The Stock Market has rebounded of late, the US Congress agreed to lift the debt ceiling for a year, and January Retail Sales were solid. Life seems good on the surface. Underneath the surface, things are not looking nearly as rosy. It appears that job growth will be slowing in the future, and the US economy along with it.
Corporate Profits for Financial Institutions, Nonfinancial Institutions, and Manufacturing firms are all experiencing slower rates of growth (8.1%, 9.1%, and 2.3%, respectively, all in Phase C). A slowing in profit growth can be expected to pinch job growth through time.
Total Private Sector Job Openings are 6.4% higher than last year, but here again the rate of growth is slowing. A slowdown in the amount of job openings is not the way to ramp up employment and consumer spending. The manufacturing sector, often in the news and important to our economic health, is posting a slim 0.6% year-over-year gain in employment. That growth rate is likely to hold at about that level, keeping manufacturing employment growth well below the 1.5% average of the last two years.
None of this spells doom for the economy, but it does mean that readers would do well to watch their cash balances now and cash projections for the latter half of 2014.