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By the Numbers

Featuring brief segments of economic analysis from our senior economist Michael Bazdarich, PhD.

The economic analysis we previously featured in By the Numbers is now available on the Western Asset Blog. This page will no longer be updated.

December Payrolls Get 2018 Off to a Soggy Start

Actually, today’s news covered December 2017, but since it is the first major data release of 2018, we’ll stick with the stance taken in the headline. As for the “soggy” part, private-sector jobs rose only 146,000 in December, while our “core” measure, private-sector excluding construction and retailing, rose by 136,000.

The pundits we have heard this morning took this as favorable news, in part because November job growth was revised up by 24,000. What these folks failed to mention is that October was revised down by 33,000, leaving the November jobs level lower by 9,000. For our core measure, the November level was revised down by 5,000.

What was also infrequently mentioned elsewhere this morning is that the stronger October and November job gains were distorted upward by catch-up effects following the early-fall hurricanes. One can sort out the net effects of the hurricanes by averaging together September job gains, which were held down by the storms, with those of October and November, when we made up for the storm-driven softness.

On this basis, total private-sector jobs rose by 170,000 per month over September–November, while our core jobs measure rose by 146,000. So, the December prints for both these series (again, 146,000 and 136,000, respectively) fell below the averages of the previous three months.

The accompanying chart provides yet further perspective on job growth, displaying 12-month growth rates. The chart makes clear that total private-sector job growth decelerated steadily over 2017, while our core measure was at best stable. So much for all the recent hype about the economy taking off in 2017. We’re not dissing our current president’s policies, but merely trying inject a dose of reality into the discussion. And, yes, even if these gains reflect a fully employed economy, the fact still remains that job growth slowed in 2017, which is hard to jibe with a supposed pick-up in GDP growth.

Job Growth Trends
Job Growth Trends
Source: Bureau of Labor Statistics. As of 31 Dec 17

Michael Bazdarich

Product Specialist/Economist

Mike brings more than 45 years of experience to his position. "By the Numbers" will address economic data releases that are pertinent to a broad range of investors.

Prior to joining the Firm in 2005, Mike ran his own consulting firm, MB Economics. He earned his PhD in Economics at the University of Chicago.

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