Thursday, May 25, 2006

Slowing Job Market?

by Bill McBride on 5/25/2006 12:13:00 PM

In addition to revised GDP and Existing Home Sales, there were a couple of employment related indicators released this morning.

For Initial Claims:

In the week ending May 20, the advance figure for seasonally adjusted initial claims was 329,000, a decrease of 40,000 from the previous week's revised figure of 369,000. The 4-week moving average was 337,000, an increase of 3,250 from the previous week's revised average of 333,750.
The number to watch is the 4-week moving average, and this has been moving up for several weeks.

From the Conference Board: Help-Wanted Advertising Index
The Conference Board Help-Wanted Advertising Index – a key measure of job offerings in major newspapers across America – dipped two points in April. The Index now stands at 35. It was 39 one year ago.

The Conference Board, the global business research and membership organization, examines each month help-wanted ads in 51 newspapers and online.

In the last three months, help-wanted advertising declined in all nine U.S. regions. Steepest declines occurred in the West South Central (-16.0%), South Atlantic (-12.9%) and East North Central (-8.9%) regions.

Says Ken Goldstein, labor economist at The Conference Board: "The latest data shows that job advertising softened in April, both in print and online. ... If the labor market experiences some softening, it could be due to a slowing in pace in the overall economy."
I think the recent economic data is fairly weak, so I'm leaning towards the FOMC pausing in June. Unless, of course, inflation keeps rising. And that brings us to tomorrow's key number - the FED's favorite inflation indicator - the core PCE price index.