The next big recession is supposed to hit in 2019. People in the media have been echoing this sentiment for a while.
But I’m here to tell you, according to the hard data, that’s simply incorrect. We might not have a “boom year” like we’ve recently been accustomed to, but we’ll continue to see growth.
And one of the strongest signs lies in the job market.
Jobs Way Up
The January 4 jobs report was quite telling:
It showed that December 2018 non-farm payrolls included 312,000 new jobs, far surpassing the initial estimate of 184,000, while private sector payrolls grew to 301,000, which is up 42,000 from prior months.
On top of that, there was an upward revision on the October and November 2018 numbers to include an additional 58,000 jobs, bringing the three-month average for new jobs to 254,000 per month.
The reality is that employment is growing at a huge clip.
Wages Increasing Too
Unemployment numbers have been solid for a while, but the same wasn’t necessarily true for wages. However, that is changing as people are making more money because of a tighter labor market.
Average hourly earnings, exclusive of one-time payments like bonuses, are up 0.4 percent from November to December 2018, and up 3.2 percent overall from a year prior, which outpaces inflation.
Broken Narrative
Payrolls tend to decline before a recession starts.
For instance, from January 1999 to February 2000, jobs increased by 250,000 per month on average. From February 2000 until the recession began in March 2001, payrolls rose an average of only 137,000 per month.
And that’s just one of many historical examples of job growth slowing before a recession.
Given the latest employment and payroll trends, predictors of a recession are seeing their narrative destroyed.
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