Reasons not to worry about US growth

Via the excellent Damien Boey at Credit Suisse:

US non-farm payrolls came in below expectations, rising by only 130K in August, compared with expectations for 160K gain. Compositionally, private payrolls added only 96K, compared with expectations for 150K job creation. Interestingly, many economists expected stronger gains for August because of Census-related hiring. But overshadowing this, was the negative “seasonal” effect of the month of August. Even though payrolls data are supposed to be seasonally-adjusted, the process used by the Bureau of Labour Statistics (BLS) to do this is far from perfect, and a downward bias has emerged for August over the past decade.

While payrolls were softer than forecast, wage inflation was not. Average hourly earnings rose by 0.4% in August, compared with expectations for an 0.3% gain. Year-ended wage inflation slowed fractionally to 3.2% from an upwardly-revised 3.3%. Real wage, and unit labour cost growth remain firmly positive.

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