- by New Deal democrat
Here are the three main trends I was most interested in this month:
1. Is the pace of job growth beginning to decelerate?
2. Is wage growth holding up? Is it accelerating?
3. Are the leading indicators in the report beginning to flag?
The answers were:
1. The 6 month average of monthly gains, which was running at 585,000 in the prior 6 months, increased by 2,000 in March to 587,000, although, pending revisions - which have almost all been upward in the past year - this month’s number was the lowest in the last 6 months.
2. Wage growth, which averaged 5.9% in the 2nd half of 2021, for the 2nd month in a row has been up 6.7% YoY. Aside from April 2020, this is the highest wage growth in *40 years.*
3. A majority of the leading indicators within the report were positive. There is no sign yet of any major impending slowdown in the economy, particularly in the goods producing sector.
We still have 1.579 million jobs to go, or 1.0%, to equal the number of employees in February 2020 just before the pandemic hit. At the current average rate for the past 6 months, that’s 3 more months.
Here’s my in depth synopsis of the report:
Leading employment indicators of a slowdown or recession
These are leading sectors for the economy overall, and will help us gauge whether the strong rebound from the pandemic will continue. These were mainly positive:
Wages of non-managerial workers
Aggregate hours and wages:
Other significant data:
This was another very good jobs report. There is no sign of any significant slowdown in hiring at this point. Leading sectors like manufacturing, construction, and temporary help continued to improve. Also, wage gains among non-supervisory workers continued to rise sharply. Aside from 3 months in 2019 and 2020, the unemployment rate was the lowest (or equal to it) in over 50 years. Similarly, the underemployment rate was the lowest for its entire 28 year history except for two months.
There were a few blemishes, most notably the decrease in residential construction jobs (more evidence of a housing slowdown) and the likely real, inflation-adjusted decline in aggregate payrolls, which means that probably real aggregate payrolls for the American working class have only risen by 1% or less in the last year in total.
Two months ago I wrote that “Because real sales and income have not improved in over half a year, I expect the pace of job gains to slow considerably in the coming months.” For the second month in a row, I have been wrong - and happily so! But I continue to think job gains will slow (but not reverse) shortly.