It’s not so much “if” the US economy is slowing down but rather by “how much.” The mood in the country is getting decidedly bearish compared with the optimism seen at the start of this year. That negative attitude is very much expressed in the downturn of the stock market indicators which have seen significant declines in the past few weeks. More importantly, a slew of economic indicators have turned either negative or neutral.

The most important indicator is the labor market. The employment numbers are still good but they are showing signs of softness. Non-Farm payrolls in March were up 103,000, down from a 326,000 increase the month before. The participation rate in March came to 62.9%, down just a little from 63% in February. The unemployment rate remained unchanged at 4.1%.

Initial jobless claims in March rose to 242,000, up from 218,000. This number is not a good harbinger for the jobs number going forward. Nor are the job cuts announced by US-based employers which jumped 71% to 60,357 in March of 2018 from 35,369 in February. It is the highest number since April of 2016.

Private businesses in the United States hired 241,000 workers in March, compared with an upwardly revised 246,000 in February. The decline in hiring may not be significant, but it is further evidence that the US economy is slowing down, not expanding.

The number of job openings in the United States fell to 6.052 million in February from a downwardly revised 6.228 million in the previous month. There were fewer open positions in accommodation and food services (-91,000), construction (-56,000), and wholesale trade (-38,000).  

Demand for automobiles has declined sharply since the start of the year with no upturn in sight. This is a peculiar turn of events with a strong labor market. But the decline in consumer sentiment may be a good indicator for the weak car market. The University of Michigan’s consumer sentiment for the US fell to 97.8 in April from 101.4 in March and below market expectations of 100.5. Both current and future conditions sub-indexes declined, mainly due to concerns about the potential impact of President Trump’s trade policies on the domestic economy,

All these developments will have an impact on GDP growth. The GDP growth numbers for Q1 2018 will be released in the second half of April and should show just how much the economy has softened. They will also provide another glimpse of what the Fed will do in the months ahead.