U.S. Job Openings Dropped in February Employers’ postings fall below 10 million for first time since May 2021
There were a seasonally adjusted 9.9 million job openings in February, the Labor Department said Tuesday, down from January’s downwardly revised 10.6 million.
February’s openings were below a record 12 million reached last March, according to revised 2022 data, but still well above 7 million openings in February 2020 ahead of the pandemic.
Job openings in February still far outnumbered the 5.9 million unemployed people seeking work, indicating the labor market remained tight. (…)
The number of job openings plus the level of overall U.S. employment was 2.4% higher than the number of people working or looking for work in February, compared with 2.9% in January. This “jobs-workers gap,” as Goldman Sachs economists have termed it, was only rarely positive in the two decades prior to the pandemic. (…)
Layoffs fell to 1.5 million in February, compared with 1.7 million the prior month, the Labor Department said. Fewer layoffs in leisure and hospitality and professional and business services accounted for most of the decline. (…)
Hiring at restaurants, hospitals and nursing homes drove February’s job growth. But there are signs that employers in those sectors may be reaching their limits: Healthcare and social-assistance roles fell by 150,000.
Openings in professional and business services, where many corporate layoffs have been announced, dropped by 278,000. Openings in arts, entertainment and recreation rose by just 38,000 and in construction grew by 129,000. (…)
Through March 24, job postings on Indeed have declined 5.1% since the last BLS Job Openings data (February). The horizontal black line is the BLS Job Openings prepandemic. New postings, defined as those on Indeed for seven days or less, are down 3.8% over over the past month.
John Authers argues that yesterday’s JOLT data suggest slower growth and lower interest rates ahead:
The latest Atlanta Fed numbers, covering the month of February, showed that the premium for job-switching was falling very significantly after hitting an all-time high last year. This suggests, like the JOLTS numbers, that the bargaining position of workers is weakening. That’s bad news if you’re hoping for a higher salary, but good news for the Fed in its fight against inflation:
But wait, there’s even more sugar for those expecting lower rates. The JOLTS numbers are backward-looking, and have only just caught up with February. March’s sudden spate of bank failures, and the well-publicized layoffs at companies like McDonald’s Corp., are not yet in the data. So the “hope” — for those who want lower rates — is that the trend toward fewer vacancies per job-seeker will be reinforced once the March JOLTS comes out. That will be in time to influence the next Federal Open Market Committee meeting in May.
But wait, there’s perhaps less sugar coming from yesterday’s Paychex | IHS Markit Small Business Employment report:
Following several months of moderation, national hourly earnings growth increased to 4.64 percent in March and one-month annualized growth reached 5.34 percent. The 3-month annualized growth in wages jumped from 3.72% in February to 4.27% in March.
- Fed’s Mester Says Rates Should Rise Above 5%, Stay for Some Time She thinks it’s necessary to fight inflation.
Eurozone economy expands at strongest pace since May 2022
The S&P Global Eurozone Services PMI Business Activity Index rose markedly to 55.0 in March. This was up from 52.7 in February and signalled a strong increase in output across services firms. The rate of growth was the fastest since May 2022.
March survey data pointed to a solid expansion in demand for eurozone services. Overall, new business volumes have risen for three successive months. The latest increase was stronger than the long-run average and the quickest for ten months.
Increased intakes of new work led to further pressure on service sector operating capacity in March, as evidenced by another monthly rise in backlogs. The rate of accumulation was the fastest since mid-2022. In turn, firms retained their preference for extra staff, with employment levels rising for a twenty-sixth month in a row. The rate of job creation accelerated to a nine-month high.
Rates of input cost and output price inflation, despite easing in March, remained stubbornly elevated. Indeed, price concerns were a factor dampening service sector business confidence in March, which continued to run below its historic average.
China’s consumer recovery still dubious as nearly 60 per cent of households prefer to save Residents who said they were inclined to spend more increased 0.5 percentage points from the previous quarter to 23.2 per cent
(…) The China Automobile Dealers Association (CADA) said on Monday that more than 90 per cent of car dealers did not meet their sales target in the first quarter, leading to a sharp rise in the inventory and rising operating pressure.
CADA’s demand index in March 2023 was 68.2 out of 100, lower than February’s 73.3 and the trade body expected demand to shrink in April, citing an ongoing price war among dealers and soft demand for cars, among other reasons.
- USA: Electric vehicles (EVs) accounted for 7% of new vehicle registrations in the U.S. in January, up from 4.1% in January 2022 — another sign that the EV transition is gaining momentum, Axios Joann Muller reports.
- EVs made up 5.6% of all new U.S. car registrations in 2022.
- That’s up from 3.1% in 2021 and 1.8% in 2020, but still way behind China and Europe.
- At the end of 2022, there were 47 electric models available for sale in the U.S., up from 33 the prior year.
- Since January 2022, for example, Tesla’s share of the EV market fell from 72% to 54%
- General Motors’ Chevrolet Bolt is the most popular non-Tesla EV, with a 10% share — due in part to a $6,000 price cut following a damaging battery recall.
- Less than 1% of the 279 million cars and light trucks on American roads are electric.
- Even in California, the country’s leading EV market, they represent just 2.6% of all registered automobiles.
- About 87% of the cars sold in Norway last month were electric. (Bloomberg)
NERVOUS ZOMBIES
More than one in five listed companies in the USA did not cover its interest expense in each of the last 3 years. In the past 6 months, interest rates have risen another 260bps (+77%) while most operating costs have also increased.
There is no doubt most of these zombies are now on even shakier grounds as their management listen to this still hawkish Fed and hear their bankers complain about drying liquidities. One in five, maybe one in four now!