July’s reported decline of 23,000 jobs was revised to a gain of 21,000, and August’s initial reading may be revised, too. More importantly, the weakness suggested by the original July report contrasts with August’s much stronger increase of 162,000.
Looking beyond monthly swings, the three-month average offers a more reliable assessment of the underlying trend and incorporates additional revisions for a more complete picture.
Over the past three months, nonfarm payrolls have risen an average of 71,000 jobs per month. The average monthly increase since the start of the year has been 80,000. It isn’t robust, but economic activity is translating into new jobs, even if it’s spread unequally across industries.
We can also assess the labor market by examining the unemployment rate. This gauge is less volatile and has been trending downward since its most recent peak of 4.5% last November.
