Nonfarm payrolls → Unemployment

Where it stands now

Where the two indicators stand this issue

Nonfarm payrolls: 0.74 percentage points below its 10-year average. Unemployment: 0.33 percentage points below its 10-year average, about as far below as usual.

Tests

Does this link hold up?

1. Common explanationWhen job growth slows, the unemployment rate risesSource: Federal Reserve Bank of San Francisco, “Breakeven Employment Growth” (2024).
2. Tested against our dataAgreement between the positions of Nonfarm payrolls and Unemployment (2-month lag), measured in the direction of the common explanation: +0.50 (an opposite-direction link: the raw correlation is −0.50, and a negative correlation fits, so the sign is flipped). Looking at every 5-year period (shifted one year at a time), the two moved in that direction in 49 of 54. ●●●Supported by the data
3. Periods when it did not holdAcross 54 5-year periods, out of step in 1983⁠–⁠1988 and 2011⁠–⁠2019.

History

The two lines, overlaid

Nonfarm payrollsUnemployment

Time lag

At what lag do they match best?

Longer bar = moves more in the direction of the common explanation (the number is the agreement).

• same month+0.45
• 3-month lag+0.52
• 6-month lag+0.56
• 9-month lag+0.57
• 12-month lag+0.56
• 18-month lag+0.48

Limits

What this card cannot tell you

• Moving together does not prove that one causes the other.
• Links change over time; periods when this one did not hold are listed in full.
• This is the historical record, not a forecast.