The government’s reports is subject to revisions, and we may see upward adjustments in January and February. In addition, the general trend over the past few months is favorable, but it seems unlikely that any changes will diverge significantly from today’s release.
However, if we look at the employment indexes that are a part of each month’s release of the Manufacturing and Non-Manufacturing Indexes put out by the Institute for Supply Management, the employment picture is not quite as bad as the government report depicts.
With a reading of 50 suggesting that firms are neither adding or detracting from overall employment, the series shows encouraging growth in the all-important service sector, which increased 1.8 points to 52.7, the highest reading in over three years. And manufacturers continue to show interest in adding staff.
The recovery has picked up steam recently, as evidenced by the upward revision to Q3 GDP, the holiday shopping season is off to a good start and Wednesday’s release from ADP regarding private sector employment was encouraging.
Like the recovery from the 2001 recession, job growth is also likely to be uneven, meaning that it may be too much to expect a consistent upward trend in nonfarm payrolls.
Though obstacles remain, it may be only a matter of time before nonfarm payrolls more consistently reflect the firmer tone in economic activity.
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