Macroscope | Trump’s tweet-worthy jobs data should be tempered with attention to other indicators
Neal Kimberley says even encouraging signs from US non-farm payrolls and average hourly earnings data should not be viewed in isolation. Rather, retail sales figures and the flat Treasury yield curve tell a less optimistic story
This Friday’s US non-farm payrolls figure and average hourly earnings income data are the main focus for markets, and both sets of numbers shouldn’t be viewed in isolation.
That aside, it’s only fair to Trump to note that initial claims for state unemployment benefits, for the week that ended March 24, did fall by 12,000 to a seasonally adjusted 215,000, and that was the lowest level seen since January 1973. From Trump’s perspective, it was a tweet-worthy moment.
It might well be that while the US economy has been creating lots of jobs, those jobs are not particularly well paid
Yet it’s that 158-week run which is arguably more important than the 45-year low, because the length of time the US jobs market has been strong hasn’t really translated, at least so far, into marked accelerations in average hourly earnings. In 2017, average hourly earnings grew by 2.5 per cent over the year, amounting to a rise of just 65 cents, to December’s figure of US$26.63.
Of course, it might well be that while the US economy has been creating lots of jobs, those jobs are not particularly well paid. Perhaps that helps explain why, even though the US jobs market is robust, US retail sales fell in February for the third month in succession.