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<\/p>\nMarket commentary has focused on the disappointing job creation numbers in the February job report released last week: just 20,000 new jobs created. However, the report\u2019s other data were quite robust, including a steady average number of hours worked and, in particular, a pick up in the pace of hourly wages.\u00a0 It is worth pointing out that January\u2019s 300,000 job creations number was extremely high and that February\u2019s freezing temperatures most likely depressed February\u2019s number. The real picture, then, is probably less sobering than this steep plunge in job creations would lead us to believe.<\/p>\n
Among the report\u2019s other indicators is the labour force participation rate, which in the US measures the percentage of those aged 16 and over, capable of work, and either in or actively seeking employment. This indicator has stabilised at 63.2%, following two consecutive monthly increases, and currently stands at its highest level since 2013.<\/p>\n
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OUR<\/b> ANALYSIS<\/b><\/p>\n
The falling US labour force participation rate has been generally accepted as a sign of the poor quality of the economic upturn and taken to indicate an increasing number of people opting out of the labour market. In truth, as the graph above shows, a large part of the fall in the participation rate is down to demographics, and in particular due to an ageing US population.<\/p>\n
The scale of the Great Recession could well have accelerated the downward trend, but if we set each participation rate age group at the level that prevailed before 2008 (to strip out the recession effect) and take only the relative impact of each generation into account, we obtain two similar pictures.<\/p>\n
Even though demographic factors can be expected to continue to depress the participation rate in the years ahead, the recent experience of Germany and Japan demonstrates that there is still potential for the participation rate to continue upwards. But whatever happens, this jump to above 63.0% indicates a robust US job market and supports the idea that the labour market is currently very tight.<\/p>\n
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The opinion expressed above is dated March 14th, 2019, and liable to change.<\/em><\/p>\n This document is not pre-contractual or contractual in nature. It is provided for information purposes. The analyses and descriptions contained in this document shall not be interpreted as being advice or recommendations on the part of Lazard Fr\u00e8res Gestion SAS. This document does not constitute an offer or invitation to purchase or sell, nor an encouragement to invest. This document is the intellectual property of Lazard Fr\u00e8res Gestion SAS.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":" Chart of the week Market commentary has focused on the disappointing job creation numbers in the February job report released… <\/p>\n","protected":false},"author":101016,"featured_media":10242,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[148,1274],"tags":[],"class_list":["post-10229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-chart-of-the-week","category-graphique-de-la-semaine-en"],"yoast_head":"\n