Jobs report uniformly weak: 92K jobs lost (with job losses in almost every industry), household survey employment down too, unemployment rate up to 4.4%, participation down, avg weekly hours flat.

Main sign in the other direction was strong wage growth. The dynamics for private employment look just like overall (86K lost in private with govt basically flat.

A strong finish to the year for core PCE inflation. And not "strong" in a good way.

Annual growth rates.
1 month: 4.3%
3 months: 3.1%
6 months: 2.9%
12 months: 3.0% Full numbers.

More than *all* of the jobs added over the last year have been in private education & health services.

Total jobs: 359K
Private education & health services: 773K
All other sectors: -414K

This might look surprisingly unbalanced. It's actually the opposite.

A 🧵 Here is percentage job growth across sectors over the last year. Dropping the two most extreme they range from 0.8% for leisure & hospitality to -1.5% for information, a 2.2pp difference.

(Note this post generally uses 3 month moving averages to smooth otherwise volatile data.)

Core CPI inflation rose during the month of January. But it fell and was relatively muted over longer periods of time--although still some concern the numbers a bit lower due to shutdown-related quirks.

Annual rates:
1 month: 3.3%
6 months: 2.5%
12 months: 2.5% Here are the full numbers. Sadly no data for October because of shutdown so can't compute 3 month changes.

On the surface a strong jobs report (130K jobs & unemployment falls to 4.3%).

And just about every detail makes it even stronger: participation up, involuntary part-time down, hours up, wages up.

The mystery of strong GDP and weak jobs is being resolved in the direction of GDP. The job growth happened despite further cuts in federal jobs. Private employment was up an impressive 172K.

I will be enthusiastically supporting faculty legislation to cap the number of A's at Harvard at 20% (plus a bit). The collective action problem that has driven grades higher & higher over time is increasingly problematic. I hope other institutions consider similar steps. I've talked to numerous colleagues & students about grade inflation. Almost all of them see it as a a problem. I've also heard about as many different ideas for solutions as I've had conversations. I would tweak this proposal in various ways. But would support it over nothing.

Core CPI came in a smidge lower than expected but is still consistent with inflation above the Fed's target. Annual rates:

1 month: 2.9%
3 months: 1.6%
6 months: 2.6%
12 months: 2.6% Here are the full set of numbers.

December was a new normal jobs month--for a world with low net migration.

50K jobs added (37K in private sector)
3 month averages: -22K total and +29K

Unemployment rate down to 4.4%

Avg hrs down & avg wages up. Private sector job growth is a better read of the underlying economic signal.

Depending on how you look at it growth in Q3 was very very strong or very strong or just possibly merely strong. Annual rates:

GDP: 4.3%
Real final sales to domestic purchasers: 2.9%
Average of GDP & GDI: 3.4%
GDI: 2.4% A big part of the story was consumer spending up at a 3.5% annual rate. Started the year looking weak but new data and revisions have made consumers very strong.

Core PCE inflation. Annual rates:

1 month: 2.4%
3 months: 2.7%
6 months: 2.7%
12 months 2.8% Full set of numbers.

Several thoughts on that piece by @nealemahoney & @BharatRamamurti in @nytopinion. 1. They claim price controls are good politically. I'm very open to this being true, I'm under no illusion that what I think is good policy is particularly well correlated with good politics. But I am genuinely interested in more evidence beyond the brief observations they make.

The Federal minimum wage was established in 1938.

It was in effect for about 85 years.

It has now, for better or worse, been effectively abolished. The last three legislated increases in the minimum wage were bipartisan:

1989: President Bush (41) and a Democratic Congress
1996: President Clinton and a Republican Congress
2007: President Bush (43) and a Democratic Congress

The government made the reasonable decision to release CPI data because needed to calculate Social Security COLAs.

Quick summary, core CPI annual rate:
1 month: 2.8%
3 months: 3.6%
6 months: 3.0%
12 months: 3.0% Here are the full set of numbers.

A big upward revision for GDP, was a 3.8% annual rate (up from 3.0% in the advance estimate). For H1 GDP up at a 1.6% annual rate.

The biggest change was consumption which was 2.5% annual rate (up from 1.4% in the advance). Business fixed investment strong, residential weak. Here is quarterly consumer spending. It looked like it was really slowing but with this upward revision and the July and August indications it's looking much more healthy.

The core inflation rate increased for the fourth straight month. Annual rates:

1 month: 4.2%
3 months: 3.6%
6 months: 2.7%
12 months: 3.1% Here are the full set of numbers.

A market slowdown in the pace of job gains, with 22K added in August, bringing the three month average to 29K.

On a percentage basis have not seen job growth this slow outside of recessionary periods in more than sixty years. The unemployment rate rose from 4.2% to 4.3% (unrounded was a smaller increase).

Wage growth was strong and average hours steady.

The core PCE inflation rate increased for the fourth month in a row. Annual rates:

1 month: 3.3%
3 months: 3.0%
6 months: 3.0%
12 months: 2.9%

But two reasons to be less worried than headline: (1) transitory tariffs & (2) some of this is imputed from rising stock market. Here are the full set of numbers I'll talk about.

Particularly notable is how much lower market core has been than overall core at every horizon. Note regular core includes imputed items, notably portfolio management fees where the price goes up when the stock market goes up.

Inflation numbers a little better than expected. But inflation numbers also showing signs of re-inflation, both tariff and possibly otherwise.

Core annual rate:

1 month: 3.9%
3 months: 2.8%
6 months: 2.4%
12 months: 3.1% Here are all the numbers. All of them highly elevated except headline--which benefited from a 2.2% decline in gasoline prices (seasonally adjusted).

The jobs slowdown is here with 73K jobs in July & large downward revisions to May & June bringing the average to 35K/month.

Not quite as bad as you might think because steady-state job growth is much lower in a low net immigration world but unemployment still gradually rising. A small portion of the weaker jobs numbers in recent months are Federal cuts.

My latest @nytopinion attempts to answer the question, "The Tariffs Kicked In. The Sky Didn’t Fall. Were the Economists Wrong?"

Part of my argument is the economy actually has slowed & inflation has picked up, as you would expect.

Plus Trump called off some tariffs and lags. But there are two broader lessons here:

1. U.S. economy is mostly domestic services. Trade matters but it doesn't matter as much as some of the hype might make you think. (And I confess, I do suffer from TDS, tariff derangement syndrome.)

A big pop in core PCE inflation in June. Annual rates:

1 month: 3.1%
3 months: 2.6%
6 months: 3.2%
12 months: 2.8%

No matter what horizon you're looking at this is too high. (Although there is a case that it is transitory due to tariffs.) Here are the full set of numbers.