Calculated Risk Blog: Best Year for Employment Since the 90’s

Today’s employment report was exceptional – the best so far in what has become a long string of good employment reports. Bill McBride at Calculated Risk breaks it down for us (click through for lots of analysis and graphs):

Employment Report Comments: Best Year for Employment since the ’90s

Earlier: November Employment Report: 321,000 Jobs, 5.8% Unemployment Rate

Last month I posted a possible list of economic words for the year since I started this blog. This included “bubble”, “subprime”, “bailout” and more. For 2014 I suggested “employment”, and for 2015 I’m hoping for “wages”. 2014 has definitely been about jobs!

This was a strong employment report with 321,000 jobs added, and job gains for September and October were revised up. This was the tenth consecutive month over 200,000, and an all time record 50th consecutive month of job gains.

As always we shouldn’t read too much into one month of data, but at the current pace (through November), the economy will add 2.89 million jobs this year (2.80 million private sector jobs). This is the best year since 1999 (and, for private employment, this might be the best year since 1997).

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Yes, let’s be pleased, but Professor Krugman cautions against taking this positive news as a signal to start applying the brakes.

On Not Counting Chickens

A genuinely good employment report this morning — adding jobs like it’s 1999, and some actual wage growth, finally.

But — you knew there would be a but — good news can turn into bad news if it encourages complacency.

There will, predictably, be calls to respond to the good news by normalizing monetary policy, raising interest rates soon. And we will want to raise rates off zero at some point. But it’s important to say that (a) we are still highly uncertain about the underlying strength of the economy (b) the risks remain very asymmetric, with much more danger from tightening too soon than from tightening too late.

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