Friday, May 12, 2017

This week's jobs and real wage reports continue to show late cycle improvement

 - by New Deal democrat

Let's catch up on some of the jobs information we got this week.

I seem to be nearly alone in my analysis that JOLTS reports from the last year have been largely underwhelming.  The report for March, released earlier this week, doesn't change my opinion.

My perennial complaint has been that job openings aren't necessarily real, and that the more important metric is actual hires.  But now, both are going sideways:

Here's the YoY view, showing the complete lack of progress in the past year:

This looks very late cycle to me.

The story is only a little better on Quits, which have also flattened out:

But quits haven't turned down YoY:

Taken together, this looks very much like the "mature" expansion as of 2006.

Turing to the Labor Market Conditions Index, it has recently turned up:

Last year never got negative enough for me to be really concerned. The recent strength is inconsistent with any imminent downturn in the economy.

 Finally, yesterday I wrote that the recent downturn in gas prices appeared to herald at least a mild resurgence in real wage growth.  This morning's CPI report  means that wages for average American workers rose slightly more than inflation last month, i.e., real wages grew slightly. to a level less than 0.1% under last July's high:

We've had some signs of consumer retrenchment in the last few months, but that may be passing, as evidenced by the increase in real retail sales also reported this morning:

The overall picture remains that of a late cycle expansion.