By Mark Serlin
Washington, July 6 (BridgeNews) There is no good news for the economy in the June employment report as:
The aggregate hours index for the quarter is weaker than expected at DOWN 1.5%
The only leading indicator in the employment report, the manufacturing workweek, declined for the second consecutive month, leaving it back within easy reach of its cycle low. THIS COMPONENT OF THE EMPLOYMENT REPORT NEEDS TO STABILIZE AND TURN HIGHER BEFORE THERE IS ANY HOPE OF A MEANINGFUL RECOVERY IN PAYROLLS.
The diffusion index continues to deteriorate, suggesting weakness in the manufacturing sector is spreading to other industries.
Employment growth in the services sector (narrowly and broadly defined) has slowed drastically this quarter.
While the overall unemployment rate ticked up to its recent high for the move, THE ADULT UNEMPLOYMENT RATE (25 and older) BROKE NEW GROUND TO THE UPSIDE.
The latest decline in the aggregate hours index leaves it at the bottom of a broad sideways range. ANY ADDITIONAL LOSSES WOULD TURN THE NEAR-TERM TREND IN THIS KEY INDICATOR FROM SIDEWAYS TO LOWER. A DOWNWARD TRENDING AGGREGATE HOURS INDEX IS A MAJOR RECESSION INDICATOR.
Implications for industrial production and housing starts are very weak.