BY SPENCER

The employment report appears to report that the rate of job loss is moderating and provides encouraging evidence that the economy probably is not falling as rapidly as it has been.

But the evidence is not that clear cut. Payroll employment reported a 345,000 drop in employment, a significantly smaller loss than in previous months. Moreover, the year over year drop in the household survey continues to be weaker than the payroll report– generally a leading indicator of a bottom.

However, hours worked fell sharply and that index just matched the 1974 recession as the most severe drop in hours worked. the hours worked data is not as encouraging as the headline data.

This drop in this measure of economic weakness is also moderating, but it is not showing as much improvement as the other measures.
Moreover, wages gains are continuing to slow sharply.

The combination of weak wage growth and falling hours worked means that nominal weekly wages are actually falling. With oil prices rising this implies that real wages are highly dependent on tax cuts.

When you combine the weakness in weekly earnings growth with rising oil prices it is not especially surprising that the January and February pop in real retail sales has not been repeated. Hopefully, the May jump in auto sales to 9.9 million will generate a rise in real retail sales. But the preliminary reports from retailers are not encouraging.

Correction: the originally reported increase in February real retail sales has been revised away
and I failed to notice it before I posted. Thus, January was the only month to show rising real retail sales over the last eleven months.