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The latest job growth numbers have been disppointing, causing some to become increasingly concerned about the health of the U.S. economic recovery.Contrary to common opinion, Deutsche Bank economist Carl Ricadonna argues that job growth isn’t everything. From a recent not to clients:
It is income, not job growth, that really matters: The March employment report was not as negative as the headline payroll print suggested-in large part because household income growth retained its momentum. Aggregate income creation was flat between February and March, but for the quarter as a whole it rose at the second fastest pace since the recession ended. We see little reason to believe the March jobs report represented the beginning of a sustained slowdown in the pace of hiring, so the prospects for further, solid income growth through the current quarter and into the back half of this year remain intact.
In defending the jobs report, Deutsche Bank also states that a revision of the report is possible as well, with an increase up to +160 from +120 being feasible by looking at recent trends in report revisions.
Basically, Deutsche Bank does not see the jobs report as negatively as many do see it.