Friday’s employment report augurs well for my “Second Recovery” economic outlook for 2013. Of course, I am assuming that the fiscal cliff will be averted. Let’s slice and dice the latest numbers. During October, payroll employment rose 171,000. The previous two months were revised up by 84,000, resulting in a three-month average gain of 170,300.
I give more weight to the revised data for the prior two months than to the latest month's preliminary estimate. That’s because upward (downward) revisions tend to confirm that the labor market is improving (worsening). So the latest data are encouraging, as is the positive 12-month trend in the revisions.
There’s plenty more good news in the BLS report. The household measure of employment comparable to the payroll measure rose 733,000 during October, following a gain of 294,000 during September. Over the past two months, the overall household measure, which is more volatile than the payroll one, rose a whopping 1.28 million.
Today's Morning Briefing: Consumers Are Looking Up. (1) Employment gains support “Second Recovery” scenario. (2) Upward revisions are meaningful. (3) ADP back on track. (4) Earned income at record high. (5) Consumer Optimism Index at new cyclical high. (6) Monster is comforting. (7) Consumer Discretionary should continue to outperform. (8) Despite poor earnings season, S&P 500 forward earnings remains at record high. (More for subscribers.)