Traders work on the floor of the New York Stock Exchange on the last day of trading for the year on Dec. 29, 2023.
Spencer Platt | Getty Images News | Getty Images
While December’s payrolls data and associated wage increases came in hotter than expected, the pace of job growth has slowed appreciably when one views the constant downward revisions in prior tallies.
Also underscoring some potential weakness is the drop in the employment participation rate to 62.5% in December from 62.8% in the prior month and a 683,000 decline in the number of employed Americans during that period as measured by the household survey. That’s a massive divergence from the 216,000 job gain that comes from the monthly survey of corporations.
Further, Bloomberg’s chief U.S. economist Anna Wong recently pointed out on social media platform X that the Bureau of Labor Statistics’ so-called “birth-death” model, which adjusts monthly payrolls for the assumed number of business startups, accounted for 42% of the 3.1 million jobs created in 2023.
She highlighted an explanation of this detail from the Fed’s staff in 2001, indicating that this birth-death adjustment “may overestimate job gains.”
Fourth-quarter gross domestic product, based on the Atlanta Fed’s GDPNow, is running at a 2.5% annual rate, down from the torrid pace of growth in the third quarter of 2023.
While December wages grew at a slightly faster pace than expected, they are also outpacing slowing inflation. This allows consumer spending to…
