Longest Job Expansion Continues: 79 Months


Today the Bureau of Labor Statistics reported jobs data for April 2017. Payroll employment was higher than expected at 211,000 with a positive print in almost all the job sectors in America.

Total nonfarm payroll employment increased by 211,000 in April, and the unemployment rate was little changed at 4.4 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in leisure and hospitality, health care and social assistance, financial activities, and mining.

Report from BLS:  https://www.bls.gov/news.release/pdf/empsit.pdf

The longest job expansion in history continues with almost all employment gains in this cycle full time, despite what you may hear from twitter trolls.

79… As in 79 consecutive months of jobs growth, by far the longest streak in history.

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A breakdown of the jobs created this month, shows gains in the retail trade after two bad months in this job sector.

From BLS


We are also seeing a drop in the unemployment  rate of high school drop outs. This metric is not at the lowest levels of the cycle yet but heading in the right direction after a  recent spike in the unemployment rate for high school drop outs. I would more attribute that recent spike we had to more high school drop outs looking for work.

May Jobs 4
One note on the U6 unemployment rate:  Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force 


This index really has a floor around 8% and we are heading toward that direction which is a good thing but don’t expect too much after that. Historically speaking it’s rate to be below 8% on the U6 unemployment rate

From Doug Short:

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Average hourly earnings was up 2.5%. For years now hourly earnings have been picking up.  Super strong Wage inflation doesn’t necessarily follow low unemployment rates.  In Japan for example, the unemployment rate is 2.8% but their wage inflation low as is their inflation.

Averagely hourly wages in the U.S. are still beating core inflation which is running at 2%.   I wouldn’t put too much weight on headline inflation this year because this is due mostly to increases in oil  prices, year over year, after a depressed low.  Since oil price increases are fading now, look for headline inflation to cool off  as well, especially next year.

This graph from Jim Sullivan shows the slow and steady wage inflation.


After rising from 2.3%y/y in 15 to 2.6% in 16, AHE stable so far in ’17; Apr = 2.55%y/y. Broader Q1 comp data show more acceleration


The slow and steady wage inflation story should keep the Fed from aggressively hiking rates.

More on that topic here:


However, unit labor cost are rising, so the next 2 years should be very interesting to watch if prices can be raised to match rising unit labor cost or does revenue growth make up the difference.

This April 2017 report shows the economy to be in decent shape with trend of  185K  jobs being created per month for 2017,  and an average of  171K jobs being created for the last 6 months. For 2017 I was expecting a range between 140K-170K , so as of now, the economy, at least from this metric, is beating my expectations.

Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing marketLogan Mohtashami is a senior loan officer at AMC Lending Group,  which has been providing mortgage services for California residents since 1987. Logan also tracks all economic data  daily on his own facebook page https://www.facebook.com/Logan.Mohtashami