Key Economic Indicators – June 8, 2020

  • Total nonfarm payroll employment rose by 2.5 million in May, and the unemployment rate declined to 13.3%, according to the U.S. Bureau of Labor Statistics reported today. These improvements in the labor market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus (COVID-19) pandemic and efforts to contain it. Despite the over-the-month increase, nonfarm employment in May was 13% below its February level.
  • Total non-farm payroll employment increased by 2.509 million in May, following a decrease of 20.687 million in the previous month. Private-sector payrolls increased by 3.094 million in the month, while government employment decreased by 585 thousand.
  • In May, employment in leisure and hospitality increased by 1.2 million, following losses of 7.5 million in April and 743 thousand in March. Over the month, employment in food services and drinking places rose by 1.4 million, accounting for about half of the gain in total nonfarm employment. Construction employment increased by 464 thousand in May, gaining back almost half of April’s decline of 995 thousand. Employment increased by 424 thousand in education and health services in May, after a decrease of 2.6 million in April. Employment in retail trade rose by 368 thousand, after a loss of 2.3 million in April. Employment increased 272 thousand in the other services industry, following a decline of 1.3 million in April. In May, manufacturing employment rose by 225 thousand, with gains about evenly split between the durable and nondurable goods components, following a 1.3 million decrease. Professional and business services added 127 thousand jobs in May, after shedding 2.2 million jobs in April. Financial activities added 33 thousand jobs over the month, following a loss of 264 thousand jobs in April. Wholesale trade employment was up by 21 thousand, following a decrease of 383 thousand. Mining continued to lose jobs in May (20 thousand), following a decrease of 77 thousand in the previous month. Employment in transportation and warehousing decreased by 19 thousand, after a decline of 553 thousand.
  • The average workweek of all employees on private nonfarm payrolls increased by 0.5 hour to 34.7 hours. Average hourly earnings decreased by 29 cents to $29.75, following a gain of $1.35 in the previous month. The decreases in average hourly earnings largely reflect job gains among lower-paid workers. Over the past 12 months, average hourly earnings were up 6.7%.
  • The unemployment rate decreased to 13.3% in May, from 14.7% in April. The unemployment rate was 3.6% in May of 2019. Among the major worker groups, the unemployment rates declined in May for adult men (11.6%), adult women (13.9%), Whites (12.4%), and Hispanics (17.6%). The jobless rates for teenagers (29.9%), Blacks (16.8%), and Asians (15.0%) showed little change over the month.
  • The number of unemployed persons decreased by 2.093 million to 20.985 million. The number of unemployed persons who were on temporary layoff decreased by 2.7 million in May to 15.3 million, following a sharp increase of 16.2 million in April. Among those not on temporary layoff, the number of permanent job losers continued to rise, increasing by 295 thousand in May to 2.3 million.
  • The number of unemployed persons who were jobless less than 5 weeks decreased by 10.4 million to 3.9 million. The number of unemployed persons who were jobless 5 to 14 weeks rose by 7.8 million to 14.8 million. The number of long-term unemployed (those jobless for 27 weeks or more) increased by 225 thousand to 1.164 million in May and accounted for 5.6% of the unemployed.
  • The labor force participation rate increased by 0.6 percentage point to 60.8% in May, following a decrease of 2.5 percentage points in April.
  • The advance figure for initial claims for unemployment insurance decreased 249 thousand to 1,877 thousand in the week ending May 30. The 4-week moving average was 2,284 thousand, a decrease of 324.75 thousand from the previous week’s revised average. The advance number for seasonally adjusted insured unemployment (ongoing) during the week ending May 23 was 21,487 thousand, an increase of 649 thousand from the previous week’s revised level. The 4-week moving average was 22,446.25 thousand, a decrease of 222.5 thousand from the previous week’s revised average. The advance seasonally adjusted insured unemployment rate was 14.8% for the week ending May 23, an increase of 0.5 percentage point from the previous week’s revised rate. It was stated that: “The COVID-19 virus continues to impact the number of initial claims and insured unemployment.  This report now includes information on claimants filing Pandemic Unemployment Assistance and Pandemic Emergency Unemployment Compensation claims.”
  • Unemployment rates were higher in April than a year earlier in all 389 metropolitan areas, according to the U.S. Bureau of Labor Statistics. A total of 52 areas had jobless rates of less than 10.0% and 12 areas had rates of at least 25.0%. A total of 215 areas had April jobless rates below the U.S. rate of 14.4%, 172 areas had rates above it, and 2 areas had rates equal to that of the nation. Kahului-Wailuku-Lahaina, HI, had the highest unemployment rate in April, 35.0%, followed by Kokomo, IN, 34.1%. Logan, UT-ID, had the lowest unemployment rate, 6.2%. The next lowest rates were in Columbia, MO, and Jefferson City, MO, 6.5% each.
  • Nonfarm payroll employment decreased over the year in 377 metropolitan areas and was essentially unchanged in 12 areas. The largest over-the-year employment decreases occurred in New York-Newark-Jersey City, NY-NJ-PA (1,949,600), Los Angeles-Long Beach-Anaheim, CA (916,200), and Chicago-Naperville-Elgin, IL-IN-WI (610,900). The largest over-the-year percentage losses in employment occurred in Atlantic City-Hammonton, NJ (32.9%), Norwich-New London-Westerly, CT-RI (27.4%), and Barnstable Town, MA (25.0%).  Over the year, nonfarm employment declined in all 51 metropolitan areas with a 2010 Census population of 1 million or more. The largest over-the-year percentage decreases in employment in these large metropolitan areas occurred in Detroit-Warren-Dearborn, MI (24.5%), Las Vegas-Henderson-Paradise, NV (20.7%), and Buffalo-Cheektowaga-Niagara Falls, NY (20.3%).
  • Non-farm business sector labor productivity decreased 0.9% in the first quarter of 2020, following a 1.2% increase in the previous quarter, according to the U.S. Bureau of Labor. Unit labor costs increased 5.1%, following a 2.2% increase in the previous quarter. Productivity in the non-farm business sector increased 0.7% from the first quarter of 2019, and unit labor costs increased 1.9%. The 0.9% decline in nonfarm business sector labor productivity in the first quarter of 2020 was only the second quarterly decline since the fourth quarter of 2015, when output per hour decreased 2.9%. The 6.5% first-quarter 2020 decrease in output was the largest since the first quarter of 2009, when output also fell 6.5%, and the 5.6% decline in hours worked was the largest since the second quarter of 2009 (8.7%).
  • Manufacturing sector labor productivity increased 0.3% in the first quarter of 2020, as output decreased 6.3% and hours worked decreased 6.6%. Total manufacturing sector productivity declined 0.8% over the last four quarters, as output decreased 2.2% and hours worked decreased 1.4%. Productivity decreased 3.5% in the durable manufacturing sector in the first quarter of 2020, reflecting a 10.2% decrease in output and a 6.9% decrease in hours worked. Productivity increased 4.3% in the nondurable manufacturing sector, as output decreased 2.0% and hours worked decreased 6.1%. Unit labor costs in the total manufacturing sector increased 6.9% in the first quarter of 2020 and increased 4.4% from the same quarter a year ago.
  • New orders for manufactured goods decreased 13.0% in April, following an 11.0% decrease in the previous month, according to the U.S. Census Bureau. Shipments decreased 13.5%, following a 5.5% decrease in the previous month. Year-to-date new orders were down 8.0%, and shipments were down 6.3%.  Unfilled orders decreased 1.6% in April, and inventories decreased 0.4%. The inventories-to-shipments ratio was 1.69, up from 1.46 in March.
  • In April, international trade deficit in goods and services was $49.4 billion, up $7.1 billion from March. Exports decreased $38.9 billion to $151.3 billion, and imports decreased $31.8 billion to $200.7 billion. The cumulative deficit was $168.5 billion for the first four months of 2020, compared with a deficit of $194.4 billion for the same period of the previous year. Year-to-date, exports decreased 9.5% and imports decreased 10.2% from the same period in 2019.
  • Construction spending during April 2020 was estimated at a seasonally adjusted annual rate of $1,346.2 billion, 2.9% below the March level, according to the U.S. Census Bureau. The April figure was 3.0% above the April 2019 figure. During the first four months of this year, construction spending amounted to $412.5 billion, 7.1% above the figure for the same period in 2019.  Spending on private construction was at a seasonally adjusted annual rate of $1,004.1 billion, 3.0% below the revised March estimate. Residential construction was at a seasonally adjusted annual rate of $536.8 billion in April, 4.5% below the previous month. Nonresidential construction was at a seasonally adjusted annual rate of $467.3 billion in April, 1.3% below the March estimate. In April, the estimated seasonally adjusted annual rate of public construction spending was $342.1 billion, 2.5% below the March figure. Educational construction was 2.3% below the revised March estimate. Highway construction was 5.2% below the March level.
  • The results of Freddie Mac’s Primary Mortgage Market Survey showed that average mortgage rates ticked up slightly. 30-year fixed-rate mortgage averaged 3.18% for the week ending June 4, up from last week when it averaged 3.15%. A year-ago this time, the 30-year fixed-rate averaged 3.82%. 15-year fixed-rate mortgage averaged 2.62%, unchanged from last week. A year-ago this time, the 15-year fixed-rate averaged 3.28%.
  • Mortgage applications decreased 3.9% from a week earlier, according to data from Mortgage Bankers Association’s (MBA) Weekly Applications Survey for the week ending May 29th.
  • The Institute for Supply Management’s (ISM) manufacturing survey indicated that the manufacturing sector contracted in May, and the overall economy returned to expansion after one month of contraction. Eleven manufacturing industries reported contraction and six reported growth in May.
  • The Institute for Supply Management’s (ISM) non-manufacturing survey indicated that economic activity in the non-manufacturing sector contracted in May, for the second consecutive month. Fourteen non-manufacturing industries reported contraction and four reported growth in May.
  • The Chicago Fed’s National Financial Conditions Index (NFCI) edged down to negative 0.51 in the week ending May 29. Risk indicators contributed negative 0.22, credit indicators contributed negative 0.20, and leverage indicators contributed negative 0.09 to the index in the latest week. The adjusted index (ANFCI), which isolates a component of financial conditions uncorrelated with economic conditions to provide an update on financial conditions relative to current economic conditions, edged down in the latest week to 0.03. Risk indicators contributed negative 0.33, credit indicators contributed negative 0.34, leverage indicators contributed negative 0.04, and the adjustments for prevailing macroeconomic conditions contributed 0.75 to the index in the latest week.
  • There were 6,664,908 COVID-19 confirmed cases in the world, 391,686 deaths, and 2,982,047 recovered, according to Johns Hopkins University, Coronavirus Resource Center (access date and time: 6/5/2020, 9:00 EST). In the United States, there are 1,872,660 confirmed cases, 108,211 deaths, and 485,002 recovered cases. The world is struggling to control the spread of the virus.

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