Nonfarm Payroll Employment vs. Trend, Pre-Covid-19

Slowing even before the pandemic…


Figure 1: Nonfarm payroll employment (blue), deterministic trend estimated 2013M01-2017M01 (brown), both on log scale. Source: BLS and author’s calculations.

Figure 2: Nonfarm payroll employment (blue), stochastic trend estimated 2013M01-2017M01 (brown), both on log scale. Source: BLS and author’s calculations.

The above graphs are useful if you thought everything was hunky-dory employment-wise, even before the pandemic hit.

26 thoughts on “Nonfarm Payroll Employment vs. Trend, Pre-Covid-19

  1. Moses Herzog

    OK, so I’m assuming at least part of that gap pre-Covid19 relates to MAGA trade policy?? Are these the type of graphs we would have seen Ross Perot highlight “back in the day”, whereas the DNC is busy manipulating people that they want a woman they hate to get the nomination?? I’m obviously referencing 2016 which the Hillary Clinton fan club is so ashamed of and runs to the bathroom crying every time it’s brought up, or considers making public security officers’ life a living hell in Aukland:

    I mean I’m wondering why Democrat candidates don’t present these graphs at the rallies. Democrat voters tend to be more literate, why not treat them as such and show what Republican policies bring us. I never could get why Democrats “played dead” on the Reaganite claims of deficit reduction that never happened. So now the DNC is gonna act like these graphs don’t exist?? Put them up at rallies and run them in commercials.

  2. Dr. Dysmalist

    Well, what I see is a reduced slope in the yellow-shaded area (my phone shows it as yellow, anyway), a sudden, steep, and deep drop-off, followed by a sudden and steep half-recovery because the economy can’t recover fully with SARS-CoV-2 still roaring along.

    Trump keeps claiming that this economy is due to his efforts. The pandemic crash would have occurred regardless of who occupied the White House. But given the slower rate of increase in pre-pandemic NFP employment and the ” half” part of the recovery, I would say that, for the first time ever, Trump isn’t lying.

    1. Paul Mathis

      Nope. Trump is lying as usual.
      China has had only 100,000 cases while we have 7 million with a third of China’s population. Consequently, China far ahead of us economically.

      ” China is well on its way to recovering from a coronavirus pandemic-led economic crisis and will continue to be the most important marginal driver of global GDP, British economist Jim O’Neill told CNBC.

      O’Neill, former chief economist at Goldman Sachs, pointed to the latest Chinese consumer spending data as a sign of China’s accelerating recovery. Retail sales for August in the world’s second-largest economy rose 0.5% from a year ago, the first positive report for 2020 so far.

      “I suspect Chinese GDP growth could actually end 2020 as net positive still,” O’Neill told CNBC in an interview. “By end 2021, Chinese GDP growth will have possibly even made up for, not only the losses, but the loss in the trend also.”

      Thanks to Trump, we a deep in a hole and still digging deeper with the anti-masker Trumpers.

  3. 2slugbaits

    I wonder which trend our Trump supporters believe captures employment. Do they think employment follows a deterministic trend or a stochastic trend?

    1. not_really

      Neither. There is a third answer. Whatever feels like a useful answer, at the moment.

      Part of what is so poisonous about fascism is the people promoting fascism treat a social contract that includes empiricism as null and void. While the empiricist is still asking “deterministic or stochastic?” the fascist is eroding democracy, mocking the scientific process and punishing the people who believe it.

  4. mp123

    Is it reasonable to expect the trend in payrolls to continue on trend once the economy reaches full employment? The US fell below 5% in 2016? That said, it’s also reasonable to expect wage growth, but that didn’t happen either.

    1. Willie

      Once the economy reaches full employment? What happens then is a problem for another day. It is going to be a long time until that day comes. My guess is several years. The initial shock and rebound seem to be over. We are now in for a long slow slog, just like after the Great Recession.

      1. Moses Herzog

        I’m trying to remain positive. But donald trump leading in Ohio isn’t giving me much hope for this nation. And I’m not just talking economics. I’m talking a downward spiral in everything this country isn’t going to be able to get out of. If a state with the population base of Ohio hasn’t gotten the idea after 3 and 1/2 years, I think donald trump is not the problem here—it is the education level and general judgement of the electorate which is putting this entire nation on wobbly ground.

        1. Barkley Rosser

          The matter of Ohio is indeed depressing. However, it is the case that the state strongly identifies with two economic sectors that Trump has attempted to help either through trade policy or deregulation, namely steel and coal. What is more disturbing is that workers in auto parts and autos themselves somehow seem to go along with this, with autos long part of a coal-stell-auto complex, but in fact the protectionism for steel hurts the auto industry, and indeed a major auto plant has shut down in Ohio since Trump came to office, the GM Lordstown facility. But as the construction workers in Youngstown, an old steel town, wo were interviewed by an reporter from The Economist recently, this sense Trump has been helping some of Ohio’s industries seems to have spilled over to workers in other industries he is not helping.

          1. Barkley Rosser


            I just checked, and Ohio looks like a tossup. A source had the 10 most recent polls for there. In 6 of them Biden was ahead with Trump ahead in 4, but if one looks at the average of the 10, Trump has a slight lead, 475% to 47.0%. Looks like a tossup, not a place where one can say as you did here, “Trump leading in ohio??? Nope.” Sorry, but to you, nope.

    2. macroduck

      That’s right. The shinning out of the labor pool would naturlly lead to slower employment growth as fewer good candidates are available. Scarcity of labor should have led to wage gains. In fact, wage gains were picking up a bit, but there was reluctance to use wges to attract workers. In recent cycles it has been obvious when wage increases were needed to attract worers because employers would complain bout a skills shortage. They were really complaining that higher wge offers were needed to attract the workers they wanted.

  5. The Rage

    I don’t think Obama trend mattered. In the 90’s, NFP trends never got up to speed back to 1994 levels. NFP generally slows down as cycles move on. The repo mess in September 19 was like the October tech swoon….The end. Business was no longer making money. The inertia was still going on but the investment cuts had started.

    The reopening clearly happened faster than expected and NFP is lagging as usual.

    1. macroduck

      Uh, repo as the driver of profits outide the financial sector? The Fed freaked out but neither sales nor employment suffered a serious slowdown. You’ve treed a squirrel and mistaken it for a bear.

        1. macroduck

          Sales and employment lagged right into the paandemic? Not reaaly an evidence-based anlysis you got there. No evidence the repo hiccup damaged the real economy much.

    1. not_really

      The ones that want to punish the people they don’t like. There’s a weird exceptionalism whereby the fascist thinks the punishment they mete doesn’t affect them. Ample evidence to the contrary exists, of course.

  6. spencer

    I suspect that in another year or two we will be repeating the debate of 2015
    about “sticky” wages. Right now my wage equation is saying that nominal
    average hourly wages should be falling just as it did after the great recession.

    The equation did rebound and captured the modest strengthening of average hourly
    wages in 2017-19.

  7. pgl

    Economists for Biden:

    ‘More than a dozen Nobel laureates in economics have endorsed Democratic nominee Joe Biden for president, saying that his support of science-backed public health solutions amid the coronavirus pandemic “will result in economic growth that is faster, more robust, and more equitable.” The 13 economists issued a joint letter supporting “the economic principles and policies” put forward by the Democratic nominee released early Tuesday by the Biden campaign. “While each of us has different views on the particulars of various economic policies, we believe that Biden’s overall economic agenda will improve our nation’s health, investment, sustainability, resilience, employment opportunities, and fairness and be vastly superior to the counterproductive economic policies of Donald Trump,” the group of economists wrote. The laureates agreed that Biden’s proposed economic agenda will “do far more” than President Donald Trump’s to increase the economic strength and wellbeing of the nation and its people.’

    Yea but Trump has Kudlow! Snicker.

    Conservative Edmund Phelps was one of these 13. Phelps penned this:

    The Economic Case for Biden

    1. Paul Mathis

      Let’s just hope that Biden doesn’t reduce the budget deficit 75% like Obama did ( and the WH was touting that “accomplishment” on its website).

  8. Ooe

    the economy was slowing before the covid situation. he inherited the BHO economy. the economy was lackluster before the virus hit. in fact, my figures indicated the economy was headed for a recession by the 2nd quarter of this year.

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