- by New Deal democrat
In the light of the last two month’s relatively “poor” jobs readings, an important question was what was going to happen with revisions. As we will see below, they really delivered! - big positive revisions to both of the last two months’ numbers. Additionally, I have been watching manufacturing hours and payrolls, to see if that white-hot sector was holding up in the face of supply bottlenecks. Also important are whether there were continued gains in leisure and hospitality jobs, or whether Delta had caused those to stall. Both of these metrics also were very positive this month.
The 6 month average of monthly gains as of now is 665,000 - not bad at all! But we still have 4.2 million jobs to go to equal the number of employees in February 2020 just before the pandemic hit. If you are doing math, that’s about 7 more months at this rate.
Here’s my 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 how strong the rebound from the pandemic will be. These were positive:
Wages of non-managerial workers
Aggregate hours and wages:
Other significant data:
With the exception of the “relatively” poor gain of 142,000 in the more volatile household report (still up an average of 477,000/month over the past 6 months), the decline in education jobs (almost certainly due to seasonality issues caused by the pandemic), and a slight decline in the manufacturing workweek, everything about this report was positive to strongly positive.
To begin with, the last two reports got revised significantly higher. In fact August is now 248,000 higher than when first reported. The average gain for the last 6 months remains over 600,000. All of the leading jobs sectors showed gains. Both full time and part time employment showed gains. Involuntary part-time employment is virtually back to where it was before the pandemic hit. Wages for non-managerial workers continued to increase sharply. Those on temporary layoff are down to 2015-16 levels.
There is still substantial ground to be made up. As indicated above, we are still 4.2 million jobs below where we were in February 2020. At the current rate, it will take until next May to make up the remaining difference. Total hours worked are still -2.5% below their pre-pandemic peak, and there are still about 750,000 more permanent job losers than there were before the pandemic hit.
This was a very good report, putting to rest many questions about whether the recovery was faltering.