NAM Economic Report: Quits in the Economy Hit All-Time Highs, with Job Openings Still Very Elevated

AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Monday Economic Report" from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).

By Chad Moutray, Ph.D., CBE – October 18, 2021

NAM Weekly Economic Toplines:

Manufacturing job openings  pulled back from a record high but remained very elevated, down from a revised 906,000 in July to 870,000 in August. It was the fifth straight month with postings that exceeded 800,000. In addition, quits in the manufacturing sector increased from 300,000 in July to 306,000 in August, a new all-time high. Likewise, nonfarm payroll quits soared from 4,028,000 to a record 4,270,000. Nonfarm business job openings decreased from a record 11,098,000 in July to 10,439,000 in August. There were 8,384,000 unemployed Americans in August, which translates to 0.80 unemployed workers for every one job opening in the U.S. economy. That speaks to the tightness of the labor market, with more job openings than people looking for work. According to the  National Federation of Independent Business , the percentage of small business respondents suggesting they had job openings they were unable to fill inched up from 50% to 51%, a new record, and the percentage of respondents saying there were few or no qualified applicants for job openings rose from 60% to a record 62%. Initial and continuing unemployment claims  dropped  to post-pandemic lows in the latest data. Consumer  and  producer  prices hit new record year-over-year paces in September, but core inflation moderated slightly (at still very elevated paces) in both measures. Food and energy costs helped buoy price growth in September, but on the consumer side, some easing occurred in costs for used cars and trucks and transportation services, both of which have propped up the CPI year to date. The price of new vehicles continued to rise solidly. For its part, the Federal Open Market Committee will likely start the process of tapering asset purchases at its next meeting on Nov. 2–3, with the federal funds rate edging higher by the second half of 2022. Even with those moves, monetary policy will continue to be highly stimulative for the foreseeable future. Manufacturing activity  slowed  but continued to expand solidly in October, according to the Empire State Manufacturing Survey. The index for delivery times soared to a record high. Input and output costs remained near record paces, but manufacturers in the New York Fed’s district remained very upbeat in their outlook. Retail sales  rose 0.7% in September, building on the 0.9% gain in August. The underlying data were mostly higher, which was an encouraging sign that consumer spending continues to rebound. Importantly, this included motor vehicles and parts dealers and food services and drinking places, both of which have been hard-hit over the past year. The  Index of Consumer Sentiment  declined from 72.8 in September to 71.4 in October, according to preliminary data from the University of Michigan and Thomson Reuters. This remains not far from August’s reading (70.3), which was the lowest since December 2011. Read Full Report