Justin Fox (also in today's links):
This Job Market Slump Started a While Ago: The sharp May hiring slowdown revealed in Friday's employment report took a lot of people -- including me -- by surprise. It shouldn't have. Things have actually been on the downswing for the U.S. labor market for months, according to the Federal Reserve's Labor Market Conditions Index.
The LMCI is a new measure cooked up by Federal Reserve Board economists in 2014 that consolidates 19 different labor market indicators to reflect changes in the job market. ... As you can see from the chart, the index has now declined for five straight months -- its worst performance since the recession. The index does get revised a lot. ...
Though the signals coming from the U.S. labor market have been mostly negative for several months now, according to the LMCI, they'll have to get much worse before it indicates that the economy is falling into a recession. Still, this is clearly more than just one off month.