It’s natural for job growth to wane as the economic cycle ages, when businesses are already running at or near target employment levels and labor is becoming scarcer. That pattern has held true so far in this cycle, as evidenced by our LPL Chart of the Day, which shows average yearly job growth peaked at 261,000 in February 2015 and has gone through a natural slowing process since:
Nevertheless, as LPL Research Chief Investment Strategist John Lynch explained, “Job growth remains at very healthy levels for this point in the cycle, and the most recent report provided growing evidence that the trend may be ramping up.” The one-year average of monthly job growth has clearly stabilized and has even accelerated in the short term, rising 29,000 over the last eight months.
The job numbers are much noisier (more statistically uncertain) than they are usually given credit for, so we wouldn’t make too much of that eight-month change (yet), but at the very least we’ve seen improvement. For more on jobs and wages, please see our Weekly Economic Commentary.
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