May’s wholesale sales and inventories, job openings and turnover, and consumer credit

there were just a handful of relatively minor reports released this week, and all were on May data…we’ll start with the Census report on Wholesale Trade: Sales and Inventories for May (pdf), which estimated that seasonally adjusted sales of merchant wholesalers increased by 0.7% (+/-0.5%) to $453.2billion for the month and by 6.6% (+/-1.4%) over the sales of May 2013, not adjusted for inflation….wholesale sales of durable goods were up 0.2% (+/-0.7%)*, as a 3.2% increase in wholesale sales of metals and minerals was partially offset by a 1.6% decrease in wholesale sales of computers, peripheral equipment and software, while wholesale sales of nondurable goods were up were up 1.1 percent (+/-0.5%) from April on a seasonally adjusted 6.6% increase in wholesale sales of farm products…

meanwhile, May’s seasonally adjusted wholesale inventories, which will impact 2nd quarter GDP, rose 0.5% (+/-0.4%) from the downwardly revised April figure to $532.7 billion at the end of May, a level 7.9% (+/-0.9%) higher than a year earlier, as inventories of durable goods rose 1.0% (+/-0.4%) on a 2.1% increase in metals and minerals stocks and a 1.9% increase in inventories of motor vehicles and vehicle parts and supplies, while inventories of nondurable goods fell 0.3% (+/-0.5%)* on a 3.2% decrease in wholesale inventories of farm products, which was partially offset by a 2.0% increase in wholesale inventories of petroleum and petroleum products…with wholesale inventories and sales both rising, the inventories to sales ratio for wholesalers was unchanged from April at 1.18…

Job Openings at 7 Year High in May as Hiring, Firing Falls

according to the May Job Openings and Labor Turnover Survey (JOLTS) from the Bureau of Labor Statistics, seasonally adjusted job openings rose by 171,000 to a new 7 year high of 4,635,000, as job openings in health care and social assistance rose from 658,000 to 736,000 and job openings in restaurants and bars rose from 589,000 to 644,000, while job openings in retail fell from 570,000 in March to 460,000 in April… jobs open at the end of April were revised up by 9,000 from the originally reported 4,455,000 opening to 4,464,000, and job openings as a percentage of the employed labor force rose to 3.2% from 3.1%, up from 2.8% a year earlier and up from 2.7% in January …based on 9,799,000 officially unemployed in May, there would be 2.1 who were actually looking for work during May for every job opening; that, of course, does not count those who might have wanted a job but didn’t look for work during the month…jobs are now staying unfilled longer than ever; the average job opening went unfilled for 25.1 days in May, the longest duration since 2001, when those record were first kept…

this JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and ‘other separations’, which include retirements and death…. in May, seasonally adjusted new hires totaled 4,718,000, down 52,000 from the 4,770,000 hired or rehired in April, as the hiring rate as a percentage of all employed fell from 3.5% to 3.4%, but still remained up from 3.3% a year earlier…total hiring in the professional and business services category decreased by 43,000 to 967,000 in May, hiring in health care and social assistance services fell by 36,000 to 463,000, while hires at bars and restaurants rose 10,000 to 702,000….total separations also fell, from 4,550,000 in April to 4,495,000 in May, as the separations rate as a percentage of the employed slipped from 3.3% to 3.2%, the same as it was a year ago…subtracting the 4,495,000 total separations from the total hires of 4,718,000 would imply an increase of 223,000 jobs in May, virtually the same as the revised payroll job increase of 224,000 for April reported by the BLS establishment survey last week, a rare match between these two surveys that both have wide confidence intervals…

further breaking down the seasonally adjusted job separations, we find 2,527,000 quit their jobs in May, 60,000 more than the 2,467,000 who quit their jobs in April, while the quits rate, an indicator of worker confidence which is being watched by the Fed, remained unchanged at 1.8% of total employment…that quitting rate varied considerably between industries, ranging from a high of 3.8% of restaurant and bar workers who quit to a low quit rate of 0.6% for government employees….in addition to those who quit, another 1,575,000 were either laid off, fired or otherwise discharged in April, down 126,00 from 1,701,000 discharges in April, which pushed the discharges rate down to its low for the year at 1.1% of all those who were employed during the month….meanwhile, other separations, which includes retirement and death, were at 392,000 in April, up a bit from 382,000 in April, for an ‘other separations’ rate of 0.3%, which was unchanged….

our FRED graph for this report below shows job openings in blue in thousands monthly since January 2005, and monthly hires in orange and monthly separations in violet over the same span.note that when separations in purple were above  hires in orange we were losing jobs…the two major components of separations are also included, the count of layoffs and firings is tracked in red, while the number of those quitting their jobs monthly is shown in green….

May 2014 JOLTS

May Consumer Credit Up $19.6 Billion on Car Loans as Credit Card Growth Slows

G-19 report on Consumer Credit for May, which showed that seasonally adjusted consumer borrowing outstanding at the end of May was up $19.6 billion over April to $3,194.6 billion, increasing at an annual rate of 7.4% over April’s revised $3,175.0 billion total…revolving credit, which is mostly credit card debt, grew at an annual rate of 2.5%, increasing to $872.2 billion in May from $870.4 billion in April, and slowing from what now appears to be a one time spike at a 12.5% growth rate in April, while non-revolving debt, which includes long term borrowing for items such as cars and yachts and tuition, but not real estate, rose at an annual rate of 9.7% to a seasonally adjusted $2,322.4 billion from $2,304.6 billion in April….

the Zero Hedge bar graph below shows the seasonally adjusted monthly change in non-revolving credit outstanding in red and the change in revolving credit monthly in blue since the beginning of 2011, with negative changes pointing down, while the black line on the graph sums the two to track the headline change in overall credit that this release reports on…we can see the relatively large jump in credit card debt (blue) last month seems to have been a one time phenomena, and note that higher borrowing overall over the last three months is more than likely is related to the post-recession highs in automobile sales that we’d been seeing over those months..

May 2014 change in consumer credit from zero hedge

the unadjusted consumer credit data shows that outstanding revolving credit is still $22.6 billion below the level of credit card debt at year end, as $40.0 billion in credit card debt was paid down in the first quarter; moreover, aggregate credit card balances outstanding are still $81.6 billion below the early recession level of $916.8 billion at the end of 2009…so the panicked reports last month that consumers were “maxing out their credit cards” were greatly exaggerated…moreover, data from the American Bankers Association indicates that delinquency rates on bank issued credit cards fell to 2.44% in the first quarter, 36% below their 15-year average, and just off the 24 year low of 2.41% hit a year earlier…contrast that to the mortgage delinquency rate of 5.62% for May that we reported on last week, and it appears consumers have their credit cards well controlled…..

the truncated section of table below, excerpted from the second table in the report, shows the actual level of credit outstanding in billions of dollars by type and by holder at year end for each year from 2009 to 2013, and then also at the end of the March, April and May of this year…note that revolving credit outstanding in May remains below the year end level for each of the past five years, and that non-revolving credit, which is mostly car and student loans, continues to rise as borrowing for both tuition and vehicles remains strong…in the revolving credit section, we can also see the rapid expansion of student debt held by the Federal government, from $223.1 billion in 2009 to $781.1 billion as of May…although their are other holders of the nearly $1.2 trillion in student debt outstanding, those held by the Federal government are student loans originating from the Department of Education…

May 2014 consumer credit

(the above are the comments that accompanied my regular sunday morning links emailing, synopses which in turn were mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links that accompanies these commentaries, most from the aforementioned GGO posts,contact me…)

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