Payroll Data Update

The latest report from the Bureau of Labor Statistics seems to show a genuine improvement in the labor market. It has been a long time coming, and the improvement is still weak. But it seems to finally be self-sustaining.




Over the past year, according to the employer survey, the United States has added about 150,000 jobs a month. That exceeds monthly population growth by about 60,000, but isn't enough to make a major improvement in the employment to population ratio.

The big headline when BLS released the report was that unemployment was reduced to 7.8%. Personally, I think a better number to follow is the employment/population ratio. That number is slightly better recently, but also isn't rising fast enough.



This ratio also has problems. Recently economist Paul Krugman published a slightly modified employment-population ratio, modified to reflect demographic structure of the population. As Krugman describes it: "I’ve divided the population into three age groups, 16-24, 25-54, and 55 plus, for which employment-population ratios are available in the BLS databases. (Scroll down and use the one-screen data search). I’ve then taken a weighted average of these ratios, where the weights are the 2007 shares of each group in the civilian non institutional population. And here’s what you get:"



A bit better picture, but not a terrific recovery.

I have doubted that the FED's most recent Quantitative Easing or Twist or whatever it is now being called would do much. Apparently I was wrong and QE is having a positive effect. Just not very strong.

I'd still prefer a fiscal "kick in the pants," but that won't happen until after the election, if at all.