Tag: Unemployment

Thinking About (Much) Better Pro-Work Ideas Than a Cartoonish Federal Jobs Guarantee

 

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.

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.

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.

December Jobs Report: Maybe America’s “Great Stagnation” Isn’t So Bad

 

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.”

So if this is “stagnation,” perhaps more of it wouldn’t be so unwelcome. What the expansion has lacked in vigor, it is somewhat compensating for with duration. Now, this isn’t to say things couldn’t be better, such as faster wage growth. But certainly ok overall, especially if the jobless rate starts falling deep into the threes.

A Downer of an August Jobs Report. But Maybe Not for Trump.

 

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.

But I wonder if Team Trump sees things the same way.

July Jobs: After Another Strong Employment Report, What Does the US Economy Really Need Right Now?

 

Good stuff! The US economy generated 209,000 jobs last month. That’s a bit stronger than analyst expectations and above the average monthly jobs gains so far this year.

Think of it this way: The current expansion is the third-longest ever with 82-straight months of job growth. And while job growth is slowly easing back — at 179,000, the average monthly gain over the past six months is slightly weaker than 2016’s 187,000 average — it’s still on a 2-million-a-year pace. Not bad at all.

June Jobs Report Shows Why Productivity Growth Remains Top Economic Challenge

 

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.

May Jobs Report: Bad But Not Terrible

 

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.

What about paychecks? This from JPMorgan: “The dreary realities on labor supply have been reasserting themselves in recent months. On wages, the gradual 2015-2016 acceleration has stalled so far this year; average hourly earnings rose a modest 0.2% last month and the year-ago increase was unchanged at 2.5%.” So as Deutsche Bank argues, perhaps 2.5% wage growth is the news 3%, especially given weak productivity growth.

Are We About to Get the Lowest Unemployment Rate Since the Clinton Presidency?

 

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):

  • The latest NFIB and JOLT surveys suggest that, despite the slowdown in payroll employment growth last month, labor market slack continues to diminish. They also provide further evidence that this will soon translate into a renewed acceleration in wage growth.
    • The job openings rate ticked up to 3.8% in February. Admittedly, the hiring rate edged down but both have been broadly stable at relatively high levels for some time. This isn’t a huge surprise, however, given that the number of unemployed people per job opening is at a 16-year low.
    • Meanwhile, although the voluntary quits rate dropped back to 2.1% in February, the continued decline in the unemployment rate is clearly making workers more confident in their ability to find new jobs. Furthermore, the share of small firms in the March NFIB survey saying that job vacancies are hard to fill suggests that the unemployment rate could soon fall below 4%. The latest Conference Board consumer confidence survey points to a very similar outcome.
    • With little slack left in the labour market, wage growth is likely to continue to accelerate. Indeed, the share of small firms planning to increase worker compensation has risen sharply in recent months, and is consistent with annual growth in average hourly earnings rising towards 3.5% by year-end.

By the way, we haven’t seen a sub-4% unemployment rate since 2000.

Yes, the March Jobs Report Was Disappointing. No, You Shouldn’t Freak Out.

 

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.”

Still, not long after, the following phrase was trending on Twitter: “Big Slowdown for U.S. Economy.” It came from a New York Times story whose headline (which I clicked) was then apparently altered to the less apocalyptic “Job Growth Loses Steam as U.S. Adds 98,000 in March.”

A Few Thoughts on Obama’s Final Jobs Friday

 

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.

So how does the Obama economy go out after coming in during a time of recession and financial crisis? Well, the GDP numbers tell a pretty gloomy story, but the job market offers a bit brighter one about the economy. I am inclined to think jobs might be more informative statistic here. This is in line with my view that possible productivity mismeasurement could result in GDP numbers understating the true pace of economic growth. At the same time, both boosting productivity growth and labor force participation need to be prime priorities of the next administration.

Obama’s Labor Market Mischief

 
Labor Thomas Perez

President Obama with Secretary of Labor Thomas Perez.

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.

October Jobs Report: Is the US Economy “Basically Healthy?”

 

05onfire1_xp-master768-v2The October jobs report contained lots of good news. Even though the 161,000 increase in nonfarm jobs was a bit shy of expectations, it came with a 44,000 upward revision to August and September data. This is longest streak of total job growth on record, as American businesses have now added 15.5 million jobs since early 2010.

Perhaps the brightest spot was the wage data. The 0.4% increase in average hourly earnings last month nudged the annual growth rate up to a seven-year high of 2.8%, from 2.7%. More from First Trust Advisors: “Total hours worked increased 0.2% in October and are up 1.5% in the past year.  Combined with the earnings data, this means, total cash earnings (which exclude fringe benefits and irregular bonuses/commissions) are up 4.4% in the past year, which is plenty of fuel to push consumer spending higher.”

And RSM US economist Joseph Brusuelas notes that, “for the first time since prior to the 2007-2009 Great Recession wages are rising for the two lower quintile of income earners.”

The New Unworking Class

 

He that will not work shall not eat (except by sickness he be disabled). For the labors of thirty or forty honest and industrious men shall not be consumed to maintain a hundred and fifty idle loiterers. – John Smith, 1609

One out of six prime working-age adult males in the United States is not temporarily unemployed, or “between jobs,” or “looking for work.” No, a huge cohort of men in America is now neither employed nor looking for work. They are just skating by on a combination of girlfriends, wives, mothers, and government benefits. Their status, argues Nicholas Eberstadt in Men Without Work, is a “quiet catastrophe.”

Men at Work … or Not

 

shutterstock_284883917We’ve heard a great deal this campaign year about the plight of the working class. The left tells a story about the middle class being destroyed by predatory millionaires and billionaires who are soaking up 99 percent of the “income gains” (as if national income were one giant Big Gulp and the one percent managed to nab the biggest straws).

Donald Trump tells a different story. The jobs that once provided a stable middle-class income have been outsourced. If people are unemployed, it’s because the factories are all in Guangzhou or Juarez. Trump promises that he will bring those jobs back.

Of course, neither Trump nor anyone else can bring those manufacturing jobs back because they weren’t lost primarily to foreign competition. Manufacturing jobs (as opposed to manufacturing outputs, which continue to rise) have been in steep decline since 1947, mostly due to automation and efficiency. Service jobs have been increasing, and as AEI economist Mark Perry notes, the US trade surplus in services vis à vis the rest of the world (including China, Japan, Mexico, and the EU) has shown a 450 percent increase since 2005 and continues to grow. (He winks: “Are we killing them and laughing at them?”)