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TUESDAY DATA DOWNPOUR: JOLTS, SERVICES PMI, TRADE BALANCE, NEW HOME SALES

Investors were greeted by a hodgepodge of economic indicators on Tuesday. Cumulatively, they painted a partly sunny picture.

Job openings in the United States decreased by 0.8% in March to 6.866 million, according to the Labor Department's Job Openings and Labor Turnover Survey (JOLTS) USJOLT=ECI.

That's 32,000 more than analysts expected.

The JOLTS report, which tracks labor market churn, also showed hiring jumped by 13.4%.

But firings also increased, rising 8.9%, while quits surged by 6.3%. The quit rate - a metric often associated with consumer expectations - was little changed, at 2.0% of the workforce.

"The March JOLTS report undermines the theory that labor demand is picking up," says Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics. "Unofficial indicators suggest labor demand is still fading, perhaps at a faster rate since the conflict in the Middle East began."

JOLTS is the first of several labor market indicators on deck this week, leading up to the April employment report on Friday. Economists predict the U.S. economy added a languid 62,000 jobs last month, with the jobless rate holding firm at 4.3%.

Moving on to the services sector, which continued to expand last month, but lost a bit of momentum, according to the Institute for Supply Management (ISM).

ISM's non-manufacturing PMI USNPMI=ECI shaved off 0.4 points to 54.4 in April, well above the magic PMI level of 50, the dividing line between contraction and expansion.

Analysts predicted a 0.3 percentage point deceleration.

A closer gander at the index's subcomponents shows new orders lost steam, dropping by the most in three years, while production gained some velocity. Employment improved, but remained the only component in contraction territory.

Prices paid - an inflation predictor - held steady at 70.7, the highest since 2022 amid the war-related spike in energy prices.

"We expect to see continued elevated readings for the Prices Index for several months — regardless of when the conflict in Iran ends — due to these costs working their way through global supply chains," writes Steve Miller, chair of ISM's Services Business Survey Committee.

For its part, S&P Global's final take on April services PMI USMPSF=ECI, paints a slightly less rosy picture, shedding 0.3 of a point from its initial "Flash" take to land at 51.0, or 1.4 points stronger than March's final number.

Taken together with Friday's manufacturing PMI, S&P Global's composite reading edged down to 51.0.

"The direct impact of the war has been most evident in consumer-facing services, as high prices have led to a pull-back in discretionary spending on activities such as holidays and recreation, though transport has also been curbed by high fuel prices and travel disruptions," says Chris Williamson, chief business economist at S&P Global.

Moving on to trade, the difference in the value of goods and services imported into the U.S. and those exported abroad widened by 4.3% to $60.3 billion in March, according to the Commerce Department's report USTBAL=ECI.

That was just a hair narrower than economists predicted.

Under the hood, exports increased by 2.0%, and imports grew by 2.3%. Both marked a deceleration from February's respective readings of 4.1% and 4.4%. The closely watched trade deficit with China narrowed by 11.4% to $9.76 billion.

"The trade gap averaged a whopping -$128B a month in the first quarter of last year," notes Carl Weinberg, chief economist at High Frequency Economics. "That is a huge improvement and suggests net exports will add to year-over-year GDP growth."

"A narrowing nominal trade (gap) supports national income growth," Weinberg adds.

Finally, the sales of freshly constructed single-family U.S. homes USHNS=ECI rose by 7.4% in March to 682,000 units at a seasonally adjusted annualized rate (SAAR), according to the Commerce Department.

It marks a partial rebound from February's 19.9% plunge and was 4.9% better than the 650,000 units SAAR consensus.

At March's rate of new home sales, it would take 8.5 months to sell every unit on the market, down from 9.1 months in February.

"After some weather-related weakness in January and February, new home sales staged a modest rebound in March," says Nancy Vanden Houten, lead U.S. economist at Oxford Economics. "We don’t see much upside for sales in the near term, though, as higher interest rates and gasoline prices squeeze household budgets."

(Stephen Culp)

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