Job growth has been strong, sustained and significant. It’s also old news.
That’s hard to understand for long-term investors. When one’s investment profits aren’t measured by fractions of a penny in fractions of a second, employment growth is fundamental to a healthy economy feeding corporate profits and paying off in higher stock prices. Over the past year, the American economy has created an average of 267,400 jobs per month. The rate of job growth is the best it’s been since the late 1990s.
And the market has come to expect it, but better.
The trouble with good economic news in the short term is the insatiable appetite for it to always be better at the cost of the long-term perspective.
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The economy slowed considerably in the first three months of the year compared to late 2014. Job growth has slowed as well. Friday’s report from the Bureau of Labor Statistics will be understandably scrutinized for signs of weakness in job growth. In addition to the dual headline data of the unemployment rate and private payroll job growth, weekly hours, wages and underemployment deserve the attention they’ll receive (and likely detractors if they continue to be underwhelming).
The average forecast expects at least 250,000 new jobs were added to U.S. payrolls in March. Critics are right to point out the pace has been slower than previous economic expansions. That’s old news, too. And old news has been good news for patient investors.
Financial journalist Tom Hudson hosts The Sunshine Economy on WLRN-FM in Miami. Follow him on Twitter @HudsonsView.