October’s job openings & labor turnover; September’s trade deficit and wholesale sales

Delayed economic reports released ​last week included the Job Openings and Labor Turnover Survey (JOLTS) for October from the Bureau of Labor Statistics, the Commerce Department’s report on our International Trade for September, and the September report on Wholesale Trade, Sales and Inventories from the Census Bureau….in addition, late last week the Fed released regularly scheduled Consumer Credit Report for October, which indicated that overall consumer credit, a measure of non-real estate debt, expanded by a seasonally adjusted $9.2 billion, or at a 2.2% annual rate, as non-revolving credit outstanding expanded at a 1.2% rate to $3,767.3 billion, while revolving credit outstanding grew at a 4.9% rate to $1,316.8 billion….

The major private report released ​l​ast week was the Mortgage Monitor for December, which now comes from the Mortgage Technology unit of ICE, and which indicated that 3.34% of all mortgages were delinquent in October, down from 3.41% in September, and down from the 3.45% mortgage delinquency rate of October of 2024, and that 226,000, or 0.41% of all mortgages were in the foreclosure process in October, up 4,000 from the 0.40% of mortgages that were​ in foreclosure in September, and up 37,000 from the 189,000 or 0.35% of mortgages that were in foreclosure a year earlier….the full Mortgage Monitor for December (pdf), which covers October mortgage and housing data, is a dense, comprehensive 22 pages of tables and graphics, with explanatory text…

US Trade Deficit Fell 10.9% to a 5 Year Low in September on Higher Exports of Gold and Drugs

Our trade deficit fell 10.9% to a 5 ​year​ low​ in September, as both the value of our exports and the value of our imports increased, but our exports increased by more than four times as much​ as imports….the Commerce Dept report on our international trade in goods and services for September indicated that our seasonally adjusted goods and services trade deficit fell by a rounded $6.4 billion to $52.8 billion in September, from a revised August trade deficit of $59.3 billion, which had previously been reported at $59.6 billion…after rounding, the value of our exports rose by a rounded $8.4 billion to $289.3 billion, on a $8.8 billion increase to $187.6 billion in our exports of goods, which was partly offset by a $0.4 billion decrease to $101.7 billion in our exports of services, while our imports rose by a rounded $1.9 billion to $342.1 billion, on a $1.7 billion increase to $266.6 billion in our imports of goods, and a $0.3 billion increase to $75.5 billion in our imports of services… prices for our exports were little changed in September, so the increase in the value of this month’s exports was a real change of about 3.0%, while import prices were also unchanged, meaning that our real imports rose about 0.6%…

The $8.8 billion increase in our exports of goods in September was due to greater exports of non-monetary gold ​and of pharmaceutical​ products, which were partly offset by lower exports of capital goods…. referencing the Full Release and Tables for September (pdf), in Exhibit 7 we find that our exports of industrial supplies and materials rose by $7,229 million to $66,801 million on a $6,102 million increase in our exports of non-monetary gold, a $721 million increase in our exports of petroleum products other than fuel oil, and a $321 million increase in our exports of crude oil, and that our exports of consumer goods rose by $4,052 million to $25,241 million on a $3,106 million increase in our exports of pharmaceuticals and a $564 million increase in our exports of gem diamonds…in addition, our exports of foods, feeds and beverages rose by $464 million to $14,303 million on a $393 million increase in our exports of corn, and our exports of other goods not categorized by end use rose by $641 million to $9,048 million…partly offsetting the increases in those end-use categories, our exports of capital goods fell by $3,328 million to $58,997 million on a $2,308 million decrease in our exports of computers, a $504 million decrease in our exports of civilian aircraft engines, and a $371 million decrease in our exports of semiconductors, and our exports of automotive vehicles, parts, and engines fell by $280 million to $12,389 million on a $390 million decrease in our exports of passenger cars, trucks, buses, and special purpose vehicles..

Exhibit 8 in the Full Release and Tables gives us seasonally adjusted details on our imports of goods and shows that much higher imports of pharmaceuticals was the major reason for September’s $1.7 billion increase in our imports of goods, and that their increase was partly offset by a lower imports of capital goods….our imports of consumer goods rose by $10,166 million to $65,321 million, due a $12,856 million increase in our imports of pharmaceuticals, which were partly offset by a $541 million decrease in our imports of cellphones, and our imports of industrial supplies and materials rose by $37 million to 49,666 million as a $1,895 million increase in our imports of non-monetary gold was mostly offset by a $1306 million decrease in our imports of crude oil….partly offsetting the increases in those end-use categories, our imports of capital goods fell by $5,599 million to $87,276 million as a $4,700 million decrease in our imports of computers, a $1,531 million decrease in our imports of electric apparatuses, an $826 million decrease in our imports of industrial machinery, a $340 million decrease in our imports of telecommunications equipment, and a $333 million decrease in our imports of drilling & oilfield equipment were partly offset by a $2,276 million increase in our imports of computer accessories, an $822 million decrease in our imports of civilian aircraft, and a $449 million decrease in our imports of semiconductors….in addition, our imports of automotive vehicles, parts and engines fell by $1,428 million to $33,132 million on a $845 million decrease in our imports of passenger cars and a million decrease in our imports of automotive parts and accessories other than engines, chassis, and tires, while our imports of our imports of foods, feeds, and beverages fell by $263 million to $16,647 million, and our imports of other goods not categorized by end use fell by $1,171 million to $12,420 million….

The News Release for this month’s report also summarizes Exhibit 19 in the full release, which gives us surplus and deficit details on our goods trade with selected countries:

The September figures show surpluses, in billions of dollars, with Switzerland ($6.6), Netherlands ($5.9), South and Central America ($5.0), Hong Kong ($2.1), Belgium ($1.4), Brazil ($1.3), United Kingdom ($1.1), Australia ($0.5), Saudi Arabia ($0.4), and Singapore ($0.1). Deficits were recorded, in billions of dollars, with Ireland ($18.2), Mexico ($17.8), European Union ($17.8), Vietnam ($14.4), China ($11.4), Taiwan ($9.4), Canada ($4.9), Germany ($4.6), Japan ($3.6), South Korea ($3.4), India ($3.1), Malaysia ($1.8), Italy ($0.4), France ($0.3), and Israel ($0.1).

• The balance with Switzerland shifted from a deficit of $0.1 billion in August to a surplus of $6.6 billion in September. Exports increased $7.1 billion to $10.8 billion and imports increased $0.3 billion to $4.1 billion.
• The deficit with China decreased $4.0 billion to $11.4 billion in September. Exports increased $0.2 billion to $8.8 billion and imports decreased $3.9 billion to $20.1 billion.
• The deficit with Ireland increased $15.3 billion to $18.2 billion in September. Exports decreased $0.5 billion to $1.7 billion and imports increased $14.8 billion to $19.9 billion.

To gauge the impact of 3rd quarter international goods trade on 3rd quarter GDP growth figures, we use exhibit 10 in the full pdf for this report, which gives us monthly goods trade figures by end use category and in total, already adjusted in chained 2017 dollars, the same inflation adjustment used by the BEA to compute the impact of foreign trade on GDP, except that the figures are not annualized here….from that table, we can compute that 2nd quarter real exports of goods averaged 150,364 million monthly in 2017 dollars, while the similarly inflation adjusted July, August and September goods export figures were at 146,945 million, 145,752 million, and 151,940 million respectively, in that same 2017 dollar quantity index representation…computing the annual rate of change between the second and third quarter inflation adjusted averages, we find that the 3rd quarter’s real exports of goods are running at a 5.60% annual rate below those of the 2nd quarter, or at a pace that would subtract about 0.39 percentage points from 3rd quarter GDP….in a similar manner, we find that our 2nd quarter real imports of goods averaged 238,065.3 million monthly in chained 2017 dollars, while inflation adjusted July, August and September goods imports were at 246,532 million, 229,455 million and 230,964 million in 2017 dollars respectively…that would mean that so far in the 3rd quarter, our real imports have risen at a 4.00% annual rate from those of the 2nd quarter…since imports subtract from GDP because they represent the portion of consumption or investment that occurred during the quarter that was not produced domestically, their decrease at a 4.00% rate would conversely add about 0.57 percentage points to 3rd quarter GDP…..hence, with our imports half again larger than our exports, our improving ​3rd quarter balance of trade in goods over that of the 2nd quarter would add about 0.18 percentage points to the growth of 3rd quarter GDP….

Hiring and Job Quitting Fell in October, Layoffs Rose; Job Openings Barely Changed

The Job Openings and Labor Turnover Survey (JOLTS) report for September from the Bureau of Labor Statistics, which should have been released early November, was cancelled due to the shutdown…however, the BLS had partial data for September that businesses ​had self-reported electronically during the shutdown, and additional data for September they collected in November after the end of the shutdown….that September data has thus been included in this week’s release for October, data for which was collected after the shutdown ended..

The Job Openings and Labor Turnover Survey (JOLTS) report for October estimated that seasonally adjusted job openings increased by 12,000, from 7,658,000 openings in September to 7,670,000 in October, after September’s job openings were revised 71,000 lower, from 7,443,000 to 7,658,000 ….October’s jobs openings were also 0.7% higher than the 7,615,000 job openings reported in October a year ago, as the job opening ratio expressed as a percentage of the employed rose remained at 4.6% in October, and was also unchanged from 4.6% in October a year ago…among the largest percentage job opening changes were a 142,000 job opening increase to 762,000 openings in the retail sector, and a 52,000 job opening increase to 205,000 openings in the wholesale sales sector, figures which are seasonally adjusted, while job openings in finance and insurance fell from 293,000 to 224,000 (see table 1 for more details)…like most BLS releases, the press release for this report is easy to understand and also refers us to the associated tables for the data cited, which are linked to at the end of the release…

The JOLTS release also reports on labor turnover, which consists of hires and job separations, which in turn is further divided into layoffs and discharges, those who quit, and ‘other separations’, which includes retirements and deaths….in October, seasonally adjusted new hires totaled 5,149,000, down by 218,000 from the revised 5,367,000 who were hired or rehired in September, as the hiring rate as a percentage of all employed fell from 3.4% in September to 3.2% in October, and was also down from from the 3.4% hiring rate in October a year earlier (details of hiring by sector since March are in table 2)….meanwhile, total separations fell by 214,000, from 5,264,000 in September to 5,050,000 in October, while the separations rate as a percentage of the employed fell from 3.3% in September to 3.2% in October, and was also down from 3.3% in October a year ago (see table 3)….subtracting the 5,050,000 total separations from the total hires of 5,149,000 would imply an increase of 99,000 jobs in October, which ​c​an be seen as a reasonable stand in for the cancelled October establishment survey, after allowing for the expected +/-115,000 margin of error for these extrapolated reports….

Breaking down the seasonally adjusted job separations, the BLS finds that 2,941,000 of us voluntarily quit our jobs in October, down by 187,000 from the 3,098,000 who quit their jobs in September, while the quits rate, widely watched as an indicator of worker confidence, fell to 1.8% of total employment from 2.0% in September, and was also down from the 2.0% quits rate of a year earlier (see details in table 4)….in addition to those who quit, another 1,854,000 were either laid off, fired or otherwise discharged in October, up by 73,000 from the revised 1,781,000 who were discharged in September, while the discharges rate rose to 1.2% of all those who were employed during the month, up from the discharges rate of 1.1% in September and also up from 1.1% a year earlier….meanwhile, other separations, which includes retirements and deaths, were at 255,000 in October, down from 354,000 in September, for an ‘other separations rate’ of 0.2%, which was unchanged from September and from October of last year….both seasonally adjusted and unadjusted details by industry and by region on hires and job separations, and on job quits and discharges can be accessed by using the links to tables at the bottom of the press release…

September Wholesale Sales Fell 0.2%, Wholesale Inventories Rose 0.5%

The September report on Wholesale Trade, Sales and Inventories (pdf) from the Census Bureau estimated that the seasonally adjusted value of wholesale sales during the month was $708.2 billion, down 0.2 percent (±0.4 percent)* from the revised August level, but 4.8 percent (±0.7 percent) higher than the wholesale sales of September 2024… the August preliminary sales estimate was revised down to $709.36 billion from the $711.1 billion in wholesale sales reported last month, which thus revised the July to August change in sales from up 0.1 percent (±0.4 percent)* to down 0.2 percent (±0.4 percent)*.…as an intermediate economic activity, wholesale sales are not included in GDP except insofar as they are a trade service, since the traded goods themselves do not represent an increase in the output of the goods produced or finally sold….

On the other hand, the monthly change in private inv0entories is a major factor in GDP, since additional goods left in a warehouse represent goods that were produced but not sold, and this September report estimated that wholesale inventories were valued at a seasonally adjusted $911.5 billion at month end, up 0.5 percent (±0.2 percent) from the revised August level and 1.8 percent (±0.9 percent) higher than in September a year ago….August’s inventory value was revised from the $907.9 billion reported last month to $907.4 billion, which​ is now a 0.1% decrease from July…

September’s wholesale inventories would be adjusted for inflation with the appropriate sub-indices of the September producer price index, which showed that aggregate prices for finished goods were on average 0.9% higher, that prices for intermediate processed goods were 0.4% higher, and that prices for unprocessed goods were 0.1% higher….since about 70% wholesale inventories are finished goods and about 30% are commodities, those producer price changes suggest a modest real decrease in September’s inventories …however, since the key source data and assumptions (xls) for the third estimate of 2nd quarter GDP indicated that real wholesale inventories were down sharply in the 2nd quarter, accounting for over 35% the quarter’s record inventory decrease, that this report appears to indicate a smaller real decrease in aggregate September’s ​real wholesale inventories would therefore mean that the difference between the 2nd quarter decrease and the third quarter decrease would be added to the 3rd quarter’s real growth in GDP…

 

 

(the above is the synopsis that accompanied my regular sunday morning news links emailing, which in turn was mostly selected from my weekly blog post on the global glass onion…if you’d be interested in receiving my weekly emailing of selected links, most of which are chosen from the aforementioned GGO posts, contact me…)