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BLS: Non-Farm Payrolls +157K; Expected 193K; Unemployment Rate 3.9%; Average Hourly Earnings 2.7%

Hedgology

Hedgology

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U.S. hiring cooled but remained solid in July and the unemployment rate fell, showing the labor market remains firmly in expansion mode.

U.S. nonfarm payrolls rose a seasonally adjusted 157,000 in July, the Labor Department said Friday. The unemployment rate, a seasonally adjusted 3.9%, ticked down from 4.0% the prior month.

Looking over a broader period, job growth appears stronger. Revised figures show employers added 248,000 jobs in June and 268,000 in May, a net upward revision of 59,000.

Economists surveyed by The Wall Street Journal had expected 190,000 new jobs and a 3.9% unemployment rate.

Wages rose 2.7% from a year earlier in July, a modest pace.

Through the first seven months of the year, employers added an average of 215,000 jobs a month, a somewhat unexpected acceleration from last year’s average through July of 184,000 a month. Economists generally expect hiring to ease in the later stages of an expansion when workers are in short supply, which a 3.9% jobless rate would suggest.

https://www.wsj.com/articles/u-s-hi...-unemployment-rate-falls-1533299514?mod=e2twe
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Majority of the job gains this month was in manufacturing, leisure and hospitality wholesale trade and health care. Also temporary services ticked up again after two consecutive months of job losses in that industry. Not sure what that's about...

Screen-Shot-2018-08-03-at-8.40.29-AM-e1533300969329.png


Jobs for the month of July were revised upward from 213K to 243K.

Screen-Shot-2018-08-03-at-8.53.44-AM.png


The unemployment rate dipped below 4.0% again, showing signs that there is still slack in the labor market.

2018-08-03%20%283%29.jpg
 
Also, May was revised upward three times: from 223K to 244K, and from 244K and 268K.

So far, based on these revisions, there were 1,503K jobs created in the year of 2018 and an average of 215K jobs per month.
 
157,000 is among the lowest for 2018. Overall, job gains are nothing special to write home about. These are YTD figures for the last few years:

2012.....1,258
2013.....1,316
2014.....1,682
2015.....1,611
2016.....1,413
2017.....1,291
2018.....1,444
 
MTAtech said:
157,000 is among the lowest for 2018. Overall, job gains are nothing special to write home about. These are YTD figures for the last few years:

2012.....1,258
2013.....1,316
2014.....1,682
2015.....1,611
2016.....1,413
2017.....1,291
2018.....1,444
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If the labor market was tight, we wouldn't have the fastest job gains since 2014
 
Hedgology said:
If the labor market was tight, we wouldn't have the fastest job gains since 2014
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2015 had far more job creation, YTD. 2018 is similar to 2016. That "fast growth" for this year is concentrated in February's number -- 324,000. January, March, April and July are all below 200,000 -- which is less than are needed to replace retiring workers.

One would expect wages to rise in a tight market but we are not seeing that happen -- except in the executive suite.
 
MTAtech said:
157,000 is among the lowest for 2018. Overall, job gains are nothing special to write home about. These are YTD figures for the last few years:

2012.....1,258
2013.....1,316
2014.....1,682
2015.....1,611
2016.....1,413
2017.....1,291
2018.....1,444
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your year to date numbers for 2018 don't include the 157 from this month. It should be 1,503. Still nothing too special. Perfectly fine numbers, but not better than 2014 or 2015 when we did not have tax cuts in place, and we were reducing the deficit.
 
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MTAtech said:
That "fast growth" is concentrated in February's number -- 324,000. January, March, April and July are all below 200,000 -- which is less than are needed to replace retiring workers.

One would expect wages to rise in a tight market but we are not.
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Wage growth comes AFTER sluggish employment gains, as the only way employers will be able to attract quality talent is to increase wages; which is the entire point.

If the labor market was tight, you wouldn't be seeing the same level of employment gains as we did for the past 7 years. For whatever reason, people want to work in today's labor market, which is odd; the tradapocalypse was supposed destroy everything...
 
MrWonka said:
your year to date numbers for 2018 don't include the 157 from this month. It should be 1,503. Still nothing to special. Perfectly fine numbers, but not better than 2014 or 2015 when we did not have tax cuts in place, and we were reducing the deficit.
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The Fed was still buying bonds in 2014/15
 
Hedgology said:
The unemployment rate dipped below 4.0% again, showing signs that there is still slack in the labor market.
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Perfectly fine numbers. Nothing terrible, nothing great. Job numbers for the year are still below what we had in 2014 and 2015 when we did not have tax cuts, and we were reducing the deficit. The only major concern here is that this is the fewest number of jobs created in July since 2012, and the only significant thing I could point to which might have caused that would be the fact that many of Trump's tariffs went into effect on July 6th.

It was reported that the reason for the spike in GDP last quarter was due to China ramping up exports in advance of these tariffs so this relatively low number could be a sign that they are in fact slowing their exports down after the tariffs took effect.
 
MrWonka said:
Perfectly fine numbers. Nothing terrible, nothing great. Job numbers for the year are still below what we had in 2014 and 2015 when we did not have tax cuts, and we were reducing the deficit. The only major concern here is that this is the fewest number of jobs created in July since 2012, and the only significant thing I could point to which might have caused that would be the fact that many of Trump's tariffs went into effect on July 6th.
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Tariffs wouldn't explain why the manufacturing industry experienced job gains. The only industries that really experienced any job losses were in the Government sector.

It was reported that the reason for the spike in GDP last quarter was due to China ramping up exports in advance of these tariffs so this relatively low number could be a sign that they are in fact slowing their exports down after the tariffs took effect.
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Imports tell faster than exports grew. The GDP spike is largely due to less imports, not more exports.
 
Numbers are neither great or awful, just seemingly a continuation of the course we are on with little deviation from the trend. We have solid hiring, somewhat wage and benefit growth, but we have an issue with labor participation (that we've known about for years.)

It should be noted that by sector Financial, Mining, Utilities, and Transpiration are all down.

The biggest jump seems to be Professional, then Services (hospitality and leisure,) then Manufacturing.

All in all not a terrible report.
 
MrWonka said:
And your argument is what exactly? That the fed was making smart choices under Obama? Okay.
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The economy still needed to be propped up is the point. The Fed makes smart choices regardless of who is in the Oval Office because the Fed needs to be independent from the Government to avoid making policy errors.
 
Hedgology said:
Tariffs wouldn't explain why the manufacturing industry experienced job gains. The only industries that really experienced any job losses were in the Government sector.
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Certainly could. If China bought up a bunch of surplus stock in Q2 that could motivate a build up in that stock short term.

Hedgology said:
Imports fell faster than exports grew. The GDP spike is largely due to fewer imports, not more exports.
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Sure thing chief.
 
Hedgology said:
The economy still needed to be propped up is the point.
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So buying bonds counts as propping up an economy, but tax cuts, increased deficits and tariffs don't huh? Riiight.
 
MrWonka said:
So buying bonds counts as propping up an economy, but tax cuts, increased deficits and tariffs don't huh? Riiight.
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Yes, if the FOMC is purchasing Mortgage-Backed Securities, it is literally propping up the economy.
 
Hedgology said:
Obama isn't president.
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Well, we really haven't seen a change in the trajectory of the economy at all over the last year and a half so there's no reason to give Trump credit for anything other than not ****ing it up yet. But that's like giving your new doctor credit for the fact that you haven't gotten sick again. Doctors fix you up, but they don't do much once you're already healthy. In fact, almost anything a Dr tried to do to a healthy patient besides monitoring them would be reckless an irresponsible.
 
Hedgology said:
Yes, if the FOMC is purchasing Mortgage-Backed Securities, it is literally propping up the economy.
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But running deficits to give millionaires and billionaires a bunch of extra money to try and create jobs isn't? Protectionist policies that force people to buy local aren't? Sure thing chief.
 
MrWonka said:
Certainly could. If China bought up a bunch of surplus stock in Q2 that could motivate a build up in that stock short term.
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How would that affect the manufacturing industry who has been affected the most by the tariffs?
 
MrWonka said:
But running deficits to give millionaires and billionaires a bunch of extra money to try and create jobs isn't? Protectionist policies that force people to buy local aren't? Sure thing chief.
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I don't think anyone is making that argument; the narrative that the economy was operating normally in 2014/2015 is not correct.

The point is that the economy still isn't operating normally, which is why there is so much slack. Stimulus is a good way of mitigating slack.
 
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MrWonka said:
Well, we really haven't seen a change in the trajectory of the economy at all over the last year and a half so there's no reason to give Trump credit for anything other than not ****ing it up yet.
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You don't need to give Trump credit, but to say that the economy hasn't "changed in the trajectory" isn't accurate.

Average monthly jobs has gone from a high in 250K in 2014 to a low of 185K in 2017; it was 195K average in 2016. During the same time frame, average annual GDP growth has gone from 2.5% in 2014 to 1.6% in 2016. Now the economy is probably on track to reach 3% growth this year.

But that's like giving your new doctor credit for the fact that you haven't gotten sick again. Doctors fix you up, but they don't do much once you're already healthy. In fact, almost anything a Dr tried to do to a healthy patient besides monitoring them would be reckless an irresponsible.
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It's nothing like that at all because the trends are clearly different. It's one thing to suggest that this would have happened anyway; it's another to suggest that everything is simply the same. It isn't.
 
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