• Skip to main content

    Market Data

    May 9, 2017

    Net Job Creation by Industry through April 2017

    Written by Peter Wright

    The US Gross Domestic Product is the values of goods and services produced by all economic activity. The growth of GDP is a function of the growth in the number of employed people multiplied by the growth of their productivity. Steel consumption is correlated to GDP, therefore to understand the direction of the steel market it is useful to know more about the growth in employment. The Bureau of Labor Statistics (BLS) monthly report of net job creation presents the big picture and also enables us to drill down into sub sectors such as manufacturing and construction. This is therefore valuable in understanding the drivers of our particular steel business.

    The BLS net job creation report released on Friday was another example of why we should not be fixated on a single month’s result. Month on month there was an encouraging increase following March’s poor result. March was revised down from 98,000 to 79,000 and February was revised up from 219,000 to 232,000. The April number was 211,000 with a three month moving average (3MMA) of 174,000 which was actually down from March’s 3MMA of 176,000. Clearly the single month number is useless in its ability to measure the trend. The average monthly increase in the 12 months of May 2016 through April of 2017 was 186,000. Moody’s reported that U.S. job growth rebounded in April, highlighting that the weakness in March was attributed to transitory factors. Employment rose by 211,000 which was better than either we or the consensus anticipated. Private employment increased 194,000 in April with the bulk of the growth in professional/business services, leisure/hospitality and education/healthcare. The unemployment rate fell from 4.5 percent to 4.4 percent, matching its lowest since 2006. The unemployment rate fell for the wrong reason as the labor force participation rate slipped and those not in the labor force rose. Still, the lower unemployment rate will likely fan fears within the Fed that the labor market could begin to overheat. Average hourly earnings for all private workers rose 0.3 percent. If the economy isn’t at full employment it is close.

    Peter Wright

    Read more from Peter Wright

    Latest in Market Data

    Final Thoughts: Do Mesabi Metallics and Hyundai-POSCO signal more foreign steel investment in US?

    Could two new steel projects signal a new direction in the marketplace? Both Mesabi Metallics’ recently announced steel facility in Iowa and the Hyundai-POSCO’s proposed mill in Louisiana are major undertakings. You don’t spitball a major steel mill and then start producing the next day. From initial concept to site selection and on up to the first melt, there is a labyrinth of permitting, planning, and construction to navigate before the first heat.

    Lead times extend deeper into 2027, some see no availability until late Feb

    Lead times for sheet and plate products continue to extend in a US steel market still in the grip of a historic supply squeeze, according to the latest SMU steel market survey data. Average lead times now extend into late January 2027, with some mills not quoting availability until mid/late February. Lead times for all sheet products except Galvalume stand at their highest point since the post-Covid demand snapback in 2021. And plate lead times have exceeded their 2021 peak, repeatedly setting new record highs in our data series over the past month. (We started collecting plate lead time data in 2018. Our sheet lead time figures go back to 2012.)

    SMU flat-rolled market survey results now available

    The results of the latest Steel Market Update (SMU) flat-rolled market survey are now available on our website to all premium members. After logging in, look under the Data tab for Market Reports, and there you will find the Flat-Rolled Survey Results section. Previous survey results are also available on that page. If you need help accessing these results, or if your company would like to have your voice heard in our future surveys, contact smu@crugroup.com.

    SMU Survey: Steel mill negotiations remain rare as buyers face tight supply

    Only 5% of steel buyers surveyed by SMU this week said mills were willing to negotiate lower prices for new spot orders, suggesting mills retain substantial pricing leverage in a tight market. The share rose two percentage points from our previous survey two weeks ago but was nine points below the mid-October reading. This week's rate is just slightly higher than our previous survey when the negotiation rate fell to 3% — its lowest level since July 2021. Negotiation rates have trended downward all year as steel prices have continued to climb.