Jim Geraghty of National Review and Chad Benson of Radio America celebrate a positive July economic report, as unemployment drops to 3.9 percent and the economy adds 157,000 jobs. They also criticize The New York Times for hiring reporter Sarah Jeong, who made racist comments about white people. And they break down reporter Bill Scher’s unappealing offer for Never-Trump Republicans to join the Democratic Party, as long as they accept that their policies will not win.More
Have Americans gotten way healthier over the past several years? Seems dubious. But the US economy sure has strengthened. And America’s hot job market seems to be finally draining a reservoir of hidden slack: disability rolls. The New York Times notes the number of Americans receiving Social Security disability benefits has declined to 8.63 million from a September 2014 peak of 8.96 million.
Now there might be other things going on as well, such as the big expansion of Medicaid and the Social Security Administration tightening the approval process for benefits. But as interesting as all these numbers are, more compelling is the story of Christian Borrero, told at the end of the Times piece. Born with cerebral palsy, Borrero until 2015 received disability benefits as he worked at a part-time job answering phones. The salary was low enough that he still qualified for benefits.More
While the DC press corps worries whether Trump was booed at a White House event and curates elaborate conspiracy theories about Melania, a slightly more important story isn’t getting enough pixels. The economy is doing so well that, for the first time ever, there are now more job openings in the US than unemployed Americans:
With employers struggling to fill openings, the number of available jobs in April rose 1 percent to 6.7 million from 6.6 million in March, the Labor Department said Tuesday. That’s the most since records began in December 2000.
Is it overstating things to say the US economy is, well, booming? After all, the May jobs report was pretty impressive, including a) 223,000 new jobs, b) an uptick in average hourly earnings growth to 2.7% from a year ago, c) a downtick in the jobless rate to 3.8% — at 3.755% unrounded, the lowest since 1969 — and d) a two-tenths decline in the U6 underemployment to 7.6% — its lowest level since 2001. JPMorgan economist Michael Feroli titled his Jobs Friday report this way (while alluding to President Trump’s controversial pre-report tweet): “The secret’s out: job growth is booming.” And some economists think a jobless rate with a two-handle is hardly out of the question.
True, overall economic growth is still stuck in Two Percentland. That’s the other, less-encouraging two-handle. But maybe not for much longer. GDP estimates for the second quarter are rising across Wall Street, and this report may boost that momentum. “Nearly all aspects of this report were positive and consistent with solid growth of wage-and-salary income in the second quarter,” notes the IHS Markit econ team. “The details in this report added one-tenth to our forecast of Q2 GDP growth, which now stands at 4.1%.”More
Long-term, persistent joblessness is the great American domestic crisis of our generation. In our 2017 special issue, “The Shape of Work to Come,” City Journal grappled with the problem, and our writers continue to explore it.
City Journal recently convened a panel of experts to talk about the future of work. Audio from their discussion is featured in this episode of 10 Blocks.More
If I were funnier, I would do a classic Johnny Carson call-and-response, “How hot is it” joke on the job market. “How tight is it? It’s so tight….” So tight that it’s at full employment? Well, that’s the debate. Goldman Sachs, for one, points to a host of factors suggesting the job market is beyond full employment. From GS:
This assessment rests less on the sub-4% unemployment rate—there’s nothing special about round numbers—than on the whole range of indicators that now signal a historically tight labor market, which also includes the underemployment rate U6, job openings, quits, skill shortages, and household job market perceptions. These signals refute the still-widespread belief in large amounts of labor market slack hidden in a depressed participation rate. Just to pick one example, it is all but impossible to reconcile that belief with the fact that the net share of US households—including both labor force participants and nonparticipants—who say that jobs are “plentiful” as opposed to “hard to get” now stands at +23pp, a full 10pp above the peak of the prior cycle in 2007.
The idea of a federal jobs guarantee, perhaps last seen in the enjoyable 1993 film Dave, is the hot-take economic policy on the left at the moment. (Sorry, universal basic income, your 15 minutes appear to be up.)
Now there are many, many problems with a federal jobs guarantee. In a recent blog post, economist Timothy Taylor highlights lots of them, at least regarding the undercooked Bernie Sanders version. There’s a government managerial problem, a jobs-skills mismatch problem, a geographical mismatch problem, a worker displacement problem, a worker discipline and incentive problem, a “what happens to existing anti-poverty programs” problem, and, of course, a budgetary problem. Lots of problems. You really can’t hand-wave these away.More
Jim Geraghty of National Review and Greg Corombos of Radio America unload on President Trump for even saying he wants to see most aspects of the Democrats’ gun control agenda in a comprehensive bill and for apparently having little regard for due process rights. They also discuss the resignation of White House Communications Director Hope Hicks and how the West Wing seems to be in a constant state of turnover. And they close with good economic news, as new reports show wages rising – especially for low-income workers – and that the number of jobless claims filed last week were the fewest since 1969.More
Jim Geraghty of National Review and Greg Corombos of Radio America celebrate the lowest number of weekly jobless claims since 1973 as yet another sign the economy is on a serious upswing. They also examine the Republican National Committee’s winners for worst fake news in 2017, with a look at the choices and the RNC being unprepared for the traffic on its website. And they call out MSNBC’s Joy Reid for her vile attack on National Review’s David French and for her later retraction of the smear, which proved she never actually read his article in the first place.More
When you’re nearly nine years into an economic expansion, it’s probably asking a lot for job growth to accelerate. Steady-as-she-goes seems a rather more reasonable expectation. And that is pretty much what the December jobs report delivered.
While net new payrolls underperformed Wall Street expectations — 148,000 actual vs. 190,000 forecast — everything else was business usual. No change in the jobless rate, participation rate, employment rate, or wage growth. And even the payroll number wasn’t so bad if you smooth it out. Over the past three months, jobs gains have averaged 204,000. (For the year, the US economy added 2.1 million new jobs, just a tick below 2016.) And if you are looking for a new reason to be optimistic, you can’t do much better than the continuing rise in the prime-age employment rate — despite all those great, distracting video games. What’s more, JPMorgan notes, “The gap between white and African American unemployment rates narrowed to 3.1%, the lowest on record going back to the early 1970s.”More
Consensus opinion is that the August jobs report was lousy. For starters, the 156,000 net new jobs created by employers last month missed the consensus forecast of 180,000. Payroll gains for June and July were revised lower for a net loss of 41,000 jobs. The jobless rate ticked up to 4.4% even as the participation rate stayed steady and the employment rate ticked lower. Average hourly earnings rose 0.1% month-over-month, the weakest since November 2016. “August’s employment report was disappointing across the board,” is how Capital Economics put it.More
By many measures, the June jobs report was a pretty good one. The US economy added a better-than-expected 220,000 net new jobs. And job growth for April and May was upgraded by 47,000. Sure, the jobless rate ticked up 0.1 to 4.4%. But that’s OK, because “a massive 361,000 increase in the labour force more than offset an otherwise solid 245,000 gain in the household survey measure of employment,” according to Capital Economics. Both the employment rate and the labor force participation rate edged higher.
Edward L. Glaeser joins Brian Anderson to discuss the great American domestic crisis of the twenty-first century: persistent joblessness, particularly among “prime-age” men. This 10 Blocks edition is the first based on City Journal’s special issue, The Shape of Work to Come.
In 1967, 95 percent of men between the ages of 25 and 54 worked. During the Great Recession, the share of jobless prime-age males rose above 20 percent. Today, even after years of economic recovery, more than 15 percent of prime-age men still aren’t working. Technological changes, globalization, the educational system, and government policy have all contributed to the problem. “To solve this crisis, we must educate, reform social services, empower entrepreneurs, and even subsidize employment,” argues Glaeser in his article, “The War on Work—and How to End It,” in the special issue of City Journal.More
The US employment rate ticked lower last month, and at 4.3% fell to its lowest level since May 2001. But that’s pretty much where the good news ends. Job growth was just 138,000 versus Wall Street expectations of 180,000, and the prior two months were revised down a net 66,000 jobs. (Though it seems the calendar played a role here. The payroll survey week may have been a bit too early to capture students going to work at summer jobs.)
Moreover, the jobless rate fell “for all the wrong reasons,” notes Capital Economics. The decline was driven by the labor force participation rate falling 0.2 percentage point to 62.7%. The employment rate fell by the same amount.More
A key question about recent jobs reports, such as the March report last Friday, is what it says about labor market tightness. Just how much slack is left, if any at all? This bullish note from Capital Economics argues that little slack remains, based on two new employment surveys (bold is mine):More
Wall Street was predicting a March payrolls number of around 180,000. But it came in light at 89,000. Another positive month, though. One of many. As IHS Markit notes (bold is mine), “The string of consecutive months of payroll growth is now 78—the longest since official record keeping began in 1939. One can infer from the length of recessions prior to 1940, that the string is also the longest since 1854.”More
With a preliminary fourth-quarter estimate of 1.9%, US real GDP rose 1.6% in 2016, according to the Commerce Department. It also means US has not notched a 3% GDP year since 2005. And not a 4% year since 2000. In terms of economic growth, at least, the US has suffered a lost decade … plus.
Beyond the topline numbers — 156,000 jobs, 4.7% unemployment rate — some really good stuff in the December jobs report, the last one of the Obama presidency. The labor force participation rate ticked up, while the U-6 underemployment-unemployment rate ticked down to its lowest level since April 2008. A record 75 straight months of employment growth. But here is the biggie: Wages climbed 2.9% over the past year, the strongest growth since June 2009.More
Under the Fair Labor Standards Act of 1938 and its subsequent amendments (FLSA), Congress has delegated to the President the power to set overtime regulations for all public and private employees throughout the United States. On March 13, 2016, President Obama directed Thomas E. Perez, head of the Department of Labor (DOL), to “modernize and streamline the existing overtime regulations for executive, administrative, and professional employees,” which, in his view, “have not kept up with our modern economy.” The Department of Labor conducted exhaustive hearings on the matter, during which it received comments from close to 300,000 individuals and organizations.
In May 2016, following these hearings, the Department issued its Overtime Final Rule that showed how little it had learned from the process. It did nothing to adjust the definitions of EAP (executive, administrative, and professional employees) workers. But it did raise the minimum salary level for exempt EAP workers from $23,660 per year, or $455 per week, to $47,892 per year, or $921 per week. The regulation also included a provision that automatically raised the minimum salary level every three years to take into account the effects of inflation.More