Nonfarm payroll employment in September was slightly above consensus (263K vs 250K), showing continued growth. This is the picture of key macro indicators followed by the NBER Business Cycle Dating Committee, plus IHS-Markit monthly GDP.

Figure 1: Nonfarm payroll employment (dark blue), Bloomberg consensus as of 10/4 for NFP (blue +), civilian employment (orange), industrial production (red), personal income excluding transfers in Ch.2012$ (green), manufacturing and trade sales in Ch.2012$ (black), consumption in Ch.2012$ (light blue), and monthly GDP in Ch.2012$ (pink), official GDP (blue bars), all log normalized to 2021M11=0. Lilac shading denotes dates associated with a hypothetical recession in H1. Source: BLS, Federal Reserve, BEA, via FRED, IHS Markit (nee Macroeconomic Advisers) (10/4/2022 release), and author’s calculations.

Among these, employment and personal income ex-current transfers are central. Hence, the employment report is noteworthy in its (continued) strength.

The preliminary benchmark revision indicates that the labor market has been stronger than the official NFP series indicates. In Figure 2, I show the official series (blue), the implied benchmark revised series (light blue), and the civilian employment series from the Current Population Survey, adjusted to the nonfarm payroll concept (red).

Figure 1: Nonfarm payroll employment (dark blue), implied series incorporating preliminary benchmark revision (light blue), civilian employment adjusted to nonfarm payroll concept (red), in 000’s, s.a., all on log scale. Lilac shading denotes dates associated with a hypothetical recession in H1. Source: BLS, and author’s calculations.

Note the continued growth in the labor series even during the slowdown in GDP during H1, which some observers have tagged as a recessionary period.

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