Sunday, November 5, 2017

More jobs, less wages. Oct report more of the same

I'm out East with family on a long weekend, but wanted to drop a few quick reactions to Friday's US jobs report from October.

1. The good- Jobs bounced back from the pullback due to September's hurricanes. And yes, some of that snapback was predicted, but the previous 2 months were revised up by 90,000 jobs, for a total gain,of 351,000.

Also noteworthy, 24,000 of the gains were in manufacturing, which has had a nice rebound in 2017.

2. Mixed- Yes, the unemployment rate fell to 4.1% in October, the lowest since 2000. But it was a function of 765,000 people dropping out of the work force. Total number of people "employed" actually went down by 484,000.

It's nice that we are at full employment, but the workforce participation rate is,now lower than it was 1 year ago, and maybe we are demographically maxed out at this point.

3. The bad- But you'd think that the following 2 scenarios would lead to wage growth. It's not. Average hourly earnings dropped by 1 cent in October, and with gas prices back on the rise, it seems likely that real wages will drop again.

You look at these figures, and it tells you that the LAST thing we should be doing is cutting taxes on the rich (which encourages profit hoarding) and suppressing wage growth (like so many GOP states do). It makes no economic sense, but the Koched-up donor class isn't paying them to be sensible.

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