Reworking the Employment Numbers

The Mouth has looked at the data once again, and he still can't figure out why some people disagree with his outlook.
Author:
Publish date:

Cherry Bomb

COCOA BEACH, Fla. -- The answer is Yes.

Your narrator is every bit as tired of writing it as you are of reading it.

The underlying pace of job growth is not decelerating.

It is a fact that the manufacturing sector is still chopping jobs.

It is also a fact that the manufacturing sector accounts for just 14% of total employment.

Year-on-year service-sector payroll growth averaged 2.8% last year.

It is

averaging 2.9% so far this year.

It is unclear why anyone would claim that the underlying pace of job growth is decelerating.

The labor market is getting tighter.

The unemployment rate stood at 4.5% a year ago; it

stands at 4.3% now.

The U-5 unemployment rate stood at 5.3% a year ago; it

stands at 5.1% now. (Note that this is the rate that

Greenspan

first mentioned in

testimony back in February. The

Bureau of Labor Statistics

publishes it only on an unadjusted basis; your correspondent has applied the seasonal factor used for the regular unemployment rate to produce the adjusted numbers above.)

The number of discouraged workers just hit an expansion low (see

Table A-10 for details) and the number of job-leavers as a portion of the unemployed just hit an expansion high (see

Table A-7 for details).

It is unclear why anyone would claim that the labor market is not getting tighter.

And what of wages?

The best of the market-friendly hourly earnings

numbers is behind us.

Year-on-year wage growth decelerated from an expansion high of 4.4% to 3.8% during the seven-month period ended December 1998.

Why?

Because year-on-year wage growth in the manufacturing sector decelerated so markedly over that period. It fell from 3.1% to an expansion low of 1.6%.

And now that wage growth in the manufacturing sector has rebounded -- it has accelerated to 3.4% from 1.6% over the past six months -- it shouldn't surprise anyone that overall wage growth is headed back to the 4% area.

Anyway.

Happy Fourth to you and yours.

And hey. Try to keep your fingers attached to your hands.

Side Dish

Best seven?

And seven.

The liberal arts.

The deadly sins.

The wonders of the world.

The colors in the spectrum.