Tom Moeller

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New orders for durable goods declined 0.8% (-2.1% y/y) during September after falling by the same amount in August, revised from no change. Orders rose a little-revised 9.8% in July, according to the U.S. Census Bureau. The Action Economics Forecast Survey expected a 0.7% decline last month. The decline in orders reflected a 3.1% drop (-7.9% y/y) in orders for transportation equipment after they were off 3.4% in August. Orders outside the transportation sector rose 0.4% (1.1% y/y) in September after increasing 0.6% in August.

Last month’s weakness in transportation orders reflected fewer aircraft & parts bookings. They fell 22.9% due to a 22.7% decline in nondefense aircraft orders. Defense sector aircraft orders fell 3.2%. Motor vehicle & parts orders rose 1.1% (0.1% y/y) after edging 0.1% lower in August. Elsewhere, primary metals orders rose 0.5% (0.9% y/y) while fabricated metals orders jumped 2.1% (3.2% y/y). Machinery orders slipped 0.2% (-0.7% y/y), the third month of slight decline, while computer & electronics fell 0.3% (+1.4% y/y) following a 0.7% rise. Electrical equipment orders were little changed (1.4% y/y) following a 2.4% rise. Orders for other durable goods rose 0.2% (0.7% y/y) following a 0.3% August increase.

Capital goods orders declined 2.8% in September (-6.3% y/y) after falling 2.6% in August. Nondefense capital goods orders declined 4.5% (-13.1% y/y) after a 4.4% decline while nondefense capital goods orders excluding aircraft rose 0.5% (0.1% y/y) after easing 0.3% in August. Defense capital goods orders jumped 6.4% and by one-half y/y, following an 8.4% increase.

Shipments from all manufacturing industries eased 0.4% (+0.2% y/y) during September after falling 0.7% in August. Durable goods shipments fell 0.6% (+1.6% y/y) last month, the same as in August. Transportation product shipments fell 2.4% (+4.3% y/y) after a 2.3% decline. Shipments excluding the transportation sector rose 0.3% both m/m and y/y after rising 0.2% in August. Machinery shipments held steady (-0.4% y/y) after rising 0.4% while computer & equipment shipments improved 0.4% (-0.1% y/y) after holding steady in August. Electrical equipment & appliance shipments rose 0.9% (1.3% y/y) following a 0.5% increase. Nondurable goods shipments fell 0.2% (-1.1% y/y) after falling 0.7% in August.

Unfilled orders for durable goods rose 0.2% (3.1% y/y) in September for the third straight month. Unfilled orders in transportation sector rose 0.1% (5.0% y/y) after rising 0.2% in August. Excluding transportation, unfilled orders rose 0.2% (-0.2% y/y), the same as they did in August. Unfilled orders for durable goods less transportation rose 0.2% (-0.2% y/y) and have been trending sideways since 2022.

Inventories of all manufactured products eased 0.2% in September (+0.2% y/y) after a 0.1% August rise. Durable goods inventories slipped 0.2% (+0.9% y/y) after holding roughly three straight months. Nondurable goods inventories slipped 0.1% (-0.9% y/y) after rising 0.2% in August, though petroleum inventories fell 1.4% (-6.2% y/y in September after rising 0.4% in August.

Manufacturers’ orders and shipments of durable and nondurable goods, along with unfilled orders and inventories, are compiled by the U.S. Census Bureau. They are available in Haver’s **USECON** database. The Action Economics forecast data are in the **AS1REPNA** database.

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- Transportation orders decline with falloff in aircraft orders; excluding  transportation, orders rise modestly.
- Shipments ease for second month. Outside of transportation, shipments rise slightly.
- Unfilled orders rise negligibly for third straight month while inventories slip.

U.S. Durable Goods Orders Fall in September

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During FY 2024, the U.S. Treasury Department reported a U.S. government budget deficit of $1.833 trillion compared to a $1.695 trillion deficit in FY 2023. It was the third largest deficit on record. For September alone, the government actually ran a budget surplus of $64.3 billion, which compared to a deficit of $170.7 billion twelve months earlier. The Action Economics Forecast Survey expected a $16 billion surplus in September.

Overall revenues last fiscal year increased 10.8% y/y as individual income tax receipts rose 11.5% y/y. The level of corporate tax receipts increased 26.3% y/y for the full fiscal year. Social insurance revenues increased a lessened 5.9% y/y and excise taxes increased 33.8% y/y in FY’24. Customs duties fell 4.1% y/y, continuing the decline since late-2022.

Federal government outlays increased 10.1% y/y in FY’24 after a 2.2% decline in FY’23. Defense spending rose 6.5% y/y, about as it did in FY’23. Social Security outlays rose 7.9% y/y after rising 11.1% y/y in FY’23. Interest payments soared 33.7% y/y in FY’24 after a 38.7% rise a year earlier. Health program spending rose 2.5% y/y after declining 2.8% y/y in FY’23 while Medicare payments rose 3.1% y/y. Income security outlays fell 13.3% y/y compared to a 10.6% y/y decline in FY’23.

Haver's data on Federal Government receipts & outlays are contained in **USECON**. The expectations figure is in the **AS1REPNA** database.

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- Personal income tax receipts remain strong.
- Corporate tax payments surge.
- Social Security spending fuels outlay growth.

U.S. Government Budget Deficit Deepens in FY 2024

Andrew Cates

**The IMF’s Economic Outlook**
The IMF expects global growth to remain broadly flat – decelerating marginally from 3.3% y/y in 2023 to 3.2% in both 2024 and 2025. This outlook is largely unchanged from the forecasts that were published in April 2024 and October 2023. But there were some nuances beneath the surface, with upward revisions to the outlook for the US offset by downward revisions to the euro area, and to Germany in particular, in 2025.

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**Policy Uncertainty**
The IMF’s relative optimism about the outlook for the US and the pessimism about Germany can be traced to a number of factors, though the latter’s high energy costs along with the plight of its manufacturing sector - and its auto sector in particular - have been key. These have combined to generate very high levels of policy uncertainty in Germany relative to its European peers and particularly compared to the US (see chart 2).

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**Global trade**
Weak global demand, particularly from key markets like China, has also hit Germany’s economy. And this week’s latest data from South Korea have additionally underscored the fragility of that demand. For instance export growth in the first 20 days of October slowed to a 14 month low of -4.2% y/y on a working-day adjusted basis after +3.1% in September. PPI inflation also weakened, to 0.9%y/y in September from 1.6% in the previous month.

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**The Energy Transition (and the UK)**
There are a number of downside risks to the outlook that the IMF – and other economic forecasters – have been citing in recent months. One of the most critical is climate change and the energy transition and how this is amplifying instability in energy and food markets. Ahead of next week’s Budget announcement from the new Labour government, there has been an active debate about the provision of electricity, amidst a dearth of public investment in nuclear energy sources. This is notwithstanding a relatively impressive shift away from fossil fuels toward more sustainable renewable energy sources over the past few years (see chart 4).

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**The Policy Mix**
How policymakers now calibrate both monetary and fiscal policy will also clearly be key for the evolution of the broader world economy and financial markets in the period ahead. As the IMF additionally noted in its latest report, monetary policy has tightened considerably over the past two years and with respect to current levels of real policy rates, remains restrictive at present (with the notable exception of Japan). When measured with reference to shifts in cyclically-adjusted primary balances, fiscal policy is also now a little tighter in most major economies compared with two years ago.

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**Structural Reforms**
Supply side rigidities stemming from reform fatigue, lacklustre investment and broader global challenges (including climate change) are additional threats to global economic stability. On the reform front it is certainly of note that Infrastructure Ratings from the Economist Intelligence Unit for several major advanced economies have, on the whole, declined over the past 10 years, albeit from a relatively high base. And even in fast growing developing economies, those ratings have also often either declined a little (e.g. for China) or edged only marginally higher (e.g. for India) even though the underlying base of these ratings is usually much weaker.

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In the absence of incoming data that might have influenced the economic outlook, the financial press has been dominated by other factors, including Q3 corporate earnings reports and US political shenanigans. This week’s IMF meetings in Washington have additionally grabbed headlines and particularly the accompanying reports on the global economic outlook and financial market stability. While the IMF’s projections for global growth for 2024 and 2025 were little-changed compared with the previous full report in April (see chart 1), there were some notable revisions beneath the surface. Upgrades to the US growth outlook, for example, were offset by downgrades to Europe. And downside risks were additionally emphasised amidst elevated policy uncertainty in a number of countries (chart 2). These risks stem from a range of issues, including geopolitical stress in the Middle East, China’s imbalances and their reverberations (chart 3), high levels of debt together with other supply-side challenges such as climate change, the energy transition (chart 4) and ageing populations. Against that backdrop, policy decisions concerning the calibration of monetary and fiscal policy will be crucial (chart 5), as will the ability to implement supply-side reforms (chart 6).

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Charts of the Week: Revisions, Risks, Reforms, Repeat

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The Census Bureau reported that new single-family home sales rose 4.1% (6.3% y/y) during September to 738,000 (SAAR) after falling 2.3% in August to 709,000, revised from 716,000. Sales rose 8.0% in July to 726,000, revised from 751,000. The Action Economics Forecast Survey expected new home sales of 718,000 for September. Sales were 42.2% higher than the 519,000 low in July 2022, but remained 28.4% below their peak of 1.031 million in October 2020. The rise in September sales accompanied a decline in the average 30-year fixed-rate mortgage to 6.18% last month from 6.50% in August. It has since risen to 6.44% last week according to Freddie Mac.

The median sales price of a new home rose 3.7%, unchanged y/y, in September to $426,300 (NSA) after falling 3.8% to $410,900 in August. The median sales price was 7.4% below its October 2022 peak of $460,300. The average sales price of a new home increased 3.0% (-2.7% y/y) to $501,000 in September after falling 4.6% to $486,500 in August. The average price was 7.4% below its peak of $541,200 in July 2022. These sales price data are not seasonally adjusted.

New home sales were mixed m/m throughout the country in September. New home sales in the Northeast rose 21.7% (-22.2% y/y) to 28,000 after falling 30.3% in August. In the South, sales increased 5.8% (14.7% y/y) last month to 477,000 after rising 7.1% in August. Holding steady (-10.9% y/y) at 156,000 were new home sales in the West after they declined 17.9% in August. Working lower, new home sales in the Midwest weakened 2.5% (+14.9% y/y) to 77,000 after falling 3.7% in August.

The number of unsold new homes on the market in September rose 0.4% (8.0% y/y) to 470,000 following a 1.5% August increase. The seasonally adjusted months' supply of new homes for sale fell to 7.6 months in September from 7.9 months in August. It remained up from a low of 6.9 months in May 2023.

The median number of months a new home stayed on the market edged up to 2.5 months in September from 2.2 months in both August and July. The reading remained up from the record low of 1.5 months in both September and October of 2022 but down from a high of 5.1 months in March 2021. These figures date back to January 1975.

New home sales are recorded when the sales contract is signed. New home sales activity and prices are available in Haver's **USECON** database. The consensus expectation figure from Action Economics is available in the **AS1REPNA** database.

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- Sales rise to highest level since May 2023.
- Median sales price increase reverses earlier decline.
- Sales performance is mixed regionally.

U.S. New Home Sales & Prices Post Firm Gains in September

Winnie Tapasanun

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The Kansas City Fed manufacturing composite index was at -4 in October, up from -8 in September and slightly down from -3 in August, the October Manufacturing Survey by the Federal Reserve Bank of Kansas City showed, indicating Tenth District manufacturing activity declined modestly this month. The October index, negative for the 14th straight month, was up from -6 in October 2023 but well below a peak of 31 in March 2022. “The decline was present in both durable and nondurable goods, particularly chemical, steel, and beverage manufacturing,” the Kansas City Fed reported.

The ISM-adjusted index calculated by Haver Analytics rebounded to 47.3 (NSA) in October after a 3.4-point decline to 44.0 in September, indicating a contraction in factory activity for the fifth consecutive month but at a less severe pace. The latest ISM-adjusted figure was above 45.3 in October 2023 but well below a record-high 68.9 in March 2022.

In the latest survey, the new orders index was less negative in October, rising to -5 after a two-point decline to -14 in September; the October index registered the 27th straight negative reading and the highest since February. Twenty-nine percent of respondents (NSA) reported orders gains in October while 38% reported declines. The production index jumped to zero this month after a 24-point plunge to -18 in September; these readings were well below a high of 36 in March 2022. The shipments index rebounded to 7 in October, the first positive reading and the highest since May, after an 11-point drop to -12 in September; however, having remained down from a peak of 40 in March 2022.

The raw materials inventory index dropped to -10 in October, the eighth negative reading in 10 months, following a four-point increase to 4 in September; these figures were well below a high of 28 in March 2022. The order backlog index rose to -14 this month, the 27th consecutive negative reading, after dropping to -33 in September; these numbers were significantly below a record-high 43 in July 2021. The supplier delivery time index increased to -1 in October, the fourth successive negative reading, from -2 in September; these readings were well below a high of 51 in March 2022.

On the labor front, the employment index increased to -2 in October following a four-point decline to -11 in September, posting the fifth straight negative reading and the highest level since a positive 9 in May. The index was down from a high of 30 in May 2022. Fifteen percent of respondents (NSA) reported increases in the number of employees in October while 19% reported decreases.

On the pricing front, the prices received index for finished products jumped to 11 in October, the highest level since May 2023, after an 11-point decrease to -5 in September. These readings remained well below a high of 50 in June 2022 and a record-high 62 in August 2021. An increased 18% of respondents (NSA) reported higher prices received in October while a lessened 11% reported price declines. The prices paid index for raw materials rose to 19 this month, the highest reading since May, after a five-point drop to 13 in September; nevertheless, having remained significantly down from a high of 73 in April 2022 and a record-high 87 in October 2021.

Expectations for future activity continued to stay positive, with activity in most categories expected to gain and raw materials prices expected to rise at a faster pace than finished product prices. The expectations index for six months ahead was at 7 in October, slightly down from 9 in September and 8 in August. The expectations indexes for production (27), shipments (21), and new orders (14) rose in October, while those for raw materials inventories (-14) and supplier delivery time (-7) dropped for the month. The expectations index for employment fell to 15 in October from 18 in September and the index for capital expenditures fell to 1 from 11; however, remaining in positive territory and indicating expansion. The expectations index for raw materials prices rebounded to 38 in October following a seven-point drop to 33 in September, while the index for finished goods prices rose to 35, the highest level since March 2023, after September’s 12-point jump to 33.

The latest survey was conducted for a six-day period from October 16-21, 2024 and included 103 responses from plants in Colorado, Kansas, Nebraska, Oklahoma, Wyoming, northern New Mexico, and western Missouri.

The series dates back to July 2001. The diffusion indexes are calculated as the percentage of total respondents reporting increases minus the percentage reporting declines. The composite index is an average of the production, new orders, employment, supplier delivery time, and raw materials inventory indexes. Data for the Kansas City Fed Survey can be found in Haver’s **SURVEYS** database.

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- October Composite Index at -4 reflects negative readings in materials inventories (-10), new orders (-5) and employment (-2), while production (0) rebounds from September’s negative level (-18).
- Price indexes rise, w/ prices paid (19) up to a 5-month high and prices received (11) up to a 17-month high.
- Expectations for future activity remain positive.

Kansas City Fed Manufacturing Index Less Negative in October

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The Chicago Federal Reserve Bank reported that its National Activity Index (CFNAI) fell to -0.28 during September and reversed the August improvement to -0.01, revised from +0.12. The recent high of +0.39 was reached in February. The three-month moving average of the index eased to -0.19 during September from -0.14 in August. The index has been consistently negative since late in 2022, suggesting below-trend economic growth. During the last 20 years, there has been a 91% correlation between the three-month index level and the q/q change in real GDP.

The report indicated that each broad category of indicators used to construct the index declined in September. The Production & Income category contributed -0.21 to the total in September after adding 0.04 in August. It remained up from a January low of -0.48, continuing to suggest a lessening of negative pressure. The Employment, Unemployment & Hours series contributed -0.03 in September versus zero contribution in August. It has been mostly negative since early last year. The Personal Consumption & Housing figure contributed -0.01 last month after -0.03 in August. It remained higher, however, than the January low of -0.09. The Sales, Orders & Inventories figure contributed a steady -0.03 last month versus +0.07 in August. These negative readings reversed a July improvement.

The diffusion index of the CFNAI, which measures the breadth of component change, rose to -0.16 in September from -0.21 in August. It compared to the low of -0.27 in October of last year and was below the recent high of +0.24 in September 2022.

The CFNAI is a weighted average of 85 monthly indicators of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

These figures are available in Haver's **SURVEYS** database.

- Production & income lead softening.
- Other series are negative as well.
- Trend weakens.

Chicago Fed National Activity Index Weakens in September

Sandy Batten

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Initial claims for unemployment insurance fell 15,000 to 227,000 seasonally adjusted in the week ended October 19, from 242,000 in the previous week, revised up 1,000 from the initially reported 241,000 level. The Action Economics Forecast Survey had expected 244,000 in the October 19 week. Press reports indicate that the 35,000 jump to 260,000 in the October 5 week was related to the impact of Hurricane Helene. Over the following two weeks, weekly claims have fallen by 33,000 to a level just above the one that existed prior to the hurricane. Still, the effects of both Hurricane Helene and Milton will likely keep weekly claims data volatile in the coming weeks. The four-week moving average of initial claims was 238,500 in the week ended October 19, up from 236,500 the week before.

In the week ended October 12, the total number unemployment benefit recipients—also known as insured unemployment—was 1.897 million, up 28,000 from 1.869 million in the week of October 5, which was revised up slightly from 1.867 million. The four-week moving average of insured unemployment was 1.861 million, up from 1.843 million in the prior week.

Also, in the week ended October 12, the insured unemployment rate edged up from 1.2% to 1.3%, its first weekly change since it rose to 1.2% in the week ended March 11, 2023. This is the number of beneficiaries as a percent of covered employment.

Economic conditions vary widely across states and territories. In the week ended October 5, the highest unemployment rates were in New Jersey (2.17%), California (1.92%), Washington (1.78%), Nevada (1.59%) and Rhode Island (1.58%). The lowest rates were in South Dakota (0.23%), North Dakota (0.34%), Florida (0.34%), Virginia (0.41%) and Alabama (0.43%). Rates in other notable states include New York (1.48%), Illinois (1.40%), Pennsylvania (1.33%) and Texas (1.00%). These state rates 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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- Claims totaled 227,000, down a more-than-expected 15,000 from the previous week.
- Decline reflected some normalization after the hurricane-induced surge in early October.
- Continuing claims (reported with a one-week lag) rose sharply.

U.S. Initial Unemployment Claims Fell Again in Week of October 19

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Sales of existing homes fell 1.0% (-3.5% y/y) in September to 3.84 million units (SAAR) after declining 2.0% in August to 3.88 million, revised from 3.86 million. This was the lowest level of sales since October 2010 despite the decline in 30-year mortgage interest rates last month to an average 6.18% versus the peak 7.06% averaged in May. It has since risen to 6.44% last week. The Action Economics Forecast Survey expected September sales of 3.85 million units. The sales figures are based on closings of sales signed over the past couple of months.

The median price of all existing homes (NSA) fell 2.3% in September (3.0% y/y) to $404,500 after declining 1.7% in August to $414,200, revised from $416,700. It was the third consecutive monthly decline after having risen to a record $426,900 in June. Prices remained almost twice their level of $209,100 ten years earlier. The median price of an existing single-family home fell 2.6% (+2.9% y/y) to $409,000 in September after two months of decline. The median price for condos and co-ops were off 0.8% (+2.2% y/y) to $361,600, also after two months of decline.

By region, sales of existing homes in the Northeast declined 4.2% (-6.1% y/y) to 460,000 in September following a 2.0% August fall. Sales in the Midwest were off 2.2% last month (-5.3% y/y) to 900,000 after holding steady in August. Sales in the South declined 1.7% in September (-5.5% y/y) to 1.72 million following a 2.8% August drop. To the upside, existing home sales in the West rose 4.1% (5.6% y/y) to 760,000 after declining 2.7% in August.

The number of existing homes for sale (NSA) rose 1.5% (23.0% y/y) to 1.39 million last month after rising 2.2% in August. The supply of homes on the market at the current selling rate (NSA) inched up to 4.3 months in September from 4.2 months in August. This figure has generally risen since February. The record low in supply of 1.6 months was reached in January 2022. These figures date back to January 1999.

The data on existing home sales, prices and affordability are compiled by the National Association of Realtors. The data on single-family home sales extend back to February 1968. Total sales and price data and regional sales can be found in Haver's **USECON** database. Regional price and affordability data and national inventory data are available in the **REALTOR** database. Mortgage interest rates can be found in the **WEEKLY** database. The expectations figure is from the Action Economics Forecast Survey, reported in the **AS1REPNA** database.

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- Sales weaken for sixth month in last seven.
- Declines posted in all regions except the West.
- Median price falls for third straight month.

U.S. Existing Home Sales Ease During September

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

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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.