By One Dubious Measure, The Job Market Is Improving

In the graph, see that tiny red bar pointing higher in July? According to analysts at Credit Suisse (via WSJ) it might represent the start of a job-market turnaround.

Rather than look at national non-farm payrolls data, the analysts summed up the state-by-state numbers, which frequently vary from the national number, and found that in July, thanks to government hiring, there was actually net job creation when each state’s tally was added together.

And, say the analysts, in the past, sum-of-state numbers turn positive prior to the national numbers.


  • The analysts acknowledged that sum-of-states data is unreliable.
  • Look at August! The number turned red again. To this the analysts say: “We typically get at least one month of job gains followed by renewed declines before a sustained increase in employment is achieved.”
  • The pattern of states turning positive was only seen in the 1991 recession and the 2002 recession, so that’s just two datapoints.
  • It’s government employment, i.e. saying nothing about how the fundamentals of the economy are doing.

That’s one really, really thin green shoot!

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