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The headline payrolls numbers showed that job growth stalled in the US during August, but as always there are a pile of caveats and different interpretations to the US employment report. The main one is the fact that the Verizon strike removed 45k from headline payrolls. If we look at the household survey, employment grew by 331k, with the unemployment rate steady at 9.1%. The other stand-out was the tick higher in both the participation rate (those working or looking for work as proportion of working age population) given that this has been on a declining trend through the recession and also the subsequent recovery. This is perhaps the only positive from what is a fairly weak set of data, but given the overwhelming downward trend here, it probably pays not to get too excited by it for the time being. For those still in employment, average hours worked have been steady or falling since April, with average hourly earnings rising by 1.9%, which sits exactly on the average of the past year and slightly below the average of the past six months. In other words, the outlook for those in work is also deteriorating.

But the pattern of the numbers should not be that surprising given the recent data we’ve see on real sector activity and also from leading indicators. The overall pace of job creation remains woefully short of that seen during previous recessions and is at a pace that will take the US economy until 2017 just to reach the pre-recession level of overall employment, even before taking into account the labour force growth that will have taken place since. If the US manages to escape a double-dip recession, the outlook remains for years of sub-par growth and constrained consumer spending, which fits with the payback times normally associated with balance sheet recessions.