April’s jobs report, March’s income & outlays and trade deficit, February’s Case-Shiller

the April unemployment report was better than expected, and positive revisions of nonfarm payrolls over the past two months took some of the sting out of the lousy jobs report in Marchthe Bureau of Labor Statistics reported that seasonally adjusted payroll jobs rose 165,000 and the unemployment rate ticked down to 7.5% in April; in addition, the establishment survey payroll job numbers were revised to show 138,000 jobs added in March instead of the 88,000 reported last month, and 332,000 jobs added in February, up from the 268,000 reported last month and the originally reported 236,000according to the establishment survey, 73,000 professional and business service jobs were added in April, of which 22,800 were in professional and technical services and 30,800 were in temporary help services; another 38,000 jobs were added by restaurants and bars, and 29,000 were in retail, 15,000 of which were in general merchandise stores..and another 19,000 were in health care, more than accounted for by the 14,000 in ambulatory care services and 7,000 in social services…net government payrolls were down 11,000 workers, including 8,000 at the federal level, suggesting a minimal impact from the sequester to datejobs in construction were little changed, with 13,300 new jobs in residential construction more than offset by almost 14,000 less jobs in nonresidential buildings and civil engineering; likewise, payrolls jobs in both durable and non durable goods manufacturing, wholesale trade, transportation and warehousing, and financial activities were little changed for the month...however, with the increase in payroll jobs came a significant drop in the average workweek for all employees on private payrolls; from 34.6 hours in March to 34.4 hours in April; in manufacturing, the workweek was down 0.1 hour to 40.7 and overtime was also down 0.1 hour to 3.3 hours, while the average workweek for production and non-supervisory employees slipped to 33.7 hours; to show the significance of this, zero hedge took that decline of 0.2 hours in the workweek and multiplied it by the 135,474,000 payroll jobs reported this week and figured that the workweek decline was the equivalent of a loss of 618,000 payroll jobs; partially offsetting that cut in hours, the average hourly earnings for all private payroll employees rose by 4 cents to $23.87, while nonsupervisory employees saw their pay edge up by 2 cents to $20.06 an hourour FRED graph shows total number of employees in manufacturing in blue, those employed in retail in green, and those employed in construction in red…

FRED Graph

the April results of the smaller BLS household survey mitigated some of the extreme swings in labor force data we saw in March, which suggests the +/-400,000 margin of error may have been a factor in last month’s report; in April, those counted as in the labor force increased by 210,000 to 155.238 million, while those not in the labor force declined 31,000; we also saw a 293,000 increase in those reporting they were employed, while those meeting the criteria for being unemployed (actively looking for work during the reporting period) declined by 83,000, resulting in a drop in the official unemployment rate to 7.5% in April from the 7.6% reported in March; within demographic groups, the seasonally adjusted jobless rate for adult women fell from 7.0% to 6.7%, as unemployment for white women declined from 6.1% to 5.7% while the jobless rate for black women fell from 12.2% to 11.6%; meanwhile, the jobless rate for adult men rose from 6.9 to 7.1%, driven mostly by a surge in the jobless rate for adult while males from 6.1% to 6.4%; seasonally adjusted unemployment rates for Hispanics at 9.0%, Asians at 5.1%, and teenagers at 24.1% were little changed…the metrics we follow as a better indicator of the employment situation remained dismal; the labor force participation rate was unchanged at 63.3%, again the lowest since before women entered the labor force en masse in 1979, while the employment-population ratio increased to 58.6% in April from 58.5% in March; the track of both those metrics since 2000 is shown on our FRED graph below; over the past year, those “not in the labor force” and hence not counted as jobless increased by 1,604,000; there are now 6,329,000 of us who are not counted but still report that they want a job…the number of those jobless or 27 weeks or more and still actively looking for work declined by 258,000 to 4.353 million; their share of the total unemployed declined by 2.2% to 37.4%; there was a corresponding 230,000 increase in those unemployed 15 to 26 weeks…another 2,347,000 of us were classified as marginally attached to the workforce, up 21,000 from March; these are those who looked for work sometime over the preceding 12 months but not in the 4 weeks preceding the survey; of those, 835,000 were considered discouraged workers because they reported they werent looking for work because they believed no job is available for them; their numbers are up from 803,000 in March…there was also a significant jump in the number of employed just working part time; 26.8 million workers reported they only worked part time in April; of those, 7,916,000 either had hours cut or could only find part time work, a 278,000 increase over the number who reported they’d rather work full time in March; as a result, the broader U-6 measure of unemployment rose from 13.8% to 13.9%; several writers blame the ongoing increase in part time jobs on obamacare, due to the $2,000 per employee penalty for uncovered full time workers under ACA; there have been anecdotal reports that this is happening, but no hard numbers to quantify the effect…

FRED Graph

another important economic release this week was for Personal Income and Outlays for March from the BEA; seasonally adjusted personal income inched up $30.9 billion, or 0.2%, from an annual rate of $13,599 billion in February to a rate of $13, 630 billion in March, wages and salaries increased $14.9 billion to $7,039 billion, compared with an increase of $44.6 billion in February, supplements to wages and salaries increased $3.2 billion in March, compared with the previous increase of $5.7 billion; proprietors’ income increased $8.8 billion, compared with their increase of $17.1 billion in February; $6.3 billion of that increase went to farmers, while other business owners saw their incomes increase at a $2.5 billion annual rate; income from rents increased $9.5 billion, while interest & dividend income decreased $7.3 billion, in contrast to an increase of $68.2 billion in February; these month over month fluctuations are apparently still reflecting the accelerated and special dividend distributions paid during November and in December; in addition, personal transfer receipts, which are government payments to individuals, were up $3.7 billion over February’s leveldisposable personal income (DPI), which is income after taxes, also rose at a seasonally adjusted rate of 0.2%, from an annual rate of $12,059 billion in February to a rate of $12,080 billion in March; this is after February’s figures were revised to show personal income up $151.2 billion, and DPI up $134.0 billion, or an increase of 1.1% for both, rebounding from depressed levels of January…because of an inflation decrease of 0.1%, real (adjusted) DPI was up 0.3% for the month…regarding outlays, personal consumption expenditures (PCE) increased $21.0 billion in March, from an annual rate of $11,384 billion to a rate of $11,405.1 billion, or 0.2% above February’s rate…spending on goods overall was down from an annual rate of $3,890.5 billion to $3,857.7 in March, as spending on durable goods declined $3.0 billion or 0.2% and spending on non-durables declined $29.8 billion, or 1.3%…spending on services rose $53.8 billion from $7,493.6 billion in February to $7,547.4 billion in March, which was the 2nd largest jump in spending on services on record; nearly half of that was a jump in spending on gas and electric, roughly matching the jump in utilities we saw in the industrial production data, due to a colder than normal March…total personal outlays, which includes PCE plus interest and transfer payments, increased $22.6 billion, compared with an increase of $83.1 billion in February; personal saving, which is DPI less personal outlays, was $329.1 billion in March, compared with $330.9 billion in February, which left the personal saving rate, which is personal saving as a percentage of disposable personal income, virtually unchanged in March at 2.7%, a post recession low…our FRED graph shows gross real DPI in blue and real PCE in red in billions of 2005 dollars since 2000, with the savings rate in green on the right scale… the price index for personal consumption expenditures, which is the Fed’s preferred inflation gauge, was down 0.1% in March, while the core PCE price index, which excludes food and energy, was up less than a tenth of a percent…year over year inflation for the headline PCE index is now under 1% at .97%, while the Core PCE index has slipped to 1.13%

  FRED Graph

our trade deficit for March was less than expected as daily oil imports dropped to a 17 year low and our bilateral trade deficit with china fell to a 3 year low (china new year)….the Department of Commerce reported that seasonally adjusted exports of $184.3 billion and imports of $223.1 billion lowered our international goods and services deficit  in March to $38.8 billion, down from $43.6 billion in February; an immediate impact will likely be a revision to 1st quarter GDP which we reviewed last week, as this report represents an annualized 4.6% decline from reported first quarter net trade…in March, exports of goods fell $4.6 billion to $56.1 billion while exports of services rose $0.1 billion to $53.9 billion; meanwhile, imports of goods fell $6.4 billion to $186.5 billion and imports of services fell $0.1 billion to $36.6 billionseasonally adjusted month over month changes to major export components included a $1.052 billion decrease in exports of foods & grains, a $0.331 billion decrease in exports of cars & parts, a $0.288 billion decrease in exports of industrial materials & supplies, a $0.269 billion decrease in exports of capital goods, & a $0.260 billion decrease in exports of consumer goods; decreases in imports components included $1.417 billion less industrial materials & supplies, including the $1.919 billion decrease in oil imports, $3,406 billion less imports of consumer goods, $1.505 billion less imports of capital goods, and $0.771 billion less imports of cars and parts…exports in advanced technology products, which are not seasonally adjusted, amounted to $27.9 billion in March and imports of same were at $31.3 billion, resulting in a March  deficit of $3.4 billion, which was down $1.5 billion from the advanced technology deficit of $4.9 billion in February…our major bilateral trade deficits in March, also not seasonally adjusted, were $17.9 billion with China, down from February’s $23.4 billion, $9.9 billion with the European Union, up from $8.8 billion, $6.6 billion with Japan, up from $5.9, and $5.3 with Mexico, $5.1 billion with Germany, and 4.5 billion with OPEC….smaller bilateral trade surpluses were recorded with Hong Kong at $3.2 billion, Brazil at $1.7 billion, Australia at $1.5 billion, and Singapore at $1.4 billion…Bill McBride’s graph shows our trade deficit in Blue through March; our petroleum deficit is also charted in black, and our deficit without petroleum in red; note that despite our lower than ever oil imports, the oil trade deficit has remained in a range between ~$20 billion and ~$30 billion for over 3 years due to higher oil prices; oil averaged $96.95 a barrel in March, up from  $95.96 per barrel in February… 

U.S. Trade Deficit

the widely followed Case-Shiller home price indexes for February were also released this week, which are the average of home price increases over 3 months (December, January and February); with the Fed continuing to subsidize mortgage interest rates, the 20 city index was up 9.3% year over year, the most in almost 7 years; while the ten city index showed an annual increase of 8.6%; for the month, the 10 city rose 0.4% and the 20 city rose 0.3%, while on a seasonally adjusted basis both indexes were up 1.2% in Februarycities showing the greatest year over year price appreciation were Phoenix, where prices climbed 23%, San Francisco where prices were up 18.9%, Las Vegas, which saw a 17.6% home price increase, and Atlanta, where home prices were 16.5% higher than last February…the smallest annual gain was in prices of homes in New York, which were up 1.9%; as per usual, the wall street journal has an accessible, sortable interactive table including the Case-Shiller index for February, the monthly and the annual change; Case-Shiller individual city indexes are all set at January 2000 = 100…included below is a bar graph from Robert Oak’s coverage at the Economic Populist showing the home price increases in each of the 20 case-shiller cities over the past year…mortgage rates are falling again; Freddie Mac reports the 30-year fixed-rate mortgage at 3.35%, just above its all-time record low of 3.31% set during November, while the 15-year fixed-rate mortgage is at a new all-time record low of 2.56%, breaking the record low set last week…much of the home buying continues to be driven by investors; the Census Bureau reported this week that US home ownership fell to 65% in the first quarter, down from 65.4% a year earlier and the lowest home ownership rate in nearly 18 years…

case shiller 1 yr chg sa February 2013

(the above is my weekly commentary that accompanied my sunday morning links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in getting my weekly emailing of selected links that accompanies these commentaries, most coming from the aforementioned GGO posts, contact me…)

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