There were other additional promising aspects. Average hourly earnings were $25.39/hour in January, a gain of 2.54% from a year earlier – about the same annual change as posted in December. Hours worked inched up as well. The year-over-year gains in hourly earnings, plus hours worked, plus the change number of those included in the nonfarm payroll figures, is a good proxy for consumer income on a national basis. Since there is virtually no inflation currently, the January calculation of 4.32% is a good proxy for growth in real income for the consumer.
Jobs reports represent a snapshot in time and can vary significantly from month to month. However the difference between the outlook of a host of media outlets, some of which are discussing the possibility of recession, and the employment trends can appear quite dramatic.
Reasons for optimism from the jobs numbers keep going. Private sector jobs grew 158,000 jobs while the government sector declined by 7,000 jobs. Within the totals, the strongest areas of job growth could be found in goods producing industries, up by 40,000; construction, which rose 18,000 despite an earlier surge in December due to warm weather; and the private service-providing sector which jumped by 118,000, fueled by retail trade gains of 57,000.
Investor sentiment seems to have taken a decidedly negative turn for 2016, increasingly so as the year progresses and it may not be over yet. However, while the data can do an about face, there appears to be little in the current batch that points towards a dramatic slowdown. Price and proof rarely occur at the same time and the current disparity between market forces and economic fundamentals certainly feels that way.
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