Stall Speed for Hiring

Powell noted that in turning points for the labor market, official estimates of employment at establishments (so called “non-farm payrolls”) tend to overstate employment gains. Over the last six months of available data, payroll employment averaged +64K per month. A separate survey of households shows just +15K jobs added per month over a similar period.  This is near “stall speed” in our view.

How does the future of the unemployment rate look?  A real time assessment from the Conference Board’s survey of consumers indicates further deterioration in labor market performance (Figure 2).  While state unemployment insurance filings show no major uptick in firings, labor demand readings have certainly moderated.