Labor Market 'Breadth' Nears Record Low

Tyler Durden's picture

Authored by Teddy Vallee via,

Tom Keene was out with a chart today referencing Zerohedge’s point that a large percentage of the non-farm payroll growth has been a result of lower paying industries, such as food and drinking places – or as they would put it, more bartenders.

While a job is a job, the composition and strength of gains is quite important, as it gives us an understanding of aggregate health.

If total growth is strong, but is the result of only a few sectors, the breadth of the overall market is weak. This typically provides us with a signal on where the overall market is heading – and this goes both ways.

This brings me to an indicator that I built out over the past year – labor market breadth – which seeks to measure the aggregate health of the labor market by looking at its sub-components. While I don’t break out how it’s calculated, I will say it is comparable to the breadth of the stock market.

Following Friday’s employment report of 209k new jobs, beating estimates of 183k, labor market breadth fell to an un-smoothed cycle low, as shown below. So while the headline number was strong, it’s aggregate sub-components continue to slow, which is not indicative of strength.

We can see this by sharp decreases in total job growth of retail trade, which many will attribute to the rise of Amazon.

And information, which is not affected by the retail giant.

As well as arts, entertainment, and recreation.

And health care, which has slowed materially over the past four months.

There is some strength however in wholesale trade.

And durable goods

But this today was offset by weakness in a previously strong industry – real estate.

And a slowing financial sector.

In total, the current breadth of the labor market is indicating that wages and salaries will move lower over the next 6 months, as shown below.

We’ll see if this manifests or not.


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JRobby's picture

Breadth headed back to 2009 levels!  Yea! It's a party for the FED's failed policies!

schrock's picture

You make it sound like going back to 2009 levels would be a bad thing. Back then housing, food, vehicles etc. were affordable.

Consuelo's picture



You bring up a key point whether you realized it or not.   Quite actually, housing, food, vehicles, etc., have NOT been 'affordable' (we'll define 'affordable' in a moment), since the period of the mid 1970's to early 1980's, and never stopping on a continuous upwards trajectory.


Because prior to the aforementioned period, a wage-earner could afford to save enough money on his own for 20%+ down payment on a home.   Food was reasonably priced - with full amounts - not shaved off 28 oz. deals in place of 32 oz. quarts and so on, and automobiles weren't priced at levels approaching the aforementioned period for residential housing...

'Stated differently': We were not yet fully financialized and outsourced.

EuroZone's picture

I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do...

Tom Green Swedish's picture

Millenials in a nutshell guys are all drunks and the girls are obsessed with their phones. Totally useless

A. Boaty's picture

Kids! I don't know what's wrong with these kids today!
Why can't they be like we were, perfect in every way?

divingengineer's picture

As an X-er, I am not ready to be the cranky old man that yells at kids to keep off his lawn.

gregga777's picture

The on-going destruction of good paying, full-time jobs by the Goldman Sachs Feral Reserve System and the political parasites continues. The last thing that the Intellectual Yet Idiot classes ruling MORONS want is increasing costs of labor. To that end, for the last +30 years, they've overseen the destruction of the American manufacturing industry. They've sent 10's of thousands of factories and 10's of millions of good paying, full-time manufacturing jobs to their Communitst bosom buddies in the People's Republic of China. They've devastated American cities like Chicago, Baltimore, etc., not that they care.

Stormtrooper's picture

Well, the Democratic administrations in those cities have helped "bigly" in their destruction, aided immensely by the Fed.

Salmo trutta's picture

We have an “elastic” currency “aided and abetted” by “elastic” legislators. We have perennial Walter Wriston caricatures pressuring the House Committee on Financial Services & the U.S. Senate Committee on Banking, Housing, and Urban Affairs. We have a conspiratorial organization that goes by the name of the American Bankers Association - with its well funded lobbyists that “routinely spends more money influencing legislation, than all other industry and labor groupings.”

The Board of Governors is self-described as: “subject to oversight by Congress, which periodically reviews its activities and can alter its responsibilities by statute” Even so, the Fed is “connected at the hip” with Congressional allies, a la Greenspan, who the New York Times called a “three-card maestro”.

The Fed’s research is politically coordinated, targeted to justify its monetary policy objectives - those that appease the banking community.  It’s not a Federal Reserve System, it’s a Commercial Banker’s System.


The great German poet and playwright Bertolt Brecht would have agreed and once said it was "easier to rob by setting up a bank than by holding up (one)."


As Willie Sutton said: his reason for robbing banks is 'That's where the money is'.


Thomas Jefferson's my favorite: "I sincerely believe the banking institutions having the issuing power of money are more dangerous to liberty than standing armies."


It’s as the university professor said: “innovate away from home”. Academic freedom has become the “barbarous relic”.


The future of the United States holds that it will be forced into (1) a high degree of economic isolation, (2) reflect an increasingly totalitarian mold, (3) and operate under a command economy.


libertyanyday's picture

we understand the banking cabal that holds us in do you suggest we get out of them.??

LawsofPhysics's picture

Correct!!!  At the end of the day the Global "elite" want everyone on the planet working for Chinese (or lower) wages!


It really does come back down to the monetary system itself and what you are really being offered in exchange for the products of your LABOR (and implied RISK of the labor)!!!!

Why do we allow a select group of bankers/financiers ACCESS TO TRILLIONS OF FREE MONEY (ZIPR/NIRP) RISK FREE?!?!?!?! If you could create all the money you wanted without risk and without real collateral you would eventually OWN EVERYTHING TOO!!!!   Power corrupts and absolute power corrupts ABSOLUTELY.

"Full Faith and Credit"


tick tock you criminal overcompensated paper pushers, the rest of the world better hope you taste like chicken!!!!



ReturnOfDaMac's picture

American middle class destruction on a massive scale. Other than buying GS stock, what can you do?  Can we create a technology to counter their destructiveness?  The crypto currencies seem to be an attempt, but I don't know how practical they can be on a large scale.

wmbz's picture

All bars will be booming in College towns once school is back in. Got to drink up that student loan money!

Screw debt, it's not fair...Party on!

Rebelrebel7's picture

This should come as no surprise to anyone since the government has chosen who the winners and losers will be in this pseudo -capitalist, actual crony- socialist country!

8 out of 10 small businesses fail within the first 18 months, being forced to compete with heavily subsidized corrupt corporations in  a trickle-up crony socialist country employing the most corrupt and  incompetent criminals on Earth in an orgy of deceit, corruption, bribery, blackmail and every imaginable nefarious activity conceivable

Over 190,00O corporations are listed as defense  contractors receiving over $352 billion in bogus contracts raping the poor and the middle class so that elitist neoconservative / neoliberal Mussolini fascist assholes can parade on CNBC singing the virtues of Capitalism!

These defense contractors include all TV news and major media organizations, all telecoms, most technology companies, all oil companies, all major auto companies, ADT Home Security, International Paper, prominent  universities, and that is just federal handouts for federal defense! Then there are all of the other branches of the federal government banding out research grants! I'm researching the assholes for free as a service to my fellow Americans!

Then of course there are also contracts awarded by state and local governments!

I attempted to find the extent of this bogus economy but in Obama's policy of unprecedented transparency, nothing is listed after 2007!

This is my final farewell ending with a giant FUCK YOU to corrupt, incompetent, control freaks of  the American establishment!

Another stupid idea courtesy of the Rockefeller Foundation!



Watch "Rage Against The Machine - Bulls on Parade" on YouTube "Rage Against The Machine - Bulls on Parade" on YouTube
c2nnib2l's picture

PPT will jump start this chart on Monday I wouldn't worry about it too much ^^

incog99's picture

Obviously, real wages adjusted for inflation are the problem.  As durable goods and real estate skyrocket wages stagnate.  To be sustainable, either real wages need to rise or the price of durable goods and real estate must come down.  

libertyanyday's picture

we just print more....problem ' solved '.

dunce's picture

The $15 an hour policy will stop that growth in it's tracks.

ElTerco's picture

Looks like we just entered a recession. It will probably be announced elsewhere in a few months.