- by New Deal democrat
Leading employment indicators of a slowdown or recession
These are leading sectors for the economy overall, and will help us gauge how strong the rebound from the pandemic will be. These were mainly positive:
Wages of non-managerial workers
Aggregate hours and wages:
Other significant data:
This was a very positive report, but still one which shows how far we still have to go.
Negatives were almost non-existent, consisting of declines in nonresidential construction jobs and temporary jobs (but the latter may be temps transitioning to permanent employment).
The more consistent theme, though, was that while there were gains, they weren’t nearly of the order we need for a quick recovery to pre-pandemic levels. Overall jobs are still 5% below where they were in February 2020, and the hard hit leisure and hospitality sector is 15% below its pre-pandemic peak! The upward revisions in March and April were tepid, confirming my suspicion that March may have been as much as or more of an outlier than April. This month’s number was close to the combined March and April average.
Further, the YoY gains in hourly wages have been more than eaten up by inflation. As the stimulus payments wear off, I suspect we are going to see a faltering in sales, which would not be good.
The brightest spot was the new low in short-term unemployment, which was even lower than before the pandemic, and among the 10 lowest months in the past 10 years.
In essence, this report showed that there are very few new layoffs, but not enough new hires to keep the new expansion growing robustly.