Labor Market Analysis

Even without an estimate of population growth, one can infer that the breakeven growth rate of nonfarm payrolls has fallen.

Intro With jobs day coming up on Friday, it is important to understand how the Fed is tracking the labor market. In particular, it is crucial to not overindex to the monthly nonfarm payroll prints—something we have warned against since 2023. Revisions whiplash, a shifting "breakeven rate"

Summary: The unemployment rate has risen 1% from its post-pandemic trough three years ago, but this rise likely overstates the degree of labor market and business cycle deterioration relative to what such a rise in the unemployment rate typically implied. Most prime working age cohorts actually saw rising employment and

Both initial and continuing claims fell slightly with this week's data.

Key Takeaways:  * This post is a follow up to our piece last week outlining why Reported Quarterly Growth (RQG) is a better approach to accounting for data changes more transparently. * This methodology allows us to account for revisions more robustly and to run rigorous back-tests and stress-tests to see how