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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.

November Payrolls: Here's That Sunny Day

In previous recoveries, we would routinely see monthly payroll job gains of 300,000 to 400,000. The current expansion has been so tepid that bulls have had to take solace from monthly gains of around 230,000...until today. November private-sector payrolls were reported today up 314,000, with total payrolls up 321,000.

So, we finally have monthly job gains reminiscent of past expansions. In fact, as you can see in the accompanying chart, with upward revisions to past months’ data, job trends now look to have lifted a bit from the pace of recent years. (In the chart, 2011 and 2012's monthly gains of above 300,000 occurred only after substantial benchmark revisions, not in the actual monthly news.)

So, there is no getting around the fact that the jobs data have improved on balance over the last five months. There is not much indication of follow-through from this to the rest of the economy, and there is no guarantee that the recently faster pace of job growth will continue, but for now, better jobs data are the order of the day.

It will be interesting to see how the bond markets react to this over the next few weeks. Virtually everyone knows that the Federal Reserve will be attempting to raise short-term rates next year, and there has already been a cadre of folks clamoring that the economy is picking up. Nevertheless, bond yields have stayed stubbornly low, even hitting new 2014 lows last Friday

Will today's news finally incite a sustained move higher in yields, and would such a rise make bonds a buy, or would it merely be the first step in a continuing climb? For now, better growth is in the jobs data, and we will have to see whether it penetrates yield levels.

Private-Sector Job Growth
October Home Sales Chart
Source: Bureau of Labor Statistics. As of 30 Nov 14.

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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