The Bureau of Labor Statistics has revised its estimates of job growth over the last year downwards by more than 800,000 jobs. Josh Shafer reports at Yahoo Finance:
The US economy employed 818,000 fewer people than originally reported as of March 2024, showing the labor market may have been cooling long before initially thought.
The revisions are a yearly practice from the Bureau of Labor Statistics; final revised numbers are expected to be released early next year.
The report, released Wednesday morning, showed the largest downward revisions to the professional and business services industry, where employment was revised down by 358,000 during the period. Leisure & hospitality saw the second-largest downward revision of 150,000.
The report moves down the monthly job additions seen in the US economy over the time period to 174,000 from 242,000.
“Despite this big downward revision, that’s still a very healthy growth rate in terms of the monthly jobs added to the economy,” Omair Sharif, Inflation Insights president, told Yahoo Finance.
I think that’s about right. Job growth was still good; it just wasn’t as good as previously estimated. For context consider this graph:
That chart does not include the downwards revision. As you can the revision is not catastrophic.
To my eye more concerning is this from Business Insider. The M2 money supply has decreased, a sign that spelled every time it has occurred in the last century.
The US money supply is flashing a major warning to the US economy, according to Wharton professor Jeremy Siegel.
M2 money supply, which includes cash, checking deposits, and other highly liquid assets, bottomed out around $20.7 trillion in April this year amid aggressive rate hikes, according to Federal Reserve data. That’s a 4% drawdown from the prior all-time-record of $21.7 trillion, which was recorded in 2021.
Money supply then rebounded through the summer, but has recently returned to its decline, nearing April’s low.
That marks the the longest stagnation in the M2 money supply since World War II, Siegel said in an interview with CNBC on Monday.
The feeling seems to be that recession is likely over the next six months. The reason it is more troubling than your run-of-the-mill economic slowdown is our flat output. That suggests that deficit spending to stimulate the economy will go straight to inflation.
Unlike some I don’t have a problem with the federal government meddling with the economy. I just think it ought to meddle in the direction of greater production rather than greater consumption. Unfortunately, the direction of policy has been wrong for a very long time.