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Broken, yet strong as a rock
The longest Jobs employment winning streak since 1951 of 27 straight months of unemployment below 4% has finally been broken.
The employment picture remains rock solid with this month’s payroll gain of 272K. Strength in employment is a big contributor to equity market performance, EPS beating expectations, supporting consumer spending and companies both small and large adding to headcount.
The broken streak of 27 straight months under 4% stems from a census adjustment based on new data that revises down prior reports by approximately 80k per month from what was previously reported. The magnitude of revisions sheds light on the lack of handle that the government has on accurately reporting this information in real-time as the complexity of labor accounting has never been harder with the influx of immigration across our southern border.
Despite the revision, the macro picture as it relates to employment remains unchanged as gains are robust accompanied with strong wage growth. It is essential to remember that we’ve never seen a recession when adding jobs to the economy.
Wage inflation has not softened – rising .40% month over month equating to a 4.8% annualized rise, supporting spending and nominal GDP growth.
It is higher for longer given the strength of both the labor markets, the broader economy and corporate earnings.
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