Doughnuts look good. Doughnuts even taste good. But doughnuts have a hole in the middle and really can’t nourish you.
The January employment report showed real strength across the board. Payroll jobs were up 257,000, while November and December were revised upward by 147,000. Usually the good news ends there. In January average hourly earnings were up by 0.5 percent – and up 2.2 percent on a year-over-year basis. Average hours were flat, however, but overall the combination of jobs and earnings was a positive sign for the labor market.
The December payroll jobs showed real strength. Payroll jobs were up 252,000 and October and November (originally at 321,000 jobs) were revised upward. But the good news ends there. Average hourly earnings were down 0.2 percent (and the strong November number was revised down) and the average hours were flat. Jobs and no income has become the signature of the labor market.
The payroll survey is incredible: 321,000 jobs. Average hourly earnings up 0.4 per-cent. Average workweek up strongly. This is the kind of job report that has been long awaited because there are jobs, hours, and wages creating income.
The economy created 214,000 jobs in October, a disappointing headline number, down from the September pace and a surprise in light of other strong data. At the same time, the unemployment rate fell from 5.9 percent to 5.8 percent.
The headline numbers for September look great. The economy created 248,000 jobs and the unemployment rate fell to 5.9 percent. Fabulous. On top of that, the weak August number of 148,000 jobs was revised up to 180,000 jobs. Even better.
Taken at face value, the August jobs report was a disaster. The economy created only 142,000 jobs, and job growth was less widely dispersed than in the previous months. The alternative measure of jobs – from the household survey – showed a complete stall of 16,000 jobs.
The July jobs report was like flat soda. Yes, there were over 200,000 jobs – 209,000 new jobs. But the unemployment rate edged up to 6.2 percent because labor force participation also blipped up by 0.1 percent to 62.9. The household survey showed growth in the labor force (329,000), but weak employment (131,000).
The June jobs report was a 2nd straight solid report. Once again, the key was either no news or good news. Top-line employment growth was 288,000 jobs and the unemployment rate fell to 6.1 percent – both well above my expectations (and a minor victory for ADP in predicting a strong number). The household survey showed growth in the labor force (81,000) and employment (407,000), allowing the fraction of the population that was employed to rise by 0.1 to 59.0. On the no news front, the labor force participation rate was unchanged.
The May jobs report was dull – and that is a good thing. Unlike past reports, May consisted of either no news or good news. In the no news category, unemployment was unchanged at 6.3 percent, the labor force rose modestly and labor force participation rate was unchanged at 62.8 percent. Average weekly hours were flat.