US employment steadily losing momentum.

US hiring pace steadily slowing...

Fed index of labor-market conditions weakest since mid-2012

 

The pace of hiring in the U.S. has lost momentum despite the rebound in job creation in April, according to a pair of surveys, including one that’s watched closed by the chairwoman of the Federal Reserve.

The Federal Reserve’s index of labor market conditions fell to -1.9 in April from -1.8 in March, the first time the gauge has been negative for two months in a row since the middle of 2012.

The index, developed under the watch of Fed Chairwoman Janet Yellen, tracks 19 indicators and is used by the central bank to assess the health of the U.S. labor market in determining when to raise interest rates.

A separate assessment of the labor market compiled by the privately run Conference Board has also softened.

The board’s employment trends index rose slightly in April after falling in March, but it’s no longer increasing as fast as it did in 2014. The employment index is composed of eight labor-market indicators and has some overlap with the Fed’s version.

“April’s bounceback in the employment trends index is somewhat reassuring, but expectations remain that job growth will be slower this year compared with last year,” said Gad Levanon, managing director of macroeconomic research at the board. The economy added an average of 260,000 jobs a month in 2014.

What’s going on here? Some of the weakness is a residue of poor employment gains in March, when the U.S. economy added just 85,000 jobs. That was the smallest increase in almost three years, a disappointing result that economists partly blame on harsh weather early in the month.

Yet the pace of hiring has clearly slowed even though April brought a much higher 223,000 new jobs. Job creation in early 2015 dropped down to average of 194,000 a month from a rapid 324,000 pace in the fourth quarter.

Hiring has been hurt in part by a strong dollar that’s curbed U.S. exports as well as layoffs in the energy industry after oil prices tanked last year. Consumers are also not spending as much as expected despite the influx of new jobs.

Don’t look for the Fed to be scared off from raising interest rates, however. Most labor-market indicators point to steady job growth and central bankers believe the nation’s unemployment rate will continue to move toward 5% by year end. The April employment report did nothing to change that.

“The fact that we saw good employment numbers and other indicators, I think, is very reassuring,” said San Francisco Federal Reserve Bank President John Williams, who is voting member of the central bank’s interest-rate setting panel, in an interview on CNBC.

If that’s what other Fed bigwigs think, a rate hike as early as September remains in the offing.

 

[by Jeffry Bartash, writing for MARKETWATCH]

 

NORM ‘n’ AL Note:  In spite of what you just read above, we are willing to bet that the flow of good news from the White House will continue unabated. Mr. O always and only tells us what he thinks we want to hear.

 

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As always, posted for your edification and enlightenment by

NORM ‘n’ AL, Minneapolis
normal@usa1usa.com
612.239.0970

 

 

 

 

 

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