June promises to be a month when Wall Street fully embraces the question: Is the economy slowing or isn’t it?
The latest smoking gun suggesting that the economy is in fact slowing comes in this morning’s jobs report for May, a release that shows the smallest monthly increase in nonfarm payrolls since last October’s 37,000 advance, and well below the average monthly increase of 157,000 that’s prevailed over the past two years, the Bureau of Labor Statistics reported.
One month is not a trend, of course, although a longer-term inclination is. Consider that the rolling 12-month percentage change in monthly nonfarm payrolls has been looking tired for some time. As our chart below illustrates, the 12-month change in job growth appears to have hit a ceiling of around 1.5% in the last two years and is now starting to drift lower. For May, the advance was 1.4%, unchanged from April’s percentage rise.
