U.S. Jobs: Slower isn't slow

Written by: Global Thought Leadership | December 14, 2018

Chart Courtesy of Western Asset Management.  Source: U.S. Bureau of Labor Statistics, as of Nov 30, 2018. Past performance is no guarantee of future results. Indexes are unmanaged, and not available for direct investment. Index returns do not include fees or sales charges. This information is provided for illustrative purposes only and does not reflect the performance of an actual investment.

The Bottom Line

  • November’s headline jobs growth figure came in at 161,000, well below consensus expectations.
  • Private-sector jobs, excluding construction and retail rose 138,000, less than the average gain of 164,000 jobs per month in recent years.
  • This is just one of several recent economic indicators that have grown a bit softer recently, feeding a shift in market sentiment surrounding growth.  A month ago, belief that the Fed would react to continued economic strength by hiking its rate three times in 2019 was widespread. Now, a month later, that consensus has evaporated, and expectations for rate hikes are fading.
  • And yet, as the chart shows, November’s “disappointing” hiring is well within the bound of normal fluctuations in the data. That’s one key reason bond manager Western Asset factors out the relatively volatile construction and retail figures from its preferred measure of jobs growth.
  • Western continues to believe growth will be slower going forward than it’s been over the past year or so. But that’s a far cry from the swing toward doom and gloom that seems to have gripped markets in the last month. For more on Western’s outlook, see CIO Ken Leech’s most recent quarterly outlook

 


Definition:

The Federal Reserve Board ("Fed") is responsible for the formulation of U.S. policies designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments.

 

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