Jobs, March '08 vs year-ago

As of March, the number of private nonfarm jobs in the economy is just barely greater than year ago.  Unemployment is up to 5.1% (vs. 4.4% year ago).  Not encouraging. 

Here are the latest charts; click to enlarge.  (Keep in mind I'm no longer going to calculate the average wage rate of jobs lost vs jobs gained.)  The construction jobs situation is more evidence that we need the housing sector to turn around before things will get much better. 

Two minor bright spots: average wage increases beat PCE inflation, and the labor force participation rate is up a notch -- for what it's worth. 

Comments

[Ken]

Forgive my elementary lack of understanding, but if the average wage rises more than inflation, doesn’t that mean there is more inflation down the line (for it to catch up), or does it mean that we all, collectively, got 1% richer?

[TDM]

We get richer when we produce more goods and services on, or off, our jobs. Our standard of living is determined by the goods and services what we consume, which is determined by what we produce, not by our wages.

[Ken]

TDM: I realized my mistake as soon as I typed it in. Higher income doesnt mean richer. Ok, but I'm still a touch confused. If the average wage rises, would inflation not follow? Since people have more money to spend on the same ammount of stuff.

Or does it mean that our productivity inched up higher allowing us to produce more stuff?

[TDM]

Money flows between consumers and producers as cash (wages and prices), debt and equity. If wages increase, inflation typically follows, but there could also be changes in debt and equity flows in addition to price level changes. Changes in debt and equity flows typically result in changes in asset price levels.

We have seen two bubbles recently where wages have diverged from productivity and caused different asset price bubbles. One of them had better looking statistics but productivity increased about the same in both.