Last week I ranked my favorite Employment Indicators and promised to circle back and use these indicators to predict the jobs added in the April Jobs Report due out Friday. This first preview will cover the Federal Reserve's Senior Loan Officer Survey on Bank Lending Practices and the Temporary Employment data series from last month's Employment Situation (Jobs) report. Both of these indicators tend to lead Employment growth by a quarter, so the kind of job growth they are predicting allows a broader context around Friday's report. For instance, if the Jobs Report comes outside the expectations of the leading employment indicators, one could look for a mean reversion of the data over the coming months.
I have used this survey to create a Small Business Lending Standards Indicator which is just a composite of three sub - components of the survey. Banks have been progressively easing lending standards to Small Business for over two years running. This tends to lead to Employment Growth with a one quarter lag and is currently predicting Employment Growth of 250k a month - and this should accelerate in the coming quarter.
The number of Temp Workers has been growing as normal expansionary levels and is predicting employment growth of around 150k a month for April - with similar growth predicted over the coming quarter.
In combination with the Senior Loan Officer Survey, Employment Growth looks to be in the 150k - 250k range with some acceleration possible in the coming quarter.