Macbeth’s Take on the Employment Report
Nonfarm payroll employment rose by 111,000 in January, and the unemployment rate was essentially unchanged at 4.6 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job growth continued in sev- eral service-providing industries over the month, and construction employment also rose. The number of manufacturing jobs continued to decline.
However much attention is paid to the report, investors should consider that the fluctuations in the monthly data are “full of sound and fury, signifying nothing.” We illustrate:
As the key shows, the bars represent the number of jobs added over the last 12 months, while the line represents the percentage change in total employment (currently 1.6% year/year). It wouldn’t be hard to draw a trendline on this data showing that job growth was rising. Nor would it be hard to draw one showing it is flat or declining.
What would be easiest to conclude is that jobs are growing at a fairly slow pace, without any clear acceleration or deceleration. But we bet you will hear few pundits come to that conclusion.
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