Succinct Summation of the Week's Events

Succinct Summation of the Week’s Events:

Positives,

1)March payrolls grew by 303k, 89k more than expected with 232k of that being from the private sector. Also, the two prior months were revised up by a combined 22k. The household survey showed strength too, rising by 498k after 4 months in the past 5 of declines but all came from those aged over 55 and under 25. There was a drop in household employment for those aged 25-54, the key working cohort. The labor force was up by a similar amount, by 469k and the mix put the unemployment rate at 3.8% vs the 2 yr high of 3.9% last month. Also, hours worked ticked up to 34.4 from 34.3 and better than the estimate of no change. Average hourly earnings rose .3% m/o/m as expected but February was revised up by one tenth. The y/o/y gain was 4.1%. Average weekly earnings were higher by 4.1% too. The labor force participation rate rose two tenths to 62.7%, though still below the February level of 63.3%. The 25-54 age category saw a one tenth drop in its participation rate to 83.4% but above the February 2020 level. Job leavers as a % of unemployed, measuring quits essentially, rose to 12.7% from 11% in February and 12.8% in January. Again, most of the jobs, 2/3 of which, came from 3 groupings, leisure/hospitality, private education/health and government with gains of 49k, 88k and 71k respectively. Construction too helped, rising by 39k but tough to say how many of which were government induced with the IRA and Chips Act encouraged projects. For the private sector, the 3 month average is now 212k vs the 6 month average of 183k and the 12 month average of 189k. 

2)ADP said a net 184k private sector jobs were created in March, 34k more than estimated and follows a gain of 155k in February (revised up by 15k). Most of the jobs came from medium and large companies with just 16k coming from small ones. On wages, for ‘job stayers’ they grew by 5.1% y/o/y, the same pace seen last month. Wages for ‘job changers’ spiked by 10% y/o/y and a notable rise from the 7.6% y/o/y gain in February. ADP said “The three biggest increases for job-changers were in construction, financial services, and manufacturing.” Smoothing out the monthly volatility in the data, the 3 month average is 150k vs the 6 month average of 137k and the 12 month average of 204k.

3)Continuing claims fell by 19k w/o/w to back under 1.8mm at 1.79mm.

4)The March ISM manufacturing index finally got back to a 50 handle for the first time since October 2022 at 50.3 vs 47.8 in February and 49.1 in January. That was 2 pts above expectations. Breadth improved slightly as 9 industries of 18 surveyed seeing growth vs 8 in February while 6 said their business contracted vs 7 in the month before. The balance saw no change in business.

5)The S&P Global manufacturing index fell a touch to 51.9 from 52.2, though above 50 for a 3^rd straight month.

6)Here's an update on shipping rates as they continue to moderate after the spike seen off the lows in January. The World Container Index trip from Shanghai to Rotterdam for a 40 ft container averaged $3,078, down $81 on the week. That's still about double the 2023 year end rate but off the January highs of $4,984. The Shanghai to LA route, the price fell $121 to $3,704 for the week ended 4/4. It started the year at $2,100 and touched $4,344 at the end of January. 

7)From Conagra: Benefiting from eat at home, “trends in consumption across our key domains reinforce our confidence in even further volume recovery...And encouragingly, that momentum has continued in Q4, driven by frozen."