JB: No. I include it because so many ask about it. It's like saying you're healthy if you ignore that your foot has gangrene! There is always a reason for slumping earnings (2008, housing; 2001, tech) so this isn't new or different. It is a rationalization for bulls.
Also, I believe the measure is flawed. It takes out energy companies that are hurt by falling crude prices. But it doesn't take out retailers, industrials or basic materials that are helped by falling crude prices. Why not?
BR: What does all this mean in the context of strong payrolls data?
JB: I think you’re asking why hiring is so strong, yet earnings so weak. The answer is productivity. See the chart below. We add workers but it’s not increasing gross domestic product, so productivity wanes.