US labor market conditions deteriorate slightly in January on fewer employment

The US labor market conditions deteriorated slightly in January, while the pace continued to moderate, based on Barclays Indicator of Labor Market Conditions and the Barclays Indicator of Labor Market Momentum. According to both the indicators, the US growth has more room to continue. In January, the Barclays Indicator of Labor Market Conditions fell 0.07 to 0.31, whereas the Barclays Indicator of Labor Market Momentum dropped to 0.78.

The drop in the labor market conditions indicator was mainly because lesser small businesses planned on increasing employment. The series from the NFIB small business optimism survey gave back its year-end gain in January. Moderately higher initial unemployment claims and a small widening in the gap between U3 and U6 joblessness also weighed on conditions. There is a further room for rebound in the labor market in the coming months. The US economy is not facing any downturn based on the signals sent by the labor market.