Last week’s flash PMIs for May confirmed that economic weakness has spread to the US, and from manufacturing to services. The next stage of the downswing, according to the analysis here, will be a crumbling of labour market resilience, which – together with slowing inflation – will add to pressure for central bank policy easing. This is the first of a series of short posts focusing on incoming labour market news.
A previous post noted that UK vacancies (three-month moving average) fell for a third consecutive month in April, signalling a likely decline in employee numbers. The first chart shows that measures of job openings / vacancies rose across economies into early 2018 but are now flatlining or falling across the board.
A drop in German vacancies in May was accompanied by a surprise rise in unemployment – even after adjusting for a reporting change. German aggregate hours worked, meanwhile, fell in the first quarter – second chart.
