Trends

August 11-24, 2022 The Business Times News PAge 19 Trends

INDICATORS AT A GLANCE n Business filings Contributors t New business filings in Colorado, 43,780 in the first quarter, down 2.1 percent from the first quarter of 2021. OpinionPhil Castle Business Times Business Briefs Business People n Confidence t Consumer Confidence Index 95.7 for July, down 2.7. t Leeds Business Confidence Index for Colorado, 41.1 for the third quarter, down 12.8. s National Federation of Independent Business Small Business Optimism Index 89.9 for July, up 0.4. The unemployment rate increased in Mesa County in June — something of seasonal speed bump attributed in part to college and high school graduates entering the labor market, but not yet finding jobs. But at three-tenths of a point, the June jump this year was smaller than last year. Moreover, the latest jobless rate is lower at Almanac 3.6 percent. n Foreclosures While a shrinking labor force remains s Foreclosure filings in something to watch, overall conditions have Mesa County, 20 in improved, said Curtis Englehart, former July, up from 2 in director of the Mesa County Workforce July 2021. Center in Grand Junction. “It’s really a much s Foreclosure sales in different outlook.” Mesa County, 6 in The seasonally unadjusted unemployment rate rose in Mesa July, up from 0 in County from 3.3 percent to 3.6 percent between May and June, July 2021. according to the latest estimates from the Colorado Department n Indexes of Labor and Employment. Last year, the rate spiked from 5.8 percent to 6.7 percent.t Conference Board Employment Trends Index, 117.53 for July, down 1.18. t Conference Board Leading Economic Index 117.1 for June, down 0.8. Between May and June 2022, Mesa County payrolls decreased 992 to 75,046. The number of people counted among those unsuccessfully looking for work increased 273 to 2,833. The labor force, which includes the employed and unemployed, shrank 719 to 77,879. The labor force has declined t Institute for Supply Management Purchasing Managers Index for manufacturing, 52.8% for three consecutive months — small decreases Englehart said don’t raise alarms, but the trend is worth watching. Over the past year, payrolls increased 3,094 — or 4.3 percent. July, down 0.2%. The ranks of the unemployed decreased 2,316. The labor force n Lodging grew 778. Labor demand as measured by the number of job orders s Lodging tax collections in posted at the Mesa County Workforce Center has slowed from Grand Junction, $527,820 what Englehart said was an unsustainable pace last year. for June, up 28.5% from June 2021.

June jobless rate jumps

But seasonal speed bump in Mesa County still smaller than last year For June, 862 orders were posted. That’s down from 1,060 for the same month last year. For the first half of 2022, 4,968 orders were posted. That’s down from 5,567 for the first half of 2021. Englehart said the latest numbers of job orders remain healthy, but also indicate more employers are filling positions in a tight labor market. Looking ahead to the second half of 2022, Englehart said he expects the unemployment rate to edge down. But the decreases likely will be incremental since the jobless rate has remained below 4 percent for four straight months. Barring any unforeseen events, the outlook is encouraging, he said. “I think Mesa County is in a really good place for 2022.” Seasonally unadjusted unemployment rate also rose in neighboring Western Colorado counties in June: up two-tenths of Curtis Englehart a point to 3.4 percent in Delta County and up a tenth of a point to 3.1 percent in Montrose County and 3.8 percent in Rio Blanco County. The jobless rate held steady at 2.8 percent in Garfield County. The statewide seasonally adjusted unemployment rate retreated a tenth of a point to 3.4, the lowest level since the rate stood at 2.8 percent in February 2020 before the onset of the COVID-19 pandemic in the United States. Nonfarm payrolls increased 4,500 between May and June. Over the past 26 months, nonfarm payrolls increased 412,300, more than offsetting jobs lost in early 2020 because of the pandemic and related restrictions. Over the past year, payrolls increased 111,700 with the biggest gains in the leisure and hospitality; professional and business services; and trade, transportation and utilities sectors. No sectors lost jobs during that period. The average workweek for employees on private, nonfarm payrolls shortened six-tenths of an hour over the past year to 33.2 hours. Average hourly earnings increased $2.61 to $34.21. F

AREA JOBLESS RATES June May

s Delta County 3.4 3.2 n Garfield County 2.8 2.8 s Mesa County 3.6 3.3 s Montrose County 3.1 3.0 s Rio Blanco County 3.8 3.7

n Real estate

t Real estate transactions in Mesa County, 396 in July, down 33.4% from July 2021. t Dollar volume of real estate transactions in Mesa County, $170 million in July, down 29.7% from July 2021. n Sales

s Sales and use tax collections in Grand Junction, $6.3 million for June, up 8.6% from June 2021. s Sales and use tax collections in Mesa County, $4.2 million for June, up 10.4% from June 2021. n Unemployment

s Mesa County — 3.6% for June, up 0.3.

t Colorado — 3.4% for June, down 0.1. t United States — 3.5% for July, down 0.1.

Business index edges up, but reflects uncertainty

A measure of optimism among small business owners has edged up, but remains below its historical average as uncertainty over inflation, labor shortages and other problems persist.

The National Federation of Independent Business reported its Small Business Optimism Index rose four-tenths of a point between June and July to 89.9. The index has remained below its historical average of 98 for six straight months, however. “The uncertainty in the small business sector is climbing again as owners continue to manage historic inflation, labor shortages and supply chain disruptions,” said Bill Dunkelberg, chief economist of the NFIB. “As we move into the second half of 2022, owners will continue to manage their businesses into a very uncertain future.”

The NFIB bases the index on the results of monthly surveys of members of the small business advocacy group, most of them small business owners. For July, six of the 10 components of the index decreased and four increased.

The proportion of NFIB members who responded to the survey upon which the July index was based who said they expect the economy to improve over the next six months rose nine points between June and July. The increase was the first this year. But at a net negative 52 percent, more of those who responded anticipated

worsening economic conditions in the months ahead. A net 22 percent of respondents reported plans for capital outlays, down a point. A net 4 percent said they consider now a good time to expand, up a point. The share of those who reported plans to increase staffing rose a point to a net 20 percent. But a net 49 percent also reported unfilled job openings, down a point. The proportion of respondents who said they expect increased sales fell a point to a net negative 29 percent. A net 1 percent reported plans to increase inventories, up three points. A net 2 percent said current inventories were too low, down three points. Bill Dunkelberg The share of those who expect increased profits fell a point to a net negative 26 percent. Among those reporting lower profits, 40 percent blamed the rising cost of materials and 17 percent cited weaker sales. Asked to identify their single most important problem, 37 percent cited inflation. That’s an increase of three points from June and the largest proportion since the fourth quarter of 1979. Another 21 percent of respondents cited quality of labor. A net 56 percent of respondents reported raising their average selling prices, down seven points from June. Price hikes were most frequent in the wholesale, manufacturing, construction and retail sectors.

The Business Times U.S. payrolls up, jobless rate down

United States payrolls increased and the unemployment rate edged down in July as the two measures of the labor market returned to pre-pandemic levels.

Nonfarm payrolls increased 528,000 and the jobless rate retreated a tenth of a point to 3.5 percent, according to the latest Bureau of Labor Statistics estimates.

The monthly payroll increase was the largest since the addition of 714,000 jobs in February and exceeds the average monthly gain of 388,000 jobs over the past four months.

Total nonfarm employment has increased 22 million since reaching a low in April 2020. Private sector employment is 629,000 higher now than in February 2020 and the onset of the COVID-19 pandemic in the U.S.

The unemployment rate similarly returned to its level in February 2020.

Payroll gains for the previous two months were revised upward a total of 28,000 to 398,000 for June and 386,000 for May.

For July, 5.7 million people were counted among those unsuccessfully looking for work. Of those, 1.1 million had been out of work 27 weeks or longer. Another 3.9 million people were counted among those working part-time because their hours were cut or they were unable to find full-time positions.

The labor participation rate — the portion of the population working or looking for work — edged down a tenth of a point to 62.1 percent. That remains below the 63.4 percent level in February 2022.

Payroll gains for July were spread out among industry sectors.

Employment increased 96,000 in leisure and hospitality, although the sector has yet to regain all the jobs lost in the aftermath of the pandemic and related restrictions.

Employment increased 89,000 in business and professional services, 70,000 in health care and 57,000 in government. Payrolls grew 32,000 in construction, 30,000 in manufacturing and 22,000 in retail trades.

The average workweek for employees on private, nonfarm payrolls remained unchanged at 34.6 hours for a fifth consecutive month. The average manufacturing workweek held steady at 40.4 hours.

Average hourly earnings for employees on private, nonfarm payrolls increased 15 cents to $32.27. Over the past year, horuly earnings have increased 5.2 percent.

Index signals slowing ahead

A monthly index tracking labor trends in the United States has decreased, signaling what could be slowing job growth in the months ahead.

The Conference Board Employment Trends Index fell 1.18 points between June and July to 117.53.

Frank Steemers, a senior economist at the Conference Board, said the index has trended downward since March. “While the U.S. labor market is currently still robust, the recent behavior of the index signals that slower job growth should be expected over the next several months. This would bring the labor market in line with the rest of the economy, where economic activity has already been slowing.”

Steemer said a recession is likely to begin by the end of this year or early next year.

The index aggregates eight leading indicators of employment. For July, six indicators declined. F

F

Leading index retreats

An index forecasting economic conditions in the United States continues to retreat, signaling slowing growth and the possibility of recession. The Conference Board reported its Leading Economic Index fell eight-tenths of a point to 117.1 in June. With declines in each of the last four months, the Leading Economic Index fell 1.8 percent over the first half of 2022, reversing a 3.3 percent gain Ataman Ozyildirim over the second half of 2021. Ataman Ozyildirim, senior director of economic research at the Conference Board, said consumer pessimism, moderating labor conditions, falling stock prices and fewer new orders for manufactured goods drove down the index in June.

“Amid high inflation and rapidly tightening monetary policy, the Conference Board expects economic growth will continue to cool throughout 2022,” Ozuildirim said.

The Conference Board projected gross domestic product, the broad measure of goods and services produced in the U.S., to grow at an annual rate of 1.7 percent in 2022 and 0.5 percent in 2023.

The Coincident Economic Index increased two-tenths of a point to 108.6 in June. The index rose 1.2 percent during the first half of 2022.

The Lagging Economic Index rose eight-tenths of a point to 113.9 in June. The index increased 4 percent during the first half of the year. F

Consumer Confidence Index slips as concerns mount

A measure of consumer confidence has retreated for a third straight month on less upbeat assessments of business and labor conditions as well as growing concerns about inflation.

The Conference Board reported its Consumer Confidence Index fell 2.7 points to 95.7 in July. Components of the index tracking current conditions and expectations both declined. Lynn Franco

“The decrease was driven primarily by a decline in the Present Situation Index — a sign growth has slowed at the start of Q3,” said Lynn Franco, senior director of economic indicators at the Conference Board. “The Expectations Index held relatively steady, but remained well below a reading of 80, suggesting recession risks persist. Concerns about inflation — rising gas and food prices in particular — continued to weigh on consumers.”

Even as the Federal Reserve raised its short-term interest rate to curb inflation, plans to purchase homes, automobiles and major appliances pulled back, Franco said. “Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months.”

The Conference Board bases the index on the results of monthly household surveys. Economists closely monitor the index because consumer spending accounts for more than two-thirds of economic activity.

For July, less optimistic assessments of current conditions pulled down the Present Situation Index 5.9 points to 141.3.

The proportion of consumers responding to the survey upon which the July index was based who described business conditions as “good” fell 2.5 points to 15 percent. The share of those who characterized conditions as “bad” rose 1.2 points to 24 percent.

The proportion of consumers who said jobs were “plentiful” fell 1.4 points to 50.1 percent. The share of those who said jobs were “hard to get” rose seven-tenths of a point to 12.3 percent.

Less upbeat outlooks pulled down the Expectations Index a half point to 65.3.

The share of consumers who said they expect business conditions to improve over the next six months decreased six-tenths of a point to 14 percent. The proportion of those who anticipated worsening conditions also fell, though, 2.5 points to 27.2 percent.

The share of consumers who said they expect more jobs to become available slipped two-tenths of a point to 15.7 percent. The portion of those anticipating fewer jobs also retreated — eight-tenths of a point to 21.4 percent. F