Friday, August 3, 2012

It should exceed 450 thousand per month by now

Today's job numbers are a mixed bag.  Payroll employment rose by 163 thousand, which is somewhat higher than the number of working-age adults that were added last month.  As a rule of thumb, job growth of about 125 thousand is needed just to keep pace with population growth.  We should be adding 450 thousand or more jobs every month by now.  And don't believe the hokum that the weak recovery is due to the deepness of the recession.  The opposite is true. 

Here's a good characterization of the payroll numbers:
"I'd call this a soft 163," said Steve Blitz, chief economist at investment research firm ITG in New York. "If you want to take from this the notion that the economy is not heading to a recession or something more ominous, that's fine. But if you want to take from this the idea that the economy is about to accelerate, I think that would be a big mistake."
The unemployment rate, on the other hand, rose from 8.2 to 8.3 percent.  As I've said many times, the unemployment rate is very close to worthless as a measure of labor market conditions. Higher unemployment can indicate improving or worsening conditions. The employment to population ratio is much more useful, and it fell from 58.6 to 58.4: