NAM: Monday Economic Report
Manufacturing job openings eased slightly from a record 825,000 in April to 814,000 in May but remained very elevated. With strong demand and a need to ramp up production, manufacturers must hire more workers to be able to increase capacity, pushing job postings to unprecedented levels.
These data offer an encouraging sign that manufacturers feel confident enough about economic growth over the coming months for their businesses to post new jobs. Yet, manufacturing business leaders continue to cite difficulties with attracting and retaining talent as one of their top concerns.
Nonfarm business job openings rose from 9,193,000 in April to 9,209,000 in May, a new record. The May survey reported 9,316,000 unemployed Americans, which translates to 1.01 unemployed workers for every one job opening in the U.S. economy. That figure represents a phenomenal improvement from 4.99 unemployed workers for every one job opening in April 2020.
Nonfarm business layoffs dropped from 1,450,000 in April to 1,368,000, the lowest level on record for a series dating to December 2000. Meanwhile, layoffs in the manufacturing sector edged down from 112,000 to 110,000.
Initial unemployment claims totaled 373,000 for the week ending July 2, little changed from 371,000 for the week ending June 26 and remaining near a post-pandemic low.
U.S. consumer credit outstanding jumped 11.0% in May. Americans had been less willing to take on revolving credit, with many paying down their balances over the course of the past year. This suggests that consumers were opening their wallets more in May, incurring more debt in the process.
Financial market participants worried last week about the spread of the Delta variant of COVID-19 globally, pushing Treasury yields to the lowest rates since February and weighing on equity markets. This trend stands in contrast to what has otherwise been a solid outlook for the second half of this year. However, increased vaccination rates have always been the key to reducing the risk of additional outbreaks and renewed restrictions.
Releases this week will comprise several key readings on the health of the U.S. economy, including updates on consumer and producer prices, industrial production and retail sales.
Manufacturers continue to be challenged by accelerated price growth and will be looking for signs of stabilization on the inflation front in the coming months, if not in the June data that will be released this week.
For its part, the Federal Reserve has been banking on sizable price growth being transitory. However, incoming data could force its hand to start tapering asset purchases and hiking interest rates faster than currently outlined.