Saturday, July 8, 2023

Steady as it goes for US jobs and wages in June. Still not seeing the downside

It was another jobs Friday in America yesterday, and the numbers were OK but not amazing.

Not sure I'd call a 110,000 downward revision "modest", but it also brought those large gains back toward the moderate growth we've been seeing for most of the first half of 2023. Since peaking in the second half of 2021, after vaccinations for COVID were in place and Biden/Dem stimulus were put into law, we've seen a steady decline in the rate of job growth, and now are at a little over 200,000 private sector jobs a month.

And you'd expect less job growth when you have an unemployment below 4% and slow population growth. It's been remarkable that we've still been able to grow both our jobs numbers and workforce even as unemployment has stayed at multi-decade lows for more than a year, and in fact, we have a higher percentage of working-age Americans in jobs than we have in 22 years (a time when Boomers dominated this age range).

For the Fed-watchers, we saw growth in average hourly earnings stay solid, beating the "expert expectations" with +0.36% for June and +4.35% over the last 12 months.

If you look at that chart, I think we can safely say this isn't a temporary thing anymore, and workers have a better hand than they had in the 2000s and 2010s. It also shows that there was never a wage-price spiral when inflation jumped in late 2021 and the first half of 2022, because CPI has receded into a 3-4% range while wage growth has stayed at 4-5%.

And again, I ask - what is wrong with a full-employment economy with decent job growth, 4-5% wage growth, and 3-4% inflation? You know, other than not allowing corporations to max out profits by squeezing everyday workers like they've been able to do for most of the 2000s?

But the Fed seems like they are hell-bent on fixing this "problem", and seem likely to raise rates to their highest levels since 2000. You'd think they'd recognize that hiring has slowed, and that we are in a mostly-balanced economy in mid-2023. But maybe that's not what they want, is it?

By comparison, you want to know what I think of this jobs market?

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