MacroEdge Ozone March Labor Market Report
Labor market cools in March - headline data comes out strong but digging into the details that matter. #MacroEdgeOzone
In tonight’s March Ozone Labor Market Report - we will dive into the labor market details that matter most. In the March jobs release Friday from the BLS - the picture and our outlook remain unchanged on the aggregate weakening of the labor market in the US. While the KC Fed Labor Market Conditions Index will not be updated until mid-month, we anticipate with the combination of cooling job openings, elevated job cuts, and rising state-level unemployment, the diffusion index will likely drop further.
Take a look at the updated total unemployment persons # for March - with a 12mma lag. Look long and hard for an instance where the 12mma has advanced (as it has in the last quarter) that hasn’t seen much larger economic problems worsen dramatically in the following 2-3 years. This below is really the chart that matters regardless what total policy transmission time ends up being.
Our Job Cuts Tracker is likely to followed by a 3-6 month lag in claims (as noted by Pantheon Macro Research) in their latest report on the Challenger, Gray, and Christmas number serving as a leading indicator to a spike in initial claims. If we get a new high for our measurement in April - we will likely see new highs for the year in Initial Claims around the June or July time frame.
The lag time from existing Challenger data (Excludes the latest SA March reading >90,000), demonstrated by Pantheon Macro:
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