More Evidence US Job Creation has lost Sizzle

WASHINGTON (MarketWatch) — The pace of hiring in the U.S. has lost momentum despite the rebound in job creation in April, according to a pair of surveys, including one that’s watched closed by the chairwoman of the Federal Reserve.

The Federal Reserve’s index of labor market conditions fell to -1.9 in April from -1.8 in March, the first time the gauge has been negative for two months in a row since the middle of 2012.

The index, developed under the watch of Fed Chairwoman Janet Yellen, tracks 19 indicators and is used by the central bank to assess the health of the U.S. labor market in determining when to raise interest rates.

A separate assessment of the labor market compiled by the privately run Conference Board has also softened.

The board’s employment trends index rose slightly in April after falling in March, but it’s no longer increasing as fast as it did in 2014. The employment index is composed of eight labor-market indicators and has some overlap with the Fed’s version.

“April’s bounceback in the employment trends index is somewhat reassuring, but expectations remain that job growth will be slower this year compared with last year,” said Gad Levanon, managing director of macroeconomic research at the board. The economy added an average of 260,000 jobs a month in 2014.

What’s going on here? Some of the weakness is a residue of poor employment gains in March, when the U.S. economy added just 85,000 jobs. That was the smallest increase in almost three years, a disappointing result that economists partly blame on harsh weather early in the month.

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