Job openings in the manufacturing sector rose to a new all-time high, up from 496,000 in April to 509,000 in May. Durable goods job postings increased to 323,000 in May, the highest level since January 2001 (329,000), and openings in the nondurable goods sector also improved to a six-month high in the latest report, at 185,000.
There continued to be more job openings in the U.S. economy (7,323,000) than the number of people looking for work (5,888,000 in May and 5,975,000 in June) for the 15th straight month. That suggests there were roughly 1.4 million more job postings than there were unemployed people to fill them, echoing the workforce concerns seen in the manufacturing sector.
The National Federation of Independent Business also continued to find the difficulties in filling jobs as their top “single most important problem” in its June survey. Overall, the Small Business Optimism Index signaled highly elevated sentiment among owners, even as trade uncertainties caused the measure to drop slightly in the latest month.
Americans appeared to be willing to incur more credit card debt, which should boost spending, with U.S. consumer credit outstanding increasing 5.0 percent in May. This extended the solid 5.2 percent gain in April, with revolving credit largely boosting the latest figures.
The Federal Reserve seems poised to cut short-term interest rates after its July 30–31 meeting, according to testimony from Federal Reserve Chair Jerome Powell. In his Semiannual Monetary Policy Report to Congress, Powell referred to “uncertainty” in the economic outlook, both from slowing global growth and in trade policy. As such, the statement noted that some Federal Open Market Committee participants “saw the case for a somewhat more accommodative monetary policy.” Financial markets have already priced in a 25-basis-point cut in the federal funds rate.
Decelerating inflationary pressures, both for consumer and producer prices, are aiding the FOMC’s more “dovish” stance. Reduced energy costs have helped to keep a lid on pricing pressures in May and June, and overall core inflation continues to hover around the Federal Reserve’s stated goal of 2 percent.