Longest Job Expansion Continues: 100 Months (Bears Wrong Again)

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Today the Bureau of Labor Statistics reported jobs data for January, 2019. Payroll jobs grew at 304,000 which means that the longest job expansion streak continues, now for 100 months. The job numbers beat expectations, however, the previous month’s big job gain was revised down 92,000. The last 12 months comprised one the best job creation years we have had in recent history–especially when one takes into account the duration of this economic expansion and our demographics.  We are now 5 months away from having the longest economic expansion ever recorded in U.S. history.

For 2019 I predicted this:


“I expect job creation numbers to fall but stay in the range of 137,000 – 157,000 per month.”

https://loganmohtashami.com/2018/12/29/2019-economic-housing-predictions/

We’ve had a great start to the year, even if we see big revisions down for the January jobs print and job growth moderates this year.  We are still producing double the jobs needed for population growth without any real inflationary price pressures.

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

“Total nonfarm payroll employment increased by 304,000 in January, and the unemployment rate edged up to 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in several industries, including leisure and hospitality, construction, health care, and transportation and warehousing”

This a breakdown of the jobs created for the last month.

From BLS:
https://www.bls.gov/…/employment-by-industry-monthly-change…

Feb Jobs Breakdown

This is a look at the earnings breakdown for the previous month.

From BLS:
https://www.bls.gov/…/employment-by-industry-monthly-change…Feb Wage Breakdown

Wage growth is running at 3.2% on a 12-month average. The 3-month average fell to 3.1%. This means we have solid real wage growth since headline CPI inflation has been falling from the recent highs. Lower oil prices will boost the real average hourly wage data.

From Atlanta Fed:
https://www.frbatlanta.org/chcs/labor-report-first-look.aspx

Feb wage tracking data

From Doug Short:
https://www.advisorperspectives.com/dshort/updates/2019/01/11/consumer-price-index-december-headline-at-1-91
Jan CPI short

Job growth continues to outperform my expectations. We are producing over double the number of jobs needed for population growth.

 “This is a solid reflection of our American work ethic, especially considering the duration of this economic cycle.”

One final note, some people are saying that this hot jobs market will force the Fed to raise rates again.  I have talked about inflation and Fed rate hikes and even produced my own model, showing that Fed was at neutral. If a hot job market was pushing prices higher, we would see this in the PCE core inflation data. We have not seen price pressure accelerate and core PCE is below 2% today, again.

https://loganmohtashami.com/2018/11/29/the-fed-still-needs-more-inflation-2018-edition/

 

December PCE.png

When we are creating less than 120,000 jobs per months and job openings accelerate toward 8-10 million, then we can assume we are at full employment.  We aren’t there yet.  And we don’t have a huge numbers of Americans who have been sitting at home for 8, 16, 24 years, finally coming back to work. So enjoy this marvelous job expansion!  For my American bear friends who constantly yap about an economic collapse in 2019…

From Rocky 4:
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Logan Mohtashami is a financial writer and blogger covering the U.S. economy with a specialization in the housing market. Logan 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