Uncomfortably hot jobs report. 528K jobs added & unemployment rate falls to 3.5%.
What worries me re inflation is avg hourly earnings were up at a 5.8% ar in July. June revised to 5.4% (up from 3.8%).
The wage moderation we were all discussing last month was simply wrong data.
What worries me re inflation is avg hourly earnings were up at a 5.8% ar in July. June revised to 5.4% (up from 3.8%).
The wage moderation we were all discussing last month was simply wrong data.
Looking at a three month average the pace of job growth is still moderating. My guess is that is more true than any given month. But the news this month is in the opposite direction.
Here is what average hourly earnings growth looks like. We spent the last month trying to reconcile differences btw this & other data. The revised data looks *very* different than what we were looking at before.
Historically this is consistent with 4%+ inflation.
Historically this is consistent with 4%+ inflation.
Very different from what it looked like a month ago.
Overall, I've thought the consensus was overworried about recession & underworried about inflation. This report is consistent w/ that.
Is nice to see this many jobs added but it is scary about what it means for the size of the adjustment we may have coming.
Not the sweet spot.
Is nice to see this many jobs added but it is scary about what it means for the size of the adjustment we may have coming.
Not the sweet spot.
P.S. If you want to be an optimist, job openings do seem to be coming down rapidly (likely also in July, don't have official data yet) without UR rising. Could be a shifting "Beveridge curve" which would make the Fed's softish landing more plausible.
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