skip navigation

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.

February Payroll Jobs Finally Show Decent Gains. . .Wage Bubble Pops

Payroll jobs showed some big headline gains in February, but beneath the surface there was less cause for excitement. Private-sector jobs were reported as rising by 287,000 in February, with a whopping 50,000 upward revision to the January number.

Long-time readers of "By the Numbers" know that we focus on a job measure that excludes the volatile construction and retailing industries, especially around this time of year when both construction and retailing exhibit large seasonal swings. Net of construction and retailing, private-sector jobs rose by 176,000 in February, with a 38,000 upward revision to January.

As seen in the first chart, job growth for this measure is now a bit above its average pace for the last five years, but this follows four months of below-average growth. So, yes, we finally got some decent job growth news this month, but this is the first such positive in a while.

The construction and retailing gains will likely be reversed in coming months, when the seasonals reverse. Meanwhile, on an underlying basis, job growth has slowed markedly in the last three years. Maybe we are indeed at full-employment, but slowing job growth is simply at odds with claims of accelerating economic growth.

Meanwhile we remarked in passing last month that wages "showed a nice increase" in January. Other analysts "bit" harder on the wage gains. Upon examining the data in more detail, even our response looks overdone.

The hourly wage indicator that showed 2.9% yearly growth last month covers all private-sector jobs, even those that don’t get paid by the hour. The government also publishes another measure of hourly wages covering "nonsupervisory" workers only, the 80% of jobs that actually do get paid by the hour. That measure showed a scant 0.1% rise in January, 2.4% year-over-year, with no sign of acceleration.

The news today revised/reversed away most of the gains for supervisory workers, and left nonsupervisory worker wages on a steady growth path. Those claiming wage inflation find no succor in these data.

Payroll Data Details
Payroll Data Details
Source: Bureau of Labor Statistics. As of 28 Feb 18

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.

Sign up to receive email updates as new reports are released.

© Western Asset Management Company, LLC 2022. This publication is the property of Western Asset and is intended for the sole use of its clients, consultants, and other intended recipients. It should not be forwarded to any other person. Contents herein should be treated as confidential and proprietary information. This material may not be reproduced or used in any form or medium without express written permission.
Past results are not indicative of future investment results. This publication is for informational purposes only and reflects the current opinions of Western Asset. Information contained herein is believed to be accurate, but cannot be guaranteed. Opinions represented are not intended as an offer or solicitation with respect to the purchase or sale of any security and are subject to change without notice. Statements in this material should not be considered investment advice. Employees and/or clients of Western Asset may have a position in the securities mentioned. This publication has been prepared without taking into account your objectives, financial situation or needs. Before acting on this information, you should consider its appropriateness having regard to your objectives, financial situation or needs. It is your responsibility to be aware of and observe the applicable laws and regulations of your country of residence.
Western Asset Management Company Distribuidora de Títulos e Valores Mobiliários Limitada is authorized and regulated by Comissão de Valores Mobiliários and Brazilian Central Bank. Western Asset Management Company Pty Ltd ABN 41 117 767 923 is the holder of the Australian Financial Services Licence 303160. Western Asset Management Company Pte. Ltd. Co. Reg. No. 200007692R is a holder of a Capital Markets Services Licence for fund management and regulated by the Monetary Authority of Singapore. Western Asset Management Company Ltd is a registered Financial Instruments Business Operator and regulated by the Financial Services Agency of Japan. Western Asset Management Company Limited is authorised and regulated by the Financial Conduct Authority (“FCA”) (FRN 145930). This communication is intended for distribution to Professional Clients only if deemed to be a financial promotion in the UK as defined by the FCA. This communication may also be intended for certain EEA countries where Western Asset has been granted permission to do so. For the current list of the approved EEA countries please contact Western Asset at +44 (0)20 7422 3000.