There is an increasing amount of data pointing to a general deceleration in economic growth since the summer, yet US employment numbers keep on movin’ on. Instead of going through the repetition of data points I thought it would be useful to look at employment data from another angle.
Typically employment numbers are meant to be a coincident indicator of economic activity, but this is an average characteristic. There will be times when it will be a lagging (catch up) or a leading indicator (job losses).
Economic activity in the US surged post the winter weather interruptions and peaked around mid summer…I was wondering whether this peak in activity following a long period of relative weakness had influenced hiring somewhat and to what extent hiring has lagged this initial surge in activity:
The above shows the monthly unadjusted change in total private employment over 2012, 2013 and 2014. We can see that the differential really opened up from mid summer onwards.
So let us look at the differential between 2014 data and 2013/2012:
Well we can see that pre May 2014 numbers were below 2013 and 2012 and post June were above, especially 2014 on 2013. So let us look at unadjusted new order data and then compare it to employment data above:
New order data rose strongly to mid year relative to the prior two years then fell back relative to other years, so I wonder if employment data has fully reacted to this slowdown. It is an interesting point…