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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.

January Payrolls Rebound a Bit From December Stall

Private-sector payrolls job rose by 196,000 in January, with November and December cumulative job gains revised down by a slight 2,000. For the “core” job measure we focus on, private-sector jobs excluding construction and retailing, gains in January were 145,000, with -16,000 of revisions to November-December cumulative growth (now estimated at 148,000 in November and 159,000 in December). These gains are about average for this control series—170,000 per month over recent years.

Previous data had shown brisk gains in November and sluggish gains in December. Today’s revisions reversed the order of that sequence, marking November gains down by 38,000 and December up by 22,000. Underneath all the sound and fury, the accompanying chart shows the basic picture.

As we have remarked in previous By the Numbers installments, job growth has generally slowed over the last two years after peaking in 2014-15. Recent data essentially continue that trend. As you can see, when you average out hurricane-depressed September gains (only 5,000) with the post-hurricane rebound in October (254,000), the cumulative increase is well below previous average growth, and the three months since then have all come in below trend as well.

The common assertion is that the economy is at full employment and that this is as fast a job growth rate as we can handle. Even if that is true, the other part of the “common assertion” is that US growth is somehow accelerating. And full employment or not, slowing job growth just doesn’t jibe with claims of accelerating growth.

Meanwhile it should be noted that today’s data featured benchmark revisions to job growth going back a few years. For the data through October, private-sector jobs were revised up by 249,000, while our core measure was revised up by 146,000. It is nice to see upward revisions, after the somewhat larger downward benchmark revisions a year ago, but these stronger gains spread over a couple years don’t move the needle, as can be seen in the chart, which reflects all these revisions.

Monthly Job Growth
Monthly Job Growth
Source: Bureau of Labor Statistics. As of 31 Jan 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.

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