If the unemployment rate reaches zero and wages still don’t explode higher, the economy falls off, will Economists, central bankers, and the media stop relying on this one statistic for overall economic interpretation? You can be reasonably excited when the unemployment rate falls below 5%, as it did four years ago. Three point six, however, that’s something else entirely. We’ve [...]
The BLS giveth, and the BLS taketh away. That’s not really what has happened, of course, but for many it can seem that way. February’s payroll report obviously stands in striking contrast to January’s. The latter was a blowout, over +311k (revised), hyped near and far as proof of decoupling, the US economy the only clean shirt. In comes the [...]
The unemployment rate isn’t just misleading in the US, though the gap between what it suggests here and what isn’t happening is now enormous. This idea of a labor shortage, or LABOR SHORTAGE!!!! as each case may be, was itself as global as synchronized growth when it showed up in later 2017. There were stories about Chinese factories unable to [...]
Unfortunately for Jay Powell, labor statistics are at best backward looking and often just plain misleading. Can you imagine if the wage data contained with November 2018’s payroll report had been released last December instead? Today, pretty much nobody cares anymore. We’ve flipped from inflation hysteria to inversion unease and that was always the appropriate direction. Average hourly earnings increased [...]
It was a forgettable moment. The Federal Reserve’s Chairman at the time, Janet Yellen, was asked about a key economic statistic and she just couldn’t come up with it. In September 2016, Yellen was on Capitol Hill to testify as she usually did about how things were surely getting better. Rep. Frank Guinta wanted to know what that might mean [...]
On December 5, 2014, the Bureau of Labor Statistics (BLS) reported that in the month of November 2014 nonfarm private payrolls had surged by +321k. Typically bureaucratic, the introduction to the report was unusually blunt. “Job gains were widespread.” The text didn’t come right out and say it so the media did it all for them. TD Ameritrade’s Chief Strategist [...]
Payroll Friday continues to be among the more absurd rituals of the finance industry. That’s saying something because in this business there are many that in any other context would be laughed out of the discipline. Never mind the impropriety of attempting to use a single monthly yardstick for economic progress, over the last four years the payroll report has [...]
Economists say that the labor market is being restrained by secular factors, those outside of regular macro potential. These are opioid use, demographic changes toward an older population, and the downside effects of globalization as it alters the skills required by employers. Between drug addicts, retiring Baby Boomers, and lazy Americans who won’t go back to school, there is now [...]
There are two very big problems with these constant, increasingly shrill labor market anecdotes. The first is that they don’t end up meaning what the tellers think they do. The purpose of these stories is clear enough, it’s just that the logic doesn’t work in the end. Here’s another example from the Wall Street Journal this week. Companies are now, [...]
At a campaign rally in New Mexico in May 2016, Presidential Candidate Donald Trump returned to one of his favorite themes. It was a package deal. He first talked about NAFTA and what he considered the negative effects the trade agreement had had on American workers. That easily segued into what had by then become a campaign staple, the unemployment [...]
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