It's The Economy Stupid: There's A Whole Lot Going On

Challenger Job Cuts report at lowest level this year

The Trade Balance gap narrowed

Nonfarm Productivity increased

Unit Labor Cost growth moderated

Jobless Claims decreased to 5 year low

 

Economic Event	Period	Economic Survey	Actual Reported	Original Prior	Revised Prior
Challenger Job Cuts YoY	APR	-	-6.0%	30.0%
Trade Balance	MAR	-$42.3B	-$38.8B	-$43.0B	-$43.6B
Nonfarm Productivity	1Q P	1.0%	0.7	-1.9%	-1.70%
Unit Labor Costs	1Q P	0.7%	0.5	4.6%	4.40%
Initial Jobless Claims	APR 27	345K	324K	339K	342K
Continuing Claims	APR 20	3030K	3019K	3000K	3007K

 

Challenger Job Cuts

Job cuts fell to their lowest level since December, as U.S. employers announced plans to trim payrolls by 38,121 in April, global outplacement consultancy Challenger, Gray & Christmas, Inc., said Thursday.  April job cuts were 23 percent lower than March, when announced layoffs totaled 49,255. They were 6 percent lower than the 40,559 planned job cuts announced in April 2012. April represents the lowest job-cut month since last December, when 32,556 were tracked by Challenger.  Through the first four months of 2013, the pace of downsizing is virtually equal to a year ago. Employers have announced 183,162 job cuts to date, which is only 0.27 percent lower than the 183,653 planned layoffs announced in the first four months of 2012.

 

Trade Balance

The U.S. trade deficit narrowed more than forecast in March to its second-lowest level in three years as imports of consumer goods and business equipment declined.  The gap shrank 11 percent to $38.8 billion from a revised $43.6 billion in February, the Commerce Department reported today in Washington. The median forecast in a Bloomberg survey of 67 economists called for a $42.3 billion deficit. Imports dropped by the most since February 2009 as the U.S. shortfall with China fell to a three-year low.  Boosting shipments of American-made goods may prove difficult as companies such as Dow Chemical Co. contend with slower growth in parts of Asia and struggling economies in

Europe. At the same time, U.S. demand for imports has waned as businesses stockpile less and households cut back on purchases.

 

Nonfarm Productivity

The productivity of U.S. workers rose in the first quarter as companies focused on containing labor expenses.  The measure of employee output per hour increased at a 0.7 percent annual rate, after dropping 1.7 percent in the prior three months.  The median forecast in a Bloomberg survey of economists called for a 1 percent advance. Expenses per worker increased at a 0.5 percent rate after jumping 4.4 percent.  Employers tried to control expenses by making do with their existing staff as demand grew in the January to March period. The emphasis on wringing efficiency gains may mean hiring will take time to accelerate, particularly as across-the board federal budget cutbacks and higher payroll taxes restrain the world’s largest economy.  Estimates of the 51 economists surveyed ranged from a decline of 1 percent to a 2.8 percent gain.      The drop in fourth-quarter productivity was revised from a previously reported 1.9 percent decrease.

 

Unit Labor Cost

Unit Labor Cost expenses per worker increased at a 0.5 percent rate in a preliminary number after jumping 4.4 percent in the previous quarter.

 

Jobless Claims

The number of Americans filing claims for jobless benefits unexpectedly dropped last week to the lowest level in more than five years, indicating companies are retaining staff even as the economy cools.   Applications for unemployment insurance payments fell 18,000 to 324,000 in the week ended April 27, the fewest since January 2008.  Economists had forecast 345,000 claims, according to the median estimate in a Bloomberg survey. A Labor Department official said there was nothing unusual in the data.  Fewer firings show companies are confident their staff levels can adequately meet current demand. Even so, without a pickup in economic growth, the same companies may be reluctant to hire more workers in coming months.  Estimates for first-time claims ranged from 335,000 to 365,000 in the Bloomberg survey of 48 economists. The Labor Department revised the previous week’s figure up to 342,000, from an initially reported 339,000.