Payrolls and Inflation

Payroll growth has been declining since middle of 2006.  Notice payroll growth peaked at 2% far below any recovery before.

Payroll Growth...Update Apr'08

Continuing Claims (CC) are a good leading indicator of stock directions and inflation.

CC rising and rate of change rising leads to falling inflation and is bad for stocks. Of course, stocks don’t like protracted periods of high inflation. Here is a table with rules for interpreting CC and indicated inflation pressure.

Rate of Change in Continuing Unemployment Claims...Updated Aug’'08

It seems aggregate weekly hours index is a wonderful recession indicator.

Rate of Change in Aggregate Weekly Hours...Updated Sep’'08

Payrolls lead inflation by about 9 months.

From 1970s...

Service Wage Inflation...Updated May'08

Wage inflation declining since December'06. Now 3.7%.

Notice the high wage inflation of the 1970s....peaked at 8.8% in 1981.

Real Weekly Earnings...Updated Jul’'08

Now is -2.8% the worst since 1991.

12 Months Percent Change

Series Id:     CEU0500000031
Not Seasonally Adjusted
Super Sector:  Total private
Industry:      Total private
NAICS Code:    N/A
Data Type:     AVERAGE WEEKLY EARNINGS, 1982 DOLLARS

Real Weekly Earnings from 1965…

12 Months Percent Change

Series Id:     CEU0500000031
Not Seasonally Adjusted
Super Sector:  Total private
Industry:      Total private
NAICS Code:    N/A
Data Type:     AVERAGE WEEKLY EARNINGS, 1982 DOLLARS