What Upbeat US Job Numbers Mean for the Economy

Strong non-farm payroll data were a standout in a sea of gloomy economic reports, despite a drop in hourly wages

Robert Johnson, CFA 8 August, 2017 | 12:44PM
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A respectable employment report at the end of the week provided great relief to many economists who were still a bit stunned from the negative data earlier in the week.

Month-to-month nonfarm payroll managed to show another month of growth, with 209,000 jobs, in excess of the 12-month average of 180,000, the consensus forecast of 180,000, and my forecast of 160,000. While we believe some faulty seasonal factors and unusual sector data have helped results over the past two months, we are pleased with the relatively strong data.

In a sea of negative economic reports over the past two week – including motor vehicle sales, pending home sales, construction spending and ISM Purchasing Manager Surveys - the employment data seems to suggest that things are not so bad. And a combination of better employment levels, hours worked, and hourly wage rates should keep wage data and likely consumer data moving ahead in the second half.

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Robert Johnson, CFA  is director of economic analysis with Morningstar.