BBVA Research publishes economic analysis: signs of sustained labor market momentum


Non-farm payrolls increased by 1.4 million and the unemployment rate fell to 8.4%. In addition, the number of people on temporary layoff fell by more than 3 million, while labor force participation increased slightly to almost 62%.

The analysis, co-authored by BBVA chief economist Nathaniel Karp and senior economist Boyd Nash-Stacey, highlights the reverse of the drop in weekly hours from previous months, all major industries with the exception of education and health reporting a gain. Similarly, weekly earnings posted a solid monthly gain of 0.4%, implying a 4.7% increase over the past 12 months.

The report puts an upward bias on the research team’s short-term forecast and suggests that labor market conditions may normalize sooner than expected. However, given the scale of the fallout from the pandemic, a full recovery towards “maximum employment” will still likely take time, while pressures on wage inflation will remain contained. Based on the Federal Reserve’s updated statement on long-term objectives and monetary policy strategy, this implication is that policy rates and the yield curve will remain low for an extended period.

The BBVA USA research team analyzes the US economy and the Federal Reserve’s monetary policy. For its analyses, economists create models and forecasts of growth, inflation, monetary policy and industries. The economic research team also tracks a variety of issues that affect the Sunbelt states where BBVA USA operates. Follow their work on Twitter @BBVAResearch and @BBVANews_USA.

Read the full report here.

View the full library of BBVA Research publications here.

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