Written by rjs, MarketWatch 666
May’s job openings & labor turnover survey (JOLTS) plus May’s wholesale sales and inventories
The only agency reports released this past week were the Job Openings and Labor Turnover Survey(JOLTS) for May from the Bureau of Labor Statistics, and the May report on Wholesale Trade, Sales and Inventories from the Census Bureau….the week also saw the Consumer Credit Report for May from the Fed, which indicated that overall consumer borrowing outstanding grew by a seasonally adjusted $35.3 billion, or at a 10.0% annual rate, as non-revolving credit expanded at a 9.5% rate to $3,304.7 billion while revolving credit outstanding grew at a 11.4% rate to $974.6 billion.
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Privately issued reports released this week included the June 2021 Services ISM Report On Business from the Institute for Supply Management, which saw ISM Services index fall to 60.1%, down from the record high of 64.0% in May, indicating a somewhat smaller plurality of service industry purchasing managers reported growth in various facets of their business in June, and the Mortgage Monitor for May (pdf) from Black Knight Financial Services, which indicated that 4.73% of mortgages were delinquent in May, up from the 4.66% that were delinquent in April, but down from the 7.76% delinquency rate of May 2020, and that a record low 0.28% of mortgages remained in the foreclosure process in May, down from 0.29% of all mortgages in April and down from 0.38% in May a year ago….
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May Job Openings at Record High after April Record Revised Lower; Record Low Layoffs; Hiring, Quitting Fall
The Job Openings and Labor Turnover Survey (JOLTS) report for May from the Bureau of Labor Statistics estimated that seasonally adjusted job openings rose by 16,000, from 9,193,000 in April to a record 9,209,000 in May, after April’ job openings were revised 93,000 lower, from the record 9,286,000 reported last month to 9,193,000…May jobs openings were also 69.1% higher than the 5,447,000 job openings reported for May a year ago, while the job openings ratio expressed as a percentage of those employed remained at a record 6.0% in May, while it was up from 3.9% in May a year ago…the greatest percentage increase in May job openings was in the educational services sector, where openings rose by 35,000 to 165,000, while job openings in the arts, entertainment, and recreation sector fell by 80,000 to 167,000 (see table 1 for more details)…like most BLS releases, the press release for report is easy to understand and also refers us to the associated tables for the data cited, which are linked to at the end of the release…
The JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and ‘other separations’, which includes retirements and deaths….in May, seasonally adjusted new hires totaled 5,927,000, down by 85,000 from the revised 6,012,000 who were hired or rehired in April, as the hiring rate as a percentage of all employed fell from 4.2% to 4.1%, which was also down from the hiring rate of 6.2% in May a year earlier (details of hiring by industry since January are in table 2)…meanwhile, total separations fell by 485,000, from 5,803,000 in April to 5,318,000 in May, while the separations rate as a percentage of the employed fell from 4.0% in April to 3.7% in May, which was still up from the separations rate of 3.5% in May a year ago (see table 3)…subtracting the 5,318,000 total separations from the total hires of 5,927,000 would imply an increase of 609,000 jobs in May, a bit more than the revised payroll job increase of 583,000 for May reported by the June establishment survey last week, but well within the expected +/-110,000 margin of error in these incomplete extrapolations…
Breaking down the seasonally adjusted job separations, the BLS reports that 3,604,000 of us voluntarily quit their jobs in May, down by 388,000 from the record 3,992,000 who quit their jobs in April, while the quits rate, widely watched as an indicator of worker confidence, fell from a record high of 2.8% in Aprilto 2.5% of total employment in May, while it was still up from 1.7% a year earlier (see details in table 4)….in addition to those who quit, a record low of 1,368,000 were either laid off, fired or otherwise discharged in May, down by 82,000 from the prior record low 1,450,000 who were discharged in April, as the discharges rate fell from 1.0% to a record low 0.9% of all those who were employed during the month, and was down from the 1.6% discharges rate of a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 346,000 in May, down from 360,000 in April, for an ‘other separations’ rate of 0.2%, the same as in April and as in May of a year ago….both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be accessed using the links to tables at the bottom of the press release.
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May Wholesale Sales Up 0.8%, Wholesale Inventories Up 1.3%
The May report on Wholesale Trade, Sales and Inventories(pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales was at $576.5 billion in May, up 0.8 percent (+/-0.5%) from the revised April level, and up 36.8 percent (plus/minus 1.8 percent) from the value of wholesale sales in May 2020… the April preliminary estimate of wholesale sales was revised from the $570.8 billion reported a month ago to $572.0 billion, which meant the March to April percent change was revised from the preliminary estimate of up 0.8 percent (plus/minus 0.4 percent) to up 1.1 percent (plus/minus 0.4 percent) …as an intermediate activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods produced or finally sold….
On the other hand, the monthly change in private inventories is a major factor in GDP, as any goods left on the shelf or in intermediate storage represent goods that were produced but not sold, and this May report estimated that wholesale inventories were valued at a seasonally adjusted $709.8 billion at month end, an increase of 1.3 percent (+/-0.2%) from the revised April level and 8.2 percent (plus/minus 1.2 percent) higher than in May a year ago, with the April preliminary inventory estimate revised from $698.0 billion to $700.4 billion at the same time, now a 1.1% increase from March…
For national accounts purposes, May wholesale inventories will be adjusted for price changes by category with the appropriate components of the May producer price index, which indicated a 1.5% increase in prices for finished goods, a 2.8% increase in prices for intermediate goods, and an 8.4% increase in prices for unprocessed goods….with most of wholesale inventories finished goods, there will thus be a real decrease of at least 0.2% in May wholesale inventories, following the real wholesale inventory increase on the order of 0.2% we had figured for April…since the key source data and assumptions (xls) for the third estimate of 1st quarter GDP indicates that there was a small increase (~0.1%) in real wholesale inventories in the first quarter, any decrease in real wholesale inventories in the second quarter will subtract from 2nd quarter GDP by the size of that decrease, plus an amount representing the reversal of that 0.1% first quarter increase.
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