3 charts show the US job market is booming
The monthly update on the US labor market is due on Friday morning, bright and early. The report from the US Bureau of Labor Statistics gets a ton of attention, as well it should.
It is, after all, one of the most high-quality and comprehensive looks at the health of the US economy, which also happens to be the world’s largest economy.
But we already know what happened in August. The US job market was pretty much fine.
How do we know? Other numbers that come out earlier than the monthly jobs report.
For instance there are weekly numbers that show how many applications for unemployment benefits have been made across the country. Those spiked during the Great Recession, but they have fallen back to levels below 300,000, which is usually thought to be consistent with steady job growth. They hovered around 260,000 during the first three weeks of August.
Separately, survey data from the Conference Board’s Consumer Confidence survey also asks part of the American populace about the labor market. Economists track the assessment of respondents who are asked whether “jobs are plentiful” or “hard to get.”
During the recession, the percentage that answered “plentiful” plummeted, as “hard to get” numbers soared.
Economists like to track the difference between these “plentiful” and “hard to get.” That difference, something they call the “labor differential” was solidly positive before the recession hit. Now after a long slow climb, it’s back in positive territory. In fact, in August the differential climbed to its highest positive reading since January 2008. That’s a good indication that the August jobs report should give a pretty positive reading.
Of course, you can’t count on any single number to give you a global reading on the health of an economy as large and complex as the US. And it’s always possible that the August report could be way more disappointing than other indicators would suggest.
But the thing to remember is that almost all economic reports are essentially statistical fictions. They never tell you exactly how the economy is doing. What matters are the broad trends. And the the broad trend in the US job market, over the last few years, has clearly been toward improvement.