US chart of the week – Job market is open
The positive job openings data in the US is a sign that the US economy continues to weather ongoing trade tensions.
The latest job openings data release for June brought another positive signal for the longevity of the US business cycle, echoing other encouraging indicators from US data releases, including the July employment report (see our Flash Note and our ‘business cycle score’ derived from monthly payroll data). These data add further support for the continued strength of the US economy in the second half of the year. In other words, there is no slowdown in the pipeline as far as what early macro signals suggest.
Indeed, job openings tend to turn ahead of employment growth (as we saw in the months preceding the last recession, which started in December 2007, see chart), so the ongoing positive trend in job openings is reassuring from that perspective. Job openings were up 8.8% y-o-y in June, and up a solid 13.0% year-to-date.
Concerns about the US business cycle are surfacing now that we are on track to match the longest US business cycle expansion in modern history – the one between April 1991 and February 2001 (119 months). Considering that the current expansion officially started in July 2009, as of end-July this year, it has now passed 109 months.
This indicator of business cycle health is also a sign that the US economy continues to endure despite the current vagaries in US trade policy. However, it carries the risk that the White House could draw the conclusion that its threats of further protectionism carry little economic weight – when in reality they pose many risks for the US (and global) economy.