Where are we going from here?

Jobs Numbers Are a Blip, Not a Turn

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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After years of languishing, the labor market finally seemed to be perking up over the last few months. Jobs reports were delivering solid growth and -- imagine -- even upside surprises. Just when we thought this party might really be getting going, along comes another disappointment: Only 142,000 jobs were created in August, barely enough to keep up with population growth, not enough to increase the percentage of the population that is in work.

So here's the question: Which one's the blip, the last few months or the current jobs figures?

QuickTake Monthly U.S. Jobs Report

One clue is that we saw employment fall in sectors that should have been strong in the summer (retail, food and beverage), even as it rose in areas such as professional services and health care, which are strong year-round. What does that mean? To me, it suggests that the economy is still delivering job growth in sectors that offer stable long-term employment, while seasonal employment growth is more muted. If I had my druthers, of course I'd like to see growth in both areas. But if you have to choose one, we grew in most of the sectors you'd probably pick, though manufacturing is still lackluster.

So I lean toward "blip." The seasonal jobs were weaker than expected, dragging down the figures, but the underlying economy is still growing. On the other hand, if there's another "blip" next month, I'll start to get more anxious.

If you put this in a broader economic context, the news is still not entirely happy. If the economy was fully recovered from the financial crisis, we shouldn't see these blips: the weather-driven collapse in the first-quarter gross domestic product, these sorts of August jobs figures, an unemployment rate that's stuck above 6 percent.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the author on this story:
Megan McArdle at mmcardle3@bloomberg.net

To contact the editor on this story:
James Gibney at jgibney5@bloomberg.net