August Jobs Report: The Most Boring Economic Expansion Ever Keeps Being Boring

 

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As I tweeted about the August jobs report: “So 151,000 new August jobs, under expectations. Unemployment, employment, participation, and U-6 rates all stay the same.” I could also have tossed in the meh numbers on wage growth (slowed a bit, though keep in mind inflation is quite low) and long-term unemployment (stable but high).

IMO, nothing to change the presidential race or give the Fed reason to hike. Regarding the latter point, just slow enough. Indeed, odds of a September rate hike by the Fed have fallen to 18% from 24% yesterday. Certainly not everyone agrees. Barclays:

On the whole, this morning’s strong July employment report, despite the slower pace of job gains, indicates that labor market health remains intact and that therefore economic activity remains solid. Furthermore, this print should maintain the confidence of most FOMC members in the outlook. Most members will view this report as consistent with solid economic activity and will believe that that activity will continue to pull inflation upward toward their target. We maintain our call of a September rate hike.

Also worth noting, the US economy has generated 15.1 million net new jobs — private sector jobs! — since the labor market nadir in February 2010.

But probably slower monthly numbers going forward than in recent years. From the WSJ econ team:

U.S. employers have added jobs at a 182,000 monthly pace so far this year. That is down from average gains in 2015 and 2014—the best two years for employment growth since 1999—but is more than adequate in the view of many economists to absorb new entrants to the job market and keep the unemployment rate in check.

And a similar take from IHS Markit:

A more plausible explanation is that the strong job market momentum of the past two years is slowing. This means that the ultra-strong jobs gains of June and July were anomalies (as was the very weak gain in May). IHS Markit believes that in the near term, US payrolls will increase at an average monthly rate of around 175,000, which implies a steady unemployment rate. All this points to an economy that is reaching a steady, if unexciting, cruise speed of between 2% and 2.5%.

BTW, GDP growth over the past seven quarters has averaged about 1.7%.

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  1. Chris Campion Coolidge
    Chris Campion
    @ChrisCampion

    So the Obamanomics policy of significantly increased spending, regulation, and control of one of the major sectors (health care) has reached the desired effect:  A permanently diminished economic vitality.

    He’s managed to take the economy down a peg or two, the military, and world standing.  Not bad for 8 years’ worth of work.  The difference between him and Carter is that Barry wanted these things to happen.

    • #1

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