The number of new jobless claims decreased by 18,000 to 228,000 during the week ending 1 April. Continuing claims increased by 6,000 to 1.82 million, and the insured unemployment rate for the week ending 25 March was 1.3%, unchanged from the previous week’s revised rate.
Another sign of a cooling labor market, job openings fell 6% in February to 9.9 million, the lowest level in nearly two years. There were 1.7 jobs available for every unemployed person. The gap between the number of jobs available in the economy (the number of employed people + job openings) and the number of workers available in the economy (civilian labor force) fell below 4 million for the first time since September 2021.
The ISM Services PMI® was 3.9 points lower in March at 51.2%, indicating the U.S. services sector continues to expand at a slower pace. Except for a contraction in December, services have grown 33 of the last 34 months. The report for March indicated that there was a pullback in the growth rate due to a cooling off in the new orders growth rate, employment growth that varies by industry, and continued improvements in capacity and logistics, which is a positive impact on supplier performance.
Sales of light vehicles (autos & light-duty trucks) eased for a second straight month in March to a 14.8 million seasonally adjusted annual rate (SAAR). Sales were lower in both passenger cars and light trucks. Sales were ahead of last March’s 13.6 million (SAAR). Sales remain well below pre-pandemic levels as some remaining shortages of materials and higher lending rates constrain the market.
Construction spending declined 0.1% in February but was up 5.2% Y/Y. Residential construction remained the same. Spending on multi-family home construction rose 1.4% while spending on chemistry-intensive single family home construction fell 1.8%. Higher non-residential spending was influenced by a 2.7% increase in manufacturing which was up 53.8% Y/Y. Public spending on construction fell by 0.2% but was 12.8% higher Y/Y.
The US deficit in goods and services trade widened by 2.7% to $70.5 billion in February. Both exports and imports fell over the month. Good exports were down across all major categories. Exports declined in natural gas, cars, pharmaceuticals, and aircraft. Imported goods were down as well. Imports declined in consumer goods, autos and other vehicles.
Led by a decline in transportation equipment, headline factory orders fell by 0.7% in February. The only increases were in transmission power equipment, iron foundries, and mining & oil and gas field machinery. Core business orders (nondefense capital goods excluding aircraft) fell by 0.1%, virtually the same as the last three months. Unfilled orders (a measure of the manufacturing pipeline) were down 0.1%. Manufacturing shipments declined 0.5% while inventories declined 0.1% in February, the same as January. The manufacturing inventories-to-sales ratio was 1.49, virtually unchanged from January and December.
The ISM Manufacturing PMI® was down 1.4 points to 46.3% in March as activity in the U.S. industrial contracted for the fifth month in a row. New orders were down for a seventh month, new export orders were down for an eight month, and production was down for a fourth month. The employment index was down again as panelists indicate the gap between hiring and holding staff is narrowing. Manufacturers projecting growth later this year may be hesitant to let go of hard-to-find workers. Faster supplier deliveries are alleviating pressure across supply chains. Manufacturers continue to work down inventories. Customer inventories are just about “right” which would be less accommodative to future demand. Input/ raw materials costs are declining. Manufacturers are working off order backlogs as new demand has been soft.
The J.P.Morgan Global Manufacturing PMITM fell 0.3 points to 49.6% in March, indicating two months in a row of contraction. Output expanded though at a slightly lower rate. Both new orders and export orders declined in March. Inflationary pressures are easing and manufacturers are facing slower gains in input costs and slower gains in selling price inflation. Supply chain conditions continue to improve.
Global semiconductor sales fell by 4.0% in February to $39.7 billion. Sales were lower across all regions. Compared to last February, sales were down by 20.7%. SIA noted that the global semiconductor market cooled off over the last six months because of short-term cyclicality and macroeconomic headwinds.
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