Key US data preview: JOLTS to show a long-term slowdown in job openings growth? - Nomura


Analysts at Nomura offered a preview of the US jobs market.

Key Quotes:

"JOLTS: In February, job openings increased by 118k to 5743k from 5625k, driven primarily by increased vacancy postings in health care & social assistance (+73k) and leisure & hospitality (+79k). However, job openings fell moderately in retail trade (-40k) and professional & business services (-54k). Overall, labor demand has stabilized somewhat, with y-o-y growth in job openings decelerating over the past three years. The job openings rate ticked up to 3.8%, from 3.7% in January, but remains below the alltime high of 4.0% seen in July 2016. The hires rate, at 3.6%, remains below the precrisis peak of 4.0% last seen in November 2006. While total quits decreased slightly in February, the quits rate remains elevated at 2.1%, indicating a steady willingness of workers to voluntarily separate from their current employer in a healthy labor market. Layoffs and discharges remain subdued with the layoff and discharge rate, at 1.1%, just slightly above the survey-low of 1.0%. The long-term slowdown in job openings growth corresponds to a deceleration in average payroll employment gains since January 2015. 

Wholesale inventories: According to an advance report by the Census Bureau, wholesale inventories fell 0.1% m-o-m in March, which is below expectations, and February was revised downwards to a 0.2% increase (previously reported as a 0.4% increase). In the final report for March wholesale inventories next week, we do not expect a significant revision and consensus is in line with our view (Consensus: -0.1%). Overall, these readings imply less inventory investment in Q1. In the advance estimate of Q1 real GDP by the BLS, change in private inventories deducted 0.93pp from top-line GDP growth. However, as we expect some rebound in inventory accumulation in Q2, we think wholesale inventory investment may improve steadily over Q2."

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