The Monday Morning Quarterback
A quick analysis of important economic data released over the last week
By Elliot D. Pollack & Co
U.S. job growth is still well into positive territory, with 390,000 jobs added last month and unemployment holding steady at 3.6%. The U.S. has now recovered over 96% of the jobs lost from the pandemic-induced recession and may be just a few months away from recovering all lost jobs. The pace of job growth has slowed from previous months and other metrics related to the labor market (job openings, labor force participation, quits, and separations) have softened, they are still at historically healthy levels.
With the labor market still in a strong position, the Fed is most likely going to stay on track to increase interest rates further over the summer, with many expecting additional half point increases in the hopes that inflation will moderate. The continued shift of consumer demand away from goods and towards services could also help ease inflation pressures. And if there is enough labor supply for employers in the coming months, the Fed may be able to take a less drastic course of action. But the risk of recession still looms. Time will tell.
- The U.S. economy added 390,000 jobs, bringing the 2022 total to 2.4 million. The majority of job gains were in Leisure & Hospitality (84,000), Professional & Business Services (75,000), Educational & Health Services (74,000), and Government (57,000). No sectors lost jobs in May.
- Since the start of the recovery, 21.2 million jobs have been recovered, or 96.3% of jobs lost. Five out of the eleven super sectors have fully recovered.
- The unemployment rate remained steady at 3.6% for the third consecutive month. This is down from 5.8% a year ago.
- Job openings declined 455,000 to 11.4 million. Despite the April decline, the level remains high. The number of hirings dropped slightly to 6.6 million, outpacing 6.0 million separations. The majority of separations came from the number of people (4.4 million) quitting. The number of job openings and quits remain high compared to historical levels.
- Consumer confidence slipped in May after two consecutive months of increases. May’s level was 106.4, down 11.3% from a year earlier.
- ISM’s manufacturing and service indices moved in opposite directions in May but remained at a similar level. The manufacturing index increased 1.3% to 56.1% and the service index declined 2.1% to 55.9%. The service index is at its lowest level for the year. However, any reading above 50% indicates growth.
- Air traffic at Sky Harbor continued to improve in April but still remains below 2019 levels. Year-to-date, total traffic was down 8.2% from 2019 (pre-pandemic).
- For the first time in nearly three years, the Greater Phoenix metro area did not lead the nation in annual home price increases (Tampa Bay was number one) in March. While Tampa was number one, Phoenix’s home price increase was 32.4% maintaining the same level seen since July 2021. The price deceleration has not shown up in the data, yet. Mortgages have become more expensive and that will begin showing up in the data in April and May when mortgage rates reached 4.98% and 5.23%, respectively.