
 <td >-17</td>
 <td >-0.3</td>
 <td >1.1</td>
 <td >1.4</td>
 <td >0.8</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Construction</td>
 <td >14</td>
 <td >-3</td>
 <td >-18</td>
 <td >3.3</td>
 <td >4.8</td>
 <td >5.0</td>
 <td >3.7</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp;Private Service-Producing</td>
 <td >201</td>
 <td >254</td>
 <td >44</td>
 <td >2.2</td>
 <td >2.5</td>
 <td >2.1</td>
 <td >2.1</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;Government</td>
 <td >38</td>
 <td >33</td>
 <td >25</td>
 <td >0.7</td>
 <td >0.5</td>
 <td >0.0</td>
 <td >-0.3</td>
 </tr>
 <tr>
 <td class="firstcol" >Average Weekly Hours - Private Sector</td>
 <td >34.5</td>
 <td >34.4</td>
 <td >34.4</td>
 <td >34.6</td>
 <td >34.5</td>
 <td >34.5</td>
 <td >34.5</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Private Sector Average Hourly Earnings
 (%)</td>
 <td >0.3</td>
 <td >0.1</td>
 <td >0.2</td>
 <td >2.6</td>
 <td >2.3</td>
 <td >2.1</td>
 <td >2.1</td>
 </tr>
 <tr>
 <td class="firstcol" >Unemployment Rate (%)</td>
 <td >4.9</td>
 <td >4.9</td>
 <td >4.7</td>
 <td >5.3</td>
 <td >5.3</td>
 <td >6.2</td>
 <td >7.4</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

U.S. Payroll Growth Is Surprisingly Strong

Carol Stone, CBE

<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN">
<html><head>
</head>
<body>
	 
 
 
 

 <a href="/comment/160805a_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805a.png"></a>
 <a href="/comment/160805b_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805b.png"></a>

The U.S. trade deficit in goods and services widened to $44.5 billion in June from a slightly revised $41.0 billion in May. The Action Economics Forecast Survey had expected a $43.1 billion deficit. The latest deficit was the largest since August 2015. It is the result of a 0.3% increase in exports (-3.8% y/y) and a 1.9% rise in imports (-2.4% y/y). Within imports, petroleum end-use goods grew 19.4% (-20.6% y/y) and nonpetroleum goods rose 1.9% (-1.5% y/y).

Among exports, goods rose 0.5% (-5.5% y/y). This featured a 5.7% gain in foods, feeds & beverages (2.1% y/y), with lesser increases in consumer goods, 2.7% (-3.8% y/y) and capital goods, 0.8% (-3.4% y/y). Autos & parts continued to decline, this month by 3.4% (-4.3% y/y), while "other" goods fell 2.2% (-0.8% y/y) and industrial materials & supplies were off 0.3% (-11.8% y/y). Exports of services edged higher 0.1% (-0.3% y/y), with a 3.6% (15.5% y/y) advance in maintenance & repair and 1.3% (0.4% y/y) in finance. There were declines in travel, which fell 0.8% in June (-0.4% y/y) and intellectual property charges, which fell 0.4% (-5.2% y/y).

Imports of goods increased 2.3% (-3.2% y/y) as industrial supplies & materials imports surged 6.9% (-12.0% y/y). As noted above, petroleum imports rose markedly, and the value of energy-related petroleum imports surged 23.8% (-20.0% y/y); the cost per barrel of crude oil was $39.38, up $5.19 from May. The quantity of energy-related product imports rebounded as well, up 9.9% (+9.8% y/y) after their decline in May. Nonauto consumer goods imports continued higher, rising another 3.9% (-0.9% y/y) and capital goods were up 2.1% (unchanged y/y). Foods, feeds & beverages fell 3.1% in the month (-5.5% y/y), autos were down 1.9% (-4.7% y/y) and "other" goods fell 1.1% (-1.6% y/y). Services imports eased 0.5% (+1.6% y/y), with travel off 1.2% (+7.1% y/y), transport down 1.1% (+1.8% y/y) and intellectual property charges down 0.5% (-0.5% y/y). As with exports, maintenance & repair had a noticeable increase, 1.4% (7.9% y/y).

By country, the trade deficit with mainland China widened a bit further to $29.8 billion in June from $29.0 billion in May. Exports rose, by 3.6% (-8.3% y/y) and imports also rose, by 2.8% (-6.0% y/y). Exports to Japan fell back by 1.1% (-1.1% y/y) after their surge in May but imports rebounded by 11.7% (+5.0% y/y), reversing their May decline. The trade deficit with the European Union narrowed slightly to $12.8 billion from $13.4 billion. Exports and imports both increased, exports by 7.8% (4.0% y/y) and imports by 3.4% (-2.1% y/y. Within that group, the balance with the U.K. in June, which is the last pre-Brexit reading, was a tiny surplus of $73 million; U.S. exports to the U.K. jumped 18.2% (-5.4% y/y), reversing a May decline, while imports from the U.K. were also up, by 9.4% (-10.3% y/y).


The international trade data can be found in Haver's USECON database.
Detailed figures are available in the USINT database. The expectations
figures are from the Action Economics Forecast Survey, which is carried in the AS1REPNA.

<a href="/comment/160805c_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805c.png"></a>
 <a href="/comment/160805d_big.png" name="modal"><img class="small" src="https://haver-commentaries.s3.eu-west-1.amazonaws.com/comments/160805d.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" >Foreign Trade in Goods &amp;
 Services (Current Dollars)</th>
 <th>Jun</th>
 <th>May</th>
 <th>Apr</th>
 <th>Y/Y</th>
 <th>2015</th>
 <th>2014</th>
 <th>2013</th>
 </tr>
 </thead>
 <tbody>
 <tr>
 <td class="firstcol" scope="col" >U.S. Trade Deficit</td>
 <td >$44.5 bil.</td>
 <td >$41.0 bil.</td>
 <td >$37.4 bil.</td>
 <td >$43.0 bil. 
 (6/15)</td>
 <td >$500.4 bil.</td>
 <td >$490.2 bil.</td>
 <td >$461.9 bil.</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >Exports of Goods &amp; Services (% Chg)</td>
 <td >0.3</td>
 <td >-0.1</td>
 <td >1.4</td>
 <td >-3.8</td>
 <td >-4.9</td>
 <td >3.6</td>
 <td >3.4</td>
 </tr>
 <tr>
 <td class="firstcol" >Imports of Goods &amp; Services (% Chg)</td>
 <td >1.9</td>
 <td >1.6</td>
 <td >2.0</td>
 <td >-2.4</td>
 <td >-3.7</td>
 <td >4.0</td>
 <td >0.0</td>
 </tr>
 <tr class="odd">
 <td class="firstcol" >&nbsp;&nbsp;Petroleum (% Chg)</td>
 <td >19.4</td>
 <td >8.4</td>
 <td >5.0</td>
 <td >-20.6</td>
 <td >-45.5</td>
 <td >-9.6</td>
 <td >-11.0</td>
 </tr>
 <tr>
 <td class="firstcol" >&nbsp; Nonpetroleum Goods (% Chg)</td>
 <td >1.2</td>
 <td >1.5</td>
 <td >2.2</td>
 <td >-1.5</td>
 <td >2.2</td>
 <td >6.5</td>
 <td >2.0</td>
 </tr>
 </tbody>
 </table>
 
</body></html>

The U.S. trade deficit in goods and services widened to $44.5 billion in June from a slightly revised $41.0 billion in May. The Action Economics Forecast Survey had expected a $43.1 billion deficit. The latest deficit was the largest [...]

U.S. Trade Deficit Widens with Rise in Petroleum Imports

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

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

Our global data offering is unparalleled in terms of coverage, quality, and organization. We offer 290+ databases from 2500 government and private sources, a wealth of key survey and forecast data covering the world’s economies, and a robust offering of archive databases that drive machine learning for big data applications.

Optimized for precision analytics, our data is seamlessly integrated with Microsoft Office and all leading statistical packages through our DLX® software and platform independent HaverView™ website. We further offer direct database feeds, client server or cloud-based delivery, and RESTful API.


Privacy Policy

Disclaimer

Contact us

A premier time series data platform for the global strategy, research, and quant communities. 

New York

London

Singapore

Tokyo

Economy in Brief

Viewpoints

Contact Us

Our Data

Our Products

What We Do

Our Authors

About Us

Data News

Resources

Release Calendars

Training Center

Webinars

Newsletters

Download Software

For Clients

Live Updates

250502A5.jpg

250502B5.jpg

Nonfarm payrolls increased 177,000 (1.2% y/y) during April after rising 185,000 in March, revised from 228,000, and 102,000 in February, revised from 117,000. Expectations had been for a 130,000 rise in the Action Economics Forecast Survey. The latest figure left the three-month average change at 155,000 in April, down from 232,000 in January.

Average hourly earnings rose 0.2% during April after unrevised increases of 0.3% in March and 0.2% in February. Earnings growth of 3.8% y/y was below the 5.9% high in March 2022.

The unemployment rate, measured in the household survey, held m/m at an expected 4.2% in April, and compared to 4.1% in February and 4.0% in January. 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 7.8% in April from 7.9% in March.

In the **establishment survey**, private-sector employment rose 167,000 (1.2% y/y) after a 170,000 March increase. Factory sector jobs edged 1,000 lower (-0.7% y/y) following a 3,000 gain. Construction sector employment increased 11,000 (1.7% y/y), after rising 7,000 in March.

Private service-producing sector employment increased 156,000 (1.4% y/y) in April after improving 161,000 in March. Increases varied greatly amongst service sector categories. Private education & health sector employment rose 70,000 (3.4% y/y) last month following a 74,000 March increase. Leisure & hospitality employment rose 24,000 (1.3% y/y) after a 38,000 gain. Trade, transportation & utilities rose 32,000 (0.9% y/y) in April following a 25,000 March increase. Professional & business services employment rose 17,000 (-0.1% y/y) following a 3,000 rise while temporary help employment rose 3,600 (-3.9% y/y) following a 2,700 decline. Financial activities employment improved 14,000 (1.2% y/y) after a 6,000 gain. The number of information sector jobs held steady (-0.4% y/y) last month after falling 2,000 in March.

Government sector payrolls rose 10,000 (1.3% y/y) last month after increasing 15,000 in March. The number of local government jobs increased 13,000 (1.4% y/y) following a 17,000 gain. State government employment rose 6,000 (1.8% y/y) following a 2,000 March increase but federal government payrolls fell 9,000 (-0.3% y/y), the third consecutive monthly decline.

Private-sector average hourly earnings rose 0.2% (3.8% y/y) in April after increasing 0.3% in March. Earnings in the goods-producing sector eased 0.1% (+4.0% y/y) following a 0.6% gain. Earnings in construction rose 0.3% (3.6% y/y), after a 0.2% rise but factory sector earnings declined 0.3% (+4.3% y/y) after surging 0.8% in March. In the private services-sector, earnings rose 0.2% (3.7% y/y) in April for the third straight month. Information sector pay increased 1.0% (5.2% y/y) last month after easing 0.1%, and financial activities earnings rose 0.5% (4.3% y/y) for the second straight month. Trade, transportation & utilities sector pay increased 0.4% (3.4% y/y) after 0.6%. Professional & business sector earnings increased 0.1% (4.4% y/y) after 0.2% in March. Leisure & hospitality earnings held steady (+3.8% y/y) following a 0.6% March increase.

250502C5.jpg

250502D5.jpg

The length of the average workweek held steady at 34.3 hours in April. The workweek in the goods-producing sector eased to 39.8 hours from 40.0 hours. The construction sector average workweek eased to 39.0 hours from 39.3 hours while the factory sector workweek moved lower to 40.0 hours from 40.2. The average workweek in the private service sector held at 33.2 hours. Professional & business service hours fell to 36.3 hours from 36.4 while trade, transportation & utilities hours improved to 34.3 from 34.0 hours. Private education hours rose slightly to 32.8, but leisure & hospitality held steady at 25.5 hours.

In the **household survey**, the unemployment rate held at 4.2% in April as employment rose 436,000 and the size of the labor force increased 518,000. The labor force participation rate edged up to 62.6% last month from 62.5% in March. It remained below the high of 63.3% early in 2020. The rate for teenagers declined to 36.9%. For workers aged 20-24, the rate held steady at 72.1%, up from 71.8% six months earlier. For workers aged 25-54 the rate rose to 83.6%, a five-month high. For individuals 55 and over, the rate improved to 38.4% in April.

The employment/population ratio for all workers in April rose to 60.0%. 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.

250502X5.jpg

250502F5.jpg

- Job growth spreads across most sectors.
- Earnings growth trend decelerates.
- Jobless rate holds steady.

U.S. Job Growth Is Firm in April but March Gain Is Lessened

Winnie Tapasanun

250502F32.jpg

250502G32.jpg

Total factory orders rose a slightly less-than-expected 4.3% m/m in March after rises of 0.5% in February and 1.8% in January, data from the U.S. Census Bureau showed. A 4.5% m/m March increase had been expected in the Action Economics Forecast Survey. The March reading was the third successive monthly rise and the largest since July 2024. The year-on-year rate accelerated to 6.0% in March, the highest since November 2022, from 2.3% in February. Notably, orders for nondefense aircraft & parts soared 139.0% in March following a 7.4% drop in February and a 92.9% surge in January. Factory orders excluding defense rose 4.8% (5.9% y/y), the largest of three straight m/m/ rises, after a 0.4% February increase. Factory orders excluding the transportation sector fell 0.2% (+1.1% y/y), the first m/m fall since August, after rising 0.3% in February, January and December.

Durable goods orders jumped 9.2% (11.9% y/y) in March, the third consecutive m/m gain and the biggest since July 2024, on top of a 0.8% increase in February (matching +9.2% m/m in the advance report on April 24). The March jump reflected m/m orders increases of 27.1% (the largest m/m surge since July 2024; 31.2% y/y) in transportation equipment, 1.1% (4.9% y/y) in primary metals, 0.5% (-0.4% y/y) in furniture & related products, 0.1% (2.5% y/y) in fabricated metal products, and 0.1% (0.9% y/y) in machinery. To the downside, durable goods orders for computers & electronic products (-1.3%; +2.7% y/y) and electrical equipment, appliances & components (-1.0%; +4.2% y/y) declined m/m in March.

Nondurable goods orders, which equal nondurable goods shipments, fell 0.3% (+0.4% y/y) in March, the first m/m fall since September, after a 0.1% uptick in February. The March fall reflected m/m drops of 2.4% (-9.3% y/y) in petroleum & coal products and 0.9% (-1.2% y/y) in apparel. To the upside, the following nondurable goods shipments rose m/m in March: leather & allied products (1.5%; 8.6% y/y), beverage & tobacco products (0.7%; 5.8% y/y), paper products (0.6%; 2.3% y/y), printing (0.3%; 3.8% y/y), textile mills (0.3%; 0.8% y/y), chemical products (0.2%; 5.4% y/y), plastics & rubber products (0.2%; 0.4% y/y), food products (0.1%; 1.8% y/y), and textile products (0.1%; 2.1% y/y).

Total shipments slipped 0.1% (+2.0% y/y) in March, the first m/m easing since October, after a 0.7% increase in February. Excluding transportation, shipments were virtually unchanged m/m (+1.1% y/y) in March following six straight m/m gains. Shipments of durable goods industries inched up 0.1% (3.8% y/y) in March, the smallest of four consecutive m/m increases, after a 1.3% advance in February. This reflected m/m durable goods shipments rises of 1.2% (5.6% y/y) in primary metals, 0.9% (0.1% y/y) in furniture & related products, 0.8% (-0.2% y/y) in nonmetallic mineral products, 0.4% (0.0% y/y) in machinery, 0.3% (1.8% y/y) in fabricated metal products, 0.2% (4.5% y/y) in computers & electronic products, 0.2% (-2.1% y/y) in wood products, and 0.1% (3.0% y/y) in electrical equipment, appliances & components. In contrast, durable goods shipments for transportation equipment (-0.5%; +7.3% y/y) and miscellaneous durable goods (-0.1%; +2.9% y/y) fell m/m in March following three successive m/m increases.

Unfilled orders rose 2.0% (2.3% y/y) in March, up for the eighth month in nine, after a 0.1% uptick in February. Excluding transportation, unfilled orders dipped 0.1% (+0.7% y/y) in March, the first m/m easing since May 2024, after holding steady in February. Backlogs of durable goods rose 2.0% (2.3% y/y) in March, reflecting m/m rises of 3.1% (3.1% y/y) in transportation equipment and 0.2% (2.4% y/y) in electrical equipment, appliances & components.

Inventories edged up 0.1% (0.9% y/y) in March, the fifth straight m/m increase, after rising at the same pace in the prior two months. Excluding transportation, inventories were up 0.1% (0.5% y/y) in March, the fifth consecutive m/m rise. Durable goods inventories ticked up 0.1% (1.0% y/y) in March after holding steady in February and January; nondurable goods inventories edged up 0.1% (0.8% y/y), the fifth successive m/m increase.

The factory sector data are available in Haver’s **USECON** database. The Action Economics Forecast Survey is in the **AS1REPNA** database.

250502H32.jpg

250502I32.jpg

- March manufacturers’ new orders +4.3% m/m; +6.0% y/y, highest since Nov. ’22.
- Durable goods orders (+9.2%) jump m/m, while nondurable goods orders (-0.3%) and shipments (-0.1%) decline m/m.
- Transportation equipt. orders +27.1% m/m, w/ a 139.0% m/m surge in nondefense aircraft & parts orders.
- Unfilled orders +2.0%, the eighth m/m rise in nine months.
- Inventories +0.1%, the fifth consecutive m/m increase.

U.S. Factory Orders Increase for the Third Straight Month in March

250502E.jpg

The global manufacturing data showed broad weakening in April as conditions weakened across more than half of the contributing early reporters in the S&P survey of manufacturing. Of the 18 early reporting countries, more than half of them showed deceleration over six months and 12 months. Over three months, only 8 of 18 showed deterioration and that's about as good as it got in this report. In the current month, month-to-month changes showed more than half of the survey contributors showing weaker results than the month before. In the S&P framework, manufacturing improved month-to-month for the U.S.; however, looking at sequential averages for the U.S., U.K., European monetary union, Canada, and Japan, we see a steady weakening and results over 12 months, over six months versus 12 months, and for three months versus 6 months. The highly developed countries are not doing particularly well.

Asian economies are also showing slight deterioration but doing a little better than the developed countries in general.

Only five of the 18 reporting countries have queue percentile standings in their data back to January 2021 that are above their medians. Readings at or above the 50% mark are at or above the median standing. Canada is showing the weakest manufacturing result on record over this span, in terms of its queue percentile standing which is at 0 in the current month.

I showed the graphic for the Baltic dry goods index in this report rather than statistics on the manufacturing PMI data because the Baltic data, which reflect shipping volume for dry goods - that is excluding things like oil - is weak but it's only in the neighborhood where it's been for some time. There has been a great deal of talk about how tariffs may have impacted trade flows, expected trade flows, shipping, shipping rates, and the like. However, according to the Baltic dry goods index, there isn't much evidence that this is occurring right now and affecting the current data. That may still lie ahead but for now it's not baked in the cake.

250502.jpg

Globally Manufacturing Weakens

Andrew Cates

**China-US shipping activity** 
The economic fallout from escalating US-China trade tensions is becoming increasingly visible in the data. A clear example is the chart below, which highlights a sharp drop in vessel arrivals at the ports of Los Angeles and Long Beach, along with a notable decline in ships waiting offshore. These trends point to a tangible weakening in bilateral trade flows, as the effects of tit-for-tat tariffs imposed by both countries begin to bite. Given the outsized role the US and China play in global commerce, this slowdown is likely to reverberate through global supply chains, weighing on trade volumes, dampening demand, and curbing economic growth worldwide.

250501Z1.jpg

**GDP growth in Q1**
Data this week showed that the US economy contracted, albeit modestly, in Q1 even as the euro area recorded a modest expansion—an unusual divergence. The contraction in US GDP can be largely attributed to a sharp increase in imports, as firms rushed to front-load purchases ahead of anticipated tariff hikes. In addition, domestic demand was subdued, with weaker contributions from both consumer spending and government consumption. This decoupling between the US and euro area economies is particularly striking given the current global focus on the US dollar. While the euro area has shown unexpected signs of resilience, the US downturn raises important questions about its underlying momentum, especially as trade dynamics and policy uncertainty continue to cloud the outlook.

250501Z2.jpg

**The US dollar versus yield differentials**
Chart 3 below illustrates a sharp breakdown in the correlation between the US-Germany 10-year yield differential and the EUR/USD exchange rate. Historically, the dollar has moved closely with interest rate spreads, as yield-seeking capital flowed into US assets. But since early 2025—and more acutely following the April tariff actions—the dollar has weakened markedly even as the yield spread has narrowed only modestly. This decoupling underscores a critical shift: capital markets are reacting not just to monetary policy, but to rising trade and geopolitical uncertainty. In other words, the exchange rate is now being driven as much by risk sentiment as by interest rate arbitrage.

250501Z3.jpg

**The US economy’s structural outperformance and the dollar**
A second dynamic, captured in the next chart, reveals a tight correlation between the US real effective exchange rate and the potential GDP growth differential between the US and euro area over the past 50-60 years. This raises the question: has dollar strength (until recently) merely been a reflection of US growth leadership—or are capital inflows themselves helping to sustain this growth outperformance? In effect, the tail may be wagging the dog. Global investors have long allocated capital to the US, attracted by its macroeconomic resilience, technological leadership, and deep, liquid financial markets. The danger now is that the US trade war may disrupt this equilibrium. A sharp or sustained reduction in capital inflows could undermine growth, weaken the dollar, and trigger broader financial instability. Moreover, reversing this dynamic is not straightforward—barring a credible structural resurgence in European (or Asian) growth, the global investment landscape remains tilted toward the US.

250501Z4.jpg

**US competitiveness versus Europe, China and Japan** 
The next chart below examines relative unit labour costs across major economies since 2011. The US and China have seen a broadly similar trajectory, with steady increases in relative cost structures, while the euro area has remained flat and Japan has seen dramatic improvement. This suggests that, from a cost competitiveness standpoint, the US is not uniquely disadvantaged vis-à-vis China. However, as we discuss further below, this parallel erosion of cost competitiveness is occurring at much higher nominal wage levels in the US, which blunts its ability to regain export share through tariff-related shifts alone. The trade war strategy—absent a corresponding improvement in productivity or structural reforms—risks imposing costs without delivering material competitiveness gains.

250501Z5.jpg

**Average wages in selected developed and developing economies**
This point is reinforced by the final chart, which shows estimates for average monthly wages across countries in 2024. US labour remains much more expensive than in peer or emerging economies. So even if China’s costs rise in tandem with the US, the global supply chain has ample alternatives. 'China plus one' strategies are accelerating, and the US remains structurally misaligned with low-cost production hubs. Tariffs aimed at reshoring supply chains are unlikely to deliver sustained gains unless accompanied by deep supply-side reforms, and risk further disincentivizing foreign direct investment if global firms perceive US trade policy as erratic or punitive.

250501Z6.jpg

Financial markets found a measure of calm this week, buoyed by some subtle shifts in tone from US policymakers. A softening in the administration’s rhetoric around trade tariffs coupled with a less confrontational stance toward Federal Reserve Chair Jerome Powell, helped ease tensions that had roiled markets earlier in the month. Equities rebounded modestly, and volatility indicators edged lower, reflecting cautious optimism that the worst of the policy shocks may be behind us. But beneath the surface, significant downside risks persist. New shipping data point to a pronounced slowdown in US-China trade flows (chart 1), suggesting the damage from recent tariff escalations is already rippling through global supply chains. Meanwhile, incoming data for the US revealed an unexpected contraction in the economy in Q1 and further signs of weakness in the labour market (chart 2). The US dollar, in the meantime, while long supported by superior growth and yield differentials, has begun to decouple from traditional drivers (charts 3 and 4) suggesting growing pressure on capital flows. At the same time, structural imbalances are drawing renewed scrutiny: unit labour cost comparisons show the US steadily losing competitiveness (chart 5), while nominal wage disparities remain stark versus China and other Asian economies, further complicating any effort to restore trade balance without broader reforms (chart 6). In short, while markets may be drawing temporary comfort from a pause in tariff brinkmanship, the deeper economic and financial vulnerabilities exposed this month remain unresolved—and increasingly central to the global macro narrative.

<iframe style="border-radius:12px" src="https://open.spotify.com/embed/episode/3PzXXKrkHcwtOLipohEdnB?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: Tariff Truce, Tenuous Trust

250501F20.jpg

250501G20.jpg

U.S. light vehicle sales dropped 2.9% (+6.5% y/y) to 17.31 million units (SAAR) in April after surging 10.8% to 17.82 million units in March. The retreat in April vehicle sales accompanied a 1.7% y/y rise in real disposable income through March, which compared to 2.0% growth last year.

Sales declines were broad-based last month. Light truck sales fell 1.3% (+9.9% y/y) during April to 14.34 million units (SAAR), after rising 12.4% in March. Purchases of domestically-made light trucks declined 1.2% (+11.9% y/y) to 11.02 million units, after jumping 12.5% in March. Sales of imported light trucks fell 1.8% (+4.4% y/y) to 3.32 million units, following an 11.6% March surge.

Trucks’ record 82.8% share of the light vehicle market last month compared to 81.5% in March and 80.3% in April of last year. The share averaged 80.3% during all of 2024 versus 53.3% ten years earlier.

Auto sales also declined last month, down 9.5% (-7.5%) to 2.97 million units (SAAR) following a 3.5% March rise. The decline reversed all of the increase over the prior two months. Purchases of domestically-produced cars fell 9.8% (-4.3% y/y) last month to 2.22 million units, after rising 3.8% in March. Sales of imported autos declined 9.6% (-15.7% y/y) to 0.75 million units, following a 2.5% March increase.

Imports' 23.5% share of the U.S. light vehicle market was little changed from 23.6% in March and compared to a May 2023 low of 22.9% and a high of 26.3% in November of 2023. Imports' share of the passenger car market held steady at 25.3% last month and compared to 27.7% in April of last year. It reached a high of 38.7% in September 2021. Imports' share of the light truck market eased to 23.2% last month after falling to 23.3% in March.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the I**NDUSTRY** database.

250501H20.jpg

250501I20.jpg

- Light truck sales pull back, while auto sales tumble.
- Both domestic and imported sales decline.
- Imports' market share slips further.

Economy in Brief: August 2016

Jump to: