The most ominous data in this report are the employment diffusion indexes, which show the percentage of industries that intend to add jobs over various periods of time. The 3-month index for manufacturing fell to 30.2 percent, its lowest reading since the last recession. This number, together with reports of sales slowdowns and excess inventories, implies that the manufacturing sector is likely to shed a significant number of jobs in coming months. This employment report should satisfy those who wanted an economic slowdown. While the labor market is still quite strong, it is very clear that job growth has slowed considerably.
Wage growth is moderate, leaving workers only slightly ahead of the inflation rate.
The big question coming out of this report is whether job growth will remain fast enough to prevent a rise in the unemployment rate. The percentage of manufacturing industries expecting to add workers is at its lowest level since the last recession.