Week in Review: June 3-7

Construction spending, job openings, & more

Oh, what a tangled web we weave. Just when one thought that the economy might be weakening, we receive another blockbuster employment report (see our longer post on that here, free for all subscribers).

I have to tell you that rarely are the economic data so interesting given all the contradictions, evidence of which you will see below. And since the sporting world is so active right now, I’m going to keep (somewhat arbitrary) score of this week’s data.

Monday

Construction Spending

Construction spending declined 0.1% in April but is up 10% over the past year. The good: manufacturing, infrastructure, and single-family housing construction are all up massively over the past year. The bad: multifamily housing, lodging (think hotels), and commercial (think retail, restaurants, and warehouses) construction are all down over the past year.

Score: good monthly/weekly data 0, bad monthly/weekly data 1

ISM Manufacturing PMI

This indicator, based on a survey of industry managers, shows that the manufacturing segment shrank in May for the 18^th time in the past 19 months. Big picture, the goods side of the economy remains far weaker than the services side.

Score: 0-2

Refilling the Strategic Petroleum Reserve

The U.S. is buying 3 million barrels of oil at a price of $77.69/barrel to refill the SPR. The U.S. has now repurchased 38.6 million barrels of the 180 million barrels sold in 2022 to cut fuel prices after the Russian invasion of Ukraine. Still a lot of refilling to be done, but so far selling high and buying low is going well.

TSA Checkpoint Travel Numbers

After a record setting Memorial Day weekend, the number of passengers screened by TSA fell but remains about 8% above 2024 levels.

(Tie, still 0-2)

Tuesday

Job Opening and Labor Turnover Survey (JOLTS)

The number of job openings fell to 8.1 million in April and the share of jobs unfilled dipped below 5% for the first time since January 2021. Job openings have been steadily falling since early 2022, so this is more of the same.

The share of employees that quit their jobs stood at 2.2% for the 6^th straight month. That’s way lower than it was over 2022 and 2023 and just slightly lower than the pre-pandemic rate. While quits have normalized, employers are still laying workers off at a historically low rate.

What do we take from this? Labor is still scarce, but less so than over the past few years. This is good news from an interest rate perspective but (slightly) bad news from a growth perspective, so giving this point to the bad news side.

Score: 0-3

Gas Prices

Gas prices fell for the sixth straight week and will keep falling going forward.

Diesel Prices

Diesel prices fell again and are at the lowest level since January 2022.  

Score: 1-3 (including diesel and gas together)

Wednesday

ADP Employment Report