Taking the Temperature of U.S. Jobs and Global Manufacturing

Employees work on the assembly line of a car factory in Qingdao, eastern China's Shandong province. ENLARGE
Employees work on the assembly line of a car factory in Qingdao, eastern China’s Shandong province. Photo: STR/AFP/Getty Images

This week, data releases will shine a light on U.S. job growth in April and the trade gap for March, plus offer updates from the manufacturing sector in the U.S., China, Japan and other major economies.

MONDAY: Reports from around the world will provide a fresh look at the health of the global manufacturing industry. The closely watched ISM Manufacturing Index in the U.S. registered growth in April for the first time since August, with 12 out of 18 industries expanding. The overall index registered 51.8—a reading above 50 indicates expansion.

Separate surveys of purchasing managers, known as PMIs, from Nikkei and Markit Economics will show snapshots of the health of manufacturers in major economies such as Japan, the eurozone and Canada. These reports will provide clues on whether industrial output in the world is truly shaking off its doldrums or sliding back into a slump.

TUESDAY: The Caixin Manufacturing PMI—a private gauge of China’s health—clocked in at 49.7 in March, just below the critical dividing line of 50. China’s slowdown has contributed to everything from wobbly financial markets to collapsing commodity prices, as investors have watched demand from the world’s second largest economy evaporate.

WEDNESDAY: Watch the Commerce Department’s report on the U.S. trade gap to see if the global economy is regaining its footing. The lack of demand for American-made goods and services has held down exports and crimped U.S. growth. The trade gap widened 2.6% in February, but there are tentative reasons for optimism, especially if the manufacturing data comes in strong and if the dollar stays somewhat weaker.

Back to Work / Monthly change in nonfarm payrolls, including the forecast for April 2016 ENLARGE
Back to Work / Monthly change in nonfarm payrolls, including the forecast for April 2016 Source: Labor Department

FRIDAY: Any weakness in manufacturing may be quickly forgotten if the U.S. jobs report remains robust. In March, the economy added 215,000 jobs and the unemployment rate stood at 5%. The Labor Department’s broadest measure of underemployment stood at 9.8%. While neither rate is completely back to normal, both have persistently declined in recent years. The steady improvement in the U.S. labor market has repeatedly proved a bulwark against global instability since the financial crisis. After all, job growth in the range of several hundred thousand a month can offset a lot of international weakness.


WSJ.com: US Business

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