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Aaron Sojourner @aaronsojourner
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Happy #JobsDay! 8:30 ET @BLS_gov delivers most important signals abt how economy is changing

+208K jobs. If >0, extends longest streak of monthly job creation on record to 8 years+1 month (graph). Progress so steady over so many years.

Big question: wage growth?
I worked as CEA senior economist for labor in 2016-‘17. Briefed @WhiteHouse & LaborSec on #JobsReport monthly…

I was honored to serve American people:

Public servants toiled all month surveying abt 200K bizs + individs, crunched data & made #JobsReport stats for us. Thanks @BLS_gov! Read @ryan_d_nunn @dwschanz @MichaelRStrain…
Most important #JobsReport stat for families is wage growth. Measures how economic change affecting our earning power.

Last month, average hourly earnings up 2.8% over year. We should see acceleration but have seen just a little.
Nominal average hourly earnings growth (blue line) is being eaten up by modest, 2.3% price inflation (red line).

So real wage growth (blue – red) is low = 0.5%.

Real wage growth was faster in 2015 & 2016, thanks to lower price growth.
The Employment Situation report will be here…
Excellent point from @PatcohenNYT on wage growth: "The year-over-year change will jump partly because there was an unusual drop in wages in October last year after Hurricane Harvey."…
+250K jobs gained last month (mid-Sept to mid-Oct).

Continues longest streak of monthly job growth on record = 97 months! Job growth turned positive Oct 2010. Longest streak of private-sector job growth too, since Apr 2010. Revisions net 0.
This month’s +250K is a strong # >> estimate of job growth needed to maintain a low and stable unemployment rate given demog change ~= +80K. How does this compare to recent years?
Over the year, job growth is up. Economy added 2.52 million jobs over last 12 months. Higher than most-recent 2 years. Down from 2 before.
Growth bump reflects in part temporary, fiscal stimulus from borrowing to pay for Dec 2017 tax law & addt'l deficit spending.

@BrookingsEcon: Fiscal policy at all gov't levels contributed 0.73 pp to 2018Q3 GDP growth, most in 8 yrs, since 2008Q3.…
Unemployment rate stable at low level of 3.7%. Has fallen steadily for years. No change this month.
Labor force participation rate (LFPR) up 0.2%, at 62.9%, similar for years. Overall LFPR was 62.7% a year ago, 62.8% 2 years ago, & about the same 3 or 4 years ago.

Boomer retirements push LFPR down 0.25-0.3 pp/yr. So staying still is a kind of progress.
Employment-population ratio (EPOP) up 0.2% to 60.6%. Was 60.4% last month & 12 months before that. +0.4%/yr trend from 3 prior years to Sept.
That’s the extensive quantity (Q) margin. The intensive Q margin is average hours.

Average workweek hours for private sector ticked up 0.1 hr to 34.5, same as a year ago. For frontline workers (production & nonsupervisory) stable at 33.7 hrs, same as last month & even Sept '12.
In manufacturing, workweek edged down 0.1 hr to 40.8 hours. Was 40.9 a year ago (Oct 2017), 40.7 hours in Oct 2016 & in Oct 2015 & 41.0 in Oct 2014. Includes stable overtime at 3.5 hrs/wk.
As labor demand starts to exceed supply, price (wage) should rise. Nominal average hourly earnings growth hovered in 2.3-2.9% for about 2.5 years, since Oct’15. Last month: 2.8%.

This month's estimate up to 3.1% growth over the year. In line with estimates from other sources.
Wage growth (blue line) of 3.1% over the year eroded by consumer price inflation (2.3%), yields real wage growth (blue-red) of less than 1.0%. Below rates in 2015 & 2016.
For the 82% of workers who are frontline (production & nonsupervisory), nominal wage growth was 3.2% over the year. That shows acceleration from 2.7% last month (blue line).

Better than before but an hour of work still buys less than 1% more now than a year ago.
Still slack in the labor market.

Long-term unemployment little changed at 1.4 million, same as last month.

Americans stuck in part time jobs but would prefer full time, unchanged at 4.6 million.

Marginally attached 1.5 million, same as a year ago.
In sum, a strong report. The financial crisis & Great Recession put us in a deep hole. We have steadily dug ourselves out since.

Dec 2017 #TCJA added $1.5 trillion new debt & created some expensive fiscal stimulus that is giving us a temporary bump.
White House brags about # of jobs added. With fiscal stimulus, growth continues.

This makes 4.05 million jobs added since Jan’17, over 21 months ending Oct’18. This is abt the same as than the 21 months ending in Oct’17 & 10% less than same ending Oct’16.
First-order forces on labor market: steady continuation of progress since Great Recession.

Also, one real piece of economic policy change in last 2 years: Dec 2017 #TCJA tax law having 2 effects:
1. Debt-fueled, expensive fiscal stimulus,
2. huge bump to company owners' profits.
Last things!

1. Make your voice heard in the election. Volunteer & vote.

2. @BLS_gov does amazing work to create timely, accurate info about America's working families, a huge public good. We need to show up for them. Follow & join @Friends_of_BLS.
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