On July 2nd, the Bureau of Labor Statistics released its monthly non-farm payroll report for the month of June. In June the U.S. economy added 4.8 million jobs. May and June saw Industrial indicators like durable goods orders and light vehicle sales rebound from April lows. However, levels still remain at some of the lowest points since the 08 recession.
The 4.8 million June Jobs number far exceeded consensus estimates for an increase of 2.9 million. However, the number of workers on temporary layoff also decreased by 4.8 million. Suggesting almost all of the jobs were workers returning from COVID shutdowns. Despite the positive jobs report. Initial jobless claims, also released earlier this morning were higher than expected at 1.427 million for the week ended June 27. Continuing claims remained stubbornly high at over 19 million and actually increased for the first time in several weeks to 19.29 Million. An increase of 61,000 from the week before. Previous weeks have seen steep drops from April Highs before flattening in recent weeks. This may reflect some state and corporate pauses in reopening plans as positive case counts have begun rising in recent weeks.
Beyond the jobs front, Industrial production recorded a reading of 92.6 in May, a slight rebound from April’s 91.3 reading. Market participants are hoping for a rise in June as states and economies implement easing restrictions but will still be far below the 109.4 reading as recently as February.
Durable goods orders, an important metric regarding the industrial and manufacturing economy, plummeted from recently stable levels to Great Recession lows as economies in the U.S. and across the world shut down in March and April. The May reading saw a small bounce back. Durable goods orders are still at the lowest levels since 2009. June’s reading will be closely watched to see the impact of orders as economies continue the reopening process.
One bright note for demand; several commodities have returned to at or near pre-COVID levels. Copper closed at $2.73 per pound on July 1, 2020. Its highest level since January 22, before the virus, took a major impact on world economies. Corn prices per bushel have rebounded recently closing at $3.51 on July 1. Still down from the $3.70 level, it was trading at on or around March 1, and YTD highs of around $3.90. Considerably higher than the $3.06 low seen on April 28th.
Many other indicators remain at lowered levels. Housing starts in May were 974,000 on an annualized basis. 23% below the same period in the previous year*. Capacity Utilization remains at the lowest levels on record after only rebounding one point to 65% in May. After a reading of 77% as recently as February.
As companies continue reopening efforts, Andress Engineering remains open and ready to support our loyal customers with our over 60 years of experience. We stand by ready to meet your Trackmobile rail car mover, compressed air systems, crane & hoists, and industrial chiller needs. Contact Andress Engineering today.