Economy

Economic Data Roundup (04/04/2018)

4/4/18 12:00 PM

iStock-177853320There were a few important reports on the U.S. economy released this morning. First private-sector payrolls in America rose by 241K in March, according to new data from ADP. That is down fractionally from February’s upward-revised 246K gain but significantly better than expected and enough to keep the less volatile 3-month average pace of job creation at a historically high level. Under the hood, most of the private-sector payrolls added last month were as usual found in the services sector (+176K), but the goods-producing sector also posted a solid 65K gain thanks to strong manufacturing and construction hiring. As for small business job creation, payrolls at firms with 1-49 employees rose by 47K in March, the sixth monthly gain in a row and equal to nearly a fifth of all the private-sector payrolls added to the economy. Mark Zandi, chief economist of Moody’s Analytics, summarized by saying that “The job market is rip-roaring. Monthly job growth remains firmly over 200,000, double the pace of labor force growth. The tight labor market continues to tighten.”

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Elsewhere, the purchasing managers' index (PMI) from IHS Markit for the U.S. services sector, which accounts for a much larger share of the overall economy than manufacturing, ended March at 54.0. That is down from February but still signals a level of business activity that is well above pre-election levels. Surveyed managers added that new orders continue to rise due to greater client demand and increases in customer referrals. However, the elevated activity is putting a lot of strain on capacity, which in turn contributed to the fastest pace of job creation since August of last year. Similarly, the Institute for Supply Management’s (ISM’s) non-manufacturing index, also released this morning, slid to 58.8 in March. That is slightly worse than expected but still the 98th consecutive month of net activity expansion. Measures of production and new orders deteriorated in March, albeit from near-record levels, and comments from surveyed managers were generally positive. Chris Williamson, chief business economist at IHS Markit, added that “Strong inflows of new orders means growth looks set to accelerate into the second quarter. The past two months have seen the largest back-to-back increases in demand for almost three years.”

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Sources: Econoday, ADP, IHS Markit, ISM, FRBSL

Post author: Charles Couch