Mixed Bags: Goods And Jobs

The US Census Bureau reported new orders for manufactured goods decreased $5.5 billion, or 1.2%, to $440.4 billion in April. Shipments decreased $0.9 billion, or 0.2%, to $444.5 billion, for the first time after seven consecutive monthly increases. Inventories, up eighteen of the last nineteen months, increased $7.7 billion, or 1.3%, to $587.8 billion. These three numbers indicated that the economy remained in a sluggish recovery as the usual suspects -- 9.1% unemployment, housing mess, rising prices, and a concern for overseas financial markets -- continued to impede the rebound.

The US Labor Department reported non-farm payrolls increased by only 54,000 jobs -- far lower than the 160,000 gain forecasted (itself lower than the original earlier 183,000 gain forecast). Unemployment rose from 9% to 9.1% in May. Worse, the Labor Department revised job gain totals downward from 221,000 to 194,000 in March and from 244,000 to 232,000 in April. Of note, teenagers are suffering the highest unemployment rate, 24.2%, although the coming of summer employment may nudge that number down.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged in May at 8.5 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. In May, the number of long-term unemployed (those jobless for 27 weeks and over) increased by 361,000 to 6.2 million; their share of unemployment increased to 45.1%, perhaps indicating an unwillingness by employers to consider hiring the long-term jobless.

Oddly enough, the Conference Board reported that its Help Wanted Online index rose by 148,800 in May to a pre-recession monthly high of 4.5 million advertised job vacancies. Analysts noted that unemployment remains high despite the job gains because of the larger number of unemployed workers that are seeking jobs compared to four years ago. All regions of the US posted more help wanted adverts, with the South leading in new vacancies. Nationally, there are 9.4 million more unemployed workers than advertised vacancies, according to the Conference Board.

Overall, more people are working, but any notions of a sharp economic recovery look premature. The economy is likely to bump along with slow, if unspectacular, progress through the year.