It’s a new year and apparently it’s time for a new debate. Or at least a rehash of a former debate that’s been routinely embraced, dismissed and then embraced anew.
We find ourselves in the embracing-anew phase in terms of the thankless task of trying to figure out where the economy’s headed. This morning’s latest from the Labor Department on the employment picture is the source of our conundrum today. Unemployment remained steady at a low 4.5% in December as the pace of job growth for nonfarm payrolls picked up slightly to 167,000 last month.
Consider the monthly change in payrolls for the last few years, as per our chart below. Is this the profile of an economy headed for a material slowdown or worse? A casual reading of the trend might pause before giving a definitive answer. And for good reason. Employment trends are no trivial factor in driving the economy.
