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Utah Labor Market Indicators - July 2008 (June/May/Apr/Mar/Feb/Jan 08)

Who is gaining jobs? - Jan - Jul 2008

Who are losing jobs? - Jan - Jul 2008

• Utah -2,308 -1.3%
• Washington -677 -1.3%
• Davis -180 -0.2%
• Juab -149 -4.1%
• Iron -109 -0.7%
• Wasatch -103 -1.5%

What jobs are we losing? - July 2008 - Higher Wage Jobs

What jobs are we gaining? - July 2008 - Lower Wage Jobs

Source: Utah Dept of Workforce Services, 8/13/08

• Global Business Confidence
• Global businesses are very nervous. They are more upbeat than they were in the spring, but confidence is low and fragile. The survey results suggest that the global economy is just barely skirting recession. The U.S., European and Japanese economies are contracting according to the survey results, but the Asian economy continues to post growth that is near its potential. Businesses are notably worried about sales, and their broad assessments of present conditions and the outlook into 2009 remain firmly negative. Pricing pressures continue to be very elevated, but have moderated a bit with the recent decline in energy and other commodity prices.

• Treasury Budget
• The unified budget deficit for July was $103 billion, slightly larger than the CBO's estimate. The federal government has run a deficit of $371 billion through the first 10 months of fiscal 2008; this is 136% larger than the deficit at the same point in fiscal 2007. After a few years of improvement, the federal budget deficit is again widening because of the poor economy, strong spending growth, and the economic stimulus package.

• International Trade (FT900)
• The U.S. trade deficit narrowed to $56.8 billion in June. The consensus had expected a widening to $61.5 billion.

• Import and Export Prices
• Import prices moderated in July but remain uncomfortably high. The import price index rose a larger than expected 1.7% in July compared with June's upwardly revised 2.9% growth (previously 2.6%). Export prices increased 1.4% following a 1% gain the previous month. Import prices are expected to moderate over the next few months but will keep the Federal Reserve on the sidelines through year's end.

• Business Inventories (MTIS)
• Total business inventories increased by 0.7% in June, above expectations. Retail inventories are the only new data in this report, and they fell modestly, led by declines at retail auto dealers. Meanwhile, the retail I/S ratio declined for the second consecutive month, evidence that retailers are trying to pare back inventories in the face of weak domestic demand.

• Fed Senior Loan Officer Opinion Survey
• The July Senior Loan Officer Opinion Survey from the Federal Reserve indicated further tightening in lending standards over the previous three months. About 60% of large banks indicated tighter standards for commercial and industrial loans from the prior survey. Fully three-quarters of banks reported tightening standards on prime mortgage loans since the spring and the share of banks tightening standards on credit card loans more than doubled since the last survey.

• CPI
• The Consumer Price Index decelerated in July. The top-line CPI increased by 0.8% for the month and 5.6% for the year in July compared with 1.1% for the month and 4.9% for the year in June. The core CPI rate of inflation remained level at 0.3% for July, the same as in June, though the core rate of inflation for the year was 2.5% in July compared with 2.4% in June. The main component of the slowdown was energy, which increased 4% for the month in July compared with 6.6% in June. Food prices increased 0.9% for the month compared with 0.8% in June. Top- line inflation is slowing thanks mainly to the fall in oil and gasoline prices since June.

• Jobless Claims
• Initial claims for unemployment insurance benefits decreased 10,000 to 450,000 for the week ending August 9. This is generally in line with expectations. This remains on the high end of UI claims for the last several months, though that is not necessarily meaningful considering the known impact on claims from the extension of UI benefits.

• Job Openings and Labor Turnover Survey
• The June JOLTS release depicts a weak but stable labor market. The hire rate improved slightly in June, to 3.1% from 3% in May, as did the number of people hired. Further, the separation rate was unchanged, at 3.1%, while the number of people who left their jobs declined. In June, 4.33 million people found new jobs, while 4.25 million left their jobs. The availability of jobs was unchanged as well.

• NAR Metro Prices
• While the descent in the national median house price is stabilizing at 8% y/y, substantial weakness persists in key regions, according to second quarter median existing house price data from the National Association of Realtors. The brunt of the decline is occurring in California, Florida, Nevada and Arizona metro areas. The industrial Midwest is also performing poorly. Combined with the sales data, it is clear that foreclosure sales are driving the descent in house prices.

• MBA Mortgage Applications Survey
• The market composite indices finished mixed for the week ending August 8. The market index fell by 1.5% from the previous week, based entirely on a 4.2% fall in the refinance index. Purchase activity remained unchanged-the purchase index stayed level over the past week. With contract rates remaining high and continuing to increase slowly, the demand side of the mortgage market remains weak.

• Retail Sales (MARTS)
• Total retail sales inched down 0.1% in July, following a revised 0.3% gain in June (originally 0.1%) as a decline in sales at auto dealers offset strong growth elsewhere. Sales excluding autos rose 0.4% after gaining 0.9% in June. Furniture stores and gasoline stations led growth in July. Core sales rose 0.3%.

• Chain Store Sales
• Chain store sales fell 1.1% in the week ending August 9 according to the ICSC. This was the first decline in seven weeks. Year-over-year growth slipped to 2.6%.

• Oil and Gas Inventories
• Crude oil inventories fell by 0.4 million barrels for the week ending August 8, according to the Energy Information Administration, exceeding expectations of a 0.2 million barrel decline. Gasoline inventories plummeted by 6.4 million barrels, far surpassing estimates of a 2.1 million barrel decline. Distillate supplies unexpectedly fell by 1.7 million barrels, contrasting expectations of a 1.9 million barrel build. Refinery operating capacity fell to 85.9%. Total domestic petroleum demand rose modestly. This report is bullish.

• Natural Gas Storage Report
• Working gas in underground storage rose by 50 billion cubic feet during the week ending August 8, slightly below consensus expectations of a 53 bcf build. This report will have little impact on natural gas prices.