50% Off! Beat the market in 2025 with InvestingProCLAIM SALE

Job Openings Hitting 3-Year Lows the Canary in the Coalmine for US Economy?

Published 07/06/2024, 09:54 pm
US10YT=X
-

Recent economic estimates suggest US growth has slowed compared with previous estimates, but today’s revised GDP nowcast for the second quarter still points to a modest pickup in output over Q1.

The median estimate for a set of projections compiled by CapitalSpectator.com indicates output rising 1.9% in Q2. If accurate, growth will strengthen, albeit modestly, relative to Q1’s sluggish 1.3% rise.US Real GDP Change

Today’s median nowcast marks a slight downgrade from the previous update on May 31, when Q2 growth was projected to rise 2.0%.

Some economists advise that consumers have turned cautious on spending, which may be a warning sign for the economy.

Bank of America (NYSE:BAC) CEO Brian Moynihan reports that the growth rate of spending has slowed, based on credit cards data. The 3.5% rise this year marks a sharp deceleration from the comparable 10% growth rate for the year-earlier pace, he notes.

“We’ve got to keep the consumer in the game in the U.S. economy, because they’re such a big part of it,” Moynihan tells CNBC. “They’re getting a little more tenuous, and that is due to everything going on around them.”

Yet new survey data for May paint a brighter profile, based on the US Composite PMI, a GDP proxy. This index points to the fastest growth rate in more than two years.Composite Output Index vs GDP

The bond market, however, seems to be pricing in softer growth lately. The 10-year Treasury yield has dropped sharply in recent days.

One factor weighing on yields: this week’s news that US job openings fell to the lowest level in over three years – a possible early warning of softer economic conditions ahead.

Overall, the case for expecting a sharp acceleration in output in Q2 has faded–a scenario that looked more likely a few weeks ago.

On the other hand, the current nowcast suggests that while growth isn’t taking off again, the path ahead still appears set to deliver a modest if unimpressive improvement vs. Q1.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.