Robert Hughes

Payrolls in the United States rose by 223,000 in May, solidly beating an expected rise of 188,000. Gains in the labor market have accelerated recently, reducing fears of a pending slowdown, yet the increases remain modest by historical comparison, suggesting that the slower and somewhat steadier gains of the current cycle may help prolong the expansion.

Retail sales rose 0.3 percent in April following a 0.8 percent increase in March. The April gain suggests that second-quarter GDP growth is off to a solid start.

Total job openings in the United States rose to a record 6.550 million in March while private-sector job openings totaled 5.928 million. Overall, the data relating to the labor market continue to show strength with payrolls rising, few layoffs, rising quits, and a declining number of available workers per opening. 

Real gross domestic product rose at a 2.3 percent annualized rate in the first quarter, down from a 2.9 percent pace in the fourth quarter of 2017. However, growth over the past four quarters hit 2.9 percent, the fastest four-quarter gain since the second quarter of 2015. 

The small-business-optimism index from the National Federation of Independent Business fell in March but the result extends a run of 16 consecutive months above 100, a very high level by historical comparison. A significant concern among small businesses is the declining quality of the available labor force, particularly in the context of an already tight labor market and robust plans for increased hiring in the near future.

The employment report was weaker than expected for March, adding just 103,000 new jobs for the month. However, there are a number of tensions among the details of the report and with other measures of the labor market. Certainly, the BLS report could be the first of a string of weaker reports on the labor market and the economy more broadly, but the preponderance of data still support a positive outlook.

Real GDP grew at a 2.9 percent pace in the fourth quarter as domestic demand surged. Most of the major components of GDP made positive contributions, and core consumer prices rose at a modest pace, however, corporate profits did show a decline.

The Consumer Confidence Survey from The Conference Board shows consumer attitudes pulled back slightly in March but remain at historically favorable levels overall, suggesting support for ongoing economic expansion.

The Chicago Fed’s National Activity Index jumped in February with the index coming in at 0.88, its second-highest reading over the past 11 years. The six-month average came in at 0.435, the highest since March 2006, suggesting economic growth remains above its long-term trend.

New orders for durable goods rose 3.1 percent in February to $247.7 billion. Over the past 12 months, total durable-goods orders are up 8.9 percent, and since hitting a recent low of $211.5 billion in June 2016, the gain is 17.1 percent.