Saturday, May 7, 2022

US jobs keep coming back, and in places that were hurting. Wall Street wants it to end

Despite financial media trying to stir up concern over inflation/recession, the US jobs market kept rolling along last month.
America’s employers added 428,000 jobs in April, the same as in March, the Bureau of Labor Statistics reported Friday. That’s undeniably good news: America remains 1.2 million jobs in the hole from the early days of Covid, when nearly 22 million jobs vanished over the span of two months.

The unemployment rate, which had been expected to fall to a pandemic-era low, held steady at 3.6%. That’s just a tick above the pre-pandemic level of 3.5%, which matched a 50-year low first set in 2019.

It was the 16th straight month of job growth and the 12th straight month that more than 400,000 jobs were added, but gains have started to moderate.
But given that we are down to 3.6% unemployment, it's logical that gains would be slowing down, and are quite a bit faster than you'd think they'd be. The rapid recovery of jobs is also in welcome contrast to what we'd seen in the last 30 years after recessions.

That seems pretty good to me, and when you dig into the full report, you can see a couple of sectors were especially strong last month.` Manufacturing added 55,000 jobs in April. Employment in durable goods rose by 31,000, with gains in transportation equipment (+14,000) and machinery (+7,000). Nondurable goods added 24,000 jobs, with job growth in food manufacturing (+8,000) and plastics and rubber products (+6,000). Since February 2020, manufacturing employment is down by a total of 56,000, or 0.4 percent. But that's 56,000 jobs left to recover after a WORLDWIDE PANDEMIC sidelined more than 1.36 million manufacturing workers 2 years ago. By comparison, we lost 47,000 maufacturing jobs between July 2019 and February 2020, aka the 7 months before the pandemic. You know, during what the Former Guy called "The Greatest Economy in the History of the Country."

Along the same lines, I found the information on this sector somewhat funny.
Mining added 9,000 jobs in April, with a gain in oil and gas extraction (+5,000). Mining employment is 73,000 higher than a recent low in February 2021.
Oh, but it’s Dems that are bad for miners and it was the Former Guy "understood them”. Riiight.

Wage gains were decent on a nominal level, although in early 2022, these numbers may not sound so great.
Average hourly earnings for all employees on private nonfarm payrolls rose by 10 cents, or 0.3 percent, to $31.85 in April. Over the past 12 months, average hourly earnings have increased by 5.5 percent. In April, average hourly earnings of private sector production and nonsupervisory employees rose by 10 cents, or 0.4 percent, to $27.12.
This time last year, 5.5% wage gains would have sounded really good. But it's blunted due to the price increases we've seen in the last year, and those gains have been moderating in recent months.

As the tweet alludes to, while wage gains of 0.3% total and 0.4% for everyday workers are solid, they're not high enough to cause any kind of wage-price spiral. In theory, that should level off inflation. You know, unless a lot of our inflation is actually profiteering by companies using "inflation" as an excuse to raise prices but not wages.

You’d think the reports of continued strong job growth along with moderate wage gains would be welcomed by a market that seems to be fearing both inflation and a possible recession. Federal Reserve Chair Jerome Powell reiterated this week that he sees no need to raise rates more than 1/2 a point at a time as things stand, which also goes to this view. But the market dropped on Friday anyway because...traders are ignoring the economic data?
Wall Street's main indexes extended losses on Friday as investors worried that the Federal Reserve will need to be more aggressive than expected in raising interest rates to combat inflation.

The tech-heavy Nasdaq registered its lowest close since 2020, notching a fifth straight weekly loss, its longest losing streak since the fourth quarter of 2012. The S&P 500 also posted its fifth straight weekly loss, its longest string of weekly losses since the second quarter of 2011.

"Ninety-five percent of the driver of the market right now is long-term interest rates," said Jay Hatfield, founder and chief executive of Infrastructure Capital Management in New York.
That sounds more like fears of a popping Bubble in housing, stocks, and debt-laden companies. Which has ZERO to do with the real economy most Americans are dealing with, other than housing prices getting out of control.

Or maybe the Wall Streeters were concerned that the jobs market is TOO good - can't have the vassals be doing well. Especially those leisiure/hospitality workers who are in demand, and getting rewarded accordingly.

You can complain about the economy all you want. But if you remove your partisan blinders, you can't deny that for a lot of Americans, it's been a pretty good last 12-15 months when it comes to getting back to work, and getting paid at that job. Corporations and speculators are trying to take advantage of those good times to wreck the positive situation through higher profits prices, and that seems to be a group of people we should concentrate more of our anger toward.
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)