Today, we learned that the American economy produced 215 thousand jobs last month, which is slightly more than expected.  The new jobs are largely (80%) in the service sector.  The manufacturing sector actually lost 29 thousand jobs.  Construction and healthcare gained 39 thousand jobs each.

Republicans are happy because the Labor Force Participation Rate increased, from 62.9% to 63.0%.  Of course, they wish it had been greater, but so do the Democrats.  The difference is that Republicans feel people get fat and lazy on unemployment benefits and other entitlements.  They argue a cut in both entitlements and corporate taxes would help, and they are right.

Democrats are happy because average hourly earnings increased 0.3% last month, a healthy increase. Worker incomes have been stagnant for far too long.  Remembering that inflation is relatively good, especially compared to deflation, the easiest path to inflation is thru wage gains.  We need that, almost as much as the workers need some wage growth.

Both Republicans and Democrats are unhappy that the U-6 level of unemployment, counting the marginally employed (part time workers) and those who have given-up finding a job, rose from 9.7% to 9.8%.  These are truly the saddest cases.  They justify life-long education!

But, if we remove our red- or blue-tinted glasses, is it a good “Jobs Report” or not?
It is absolutely a good report!
Our labor market is strong, indeed.

The question should be – if our labor market is so strong, why is GDP growth so slow?