Tom Moeller

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The U.S. trade deficit in goods and services (BOP basis) of $69.4 billion in March compared to a $69.5 billion in February, revised from $68.9 billion, and an unrevised $67.6 billion in January, according to the U.S. Census Bureau. The deficit remained nearly the largest since April 2023 which was $72.2 billion. A $69.1 billion deficit had been expected in the Action Economics Forecast Survey. Exports fell 2.0% and were roughly unchanged y/y, reversing a 2.2% February rise. Imports declined 1.6% (+3.1% y/y) in March, following three straight months of moderate gain.

The deficit in goods trade (BOP basis) increased to $92.5 billion in March from $91.7 billion in February. Goods exports fell 2.9% (-2.8% y/y) after rising 2.8% in February. Imports of goods declined 1.6% (+2.5% y/y) following three straight monthly increases. The services trade surplus increased to $23.1 billion in March from $22.2 billion in February but remained down from a peak surplus of $25.2 billion last August. Services exports eased 0.2% (+6.0% y/y) following four consecutive monthly increases. Services imports declined 1.7% (+5.4% y/y) after rising 4.7% in February.

The real (inflation-adjusted) goods trade deficit (customs value; chained 2017 dollars), widened to $88.6 billion in March, the largest deficit since April of last year, from $87.4 billion in February. Real exports of goods declined 3.2% (-0.7% y/y) after rising 2.0% in February. Real imports of goods fell 1.5% (+2.5% y/y) after three straight monthly increases. In the first quarter of this year, a widening of the trade deficit (net exports) subtracted 0.86 percentage points from GDP growth after adding 0.25 percentage points to growth in Q4 2023.

The customs value goods trade deficit widened to $91.5 billion in March from $90.5 billion in February. The latest figure compared to a $91.8 billion deficit in the advance report released on April 25. Customs value exports fell 3.0% (-1.7% y/y) in March after a 2.8% February increase. Automotive vehicles, parts & engines rose 0.6% (-1.7% y/y) while nonfood consumer goods excluding autos declined 1.8% (-5.1% y/y). Capital goods exports excluding autos weakened 3.7% (+3.1% y/y) while exports of industrial supplies & materials fell 3.0% (-4.1% y/y). Foods, feeds & beverages exports were off 8.2% (-1.5% y/y).

Customs value imports of goods declined 1.6% (+2.6% y/y) in March after increasing for three straight months. Automotive vehicles, parts & engines imports fell 11.1% (+6.1% y/y) while capital goods imports excluding autos rose 0.1% (7.4% y/y). Foods, feeds & beverage imports declined 3.5% (+5.2% y/y). Imports of industrial supplies & materials fell 2.9% (-7.0% y/y) but nonfood consumer goods excluding autos rose 4.8% (4.1% y/y). Meanwhile, petroleum imports declined 2.5% and were unchanged y/y in March, following a 1.6% February rise. Nonpetroleum imports weakened 1.5% (+2.8% y/y) following three straight monthly increases.

The rise in services exports reflected a 0.7% increase (12.4% y/y) in personal, cultural & recreational services and a 1.3% decline (+24.9% y/y) in travel services exports. Exports of construction services declined 1.3% (+2.6% y/y) while government goods & services exports declined 0.9% (-23.0% y/y). The increase in services imports was due to construction services imports which rose 1.0% (35.1% y/y) but travel services imports fell 2.6% (+21.7% y/y). Imports of transport services declined 5.8% (-0.1% y/y) while charges for the use of intellectual property eased 0.1% (+3.2 y/y) in March.

The U.S. goods trade deficit with China widened to a seasonally adjusted $24.1 billion in March from $21.9 billion in February. Exports fell 3.6% (-10.3% y/y) while imports rose 4.8% (unchanged y/y). The goods trade deficit with the European Union deepened to $19.5 billion from $17.6 billion in February as exports fell 3.4% (-6.4% y/y), off for the third straight month, and imports rose 1.8% (4.2% y/y). The trade deficit with Japan narrowed to a seasonally adjusted $5.3 billion in March after narrowing to $6.2 billion in the previous month. Exports declined 1.9% (+3.0% y/y) while imports fell 8.7% (-2.2% y/y).

The international trade data, including relevant data on oil prices, can be found in Haver's **USECON** database. Detailed figures on international trade are available in the **USINT** database. The expectations figures are from the Action Economics Forecast Survey in **AS1REPNA**.

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- Exports and imports both fall.
- Adjusted for inflation, goods trade deficit increases to eleven-month high.
- Goods trade deficits with China & Europe deepen.

U.S. Trade Deficit Deepens in March

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The Commerce Department reported that inventories in the factory sector remained unchanged (0.6% y/y) during March after a 0.2% February rise. Transportation equipment inventories held steady (6.9% y/y). Furniture inventories increased 0.3% (-4.4% y/y) while electrical equipment inventories dropped 0.4% (-0.5% y/y). Amongst nondurable goods industries, petroleum inventories were 0.5% higher (2.6% y/y) and plastics & rubber inventories rose 0.2% (-4.8% y/y). These changes were accompanied by a 0.5% rise (-1.7% y/y) in apparel. Basic chemical inventories were unchanged (-0.6% y/y) for a second consecutive month while paper product inventories gained 0.2% (-2.6% y/y).

Orders to all manufacturers improved 1.6% (1.7% y/y) in March following a 1.2% February rise. The gain was led by a 2.6% rise (1.2% y/y) in durable goods orders, as commercial aircraft surged 30.6% (-50.9% y/y) in. New orders excluding transportation gained 0.5% (1.6% y/y). Orders for nondurable goods (which equal shipments) rose 0.6% (2.1% y/y). The rise reflected a 1.5% increase (4.9% y/y) in shipments from oil refineries and a 0.7% gain (2.1% y/y) in basic chemicals. Orders for textile products declined 1.4% (-1.7% y/y) and apparel orders fell 0.2% (-1.9% y/y). Orders for food products rose 0.2% (-0.3% y/y). Paper product shipments held steady (-2.0% y/y).

Unfilled orders improved 0.4% in March (9.1% y/y) and, excluding the transportation sector, they eased 0.1% (-0.9% y/y). Backlogs of electrical equipment slipped 0.1% (+0.7% y/y). Unfilled orders in the machinery sector eased 0.3% (-3.9% y/y) and unfilled orders for transportation equipment rose 0.7% (15.5% y/y). Unfilled orders of furniture rose 0.6% (-5.6% y/) and fabricated metals backlogs were off 0.1%, unchanged y/y.

The factory sector figures are available in Haver's **USECON** database.

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- Inventories levels are flat.
- Order improvement led by aircraft.
- Unfilled orders rise.

U.S. Factory Inventories Hold Steady While Orders Rise in March

Kathleen Stephansen, CBE

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Nonfarm business sector productivity increased 0.3% (SAAR) during Q1’24, following upwardly revised gains of 3.5% in Q4’23 and 4.6% in Q3’23. The rises in productivity were originally reported as being 3.4% in Q4 and 4.4% in Q3. Expectations had been for a 0.8% rise in the Action Economics Forecast Survey. On a year-on-year comparison, Q1 productivity rose 2.9%, up from 2.7% in Q4 and 2.4% in Q3. The y/y gain was the quickest since 2020. Real value-added output rose 1.3% (SAAR) (3.2% y/y) in Q1 from a 3.8% (3.3% y/y) gain in Q4.

Hours-worked in the nonfarm business sector rose 1.0% (0.3% y/y) in Q1 from a 0.2% (0.6% y/y) rise in Q4. Nonfarm hourly compensation increased 5.0% (4.7% y/y) in Q1 from a 3.5% gain (5.2% y/y) in Q4. Adjusted for price inflation, real compensation per hour rose 1.1% (1.5% y/y) in Q1, following a 0.8% (1.9% y/y) rise in Q4.

Weaker productivity brought an acceleration in unit labor costs to 4.7% (1.8% y/y) in Q1 after a 0.0% (2.4%) rise in Q4. The Action Economics Forecast Survey called for a 2.3% quarterly rise in unit labor costs.

In the manufacturing sector, real output per hour slowed to a rise of 0.2% (1.2% y/y) last quarter after a gain of 2.4% (0.9% y/y) in Q4. Manufacturing output was unchanged over the quarter (-0.1% y/y) after declining 1.0% (-0.2% y/y) in Q4. Hours-worked declined 0.2% (-1.3% y/y) in Q1 after a drop of 3.3% (-1.1% y/y) in Q4.

Compensation per hour in manufacturing slowed to a gain of 3.4% (6.3% y/y) last quarter following a rise of 6.8% (6.7% y/y) in Q4. Real compensation declined 0.4% (3.0% y/y) in Q1, after a rise of 4.0% (3.4% y/y) in Q4. Unit labor costs in manufacturing slowed to a rise of 3.2% (5.0% y/y) in Q1 following a gain of 4.2% (5.8% y/y) the prior quarter.

The productivity and labor cost data are available in Haver’s **USECON** database. The Action Economics expectations figures are in the **AS1REPNA** database.

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- Productivity slows in Q1.
- Unit labor costs rise sharply.
- Slowdown in factory productivity and unit labor cost growth.

U.S. Productivity Growth Slows and Unit Labor Cost Growth Accelerates in Q1

Carol Stone, CBE

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Initial claims for unemployment insurance were steady last week, ended April 27, at 208,000 seasonally adjusted; the April 20 week’s number was revised marginally from 207,000.  The latest week was close to the Action Economics Forecast Survey estimate of 210,000. The four-week moving average of initial claims was 210,000 in the April 27 week, down from 213,500 the week before. The latest week’s data extends the tight range of initial claims, which has hovered from 194,000 to 228,000 since September 3, 2023.

The number of continued claims for unemployment insurance, also called “insured unemployment,” was 1.774 million in the April 20 week, unchanged from the prior week; that earlier amount was revised from 1.781 million reported last week. As with initial claims, the number of continuing claims has maintained a tight range for several months, running from 1.728 million to 1.829 million since June 3, 2023.

The insured unemployment rate, that is, the number of unemployment benefits recipients as a percent of covered employment, was again 1.2% in the April 20 week. This rate has been steady at 1.2% since March 11, 2023.

Insured unemployment rates vary widely among individual states. In the April 13 week, the highest rates were in New Jersey (2.50%), California (2.31%), Rhode Island (1.91%), Minnesota and Illinois (both 1.85%), and Massachusetts (1.84%). The lowest rates were in Kansas (0.33%), Florida (0.37%), South Dakota (0.39%), North Carolina and Virginia (both 0.41%) and Alabama (0.42%). Rates in other prominent states include Arizona (0.74%), Texas (1.07%), Pennsylvania and Connecticut (both 1.54%) and New York (1.74%).  These state data are not seasonally adjusted.

Data on weekly unemployment claims are from the Department of Labor, not the Bureau of Labor Statistics. They begin in 1967 and are contained in Haver’s **WEEKLY** database and summarized monthly in **USECON**. Data for individual states are in **REGIONW** back to December 1986. The expectations figure is from the Action Economics Forecast Survey in the **AS1REPNA** database.

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- Initial claims flat at 208,000 in April 27 week.
- Continued claims also unchanged in April 20 week.
- Insured unemployment rate maintains 1.2% level since March 2023.


U.S. Initial Unemployment Insurance Claims Maintain Tight Range

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At today’s meeting of the Federal Open Market Committee, the target range for the Federal funds rate was left unchanged at 5.25% - 5.50%. Each member of the FOMC voted in favor of today’s action. The Fed’s focus continues to be reducing price inflation, as mentioned several times in the meeting summary.

Text accompanying today’s meeting indicated, “The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent.”

“The Committee judges that the risks to achieving its employment and inflation goals have moved toward better balance over the past year. The economic outlook is uncertain, and the Committee remains highly attentive to inflation risks.”

“In considering any adjustments to the target range for the federal funds rate, the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.”

In addition, “Beginning in June, the Committee will slow the pace of decline of its securities holdings by reducing the monthly redemption cap on Treasury securities from $60 billion to $25 billion. The Committee will maintain the monthly redemption cap on agency debt and agency mortgage backed securities at $35 billion and will reinvest any principal payments in excess of this cap into Treasury securities. The Committee is strongly committed to returning inflation to its 2 percent objective.”

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- Fed maintains focus on inflation reduction.
- Federal funds rate range remains at 5.25% - 5.50%, where it’s been since early-August 2023.
- Rate stays at highest level since March 2001.

FOMC Holds Funds Rate Steady

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The Autodata Corporation reported that U.S. light vehicle sales rose 2.8% (1.5% y/y) to 16.00 million units (SAAR) in April after falling 1.9% to 15.56 million in March. Sales averaged 15.43 million in Q1.

Sales of light trucks rose 2.9% (3.4% y/y) during April to 12.9 million units (SAAR) after falling 1.3% in March. Purchases of domestically-made light trucks edged 0.5% higher to 9.68 million units (unchanged y/y), after falling 2.5% in March. Sales of imported light trucks strengthened 10.7% (15.0% y/y) to 3.22 million units, the highest level in three years,  after a 3.6% March increase.

Trucks' share of the light vehicle market held steady at a record 80.6% last month compared to 79.1% in April of last year.

Auto sales rose 1.3% (-5.8% y/y) to 3.10 million units (SAAR) in April following a 2.9% March decline. Purchases of domestically-produced cars improved 2.8% (-7.2% y/y) last month to 2.19 million units after falling 3.6% in March. Sales of imported autos weakened 2.2% both m/m and y/y to 0.91 million units after easing 1.1% in March.

Imports' share of the U.S. light vehicle market rose to 25.8% in April from 24.7% in March, up versus a May 2023 low of 22.3%. Imports' share of the passenger car market declined to 29.4% from 30.4% in March. It reached a high of 37.9% in September 2021. Imports' share of the light truck market improved to 25.0%, a five-month high, from 23.2% in March.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

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- Light truck sales improve considerably while passenger car sales edge higher.
- Imports' market share gains ground.

U.S. Light Vehicle Sales Move Up in April

Winnie Tapasanun

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The ISM U.S. manufacturing PMI fell to 49.2 in April after rising to 50.3 in March, according to the Institute for Supply Management. The April manufacturing PMI, below the 50 expansion-contraction dividing line, indicated that the U.S. manufacturing sector contracted for the 17th time in 18 months. While slightly higher than 47.0 in April 2023 and a low of 46.5 in March 2023, the April reading remained below a peak of 64.0 in March 2021. A reading of 50.0 had been expected in the Action Economics Forecast Survey for April.

The production index declined to 51.3 in April from 54.6 in March, suggesting production expanded for the third time in four months but at a slower pace compared to March; it was below a high of 66.8 in March 2021. A 22.1% (NSA) of respondents reported higher production in April while 15.3% reported lower. The employment index increased to 48.6 in April from 47.4 in March, indicating employment contracted for the seventh successive month but at a slightly less severe pace. The index remained down from a high of 57.7 in March 2021. An increased 16.3% (NSA) of respondents reported higher employment in April while 15.8% reported less hiring.

The new orders index dropped to 49.1 in April after increasing to 51.4 in March, indicating new orders contracted for the second time in three months to the lowest level since December. It was up from a low of 42.8 in January 2023 but below a high of 61.3 in February 2022. A 19.9% (NSA) of respondents reported higher new orders in April while 16.9% reported a decline. The inventories index was at 48.2 in April and March after 45.3 in February, showing inventories contracted for the 15th consecutive month. The index remained down from a high of 56.5 in July 2022. Meanwhile, the supplier deliveries index was at 48.9 in April, compared to 49.9 in March and 50.1 in February, indicating the delivery performance of suppliers to manufacturing organization was slightly faster for the second successive month. An 8.1% (NSA) of respondents reported slower delivery speeds in April while an increased 10.3% reported faster speeds.

Inflation has remained sticky. The prices paid index jumped to 60.9 (NSA) in April after rising to 55.8 in March, indicating raw materials prices rose for the fourth straight month to the highest reading since June 2022. The April index was well above a low of 39.4 in December 2022 but meaningfully below a high of 87.1 in March 2022 and a peak of 92.1 in June 2021. An increased 30.8% (NSA) of respondents reported higher prices in April while only 9.1% reported price declines.

In other ISM series not included in the composite index, the new export orders index dropped to 48.7 in April after registering at 51.6 in March and February, indicating new export orders contracted for the first time in three months. It was down from a high of 57.1 in February 2022. The imports index fell to 51.9 in April from 53.0 in March and February, remaining at an expansion level for the fourth consecutive month; it was down from a high of 61.0 in June 2021. The order backlog index decreased to 45.4 (NSA) in April from 46.3 in March and February, indicating falling backlog levels for the 19th straight month. It was up from a low of 37.5 in May 2023 but down from a high of 70.6 in May 2021.

The ISM figures are based on responses from over 400 purchasing executives from 20 industries, which correspond to their contribution to GDP in 50 states. These data are diffusion indexes where a reading above 50 indicates expansion. The figures from the Institute for Supply Management can be found in Haver's **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver's **AS1REPNA** database.

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- 49.2 in April vs. 50.3 in March, lower than expected.
- Production expands for the third month in four.
- Employment contracts for the seventh straight month.
- New orders contract to a four-month low after March’s expansion.
- Amid ongoing inflationary pressures, prices index rises to 60.9, the highest since June ’22.

U.S. ISM Manufacturing PMI Contracts in April, w/ Prices Highest Since June ’22

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Job openings decreased 325,000 in March to 8.488 million after rising 65,000 in February, revised from 8,000 reported before, according to the Job Openings and Labor Turnover Survey conducted by the Bureau of Labor Statistics. The March amount is down -11.8% from 9.623 million a year ago, that is, March 2023, and down even more from 12.182 million in March 2022. The job openings rate, that is, the number of job openings as a percent of employment plus job openings on the last business day of the month, was 5.1% this March, down from 5.3% the prior month.

Private sector job openings fell 364,000 this March, following a 9,000 decline in February. The private sector rate was 5.3%, down from February’s 5.5%. The biggest change in private sector job openings was a 182,000 drop in construction; the rate in that industry fell from 5.3% in February to 3.2% in March. Another sizable decline was in finance and insurance, where opening fell 158,000 in March, and the rate dropped to 5.0% from 7.1% in February. Retail trade saw a 64,000 decrease in openings and a fall in the rate from 3.7% to 3.3%.  Industries with positive moves include the information sector, +43,000 openings in March and a rate change from 4.0% to 5.3%. The state and local education sector saw an increase in openings of 68,000 in March, with the associated rate moving to 2.9% from 2.3% the prior month.

Hiring showed widespread declines across industries with total hirings down 281,000 in March, making a rate of 3.5%, down from February’s 3.7%. The rates here are the amount of hiring during the entire month as a percent of total employment. Construction also saw a hiring decline, 59,000, with its rate moving down to 4.1% from 4.9% in February. Transportation, warehousing and utilities saw a 50,000 decrease in March’s hiring, and a decline in the rate to 3.4% from 4.1%. There were just a few increases, notably in private educational services, +10,000 in March and a move in the rate from 2.1% to 2.4%. Another notable increase took place in durable goods manufacturing, 6,000 in March, although this was not large enough to raise the rate in that industry, which stayed flat at 2.2%.

Layoffs actually fell in March by 155,000; the associated rate, that is, layoffs during the whole month as a percent of total employment, was 1.0%, down from 1.1% in February. These decreases in layoffs were spread across numerous industries; interestingly the most sizable decrease was in construction, 63,000, following an increase in that industry’s layoffs in February of 21,000. The March layoff rate in construction was 1.8% in March, down from 2.5% in February. The highest layoff rate among industries was 3.5% in arts, entertainment and recreation, and this was down from 5.0% in February.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

- Job openings rise in just a few industries in March.
- Hiring declined among many industries in March.
- Construction job openings fell in March, but so did construction industry layoffs.

U.S. Job Openings Fell in March, but So Did Layoffs

Much lower US electricity costs gives it a competitive advantage

Wage growth slowing in the US and Euro area; elevated and sticky in the UK

Stagflation-lite: Blue Chip forecasts below-trend growth and elevated inflation

US policy gyrations boosting policy uncertainty worldwide

Expected tariff hikes have boosted inflation expectations

US and Japan ended 2024 on solid ground in contrast to Europe

US economy expected to outperform other major economies in 2025

Only modest evidence of AI-related surge in US productivity growth

Previous Trump tariffs fading. A boost from new tariffs ahead?

Heavy US manufacturing states underperforming while Sun Belt states outperforming

Rising long-term yields a global phenomenon

US financial market concerns shifting from growth to inflation

Economic activity is picking up in the US but remains lackluster abroad

Policy uncertainty has surged since the US national elections.

Recent turnaround in US economic surprises leading to increases in rate-cut expectations

The outlook has brightened in the US, while it has dimmed for other major economies

Headline US PCE inflation elevated by sticky services prices

US and global equity prices have recently diverged

US leading global upturn in economic surprises

Blue Chip forecasters look for further significant monetary easing apart from Japan

Recent rise in global supply chain pressures could augur a pickup in global inflation pressures

Underperforming German economy generating increased policy uncertainty relative to Europe and the US

Resilient US economy is pushing up longer-term inflation expectations and interest rates

Positive US economic data surprises leading to upward adjustment of interest rate expectations

Recent aggressive policy easing in China has given a massive boost to equity prices

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The light vehicle market continued to improve last month, with sales rising to the highest level in four years. U.S. light vehicle sales rose 10.4% (11.8% y/y) to 17.76 million units (SAAR) in March after rising 3.8% to 16.09 million in February. The rise in March vehicle sales accompanied a 1.8% y/y rise in real disposable income through February, which compared to 2.0% growth in 2024.

Sales improvement was broad-based last month. Light truck sales rose 12.1% (13.2% y/y) during March to 14.46 million units (SAAR), after increasing 3.3% in February. Purchases of domestically-made light trucks surged 12.4% (13.1% y/y) to 11.05 million units, after rising 3.3% in February. Sales of imported light trucks jumped 10.7% (13.0% y/y) to 3.40 million units, following February’s 3.4% rise.

Trucks’ 81.4% share of the light vehicle market last month compared to 80.2% in February and set a new record. The share was 80.3% during all of 2024 and 53.3% ten years earlier.

Auto sales also rose last month, by 3.8% (8.2% y/y) to 3.31 million units (SAAR) following a 6.0% February increase. Sales of cars moved to the highest level since July 2021. Purchases of domestically-produced cars rose 3.4% (12.3% y/y) last month to 2.46 million units, after rising 9.2% in February. Sales of imported autos gained 4.9% (-7.6% y/y) to 0.85 million units, following a 2.4% February decrease.

Imports' share of the U.S. light vehicle market eased to 23.9% in March from 24.1% in February. It compared to a May 2023 low of 22.9% before it reached a high of 26.3% in November of 2023. Imports' share of the passenger car market rose to 25.7% last month from 25.4% in February. It reached a high of 38.7% in September 2021. Imports' share of the light truck market eased to 23.5% in March after holding at 23.8% in February.

U.S. vehicle sales figures can be found in Haver's **USECON** database. Additional detail by manufacturer is in the **INDUSTRY** database.

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U.S. Light Vehicle Sales Surge in March

Sandy Batten

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Job openings fell 194,000 to 7.568 million in February from an upwardly revised 7.762 million in January (previously 7.740 million), according to the Job Openings and Labor Turnover Survey. The level of openings has been little changed over the past eleven months after having declined rather steadily from a high of 12.134 million in March 2022. The number of openings continues to exceed the number unemployed, but only by 516,000, indicating a relatively balanced labor market. The job openings rate fell to 4.5% in February from 4.7% in January. It remains well below a high of 7.4% reached in March 2022. This rate is calculated as the ratio of job openings to total nonfarm employment plus openings.

Private sector openings fell 193,000 to 6.667 million in February from 6.860 million in January. The relatively small January decline was led by a 163,000 drop in trade, transportation and utilities openings. Finance openings slid 80,000 and leisure/hospitality openings declined 61,000. By contrast, professional and business services openings increased 134,000. The private sector job openings rate edged down to 4.7% in February from 4.8% in January. It has fluctuated between 4.4% and 5.0% over the past eleven months without a noticeable trend.

Total hiring edged up 25,000 in February to 5.396 million. This was the second increase in the past three months. Still, hiring has fallen 268,000 over the past year. Private hiring rose 46,000 to 5.046 million, its third consecutive monthly increase although it has fallen 231,000 over the past year. The February gain was due mostly to an 82,000 increase in professional and business services hiring. Hiring declined in most other sectors. Government hiring fell 21,000, led by a 15,000 decline in state and local government hiring. The total hiring rate was unchanged at 3.4%, where it has been for four of the past five months. The private hiring rate was also unchanged at 3.7% in February for the fifth consecutive month.

Total job separations edged down 11,000 to 5.261 million in February. They have been little changed over the past eleven months. Quits declined 61,000 to 3.195 million; layoffs rose 116,000 to 1.790 million; other separations fell 67,000 to 275,000. Quits are voluntary separations initiated by the employee and are often viewed as an indicator of workers’ willingness to leave jobs for other opportunities. Private quits (-80,000 in February to 2.998 million) have been relatively trendless recently, fluctuating between 2.8 and 3.1 million over the past seven months. By contrast, private layoffs (separations initiated by the employer) have been on a clear, though modest, uptrend since the middle of last year, pointing to a modest cooling in the labor market. They rose 96,000 to 1.692 million in February, led by a 47,000 increase in professional and business services layoffs.

The Job Openings and Labor Turnover Survey (JOLTS) data are available in Haver’s **USECON** database.

- Job openings fell to 7.568 million from 7.762 million in January.
- The job opening rate slid to 4.5% from 4.7%.
- Hiring was little changed in February.
- Layoffs rose to 1.790 million from 1.674 million.

U.S. JOLTS: Openings Fell Slightly and Layoffs Rose Slightly in February

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The ISM Purchasing Managers Index of activity in the manufacturing sector declined to 49.0 during March after easing to 50.3 in February. It remained up from a low of 46.9 in October of last year. A level of 50 is the break-even point between a rising and falling level of activity. The Action Economics Forecast Survey expected a reading of 49.8 for March. The series reached a monthly high of 63.8 in March 2021.

Four of the five component indexes weakened last month. The new orders index declined to 45.2 last month from 48.6 in February. It was the lowest level since May 2023. A greatly lessened 19.9% (NSA) of respondents reported higher orders while an increased 23.3% indicated declines. The March production index fell to 48.3 after declining to 50.7 in February. It was the lowest level in four months. A higher 21.0% (NSA) of respondents reported higher production while an increased 20.9% reported lower output. The employment index fell to 44.7 in March, its lowest point in six months, from 47.6 in February. A lessened 8.3% (NSA) of respondents reported more hiring while an increased 18.0% indicated fewer hires. The supplier delivery index declined to 53.5 from 54.5 in February. A lessened 13.4% (NSA) of respondents reported slower delivery speeds while an increased 6.4% reported a quickening.

Moving higher, the inventories reading surged to 53.4 last month from 49.9 in February. The reading stands well above its low of 43.2 in October of last year. A greatly increased 21.5% (NSA) of respondents reported higher inventories while a significantly lessened 12.8% reported lower.

The prices index, which is not part of the composite series, surged to 69.4 (NSA) in March after increasing to 62.4 in February. It was the highest level since June 2022, up from a December 2022 low of 39.4. A greatly increased 46.0% of respondents reported higher prices last month, up from 12.2% in November, while a slightly higher 7.3% reported lower prices.

In other series, the export orders index fell to 49.6 in March from 51.4 during February. These readings remained above a low 45.2 in January of last year. The imports index weakened to 50.1 from 52.6 in February. It was the lowest reading in three months. The order backlog index dropped to 44.5 (NSA) last month from 46.8 in February. It was the lowest level in four months.

The ISM figures are based on responses from over 400 purchasing executives from 18 industries, which are weighted according to each industry’s contribution to GDP. These indexes are diffusion indexes where a reading above 50 indicates expansion and a reading below 50 points to contraction. The figures from the Institute for Supply Management can be found in Haver’s **USECON** database; further detail is found in the **SURVEYS** database. The expectations number is available in Haver’s **AS1REPNA** database.

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- Index indicates factory sector contraction.
- New orders, production & employment readings weaken.
- Prices index jumps to another three-year high.

U.S. ISM Manufacturing Index Declines in March; Prices Strengthen

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The value of construction put in place rose a more-than-expected 0.7% m/m in February after a 0.5% decline in January (-0.2% initially) and a 0.3% increase in December (+0.5% previously), data from the U.S. Census Bureau showed. The February reading was the fourth m/m rise in five months. A 0.3% m/m February rise had been expected in the Action Economics Forecast Survey. The year-on-year rate rose to 2.9% in February after decelerating to 2.7% in January (the lowest since May 2019). The latest y/y figure was lower than 9.7% in February 2024, having remained below its recent high of 9.8% in January 2024 and a peak of 18.6% in April 2022.

Private construction recovered 0.9% (2.0% y/y) in February, up for the fourth month in five, after a 0.7% decrease in January (-0.2% initially) and a 0.4% rise in December (+0.7% previously). Residential private construction rebounded 1.3% (1.6% y/y) in February, the fourth m/m increase in five months, after a 1.2% decline in January (-0.4% initially). Home improvement building rose 2.0% (8.9% y/y), the first m/m rise since November, following a 3.8% January drop; it was 40.1% of the residential private construction. Single-family building grew 1.0% (-0.1% y/y), the sixth consecutive m/m gain, after a 1.0% January rise; it was 47.4% of the residential private construction. Meanwhile, multi-family building was virtually unchanged m/m (-11.6% y/y) in February following 14 straight m/m decreases; it was 12.5% of the residential private construction. 

Nonresidential private construction rose 0.4% (2.5% y/y) in February, the third m/m rise in four months, following a 0.2% decline in January (0.0% initially) and a 0.5% increase in December (+0.1% previously). The February rise reflected m/m increases in the following nonresidential private constructions. These included religious (4.2%; 14.9% y/y), amusement & recreation (2.6%; 7.3% y/y), commercial (0.9%; -5.0% y/y), educational (0.4%; -0.1% y/y), transportation (0.3%; 10.6% y/y), office (0.2%; 3.7% y/y), manufacturing (0.1%; 4.7% y/y), and utilities (0.1%; 5.0% y/y). In contrast, lodging private construction, the only category with a monthly decline in February, fell 0.4% (-0.2% y/y), the fourth m/m fall in five months, after a 0.1% January easing. Meanwhile, communication private construction (-0.03%; +3.6% y/y) and health care private construction (+0.03%; -0.9% y/y) were virtually unchanged m/m in February.

The value of public construction grew 0.2% (6.0% y/y) in February, the seventh m/m gain in eight months, on top of a 0.2% rise in January (+0.1% initially), reflecting a 0.2% rebound (2.5% y/y) in residential public construction and a 0.2% increase (6.1% y/y) in nonresidential public construction. The February gain reflected m/m rises in the following nonresidential public constructions. These included commercial (4.1%; 53.1% y/y), conservation & development (2.4%; 8.2% y/y), water supply (1.4%; 15.6% y/y), health care (1.3%; 14.8% y/y), amusement & recreation (0.3%; 20.4% y/y), and educational (0.3%; 8.4% y/y). Notably, spending on highways & streets, which made up 28.9% of public construction spending, rose 1.2% (0.2% y/y) in February after a 0.8% increase in January, registering the fourth successive m/m rise and the sixth in seven months. To the downside, the following public constructions fell m/m in February: office (-2.8%; +1.3% y/y), utilities (-1.3%; -7.1% y/y), public safety (-1.2%; +4.3% y/y), transportation (-1.2%; +4.1% y/y), and sewage & waste disposal (-1.1%; +11.1% y/y).

The construction figures can be found in Haver's **USECON** database. The expectations figure is from the Action Economics Forecast Survey in **AS1REPNA**.

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- Construction spending +0.7% m/m (+2.9% y/y) in Feb. vs. -0.5% m/m (+2.7% y/y) in Jan.
- Residential private construction recovers 1.3% m/m, up for the fourth month in five, led by a 2.0% gain in home improvement building.
- Nonresidential private construction rebounds 0.4% m/m, up for the third month in four.
- Public sector construction increases 0.2% m/m, reflecting a 0.2% rise in both residential & nonresidential public buildings.

U.S. Construction Spending Rebounds in February, the Fourth M/M Gain in Five Months

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Retail gasoline prices for all grades rose last week to the highest level since the second week of October and averaged $3.29 per gallon (-9.6% y/y) after rising to $3.24 in the prior week. Prices have risen from a low of $3.13 in the week of December 9. The recent high was $3.79 in the week ending April 22, 2024. Its all-time high of $5.11 occurred in the week ending June 13, 2022. The retail price for on-highway diesel fuel increased to $3.59 per gallon (-10.1% y/y) in the week of March 31 after rising to $3.57 in the prior week. The latest diesel price remained well below a peak of $5.81 in the week ending June 20, 2022.

The price of West Texas Intermediate crude oil rose to $69.41 per barrel (-15.7% y/y) in the week ended March 28, after increasing to $67.64 per barrel in the prior week. Prices remain well below their peak of $120.46 in the week of June 10, 2022. Yesterday, the price was $71.48 per barrel. The price of European Brent crude oil increased to $74.35 per barrel (-13.3% y/y) in the week of March 28 compared to $72.21 in the prior week and a high of $82.79 in mid-January of this year. Prices remained well below a peak of $127.40 in the week of June 10, 2022. Yesterday, the price was $77.23 per barrel.

Natural gas prices slipped to an average $3.92 per mmbtu (+164.9% y/y) in the week ended March 29 after easing to $4.14/mmbtu in the prior week. Prices remained well above a low of $1.40/mmbtu in the week of March 15, 2024 but below their peak of $9.56 in the week of August 26, 2022. Yesterday, the price was $4.11 per mmbtu.

Gasoline demand slipped 0.2% y/y in the four weeks ending March 21 after holding steady y/y in the prior four weeks. Demand for all petroleum products rose 0.5% y/y in the four weeks ending March 21 after a 2.5% y/y rise in the previous four-week period. Crude oil input to refineries slipped 0.2% y/y in the four weeks ending March 21 after a 1.8% y/y increase in the prior four weeks.

Gasoline inventories rose 3.0% y/y in the week ending March 21 after a 4.2% y/y rise in the week ending March 14. Residual fuel oil inventories fell 19.5% y/y in the week of March 21, after a 21.3% y/y fall in the prior week. Crude oil inventories rose 2.3% y/y in the week of March 21 after a 3.2% y/y rise in the previous week.

Measured in days’ supply, gasoline inventories fell to 26.9 days in the week of March 21 from 27.2 days in the prior week. The recent low was 22.9 days in the week of November 8. The supply of crude oil was 27.7 days in the week of March 21, after three straight weeks at 28.0 days. It remained below a high of 31.9 days in the week of March 3, 2023.

These data are reported by the Energy Information Administration of the U.S. Department of Energy. The price and supply/demand data can be found in Haver’s **WEEKLY** & **USENERGY** database.

- Gasoline costs continue to move up from December low.
- Crude oil prices rise to four-week high.
- Natural gas costs ease.

U.S. Gasoline & Crude Oil Prices Rise Further Last Week