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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.

No Support For Stronger-Growth Stories From Payroll Data

Expectations for stronger US growth in 2014 have been prevalent across the financial markets lately. We have been skeptical of this latest bout of optimism, and the last two payroll job reports have bolstered our view. Job growth was especially weak a month ago, and this morning's announcement was not much better: total nonfarm payroll jobs up only 113,000 and private-sector jobs up 142,000.

We typically track a "core" jobs series that excludes retail and construction jobs, because of the intense short-term volatility in both these sectors. This core measure was up only 107,000 jobs, following a 48,000 gain in December. As you can see in the accompanying chart, trends in total and core private payrolls are essentially the same (with the core measure less volatile). Both measures show slower job growth throughout 2013, compared to what we saw in 2011 and early 2012. Similarly, while both measures looked to be picking up in October and November of 2013, the last two announcements have fully offset that drift.

Seasonal influences—such as frigid weather in the Northeast—may well have held down job growth recently. Then again, an unseasonably warm Fall may have overstated job growth in October and November. On average, job growth over the last four months has been right on a 150,000 per month pace. This is right in line with prior 2013 trends, and well below the pace of 2011–12.

Again, there is no indication in these data of the US economy breaking out of its torpor, and we think this should continue to be the case in the months ahead.

Private-Sector Payroll Job Growth
Private sector payroll job growth chart
Source: Census Bureau as of 31 Jan 2014

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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