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  • Larry Green, CFA

Expect Weaker NFP adds of 131,000.


Expect Weaker NFP adds of 131,000. The economic cycle is past the peak.

Figure 1 – Created jobs continues to under-perform.

This anomaly continues to suggest that the economic cycle has passed its current peak.

Our core indicators (derived from the LinkUp RAW jobs dataset2) show the following:

1) Jobs Filled up again to peak since recession BUT jobs created so low suggests that large portion of jobs removed are NOT filled.

2) New Jobs Posted, DECLINED 14% from April. First time in history of data set for May.

3) Total Active Job Postings down > 2% in May.

4) Labor Market Slack continues at its lowest since before the recession.

Employers are posting fewer NEW jobs than they are FILLING for the 7th consecutive month. We are past the top of this business cycle.

Our Job Duration indicator currently suggests that slack is still at its lowest point in the history of the LinkUp data set. We derive this indicator based on the average length of time jobs are posted for the month. For May, job post 'duration' continued at 57 days, the largest in the daily data set which begins in August of 2007. This would also suggest we are at the top of this cycle.

We believe the US has already passed the peak of the current business cycle, as companies are not attempting to continue to grow employee ranks at the same pace they have since the recession. In fact, NEW job postings have underperformed FILLED for 9 of the last 10 months (and the last 7 months), something never seen in the history of the data.

The continued decline in TOTAL Active Job Postings, and lagging Job Post Creation suggests we are at the end of the road for significant job gains.

Based on these four indicators, we believe that the May 2016 NFP will be 131,000, and deliver a downside surprise to the consensus 160,000 job adds.

1 The information and opinions in this report were prepared by SmartMarketData, LLC. SmartMarketData, LLC makes no representation as to its accuracy or completeness. The report is opinion based on objective data observed in

® RAW, and is not necessarily the opinion of JobDig, Inc., the owner of

® RAW data.

2

® RAW is the world's broadest and deepest near real-time jobs dataset, composed of job postings gathered directly from company career portals, daily. The data set has over 30,000 companies, and 9 years of history.

® RAW is real-time and objective, NOT delayed and survey based. LinkUp minimizes duplicates, and eliminates stale data. For more information, please contact info@SmartMarketData.com.


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