Trimtabs - Employment Gains Stalling Out

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June 16, 2004 08:45 AM US Eastern Timezone

TrimTabs: Is Pace of Economic Growth Slowing? Investment Research Shows Wages & Salaries Rise Just 2.1%; May Employment Gains are Half of March/April

SANTA ROSA, Calif.--(BUSINESS WIRE)--June 16, 2004--Over the past two weeks, TrimTabs Investment Research estimates that wages and salaries rose just 2.1% year-over-year. "We do not generally put much emphasis on data over a two-week period, but several indicators are beginning to point in the same direction," states Madeline Schnapp, Editor of TrimTabs Personal Income. "There is mounting evidence the past five months of rapid economic growth may be slowing."

TrimTabs research measured job growth of 200,000 workers in May. "Although it's too soon to declare the beginning of a trend toward slower employment growth, the job gains TrimTabs measured in May were less than half the increases we measured in March and April," added Schnapp.

Weekly unemployment claims bottomed at 313,000, but have drifted upward over the past six weeks. While claims remain well below 400,000, the level at which the economy usually sheds jobs, the upward drift may be significant. After rising 27% between December and March, the TrimTabs Online Job Postings Index has been flat over the past three weeks, suggesting the labor market demand has slowed.

Other Indicators: After rising 16 points to 125 in April, the Monster Employment Index rose only 3 points in May. Manufacturing activity in two of the Federal Reserve districts continues to expand at a healthy pace, but the pace of expansion has slowed. Cash injected into the economy from income tax refunds has been slowing rapidly, last week to just $273 million. Mortgage refinancings are 72.7% below their March 19 high, removing an important source of consumption cash from the economy.

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