Weekly Economic Update: May 6, 2024

Last Week’s Economic News

• The Federal Open Market Committee left interest rates unchanged following the conclusion of its meeting last Wednesday. The statement from the Committee noted the lack of further progress over the last several months toward driving inflation down to the Fed’s 2.0% target. The Committee also noted that, while achieving its dual goals of maximum employment and price stability are in better balance, the economic outlook continues to be uncertain, and the Committee remains attentive to inflation risks.

• There were 175,000 new jobs added in April, lower than the monthly average of 242,000 over the past 12 months. In April, job gains occurred in health care, social assistance, and in transportation and warehousing. The change in employment for February was revised down by 34,000, from 270,000 to 236,000, and the change for March was revised up by 12,000, from 303,000 to 315,000. With these revisions, employment in February and March combined was 22,000 lower than previously reported. In April, the unemployment rate rose 0.1 percentage point to 3.9%. The number of unemployed was little changed at 6.5 million. The labor force participation rate was unchanged at 62.7%, while the employment-population ratio, at 60.2%, dipped 0.1 percentage point. In April, average hourly earnings increased by $0.07, or 0.2%, to $34.75. Over the past 12 months, average hourly earnings have increased by 3.9%. In April, the average workweek edged down by 0.1 hour to 34.3 hours.

• According to the latest Job Openings and Labor Turnover Summary, the number of job openings declined by less than 400,000 in March to 8.5 million. However, this figure is down by 1.1 million from a year ago. The number of hires, at 5.8 million, was little changed from the February total. There were 5.2 million total separations in March, 339,000 under the February total. Business activity in the services sector continued to increase in April but at a slower rate amid the first reduction in new orders since last October. Employment was also reduced as firms showed a reluctance to replace departed staff.

• According to the latest survey of purchasing managers conducted by S&P Global®, manufacturing suffered its first setback of the year in April. The S&P Global US Manufacturing Purchasing Managers’ Index™ fell to 50.0 in April, down from 51.9 in March. New orders decreased for the first time in four months as survey respondents noted clients’ reluctance to commit to new business amid subdued market conditions.

• According to S&P Global US Services PMI®, business in the services sector expanded in April, but at a slower pace, as new orders declined for the first time since October. Hires also slowed as firms were hesitant to replace departed staff.

• The goods and services trade deficit changed marginally in March from the previous month. According to the latest data from the Bureau of Economic Analysis, the goods and services deficit was $69.4 billion in March, down $0.1 billion, or 0.1%, from the previous month. Exports declined $5.3 billion, or 2.0%, while imports fell $5.4 billion, or 1.6%. Year to date, the goods and services deficit increased $6.5 billion, or 3.2%, from the same period in 2023. Exports increased $9.1 billion, or 1.2%. Imports increased $15.6 billion, or 1.6%.

• The national average retail price for regular gasoline was $3.653 per gallon on April 29, $0.015 per gallon below the prior week’s price but $0.053 per gallon more than a year ago.

• For the week ended April 27, there were 208,000 new claims for unemployment insurance, unchanged from the previous week’s level, which was revised up by 1,000. According to the Department of Labor, the advance rate for insured unemployment claims for the week ended April 20 was 1.2%, unchanged from the previous week’s rate. The advance number of those receiving unemployment insurance benefits during the week ended April 20 was 1,774,000, unchanged from the previous week’s level, which was revised down by 7,000.

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