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Weekly Economic Commentary

 
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Labor Market and Sales News Remains Unsatisfactory

July 10, 2012

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There were 3.642 million job openings in May according to the job openings and labor turnover report (JOLTS), which lags the employment report by one month. The job openings rate (number of job openings on the last business day of the month as a percent of total employment plus job openings) moved up slightly to 2.7% in May from 2.5% in April, but matches the rate seen in March. The hiring rate (number of hires during the entire month as a percentage of total employment) at 3.3% in May has held at this level in three out of first five months of the year. Essentially, the report confirms the message from the employment report of sluggish labor market conditions.

DEC 7/10/12 Chart1

In related news, the National Association of Independent Business (NFIB) survey results for June pointed out that firms remain unwilling to hire. In June, only 3.0% reported plans to increase their payrolls, the lowest since March.

DEC 7/10/12 Chart 2

The assessment of sales conditions is another piece of useful information in the NFIB survey in addition to employment prospects. Since October 2012 there was an improvement with fewer respondents indicating that poor sales was problematic, but this trend has been reversed with 23% indicating in June that poor sales is the single most important problem (see Chart 3). The NFIB and JOLT surveys are both sending a message of concern and they provide more ammunition for the Fed to act in the near term.

DEC 7/10/12 Chart 3

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The opinions expressed herein are those of the author and do not necessarily represent the views of The Northern Trust Company. The Northern Trust Company does not warrant the accuracy or completeness of information contained herein, such information is subject to change and is not intended to influence your investment decisions.
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