US jobs slowdown expected to be below 8 million for first time in over 3 years

US jobs slowdown expected to be below 8 million for first time in over 3 years

The US Job Openings and Labor Turnover Survey (JOLTS) report for May 2024, set to be released on 02 July 2024, is expected to show 7.8 million job openings, just below consensus expectations of 7.9 million jobs, and the first reading below 8 million since February 2021, according to GlobalData, a leading data and analytics company.

GlobalData’s Jobs indices are derived from a high frequency company job postings dataset, available in near real-time, and well suited to detect labor market trends. Historically, GlobalData’s jobs indices track JOLTS data with a 90%+ correlation.

Adarsh Jain, CFA, Director of Financial Markets at GlobalData, comments: “Often, a change in the pace of growth or the second derivative enables earlier detection of a change in trends or an inflection point. The sub-8 million JOLTS forecast for May 2024, the first such reading in more than three years, has coincided with rapid deceleration in quarter-on-quarter (Q-o-Q%) growth of US job postings for two successive months now. GlobalData sees it as a strong signal of US jobs slowdown becoming more entrenched and forming a sustainable equilibrium to levels witnessed before the COVID-19 pandemic.”

In terms of sector trends, retail has seen the biggest fall in job postings, contributing almost a quarter of the 11.5% month-on-month (m-o-m) fall. Recent economic data also points to weaker than expected consumer spend, which can only further pressure retail sector jobs in the foreseeable future.

Jain concludes: “The accelerated slowdown in jobs, weaker than expected consumer spend, and a slight uptick in initial jobless claims are giving enough room for the Fed to think about advancing its rate cuts. Labor data in the next few months will be crucial to determine if there will be recalibration in Fed’s rate cutting cycle.”