The biggest proponents of the BLS data have been FOMC policymakers. Right from the taper tantrum of 2013, the unemployment rate has given them, and the Economists who depend on their views for crafting their own, an almost definitive set of parameters for interpreting all other economic statistics. Everything is immediately filtered through the lens of the unemployment rate and some others.
It was why two years ago when manufacturing data all over the world was suggesting serious and sustained trouble, along with crashing commodities, interest rates, and even stocks for a time, the overall impression left in the mainstream was as if a different world altogether.
“It was pretty much everything you could ask for in a jobs report,” said Michelle Meyer, deputy head of United States economics at Bank of America Merrill Lynch. “Not only was the headline number strong, but there were upward revisions for prior months, the unemployment rate fell and wage growth accelerated.”
“The report was so strong and broad-based that it will be difficult to deter them from raising rates,” said Michael Gapen, chief United States economist at Barclays.
If you didn’t know when those quotes above were given you would be easily forgiven for placing them with any one but a handful of payroll reports over the past three and a half years. The latest jobs estimates for November 2017 were certainly characterized that way. Instead, the quote above was taken from an article written in November 2015 describing the “so strong” labor market of October 2015.
Wages are always accelerating in these quotes, if not in the data. One reason for the persisting expectation, as well as the characterization, has been JOLTS estimates for Job Openings. Going all the way back to economist William Henry Beveridge, there has been an assumed relationship between Job Openings and labor demand as a top-level proxy for the whole economy.
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