Initial Unemployment Claims Fell to Lowest Level Since 1969

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 – March 28, 2022

NAM Weekly Economic Toplines: 

The week ending March 19 saw 187,000 initial unemployment claims, the lowest level since the week ending Sept. 6, 1969. Similarly, the week ending March 12 saw 1,350,000 continuing claims, which was the best reading since the week ending Jan. 3, 1970. Overall, these data continue to reflect a labor market that has improved significantly across the past year. The S&P Global Flash U.S. Manufacturing PMI rose from 57.3 in February to 58.5 in March, with output expanding at the strongest pace since August. New orders, exports and employment also improved for the month, which was encouraging. The index for future output remained at the strongest reading since November 2020. Yet, manufacturers continued to cite supply chain bottlenecks and workforce shortages as significant challenges to growth, and pricing pressures remained highly elevated. Manufacturing activity in the Kansas City Federal Reserve Bank’s district expanded at the fastest pace on record in March, and in the Richmond Federal Reserve Bank’s region, activity rebounded in March after slowing to a crawl in February. Manufacturers cited supply chain disruptions, soaring costs, workforce difficulties and the Ukrainian war as significant challenges. Yet, survey respondents remained positive in their outlook for the next six months. In the Kansas City Fed’s survey, the expected indices for product prices soared to another all-time high in March, and manufacturers anticipated input costs to rise by just shy of February’s record pace. Inflation remained a challenge in the Richmond Fed’s release, as well. Meanwhile, the S&P Global Flash Eurozone Manufacturing PMI decreased from 58.2 in February to 57.0 in March, the slowest pace of growth since January 2021. The Russian invasion of Ukraine negatively impacted activity. Supplier delivery times worsened, and input prices remained not far from the record pace in October. New orders for durable goods fell 2.2% from a record $277.6 billion in January to $271.5 billion in February. Excluding transportation equipment, new durable goods orders declined 0.6% in February. Even with some easing, new orders have jumped 12.7% over the past 12 months, or 11.8% with transportation equipment excluded. At the same time, durable goods shipments were essentially flat from a record $270.7 billion in January to $270.6 billion in February. On a year-over-year basis, durable goods shipments have risen 12.4%, or 13.3% excluding transportation equipment. Core capital goods—a proxy for capital spending in the U.S. economy—pulled back 0.3% from a record $80.3 billion in January to $80.1 billion in February, and core capital goods shipments increased 0.5% from $79.3 billion to $79.7 billion, an all-time high. Overall, core capital goods new orders and shipments have risen 11.0% and 12.5%, respectively, over the past 12 months. The Index of Consumer Sentiment declined from 62.8 in February to 59.4 in March, the lowest reading since August 2011, according to revised data from the University of Michigan and Thomson Reuters. According to the release, “Inflation has been the primary cause of rising pessimism, with an expected year-ahead inflation rate at 5.4%, the highest since November 1981.” More positively, consumers remained upbeat about job growth for the months ahead. Pennsylvania created the most net new manufacturing jobs in February, adding 10,400 workers. Sixteen states have notched increased manufacturing employment since February 2020. States with the largest gains post-pandemic included Utah (up 10,200), Florida (up 7,500), Arizona (up 5,200), Tennessee (up 4,600) and Nevada (up 4,000). READ FULL REPORT