I'm seeing a lot of analysts arguing today's jobs numbers aren't so bad because the slowdown was driven by the late/partial reopening of schools.
A thread:
On the one hand, this is literally true: The August-September slowdown is less stark when you look at the private sector, and disappears more or less entirely if you also strip out private-sector education
It's also true that the drop in state/local employment is a result of seasonal adjustment -- on an unadjusted basis, employment rose (just much less than in a normal September).
But if we're going to start to play that game, we could also note that the big jump in leisure & hospitality (nearly half the total jobs gain for the month) was also the result of seasonal adjustment. On an NSA basis, leisure & hospitality jobs fell in September.
(The reason: The leisure & hospitality sector usually cuts jobs as summer ends, but this year it's in such a hole there weren't many jobs to cut. So the seasonal factors interpret that as a substantial increase in jobs.)
Some of the notes I'm seeing discount the school cuts because they're unlikely to be repeated. But are they? It seems possible we'll see more schools shut down given the path of the virus right now. (Whereas if anything leisure seems likely to get worse with colder weather.)
My real point here is that these kinds of ad hoc adjustments can get pretty squishy pretty fast. With the exception of clearly defined one-off events like the Census, I generally think it's better not to start adjusting these numbers on the fly.
Two last points: It definitely is true that seasonal patterns have gotten messed up during this period. Looking at unadjusted payrolls, the slowdown is less pronounced in September. But looking just at the private-sector side, the slowdown is actually worse on an NSA basis.
Which leads to the final point: None of this slicing and dicing changes the big picture, which is that the pace of gains has slowed dramatically, to a level that implies a long climb back to where we were before the pandemic. nytimes.com/2020/10/02/bus…
• • •
Missing some Tweet in this thread? You can try to
force a refresh
The U.S. economy slowed in the final three months of the year, but only because the Q3 number was so strong -- the 3.3% growth rate in Q4 was well above expectations and certainly offered no hints of a brewing recession. (Belated charts thread)
This is not a case where the volatile components of G.D.P. made a weak quarter look strong, as sometimes happens. Measures of underlying demand were also very strong.
For all the predictions of a recession, G.D.P. growth actually *accelerated* in 2023, and topped the prepandemic average growth rate as well.
Job openings, quits and layoffs all edged down slightly in November. Consistent with a gradually cooling labor market, but definitely no sign things are falling off a cliff. #JOLTS
Data: bls.gov/news.release/j…
There were 8.8 million job openings on the last day of November. That's down a touch from October, but only because October was revised up. Big picture: Openings are trending down (and quite quickly, at that), but are still high by historical standards. #JOLTS
The number of job openings per unemployed worker actually ticked up in November (because unemployment fell), but ignore the noise. The labor market is becoming more balanced, though the ratio is (again) high relative to the prepandemic period.
The big increase in unemployment is mostly for "good" reasons: More people working, but also more people *looking* for work. Labor force grew by 736,000. Participation rate up by 0.2 percentage points.
U.S. employers added 253k jobs in April, defying (yet again) predictions of a slowdown. The unemployment rate ticked back down to 3.4%.
Data: bls.gov/news.release/e…
Full coverage: nytimes.com/live/2023/05/0…
Notably February and March both revised down, by a combined 149k jobs.
Average hourly earnings stronger than expected -- up 0.5% from March, 4.4% from a year earlier. Consistent with the ECI data showing little slowdown in wage growth.
As expected, the Fed raised interest rates by another quarter point, its tenth increase in a bit more than a year. Rates are now the highest they've been since 2007, before the global financial crisis.
Statement: federalreserve.gov/newsevents/pre…
Full coverage: nytimes.com/live/2023/05/0…
March statement: "The Committee anticipates that some additional policy firming may be appropriate..."
May statement: "In determining the extent to which additional policy firming may be appropriate to return inflation to 2 percent over time..."
In response to question from @jeannasmialek, Powell says that, "A decision on a pause was not made today." But he says the removal of the "anticipates" language was a "meaningful change."