“Sustainable” Employment Growth Is Only at +73K

At least according to EJ Antoni’s definition, in his critique of employment growth under the Biden administration:

gov’t and the gov’t-dominated healthcare sector [employment growth].. it’s all tax-payer funded, and it’s not at all sustainable.

OK, here’s the picture of employment growth since January, decomposed into “sustainable” and “unsustainable” components (in this latter case, health and social services, and government employmennt).

Figure 1: Month on month change in nonfarm payroll employment (black line), change in health and social services employmet (red bar), government (blue bar), and rest-of-NFP (green bar). Source: BLS and author’s calculations.

Of the cumulative change of 409K, slightly over half — 225.5K — is accounted for by the “unsustainable” component.

Dr. Antoni made no remark upon this point today.

4 thoughts on ““Sustainable” Employment Growth Is Only at +73K”

  1. Macroduck

    Let’s take a look at a more realistic notion of sustainable hiring.

    Leisure and hospitality added 70,000 jobs, restaurants 48,000. There’s a good bit of informed speculation that the FIFA soccer tournament is behind a lot of that surge. That’s temporary, if it’s true. It’s also not constrained by U.S. earnings, which remain under pressure. That fact fits with the notion that soccer is behind the leisure and hospitality hiring bump.

    If, in the other hand, this bump turns out to be permanent, it will imply that lots of households are spending on travel, entertainment and eating and drinking out, despite budget strains. There’ll be some ‘splainin’ to do.

    Part of the ‘splainin’ will be how spending on good times can be strong while average hourly earnings are up just 3.4% from a year ago – the slowest rise since May, 2021. Odds are that, after accounting for inflation, hourly earnings were lower in May than a year ago, just like in April. And the personal saving rate in April was the lowest since mid-2022, among the lowest on record; we’re back to the question of sustainability.

    1. pgl

      Trump is doing his best to screw up this soccer event – which I guess means he hates rising employment.

  2. Macroduck

    One point about the jobs report that’s probably worth noting: Full-time employment fell in May, and in April and February and January. March is the only month this year in which full-time jobs rose:

    https://fred.stlouisfed.org/graph/?g=1WNvF

    Full-time work is down 1.042 million so far this year, while part-time jobs are off 32,000. That fall in part-time work is consistent with the decline in multiple job holding since late last year, though multiple job holding is still high by historical standards:

    https://fred.stlouisfed.org/series/LNS12026619

    The loss of full-time jobs is consistent with a relatively short average workweek:

    https://fred.stlouisfed.org/graph/?g=1WNwz

    …and with the decline in the payroll index (weekly hours worked x average hourly earnings):

    https://fred.stlouisfed.org/graph/?g=1WNwq

    The decline in full-time jobs is also consistent with souring consumer sentiment.

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