A Solid Fed Friendly Employment Report

Written by Richard Hokenson 

The Employment Situation report for July was chock full of good news:
  • Wage inflation remains subdued making the report very Fed friendly (see Chart 1).
  • The average monthly increase in household employment of 270,000 for the first seven months of this year marks the strongest pace of this recovery (see Chart 2). The average monthly increase this year in the labor force of 195,000 is also the strongest in this recovery (see Chart 3).
  • The increase in household employment is being principally driven by persons who had been out of the labor force who are now employed (see Chart 4). This is consistent with our view that persons who had been on the side-lines, e.g. those who had been in the informal economy, are now seeking employment in the formal economy.
  • The likelihood that the unemployed become employed continues to improve (see Chart 5).
  • Progress in the Employment-Population ratio for prime-age workers (persons aged 25 to 54 years old) remains on track (see Chart 6).
  • The only issue of concern is that the increase in foreign-born workers was smaller than the previous three months (see Chart 7). Even though this is the change from the same month in the prior year, this series is very volatile. It is a situation that we will continue to monitor.
  • Last but certainly not least, the number of employed younger workers (persons aged 20 to 34 years old) continued to advance which supports strength in household formations (see Chart 8).


This update was researched and written by Richard Hokenson, as of August 10 2017