Employment situation

Both  the payroll and the household. survey showed continued weak employment gains as payroll employment only added some 80,000 jobs and the household survey showed a 128,000 gain.

Private payrolls expanded some 84,000 as government jobs only contracted by 4,000.

But the workweek did expand from 34.4 to 35.5 hours for all employees and from 33.7 to 33.8 for nonsupervisory employees.

The index of hours worked for all employees is now back to the trend for this recovery.

But the index of hours worked for nonsupervisory workers fell below trend.


 Average hourly earnings for nonsupervisory employees rose from $19.69 to $19.74,  a 0.25% increase.
So wage gains continue at or near record lows.

Small  changes in wages and hours worked mean that weekly wages only grew  modestly and is still only some 2.6% above its year ago level.


I watch the wage and earnings data because of what it tells about economic prospects.  It dominates income gains that in turn is the single most important factor driving consumer spending, especially later in the cycle. The US is clearly in a spiral of weak wage gains leading to weak spending that in turns leads to further weak wage gains.  It is hard to see what will cause the economy to break out of this spiral.