We can’t really say if the US economy has added any jobs recently
Here’s an unsettling factoid about the US jobs data from Omair Sharif, president and founder of Inflation Insights:
The three-month average of payrolls has now fallen to 116k, with June at 118k and July at 89k, and the 142k in August still subject to revisions, most of which have been to the downside for the last 12 months. Note that the level of statistical significance in any month for payrolls is 130k. In other words, we don't know if payrolls were any different than zero in two of the last three months.
The headline jobs growth figure is based on a survey. The Bureau of Labor Statistics says it can be 90% confident that the economy actually added or subtracted jobs if the establishment survey shows a gain or loss is in excess of 130,000. As Sharif flags, that standard hasn’t really been met with consistency as of late.
His conclusion: Time for the Federal Reserve to cut policy rates by 50 basis points.
