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A Better Gauge for Job Growth

Looking at employment data year over year, using a three-month moving average, offers a clearer picture of the U.S. job market.

Bob Johnson: This week, we look at three different charts and three different ways to look at monthly employment growth.

First, we're going to start with nonseasonally adjusted data. This is the data as it literally comes in. You can look at the monthly data and see there is huge volatility ranging from something close to 3 million jobs lost in a typical January to something as high as more than a million jobs added in April. The volatility is caused by various known seasonal factors. In January, it's retailers coming back from the holidays and shutting down a little bit from their holiday employment. You see another big spike in jobs in the other direction in April and May when we add almost a million jobs. That happens as the normal college graduation class comes out and as normal seasonal hiring for the summer begins. And then we have a fall-off in July--people going back to school as well as some of the things going on in the auto industry. Then, the other big spike you see there on the upside is in October, and that's largely related to the retailers beginning to hire on the other end of the cycle for the holiday season.