What’s the News in the September Payroll Increase of 136,000 Jobs?
The latest jobs report is actually good news, says UCLA Anderson economist Edward Leamer
Los Angeles (October 4, 2019) ― With the release of today’s September employment report, UCLA Anderson Professor Emeritus Edward Leamer offers a timely analysis of the data behind the report.
Leamer, who is also director emeritus of the UCLA Anderson Forecast, writes that the latest numbers, in a filtered analysis, show relative stability in the economy.
Read on for Leamer’s analysis:
The September 2019 payroll release of 136,000 jobs is less than the (revised) 168,000 last month, and those who are worrying about the next recession might take that as something more to worry about. But it is difficult to discern the real meaning of that measured decline because the payroll data have some extreme ups and downs, with a big drop followed in the next month by a big increase, or a big decline revised upward in the next month.
The news in these releases can be captured by two smoothed series, one based on just the overall payroll data and another one that includes the components of the payroll data, such as nondurable manufacturing. The actual and the smoothed versions are illustrated in the figure below. Both of the smoothed series are up this month, not down. Don’t despair. The news is actually good.
The right story
During the first half of 2019 the rate of increase in payrolls fell from around 210,000 to around 160,000, but in June, payroll growth stabilized at around 160,000 jobs. September is the fourth month at the same rate. Slow and steady is the news.
About UCLA Anderson Forecast
UCLA Anderson Forecast is one of the most widely watched and often-cited economic outlooks for California and the nation, and was unique in predicting both the seriousness of the early-1990s downturn in California and the strength of the state’s rebound since 1993. More recently, the Forecast was credited as the first major U.S. economic forecasting group to declare the recession of 2001. Visit UCLA Anderson Forecast at uclaforecast.com.
About UCLA Anderson School of Management
UCLA Anderson School of Management is among the leading business schools in the world, with faculty members globally renowned for their teaching excellence and research in advancing management thinking. Located in Los Angeles, gateway to the growing economies of Latin America and Asia and a city that personifies innovation in a diverse range of endeavors, UCLA Anderson’s MBA, Fully Employed MBA, Executive MBA, UCLA-NUS Executive MBA, Master of Financial Engineering, Master of Science in Business Analytics, doctoral and executive education programs embody the school’s Think in the Next ethos. Annually, some 1,800 students are trained to be global leaders seeking the business models and community solutions of tomorrow.
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