THE EMPLOYMENT SITUATION

The employment situation was mixed with the headline number, payroll employment adding 114,000 and the household report showing a gain of 873,000.

To a great extent the very large increase in the household survey appears to be just a make up for earlier weakness when the payroll report was showing larger gains than the household survey.  On a year over year basis the two reports are showing very similar gains.

With the very large gain in the household survey the unemployment rate fell to 7.8%.  It is now lower than when Obama took office.  In the modern era every democratic administration saw the unemployment rate fall during their term in office while only one Republican saw the unemployment rate lower when they left office than it was when they took office.  That was Reagan.

Interestingly, the unemployment rate for those with less than a high school showed a very large drop  When I first saw the very large gain in the household survey I though it might be the seasonal adjustment creating a very large gain in education employment, but that was not the case.

The average work week increased from 34.4 to 34.5.  Together with the gain in employment this generated a 0.6 % increase in aggregate hours worked.

Average hourly earnings increased from $23.51 to $23.58, or 0.3%.

Together this generated a 0.6% increase in average weekly earnings, the largest monthly gain in this cycle.