- Latest JOLTS report shows there were 855,000 job openings in manufacturing in January. The number of jobs available continues to exceed pre-pandemic levels. Over the past 10 months, job openings in the sector have averaged 873,000, including the record 943,000 in July.
- Total quits in the manufacturing sector rose from 322,000 in December to 331,000 in January, a new record. That is approximately 2.6% of the manufacturing workforce.
- JOLTS Link: https://www.bls.gov/news.release/pdf/jolts.pdf
New York Fed Manufacturing Survey
“Business activity declined in New York State for the first time since early in the pandemic, according to firms responding to the March 2022 Empire State Manufacturing Survey. The headline general business conditions index fell fifteen points to -11.8, its lowest level since May 2020. New orders and shipments declined modestly, while unfilled orders increased. Delivery times continued to lengthen substantially, and inventories expanded.”
Link to NYFED Survey: https://www.newyorkfed.org/survey/empire/empiresurvey_overview
FOMC Monetary Policy Statement
The most important rate in the world is the cost of money.
“The federal funds rate is the FOMC’s main policy rate. Changes in the federal funds rate trigger changes in other short- and medium-term interest rates, the foreign exchange value of the U.S. dollar, and other asset prices that influence households’ and businesses’ spending and investment decisions.”- Chicago Fed https://www.chicagofed.org/research/dual-mandate/the-federal-funds-rate
Today, the FOMC announced “The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With appropriate firming in the stance of monetary policy, the Committee expects inflation to return to its 2 percent objective and the labor market to remain strong. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 1/4 to 1/2 percent and anticipates that ongoing increases in the target range will be appropriate. In addition, the Committee expects to begin reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities at a coming meeting.”
Chairman Powell had already preannounced a quarter point hike to Congress. This was no surprise, and disappointing to many who thought that the current round of inflation needs stronger medicine.
With Consumer prices up 0.8% in February (Food up 1%, Energy up 3.5%, and Gasoline up 6.6%) there is no denying the need to take strong action against inflation.
Producer prices up 0.8% in February- up 10.0% over last 12 months. This is the rate that affects our shops, and will ultimately drive higher the price of goods purchased by the consumers.
One can use the average of the CPI and the PPI to indicate the current level of inflation across the entire economy. With CPI up 7.9% over the past year, and PPI up 10.0% we are experiencing inflation of 8.95% over the past year.
PPI link: https://www.bls.gov/ppi/
CPI link: https://www.bls.gov/cpi/
FOMC Statement Link: https://www.federalreserve.gov/newsevents/pressreleases/monetary20220316a.htm
FOMC Projections Link: https://www.federalreserve.gov/monetarypolicy/fomcprojtable20220316.htm