There were indications of ‘contentment’ after the release of the February Employment Report:
Strong across the board. Jobs reports are often a mishmash of good news and bad, with no clear signal of the direction of the labor market. Not this month. Virtually all of the major indicators were pointing in the right direction: Payrolls were up, the unemployment rate was down and every major piece of the private sector posted job gains. The consumer sector appears to have shrugged off higher taxes and rising gas prices; retailers and restaurants added jobs.
Longer-run looks steady. With today’s figures, including the revisions, the economy has now added an average of 191,000 jobs over the past three months, and 186,000 jobs over the past six. The pace has been remarkably steady in recent months, although the downward revision to January’s figures could be a warning that jobs growth has slowed some to start the year. Of course, today’s numbers are subject to revision, too.
But nothing has really changed. The view of ‘Progress’ is in the eye of the beholder. The Chart below clearly indicates that we´re getting what the Fed contracted for. The only thing is that the Fed could have:
- Not allowed nominal spending (NGDP) to crash after mid-2008 and
- Once it made that first mistake it could have ‘corrected’ it much more forcefully.
That´s what´s called the “New Normal”!