Hope springs eternal when it comes to the baseball opener. However, my Minnesota Twins have quickly sunk in the American league Central Division. We can appreciate the Chicago White Sox which are even more pathetic than the Twins. What is even worse, our AAA St. Paul Saints are rivaling Chicago in futility. They set a record last week against another minor league club, walking 20 batters in a game. Its going to be a long season.
The ISM manufacturing report for March was surprisingly strong. In February the number came in at 52.4, for March we bumped up just a bit to 52.7. Highlights in the report included a nice uptick in production to 55.3, a level not seen in years. New orders slowed from 55 to 53. Still a good number based on the last couple of years. The backlog levels also declined from 56 to 54. Again, not a number that should be sneezed at. There appears to be some cautious opportunities that are rising related to trade. The changes in the tariff structures appear to be bringing some new business from companies on-shoring their supply chain. Hopefully that will continue.
Overall, the job market continues to be stable. US Employers in March announced 60,250 job cuts. This is just a bit above February but in line with the levels for the last 12 months. The majority of the job cuts came in the technology area followed by pharmaceuticals. For the most part the job losses are blamed on AI. For the full first quarter of 2026 the job cuts totaled 217,362 which was the lowest since 2022.
Initial jobless claims for March totaled $202,000 with continuing clams rising to 1,841,000 up from 1,816,000 in February. Being in a no hire, no fire environment, the numbers in both categories are very tame when considering the last 3 years. The unemployment rate remains at a very good 4.3% level. This is considered neither too hot or too high, as Goldilocks would say, “It is just right”.
The JOLTS Job Quits number is very interesting. Workers will quit or move to another job when they anticipate a strong job market. Jumping to a new job for higher pay, but being exposed as the most likely to be cut in a downturn, is deemed acceptable if the probability of a slow down is seen as very low. The JOLTS numbers peaked in 2022 at 4,500,000. A period of very strong employment growth. The number today is 2,970,000 which the lowest in 10 years outside of the COViD period. The average worker is not enthused about the market. There are two reasons for the lower number. First is they are concerned about the future and when layoffs may come. Second, they can’t find a new job to jump to. When this number rises back over 3,250,000 we could feel better about the economy. For now, it appears we are looking at a soft summer.
Last on my list this week is the prospective plantings that were released last week. We have record surplus in most agriculture commodities. Many of our farmers continue to hold the harvests from the prior years. The thought was farmers would be cutting back. Banks continue to hold the carry over loans from the prior years. According to the St. Louis Federal Reserve, the amount of ag production loans are at an all time high. We are well above the last peak which came in 2019 during the last downturn in the farm economy. With commodity prices so low and input costs rising, a number over last years levels was not expected. So here at the numbers, of which I can not make sense of. Corn plantings 95.3 million were virtually flat from last years planting of 95.32 million acres. Soy Bean plantings are set to increase from 83.49 last year to 84.7 million acres. Wheat planting is the only one that is lower by a noticeable amount, falling from 45.35 to 43.9 million acres.
Agriculture payment programs to fund farmers in light of the tariff impact that they have suffered do provide a lifeline for cash strapped producers. However, that money should likely be used to repay debt that is burdening the sector. The simple fact that farmers are continuing to produce and plant more in a time when prices are beneath the cost of input, is very concerning about the future for our farmers as well as our banks.
Take Care.
