US Job Market Jumps Off a Cliff

I wouldn’t read too much into any one indicator, but this one does have me a bit worried. Between February and May, help wanted advertising followed a steady downward trend, declining by over 12% in all, according to the Conference Board. (I have combined the Conference Board’s index with the Monster Employment Index to account for online job advertising. The raw Conference Board index actually declined by more than 15%.) Historically, declines of this magnitude have always been indicative of recessions (for example, March 2001 and November 1990).




There are reasons to think it might be different this time. For one thing, the data could be revised. And measuring the 3-month rate of change is only one of many ways to cut the data. The Monster Index did improve in June. (The Conference Board has not yet reported for June.) Hiring activity may be less important than in the past, as layoff rates are down, and the working-age population is growing more slowly. And employment as reported by households still seems to be rising rapidly. Nonetheless, after the third month of inadequate job growth as reported by firms (in today’s employment release), the decline in help wanted advertising does seem to be part of an unpleasant pattern.