NAM: Monday Economic Report
There were 328,000 manufacturing job openings in May, up from 315,000 in April and improving for the second straight month after dropping to 310,000 postings in March, which was the slowest pace since October 2016. For comparison purposes, there were 482,000 postings one year ago. In the larger economy, nonfarm business job openings rose from 4,996,000 in April, the slowest pace since December 2014, to 5,397,000 in May, increasing after two months of declines.
The COVID-19 outbreak has altered the manufacturing labor market dramatically. Manufacturers hired 426,000 workers in May, the most since April 2001. At the same time, total separations have declined from an all-time high of 804,000 in March, to 762,000 in April, to 284,000 in May, the lowest since November 2016. Net hiring was 142,000 in May, rebounding after net declines of 505,000 and 436,000 in March and April, respectively.
There were 1,314,000 initial unemployment claims for the week ending July 4, continuing to decelerate after peaking at 6,867,000 for the week ending March 28 but remaining highly elevated. Meanwhile, 18,062,000 Americans received unemployment insurance for the week ending June 27, or 12.4% of the workforce.
U.S. consumer credit outstanding fell 5.3% in May, with Americans pulling back sharply on spending during the COVID-19 pandemic for the third straight month. In May, revolving credit (which includes credit cards and other credit lines) plummeted 28.6%, reflecting the anxiousness of the consumer and the extent to which purchases—at least those done on credit—have fallen sharply.
Over the past 12 months, consumer credit outstanding has risen just 0.9%. Nonrevolving credit (which includes auto and student loans) increased 3.8% year-over-year, but revolving credit dropped 7.2% year-over-year.
Producer prices for final demand goods and services declined for the fourth time in the past five months, down 0.2% in June. At the same time, producer prices for final demand goods increased 0.2% in June, extending the 1.6% growth in May. Core inflation for raw material goods, which excludes food and energy, edged up 0.1% in June.
There continue to be deflationary pressures in the economy, even with some stabilization, due to COVID-19 and the global recession. Over the past 12 months, producer prices for final demand goods and services have decreased 0.8%, the same pace as in May and remaining the lowest since December 2015. At the same time, core producer prices were flat year-over-year in June (seasonally adjusted), up from being down 0.4% in May.
Real value-added output in the manufacturing sector declined an annualized 4.9% in the first quarter, pulling back for the second straight quarter from the all-time high in the third quarter of 2019. Manufacturing continued to account for 11% of real GDP in the first quarter.