September nonfarm payrolls came in slightly above expectations (263K vs. 250K), showing continued growth. Here’s a picture of the key macro indicators followed by the NBER Business Cycle Dating Committee and IHS-Markit’s monthly GDP.
figure 1: Nonfarm payrolls (dark blue), Bloomberg as of 10/4 for NFP (blue+), civilian employment (orange), industrial production (red), personal income excluding 2012 transfers (green), manufacturing and Consensus 2012 sales in traded dollars (black), consumption in 2012 dollars (light blue), monthly GDP in 2012 dollars (pink), official GDP (blue bars), all log normalized to 2021M11=0. The lilac shading indicates dates associated with the H1 hypothetical recession. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (published October 4, 2022), and author’s calculations.
Among them, the non-current transfer of employment and personal income is the core. So the (persistent) strength of the jobs report is worth watching.
Preliminary benchmark revisions suggest that the labor market is stronger than the official NFP series suggests. In Figure 2, I show the official series (blue), the implied baseline revision series (light blue), and the civilian employment series adjusted for the current census, adjusted to the nonfarm wage concept (red).
figure 1: Nonfarm payrolls (dark blue), implied series containing preliminary benchmark revisions (light blue), civilian employment adjusted for nonfarm payrolls concept (red), 000s, sa, all on a logarithmic scale. The lilac shading indicates dates associated with the H1 hypothetical recession. Source: BLS and author’s calculations.
Note the continued growth in the labor force series even as GDP slowed in the first half of the year, which some observers labelled a recession.
