A major sign is that monthly job growth may decline in the coming months, according to research by Ned Davis.
The research firm highlighted the slowdown in temporary staffing services as the canary in the coal mine.
“Seasonal adjustments, weather, revisions and strikes are likely to influence this trend,” the NDR said.
The strong job growth seen in the labor market over the past three years may end in the coming months, according to a note Friday from Ned Davis Research.
The investment research firm highlighted a major leading indicator warning of a possible slowdown in hiring, which is the recruitment activities for Temporary Staffing Services.
“The industry that lost the most jobs was temporary assistance services. Historically, that wasn’t a good sign,” said Joseph Kalish, NDR’s chief global macro strategist.
The latest slowdown in temporary assistance services comes amid ongoing labor strikes, bad weather and the prospect of lower revisions to the monthly job numbers.
“Although job growth has clearly slowed, there are reasons to believe that the July numbers are overstated, and underlying growth is weaker and likely to slow further in the coming months,” Kalisz said. “Seasonal adjustments, weather, revisions and strikes are likely to influence direction.”
While warm weather often helps boost seasonal employment, The extreme heat of this summer could have the opposite effect Where the outdoors likely suffered from fewer patrons, according to Kalisz.
Signs of a slowdown in job growth have been evident over the past two months, with the three-month average non-farm payroll additions falling by 10,000 for each of the past two months. And the two The latest jobs report also fell short of economists’ estimates. Ending a long streak of better-than-expected career growth.
Other factors that could limit future job growth include stricter lending standards and a potential strike by the UAW and other unions.
Finally, the decline in the average work week is another leading indicator that has been moving lower lately. This is not a good sign for the employer’s future employment aspirations.
“Employers would rather reduce working hours than cut staff,” Kalisz said. “But at some point further reductions in the workweek become impractical and layoffs increase.” “Companies stop hiring before they start firing.”
With many stock market bulls pointing to A strong labor market and a resilient economy as a good reason to hold long-term inventories, That could change quickly if the job market really shifts south.
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