The clerk of a job growth report published by the Ministry of Labor on Friday morning tells us something we should have already suspected.
In particular, the last blocks of US job placements were just too good to be true. US employers, while still adding their wages, have not been on the epic recruitment suggested by previous reports.
So while the only 20,000 jobs in February (lowest number since September 2017) is a big disappointment – compared to both what the economists had expected and with recent hiring numbers – it can be seen as a correction to some of the more fluid opportunities that is proposed by the same data series at the end of 201[ads1]8 and January 2019.
Essentially, two of the last four months The estimate number (October and January) may have been statistical deviations at the height, and the terrible February number is most likely a deviation on the low end. Together, the average in recent months has been somewhat more realistic, given where things stand in the ten-year economic expansion.
With a single report, average average employment growth for six months has fallen to 190,000 from 234,000. The lower figure is better suited to everything else we know about the state of the economy – especially a 3.8 percent unemployment and many anecdotal reports of scarce workers. Companies cannot add people to payrolls that do not exist.
In the big evidence, the general growth rate is shrinking as trade wars continue to disturb industries and the impact of the tax cuts disappears, and one It makes sense to work on the job.
So job growth in under 200,000-one-month range seems much more plausible for the rest of 2019 – and even more deceleration is a strong opportunity.
If you take the relative Zen view of the job search numbers, there is a terrible lot else in the February numbers. The average hourly wage increased by 3.4 percent over the past year, the strongest within decades. A wider degree of unemployment that catches people who work part-time, but who want full-time projects, went to 7.3 percent.
And unemployment fell to 3.8 percent, from 4 percent, for benign reasons. More people worked and fewer were unemployed. The proportion of adults in the workforce remained stable, not improved further, but did not return the last gain.
Essentially, the labor market ultimately works the way we want it, with most people seeking a job one and employers finding the need to raise wages to make them increasingly difficult to find workers.
This is a difficult report for the Federal Reserve, however. It certainly makes its decision in January to set interest rate increases indefinitely, look like a good one. The lower trend of job growth that comes with the new figure fits the story of a decline in economic expansion everywhere.
However, wage numbers and falling unemployment levels both point to a tight labor market that can create inflationary pressures down the road. The central bank's leader, Jerome Powell, has suggested that faster wage growth does not arouse him. And it is a good material case that the Fed should rejoice at faster wage growth, unless that growth shows clear signs of creating an outbreak in overall inflation.
But if the February trend continues, there will be a test of these beliefs, and the voices claiming that the Fed needs to resume its interest rate campaign are getting higher.
Soft job growth numbers are nothing to fear at this level of unemployment – as long as the weak February number remains one corrective to the latest trend and not the start of something much worse.