LIVE MARKETS-Prank-free data: Job openings slow, factories contract, construction rebounds

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PRANK-FREE DATA: JOB OPENINGS SLOW, FACTORIES CONTRACT, CONSTRUCTION REBOUNDS

A mixed bag of data awaited investors on April Fool's Day, much of it reflecting the pins and needles on which the market sits ahead of Trump's tariff announcements expected late afternoon Wednesday.

Job openings in the United States decreased by 2.5% in February to 7.568 million, according to the Labor Department's Job Openings and Labor Turnover Survey (JOLTS) USJOLT=ECI.

The decrease was unexpected; economists expected that number to remain essentially unchanged, at 7.616 million.

The JOLTS report, which tracks labor market churn, also showed a negligible uptick in the number of hires and fires, and a slight pullback in quits.

But the abrupt drop in job openings could reflect a softening demand for labor as businesses struggle with uncertainties arising from erratic trade policy shifts from the Trump administration.

"Elevated economic policy uncertainty began to weigh on labor demand in February, but a bigger decline likely lies ahead, given the further step-up in uncertainty over the past month," says Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.

Pivoting to manufacturing, U.S. factory activity dipped into contraction in March, as expected.

The Institute for Supply Management's (ISM) purchasing managers' index (PMI) USPMI=ECI shed 1.3 points to 49.0, just a hair shy of the 49.5 consensus.

And thus endeth the metric's brief, two-month stint north of 50, a level which serves as the PMI dividing line between monthly contraction and expansion.

Wandering into the weeds, expanding inventories were no match for weaker new orders, production and employment.

Prices paid - an inflation predictor - heated up by 7 points to 69.4, its highest reading since June 2022. This is a worrisome development for those watching for inflationary effects of the tariff chaos.

"If (tariffs) are imposed as threatened, U.S. industrial activity will fold sharply and immediately, and we will not have to wait until the next ISM survey to learn about it," writes Carl Weinberg, chief economist at High Frequency Economics.

Comments from ISM's survey participants are riddled with trade policy jitters. Phrases like "anxiety about continued tariffs" and "concerns about Canadians boycotting" and "tariffs are significantly impacting orders" are dominating the conversation.

Not to be outdone, S&P Global also released its final take on March manufacturing PMI USMPMF=ECI, which showed the sector dropping 2.5 points from the February reading, but clinging to expansion by its fingernails, at 50.2.

"The strong start to the year for US manufacturers has faltered in March," says Chris Williamson, chief business economist at S&P Global. "A combination of improved optimism surrounding the new administration and the need to front-run tariffs had buoyed the goods-producing sector in the first two months of the year, but cracks are now starting to appear."

The S&P Global and ISM indexes differ from each other in the weight they apply to the various components (new orders, employment, etc).

Here's how closely the dueling PMIs agree (or not):

Finally, expenditures on construction projects USTCNS=ECI rebounded quite nicely in February, rising 0.7% and breezing right past the 0.3% gain analysts expected.

This follows in the wake of January's 0.5% drop, which was at least partially attributable to a frigid weather spell that sent much of the country into a deep freeze during the first few weeks of the year.

Delving deeper into the Commerce Department's data, spending on residential projects dominated the report, rising 1.3% in a nice rebound from the prior month's 1.2% pullback.

The private sector, as usual, did most of the heavy lifting, rising 0.9% compared with the 0.2% increase in government-funded projects.

(Stephen Culp)

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