employment report

By Spencer

The employment report was discouraging.

In contrast to last month when the leading indicators of employment appeared to be stabilizing,
they resumed their downtrend this month. Most importantly, hours worked fell o.3% from an upward revised 99.2 to 98.9. the best that can be said about this now is that the rate of decline is about half of what it was in the prior three quarters. If productivity remains as strong as it was last quarter this implies that third quarter real GDP growth should be positive.

Virtually the only sign of good news is that the sharp slowing of average hourly earnings appears to be moderating. But generally wages are even more of a lagging indicator that employment, so
this apparent moderation in weak wages may not be sustainable.

As a consequence average weekly earnings have risen the last two months. This implies that the reported rise in nominal personal income reported in July should be repeated in August..

But overall, the employment report shows little or no signs to support the other indicators that the economy has bottomed.