That great January jobs report had some weird stuff in it

As good as the January jobs report was — 257,000 net new jobs and a 0.5% increase in average hourly earnings — it was just the latest data point in an apparently improving employment story. Upward revisions have the economy adding just over a million (!) new jobs the past three months, including 423,000 in November — the best one-month showing since 1997.

But here is the weird thing: Official GDP growth wasn’t that hot as 2014 came to a close. Although the initial print was 2.6%, more recent data suggest a downward revision to maybe 2.0%, according to JPMorgan. And while worker earnings improved, they are still up just 2.2% over the past year. Then you have the split between managers and all workers with hourly earnings up 0.5% for  all private, nonfarm workers vs. a 0.3% rise for private-sector production and nonsupervisory workers (the more reliable series some economists think).

So how to make sense of all these numbers? Two thoughts: First, maybe the technology optimists are right, and economic metrics made for a wheat and steel economy are increasingly inadequate for a digital economy. As economist David Beckworth tweeted this morning, “Consistently strong job numbers reinforce my prior that GDP is increasingly becoming a poor measure of economic activity.” So perhaps growth is stronger than we think, explaining the strong job gains.

Second, wage growth remains anemic overall, more so for non-managers. This is especially notable if GDP is understating growth.  So let me again make this point: This sort of distributional issue could maybe be more evidence of an “average is over” economy where high- and low-skills jobs are growing, but not those in the middle thanks to automation and globalization. Only tech-savvy workers and managers see steadily higher wages. Some cautionary words from economist Robert Brusca:

Remember that employment is a lagging variable. When job gains continue to be strong as other indicators are receding there is a message there. The message in January is that job growth has slowed from its November and December pace. It is below its year-over-year pace yes, even as strong as it is. While we saw some wage gains there is not much there for the rank at file at +2% year-over-year.

So while the labor market is improving overall — “The labor market is on fire” was the sit-rep from Capital Economics — lots of workers may still not be feeling it.

Update: A positive take from IHS Global:

— The economy generated 257,000 new jobs in January, about in line with the average in 2014, and close to the IHS forecast of 260,000.

— Strong upward revisions to the November and December job totals increased the three-month job creation total to over one million.

— Labor force growth was also strong, increasing the labor force participation rate and adding credence to forecasts that a period of labor market tightness is not imminent.

— “Good” jobs were also created in the construction and manufacturing sectors, and in many higher-paying services areas.