US jobs growth still slightly above neutral rate

7 Jun 2013 by Jim Fickett.

The single most important statistic in the US employment report is the annual growth rate in the number of jobs. This needs to exceed 1%, the rate of population growth, just to indicate improvement, and needs to exceed 1% by a wide margin if we are to recover pre-recession conditions. The number is also fairly stable, changing slowly over time and changing little in revisions, unlike the monthly change that is the focus of the news, and so provides real information.

The annual rate of change peaked at 1.9% in February of 2012, and has been oscillating between 1.5% and 1.6% for the last 5 months. In other words, this indicates some sort of recovery, but a very, very sluggish one. Further, although the latest movement was an uptick from 1.5% to 1.6%, the overall trend seems to be down:

As has been the case for some time, the two other series that tend to prefigure changes in jobs growth also seem to be in a downward trend. On the whole it seems likely that jobs growth will continue to decline, back to and through the neutral rate.