International Trading

The U.S. labour market is not collapsing. Total payroll employment posted a better-than-expected performance in August with the loss of 54,000 jobs. The jobs report was all the more encouraging given that the two previous months were revised up by a cumulative 123,000. While negative job creation at this point in the economic cycle is a disappointment, the good news is that the losses continue to be more than offset by the combination of rising hourly earnings and a longer workweek. We calculate that the economy-wide wage bill rose 0.2% in August, following a gain of 0.5% in July. This was the sixth increase in eight months. Even if payroll jobs remain more than 5% below their pre-recession peak, the economy-wide wage bill has fared much better. As today’s Hot Chart shows, the spending power of U.S. employees was only 1.2% below its pre-recession peak in August (a development that reflects the productivity surge in the U.S.). An improving wage bill does not herald a retrenchment in consumer spending. The U.S. remains in a slow recovery, but a recovery nonetheless.






* Download full report with chartsDownload full report with charts