Non-farm payrolls added a cracking 517,000 jobs in January, well above market expectations of +190k.
This is a breathtaking number.
That spike in stories about layoffs? It was about a small unrepresentative slice of the economy. Real America is still getting back to work.
This is a breathtaking number.
That spike in stories about layoffs? It was about a small unrepresentative slice of the economy. Real America is still getting back to work.
Revisions were also quite positive, and December was revised up by +37k to +260k while November was revised up by +34k to +290k.
These call into serious question any notion that the economy has been slowing.
Average job growth over the past 3 months is a cracking +356k. A boom!
These call into serious question any notion that the economy has been slowing.
Average job growth over the past 3 months is a cracking +356k. A boom!
The unemployment rate fell a touch to 3.4% (and for the wonks, this wasn't due to the new population controls).
That's a new 50-year low. The last time unemployment was this low, was May 1969.
We haven't seen unemployment this low since before Woodstock, baby. Groovy.
That's a new 50-year low. The last time unemployment was this low, was May 1969.
We haven't seen unemployment this low since before Woodstock, baby. Groovy.
Reading the household survey is always a little tricky in January, due to technical factors (yawn), and it also shows employment growth, but at a more subdued +84k. (The +810k number in the raw data is not a real estimate of employment change.) 
The number that'll captivate the Fed is hourly earnings. Despite the hot labor market, there's really no sign of inflationary pressure there.
Average hourly earnings rose +0.3% in January, or an annualized rate of 3.7%. Wages up are 4.4% over the year.
Average hourly earnings rose +0.3% in January, or an annualized rate of 3.7%. Wages up are 4.4% over the year.
Equally, last month's (December's) hourly earnings were revised up a bit, so instead of growing 0.3% we now know they grew 0.4%.
This doesn't much change the sense of underlying wage growth right now "four-point-something percent", but it undoes the sense of a downward trend.
This doesn't much change the sense of underlying wage growth right now "four-point-something percent", but it undoes the sense of a downward trend.
Here's a graph of revised monthly wage growth (at an annualized rate). My reading is that wage growth has hit a happy groove at around four-point-something percent, and there doesn't seem to be an obvious trend upward or downward.
For sure, no wage-price spiral is developing.
For sure, no wage-price spiral is developing.
We also get the annual benchmark of the payrolls data, where better data for 2022 replace earlier estimates.
These numbers suggest that job growth over the year to March 2022 was a good bit stronger than many realized, at +7.1m, rather than +6.4m. Add +50k to monthly job growth!
These numbers suggest that job growth over the year to March 2022 was a good bit stronger than many realized, at +7.1m, rather than +6.4m. Add +50k to monthly job growth!
These revisions suggest that payrolls growth has been quite a bit stronger than we realized throughout 2022 and the economy was really motoring along.
This is a final nail in the coffin of all the 2022 recessionistas.
When average job growth is this high we call it a BOOM.
This is a final nail in the coffin of all the 2022 recessionistas.
When average job growth is this high we call it a BOOM.
Last year involved the biggest mis-reading of the economy in my lifetime.
The recession talk spiked to new highs, even as the economy recorded a rate of job growth that any real economist will tell you spelled "BOOM."
The recession talk spiked to new highs, even as the economy recorded a rate of job growth that any real economist will tell you spelled "BOOM."
It's stunning: Recession talk spiked to new highs in 2022 when:
1. The unemployment rate hit a new 50-year low
2. Job growth was the second fastest ever recorded (going back to 1939), behind... 2021.
Yet it was a very lonely year for me telling folks we weren't in recession.
1. The unemployment rate hit a new 50-year low
2. Job growth was the second fastest ever recorded (going back to 1939), behind... 2021.
Yet it was a very lonely year for me telling folks we weren't in recession.
What a year it was...
And just lemme take my victory lap and remind you that I was here for you every day reminding you that the U.S. economy was not in a recession, nor was it close to one.
And just lemme take my victory lap and remind you that I was here for you every day reminding you that the U.S. economy was not in a recession, nor was it close to one.
https://twitter.com/ingmire/status/1621510508724785156
A useful summary of the jobs report. It's all good news.
My meta-theory of why so many people have been wrong about the economy for so long is that many economists (and econ journos) are incapable of acknowledging that sometimes good things happen.
My meta-theory of why so many people have been wrong about the economy for so long is that many economists (and econ journos) are incapable of acknowledging that sometimes good things happen.
https://twitter.com/byHeatherLong/status/1621512851256135681
A broader lesson: We know so little about how an economy recovers from a pandemic that we need to follow the data even more closely. Our priors are less reliable; historical cycles provide less guidance, and beware of theory analyzing different shocks.
https://twitter.com/BetseyStevenson/status/1621505255459508225
I will say the mixed messages part, though. Even as the latest wage data looks consistent with cooling inflation, when the economy is running this hot (and the January number is lit) it becomes a bit harder to feel confident that inflation will continue gliding downward.
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