Labor Market Conditions Index Picking Up Steam

In line with trends in the monthly employment report, the labor market conditions index is picking up steam. December's 2.9 reading is moderate compared to long-term trends, but it is the eighth straight reading over zero and the third month in a row that the rate of improvement has increased. Adding to strength are large upward revisions to November, from an initial plus 0.5 percent to 2.7, and to October, to 2.9 from 2.2. All three of the latest months are the strongest readings since a 3.8 showing in January 2015. The 3-month average for non-farm payrolls, at 284,000 in December, is also the strongest since January 2015. Going into this January's troubles over China, the U.S. labor market was showing increasing strength.