Popular Economics Weekly
It is not secret by now that whoever convinces the majority they are the best jobs creator will win the Presidential election. Today’s 171,000 payroll increase with upward revisions for the past 2 months may tilt things slightly in President Obama’s direction. The change in total nonfarm payroll employment for August was revised from +142,000 to +192,000, and the change for September was revised from +114,000 to +148,000, which hugely increases the monthly average in the fall after a spring lull.
Graph: CBPP
In other words, employers are finally realizing this recovery is for real, regardless of the ‘fiscal cliff’ outcome. What are the nay sayers worst fears? That restoring Clinton-era tax rates will reduce the deficit! Monthly job growth has averaged 173,000 over the past four months compared to a 67,000 average in the April-to-June period, says WSJ Marketwatch.
The civilian labor force rose by 578,000 to 155.6 million in October, and the labor force participation rate edged up to 63.8 percent. Total employment rose by 410,000 over the month. The employment-population ratio was essentially unchanged at 58.8 percent, following an increase of 0.4 percentage point in September.
Graph: Econoday
That may be why consumers are cheering up. The Conference Board’s October consumer confidence index improved to a reading of 72.2, up from 68.4 in September. The present situation index increased to 56.2 from 48.7, a huge jump, while expectations climbed to 82.9 from 81.5 last month. Consumer confidence is now at its highest level this year.
Or, it could be housing prices have been rising this year. The Case-Shiller Home Price Index showed prices rising in 19 of the 20 cities surveyed. On a year-ago basis, the 20-city index is up 2.0 percent, following 1.2 percent in August, Not Seasonally Adjusted.
Graph: Econoday
Either way, the economy is expanding fast enough to warrant hiring more workers, and consumers know that. Add in the jump in personal incomes, which are now increasing more than 2 percent per year (though 3 percent plus needed to bring back full employment), and we may have a very good 2013.
Harlan Green © 2012
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