NAM: Monday Economic Report
Manufacturing employment rose by 15,000 in June, and in the first half of the year, the sector added 87,000 employees. There remained 481,000 fewer manufacturing employees relative to pre-pandemic levels. Nonfarm payroll employment rose by 850,000 workers in June, buoyed by the reopening of the economy, especially in leisure and hospitality. Yet, the unemployment rate inched up from 5.8% in May to 5.9% in June.
With the labor market tight, the average hourly earnings of production and nonsupervisory workers in manufacturing rose to $23.75 in June, up a whopping 5.0% year-over-year.
Initial unemployment claims fell to 364,000 for the week ending June 26, a post-pandemic low.
The ISM® Manufacturing Purchasing Managers’ Index® edged down 61.2 in May to 60.6 in June, but it was the sixth time in the past seven months that the headline index exceeded 60, signaling very strong growth. Prices soared at the fastest rate since July 1979, and survey respondents continued to cite widespread supply chain challenges. Similar trends were observed in the report from the Dallas Federal Reserve Bank.
New orders for manufactured goods rose 1.7% in May, rebounding from the 0.1% decline seen in April. Overall, the manufacturing sector continues to expand strongly despite lingering supply chain and pricing pressures, with new orders increasing 7.1% since February 2020, or 9.1% with transportation equipment excluded. Core capital goods spending and shipments increased to record levels.
The U.S. trade deficit rose from $69.07 billion in April to $71.24 billion in May, largely on higher goods imports. At the same time, goods exports edged higher to an all-time high, with exports for foods, feeds and beverages and industrial supplies and materials reaching new records.
Using non-seasonally adjusted data, U.S.-manufactured goods exports have rebounded strongly through the first five months of 2021, soaring 14.21% year to date relative to the same time period in 2020. That is encouraging news.
Still, since the pandemic began, growth in goods imports have outpaced gains in goods exports, up 17.70% and 7.24%, respectively, since February 2020.
Private manufacturing construction spending fell 2.7% in May, pulling back for the second straight month. Since the pandemic began, private manufacturing construction activity has plummeted 9.1%, but there is hope for a recovery moving forward.
Consumer confidence rose to a post-pandemic high, rising from 120.0 in May to 127.3 in June, the best reading since March 2020, according to the Conference Board. Americans felt more upbeat about the current and future economy, largely on improvements in financial and labor market conditions.