KPI – September 2024: Recent Vehicle Recalls
KPI – September 2024: The Brief
KPI – September 2024: State of Manufacturing
KPI – September 2024: State of Business
KPI – September 2024: Consumer Trends
State of the Economy
In August, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally- adjusted basis, following the same increase in July, according to the U.S. Bureau of Labor Statistics. Over the last 12 months, the all-items index increased 2.5% before seasonal adjustment.
Important Takeaways, Courtesy of the U.S. Bureau of Labor Statistics:
- The index for shelter rose 0.5% in August and was the main reason for the all-items increase. The food index increased 0.1% after rising 0.2% in July. The index for food-away-from-home rose 0.3% over the month, while the index for food-at-home was unchanged. The energy index fell 0.8%.
- Indexes on the rise include shelter, airline fares, motor vehicle insurance, education and apparel. The indexes for used cars and trucks, household furnishings and operations, medical care, communication, as well as recreation decreased month-over-month.
The all-items index rose 2.5% year-over-year, the smallest 12-month increase since February 2021. The all- items less food and energy index rose 3.2%. The energy index decreased 4%, while the food index increased 2.1%.
While economic experts say inflation is “cooling,” consumers are still wrestling stubbornly high prices at the grocery store and gas pump. Click here for recent data detailing sky-high increases since November 2020.
Employment
Total nonfarm payroll employment inched up by 142,000 in August, below industry estimates of 161,000.
While the unemployment rate and number of unemployed persons ticked down to 4.2% and 7.1 million, respectively, the “real” unemployment rate edged up to 7.9% – its highest reading since October 2021.
The labor force participation and long-term unemployed (those jobless for 27 weeks or more) rates remained steady at 62.7% and 21.3%, respectively, according to the U.S. Bureau of Labor Statistics. However, CNBC reported an alternative measure, which shows categories like discouraged workers and those holding part-time jobs for economic reasons up to 7.9% – the highest reading since October 2021. Average hourly earnings increased by 0.4% month-over-month and 3.8% year-over-year, slightly higher than expected. Hours worked inched up to 34.3.
Most recently, the Bureau downwardly revised job growth – yet again. Job creation in June was slashed by 61,000 (from a gain of 179,000 to 118,000), while July erased 25,000 (from a gain of 114,000 to 89,000). With the revision, July’s job creation was the lowest nonfarm payrolls reading since December 2020.
“I don’t like this a whole lot. It’s not disaster, but it’s below expectations on the headline, and what really bothers me is the revisions,” says Dan North, senior economist for North America at Allianz Trade. “This is certainly going the wrong way.”
Caption: Throughout 2023, negative revisions within the monthly jobs report subtracted more than 440,000 jobs from the initial total. The concerning practice continues in 2024, as the Bureau revised its data by 57,000 in April, lowering its previous estimate of 165,000 jobs added to 108,000. Likewise, May payroll estimates were revised down 54,000 jobs – decreasing total job gains from 272,000 to 218,000. That is a combined 111,000 fewer jobs in April and May than first reported, which brings the three-month average of job gains to roughly 177,000 – well below the 269,000 recorded during the first three months of the year.
Source: U.S. Bureau of Labor Statistics data
By Demographic
This month, unemployment rates among the major worker groups: adult women – 3.7%; adult men – 4%; teenagers – 14.1%; Asians – 4.1%; Whites – 3.8%; Hispanics – 5.5%; and Blacks – 6.1%.
Last month, unemployment rates among the major worker groups: adult women – 3.8%; adult men – 4%; teenagers – 12.4%; Asians – 3.7%; Whites – 3.8%; Hispanics – 5.3%; and Blacks – 6.3%.
*Data is bold reflects notable unemployment increases.
Caption and Image Source Credited to Indeed: The chart shows that monthly job gains, measured as a three-month average, have steadily declined from their peaks in 2021 and 2022. The average monthly job gains in 2023 were 255,000, as indicated by a dashed pink line, while the gains in 2019 averaged 166,000, marked by a dashed orange line. The recent data shows that monthly job gains have fallen below the 2019 benchmark, reflecting a slowdown in job growth.
By Industry
The Employment Trends Index™ (ETI) has been on a downward trajectory since its peak in March 2022, with some industry professionals preparing for an employment decrease in the second half of 2024. However, the ETI rose unexpectedly in August, recording just its second monthly gain in 2024.
“Though some ETI components have weakened, August gains put the index back above the level it averaged in 2019, which at the time was considered a historically hot labor market,” says Mitchell Barnes, economist at The Conference Board.
He believes this month’s increase in ETI coincides with key employment situation report indicators, such as payroll expansion “at a healthy pace,” unemployment ticking back down, plus no current signs that gradual slowing could deteriorate further. He points to a few factors supporting this assertion.
“Initial claims for unemployment insurance (an ETI component) have fallen marginally in recent weeks and are not signaling sizable layoffs. Employment in temporary help services (an ETI component) was flat. Neither average weekly hours nor the share of involuntary part-time workers (another ETI component) collapsed. Meanwhile, metrics of household spending and production have remained strong,” he says.
That said, Barnes admits the overall steady decline of the ETI is consistent with a collection of measures that point to increasing challenges for jobseekers who are not already employed. The share of respondents who report “jobs are hard to get” – an ETI component from the Consumer Confidence Survey® – jumped to 16.4% in August, up from 11% at the start of the year.
“But again, this roughly aligns with the 2017-2019 pre-pandemic average. The downward trend though is consistent with the Federal Reserve Beige Book released last week, which highlighted anecdotal evidence that some firms had shifted hiring ‘to be primarily for replacement, rather than growth’ even as ‘layoffs remained rare,’” he explains.
In general, Barnes says labor shortages seem to be reemerging as a challenge, “which we also see as a longer-term issue due to an aging workforce and specific talent shortfalls.” Case in point: the share of small firms that report jobs are ‘not able to be filled right now’ (an ETI component) rose to 40% in August – fluctuating between 37-42% in 2024.
“Though this share of firms facing hiring difficulties has fallen from levels immediately following the pandemic, we expect it to remain at a more elevated level going forward, driven by long-run demographic and talent challenges,” Barnes says.
Caption: The Conference Board Employment Trends Index™ (ETI) increased to 109.04 in August
amid a downtrend in the index, and following July’s downwardly revised 108.71. The Employment Trends Index is a leading composite index for payroll employment. When the Index increases, employment is likely to grow as well, and vice versa. Turning points in the Index indicate that a change in the trend of job gains or losses is about to occur in the coming months.
Important Takeaways, Courtesy of the U.S. Bureau of Labor Statistics:
- Construction employment increased by 34,000 in August, higher than the average monthly gain of 19,000 over the past 12 months. Heavy and civil engineering construction added 14,000 jobs, while non-residential specialty trade contractors continued to trend up (+14,000).
- Health care added 31,000 jobs, about half the average monthly gain of 60,000 over the past 12 months. Employment rose in ambulatory health care services (+24,000) and hospitals (+10,000).
- Social assistance continued its upward trend (+13,000) but at a slower pace than the average monthly gain over the past 12 months (+21,000). Individual and family services added 18,000 jobs over the month.
- Employment in manufacturing edged down in August (-24,000), reflecting a decline of 25,000 in
durable goods industries. Manufacturing employment has shown little net change over the year.
