U.S. JOLTS: Job Openings Rate Strengthens but Hiring Fails to Keep Pace
The emerging labor shortage was evidenced by the job openings rate during April. It gained m/m to 3.7%, up from the recession low of 1.6%. It was just below the series’ high of 3.8% early in 2001. The job openings rate is the number of job openings on the last business day of the month as a percent of total employment plus job openings. Failing to keep pace, however, was the hires rate. It fell to 3.5% and has been trending sideways for the last year. The hires rate is the number of hires during the month divided by employment.
The actual number of job openings surged 21.7% y/y to 5.376 million versus 5.109 million in March, revised from 4.994 million. Hiring was less strong as it posted a 4.5% y/y increase to 5.007 million. That was down from 5.088 million in March, revised from 5.067 million. (…)
Worker Shortage Hammers Builders U.S. builders say they can’t find enough skilled craftsmen for a growing pipeline of work. Now they’re among the industries seeing signs of wage pressures.
In commercial construction, weekly earnings were up 3.3% in April from a year earlier versus 2.2% for all private-sector employees. At nonunion shops, craft workers this year are expected to see their biggest pay raise since 2008, according to PAS, a private company that tracks salaries in the construction industry.
German 10-Year Bond Yield Tops 1% Ten-year yields on German bonds pushed above 1% for the first time since September.
European Firms Pull Back in China European companies doing business in China are cutting investment amid concerns over flagging growth prospects.
The European Union Chamber of Commerce in China, a trade organization representing more than 1,400 European companies with operations in that country, said Wednesday that many of its members have lowered their expectations for the future of China’s economy and are preparing to cut costs, mostly by reducing staffing levels.
More than one-third of European companies are planning cost reductions, including firms in the energy, logistics, machinery and the automotive industries, according to the EU Chamber’s latest survey of 541 European companies. Nearly one-fifth of the companies surveyed said they are considering shifting some of their China investments to other markets. (…)
Even with a slowing economy, few companies are exiting and many companies remain upbeat, said Mr. Wuttke. Auto companies are still planning to expand, while health-care companies view China as a critical market for future growth, according to the survey.
Half of the European chemical and petroleum companies in China also said they were optimistic about profitability in the next two years, while 58% of the companies overall said they were optimistic about growth prospects. In last year’s survey, 68% of the companies said they were optimistic about growth prospects. (…)
More than half of the companies said China’s domestic competitors are treated more favorably than foreign firms and that China’s enforcement of intellectual-property rights remains inadequate. (…)
PBOC Lowers China 2015 GDP, CPI Growth Forecasts
They now forecast China’s economy will expand 7%, slightly lower than a projection of 7.1% made six months ago, the People’s Bank of China said in a report posted on its website Tuesday.
The report also lowered the forecast for this year’s consumer inflation to 1.4% from 2.2%.
OPEC Keeps Oil Demand Growth Forecast Unchanged OPEC said it sees no further rise in demand for its crude this year, but it expects the current oversupply in the market to ease over the coming quarters.
In its closely watched monthly oil market report, OPEC kept its forecast for oil demand growth in 2015 unchanged at 1.18 million barrels a day, and said expectations of demand for its own oil this year remains at 29.3 million barrels a day, or 300,000 higher than 2014.
The oil producer group said risks in U.S. oil demand remain skewed to the upside as lower price environment plays a role in pushing up demand for transportation fuels, as Americans buy more gas guzzling sport-utility vehicles. It expects, however, the increase in non-OPEC crude oil output to remain unchanged at 680,000 barrels a day this year.
OPEC, which pumps about a third of the world’s crude, said its total production rose by 24,000 barrels a day in May to 30.98 million barrels compared with April, driven mainly by higher output from Iraq and Angola.
Iraq produced 3.8 million barrels a day in May, up from 3.695 million barrels in the previous month, OPEC said citing secondary sources other than its producing countries such as shippers, analysts and industry sources.
Saudi Arabia, the world’s largest oil exporter, told the cartel it produced 10.333 million barrels a day last month, up from 10.308 million barrels a day in April.
Despite the unchanged demand outlook and increasing supplies, OPEC said it expected that the world’s oversupply of crude oil—now estimated at about 2 million barrels a day—is “likely to ease over the coming quarters.” OPEC still forecasts U.S. production to decline in the third quarter.
Disappearing Bakken oil discount adds to output slowdown signs Oil traders scrambling to secure crude in the U.S. Midwest have pushed North Dakota’s Bakken to a near premium for the first time in two years, a rally stoked by record refinery runs and an unprecedented slump in Canadian imports.
(…) There are other compelling reasons for Bakken crude’s relative strength, to be sure.
Canada’s oil exports to the United States suffered their biggest monthly decline on record this spring due to maintenance on big oil sands projects as well as forest fires that slashed a tenth of Alberta’s total oil production.
Refiners in the U.S. Midwest region ran the most crude ever for the month of May thanks to a light maintenance slate and robust margins, triggering a bidding war for light barrels. (…)
North Dakota’s Department of Mineral Resources will release figures for April production on Friday. The No. 2 oil-producing state posted a surprising jump in oil output in March.
The Energy Information Administration estimates that Bakken output was little changed from a record high 1.3 million bpd in March, but expects it to fall by 70,000 bpd over the following three months
Others still see growth through May. PointLogic, which uses real-time natural gas flow data to forecast oil production, estimates output rose by 31,000 bpd in April versus March and kept rising through May before turning lower recently, according to data made available to Reuters.
Last week, North Dakota’s crude-by-rail loadings averaged 437,000 bpd at monitored terminals, the lowest level since mid-March, industry provider Genscape said. Meanwhile, Enbridge’s (ENB.TO) North Dakota pipeline system has run close to capacity, signifying that production has fallen. (…)
Sideways Shuffle Could Continue as Market Trends Split
Moving averages are a popular technical indicator and can be used to gauge the direction of market trends. The 200-day moving average is the average closing price over the past 200 sessions. When a stock is above its long-term moving average and the average is sloping upward, a security is considered to be in an uptrend. The reverse holds when a stock is below a downward sloping moving average — then it’s in a downtrend.
By Mr. O’Hara’s measure, roughly half of the market is trending higher, while half is trending lower. Hence why he says it’s easy to see how the market is both dead and alive.
The percentage of stocks above and below their long-term, or 200-day, moving average is one example of the tug of war between the positives and negatives. According to Factset, 268 stocks in the S&P 500 finished above their 200-day moving average Tuesday while 232 ended below. That’s close to even.
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