06/03/2011 12:24 pm ET Updated Dec 06, 2017

On the Job Numbers

You never want to freak out over one month's numbers in this biz, but when a monthly result reflects other stuff going on in the economy -- in this case, slowing growth -- you want to give that monthly number a little more weight.

So that explains my earlier impressions of this morning's jobs report.

That said, it's always good to smooth out the monthly results by averaging over the past few, say three, months. That's especially important when temporary factors, such as supply disruptions from Japan, are operative. Such smoothing begets the figure below, which shows three things worth noting:

  • With the three-month averaging, the growth rate of payroll jobs has not really decelerated. May's result obviously goes the other way, but the general trend has been a bit more positive.
  • Private sector payrolls are growing more quickly than overall, because the state and local sector continues to cut jobs. Over the past year, they've shed over 300,000 jobs.
  • Wage growth is really a problem here. On an hourly basis, yearly growth of nominal wages have been stuck below 2% since last February. That's below recent inflation, and it means that only way families can get ahead is with more hours of work. For that option, see today's jobs report.
  • Most importantly, smooth all you want, the fact is that job growth is just too slow to provide working families with the job and income opportunities they need.


Source: BLS

Someone just asked me, "how does the White House pivot from targeting deficits to targeting jobs?"

How's this? "Based on new information, we are now pivoting from targeting deficits to targeting jobs!"

OK, I'm not a speechwriter. But that's the gist. And by no means should that preclude us from setting a balanced path toward a sustainable budget. It's just too early to set down that path.

Pivot to what? See this, but I was also thinking this AM (hat tip, TM) about the Rivlin/Domenici idea for a full-year, full-bore payroll tax holiday, both on the employer and the employee side.

Why this idea? It's of significant magnitude, the first name of the commission that proposed it is "bipartisan," it cuts labor costs to employers and boosts paychecks of workers, who will spend the money, generating useful second round effects. And Alice R and Pete D ain't exactly wild-eyed radicals, which matters in this town. (Ezra Klein has touted this idea too lately, but I couldn't find the link).

Give my colleague Chad Stone's write-up a close read -- he nails the details.

This post originally appeared at Jared Bernstein's On The Economy blog.