I'm Alive ... I'm Dead
JACKSON HOLE, Wyo. -- What all do the jobs numbers change?
The central bank wants to see signs of meaningful economic slowdown.
And no objective observer would argue that the February
10-15 Saturday Night
Think of the change in gross domestic product (or GDP) as the sum of the change in hours worked plus the change in productivity.
Then consider that the index of aggregate
hours is on track to grow roughly 3% during the first quarter.
That's about a percentage point more than it grew both last year and the year before.
Then consider that productivity is (as far as anyone can tell)
growing no slower now (and possibly even faster) than it was then.
Long story short?
We are looking at another huge GDP quarter. Capable forecasters are looking for the January-February-March growth rate to print with a five-handle.
That would mark three straight quarters of plus-five growth.
The last time we saw a trifecter like that?
You remember ... back when blow was all the rage?
This economy ain't slowing, gang.
It just ain't.
Ghetto Supastar (That Is What You Are)
Did the unemployment rate not
rise last month? Did the pool of available workers (the sum of the unemployed and those not in the labor force but who currently want a job) not
rise last month? Did nonfarm payroll growth not
slow notably last month?
Yup. Yup. Yup.
And those things mean as much to a frog-ass-tight labor market as one down day means to a bull market for shares.
Keep in mind that the employment-population ratio still
sits at an all-time high. Keep in mind that year-on-year growth in the household measure of
employment accelerated to 1.8% in February (the second biggest growth rate we've seen in two years) from 1.5% in January. Keep in mind that the reversal of the technical factors that produced an unusually small payroll print this month will produce an unusually big one next. Keep in mind that firms
tell us that their
second-quarter hiring plans are stronger than they've been in two decades.
Let's Go to Bed
To claim that the February payroll report speaks meaningfully of economic slowdown or weakness (or that it in any way comforts the central bank) isn't just a stretch.
Tell those who are doing so to go jump someone else's train.