A few hours after the decently strong non-farm payrolls report, Goolsbee of the FOMC commented on inflation undershooting its target, suggesting it will take much more to convince the Fed to change its direction on policy rates. On a broader scale, it’s difficult to be overly concerned about a labor market rebound in the US economy right now. After some time to reflect on Friday’s labor report, a few thoughts emerge: while the report was solid, there are still lingering questions.

• A big increase in public employment in the household survey
• The materially less punitive seasonal adjustment of this year’s September reading compared to earlier years, with 50-100k jobs found in the spreadsheet
• The drop in the average weekly work hours, which is a procyclical indicator

Overall, the labor market might not be as “hot” as initially perceived, and we typically use the running net revision index to guide us on whether the labor market is improving or not. We are still in weakening territory on a trend basis, but nothing dramatic. History also suggests that the next six months will continue to see a downtrending US labor market on a year-over-year basis.

Charts of the Week: Labor Market Still in a Net Downtrend