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Jobs, jobs, jobs

The New Neo Posted on by

There was a good jobs report for July, much better than expected. What does it mean? Your guess is as good as – probably even better than – mine. But don’t jobs often go up in the summer because of summer jobs? And isn’t hiring going on in a sort of rebound effect from the COVID drop?

According to the Bureau of Labor Statistics, total nonfarm employment has increased by 22 million from its low in April 2020 and has fully recovered to return to its pre-pandemic level…

“The July employment report was an absolute knock-out, a major upside surprise relative to my expectations and indeed much of the labor market data released up to this point,” Renaissance Macro Research Head of U.S. Economics Neil Dutta said in a note. “Talk of recession and a monetary policy pivot is premature.”

“That said, this jobs report is consistent with an inflationary boom,” Dutta added. “The Fed has a lot more work to do and in an odd way, that the Fed needs to get more aggressive in pushing up rates, makes the hard-landing scenario more likely.”…

Markets reacted negatively to the report, which served as affirmation to investors the U.S. central bank is likely to stay on track with aggressive rate hikes.

One thing I do know from personal observation is that a lot of restaurants and stores where I live are seeking workers and having trouble finding them.

Comments

Jobs, jobs, jobs — 26 Comments

  1. Meandering around Twitter this afternoon, I’ve seen a couple of ideas about this. One, the states which have recovered to pre-pandemic levels are the states not led by leftist ideologues. Two, the job participation rate is down, which means some of these new jobs are second jobs.

  2. I think the jobs report is intended partly to distract attention (look! a squirrel!) from the Biden recession. I agree with Neo’s observation that “a lot of restaurants and stores where I live are seeking workers and having trouble finding them.” The local supermarkets in particular are begging for workers.

  4. Well, I guess it’s not as simple as just the jobs numbers. And since our financial experts play with slippery, ever-changing methodologies for inflation and unemployment, it’s hard to tell with any confidence. I was reading that the employment figures had not yet recovered from pre-COVID numbers, so in that sense, the job market is still in recovery from the shutdown. But if the numbers are now pronounced as “fully recovered to return to its pre-pandemic level” then I guess that only means we’ve exited recovery. Now we can see if we are in growth – or recession going forward.

    Then there is the adjustment to be made to the pool of workers seeking employment. I understand that this number is quite greatly reduced from pre-COVID times, so that the employment % number is affected, skewing the number of people working to a higher percentage, because fewer people are the pool actually looking for work. Here in Texas we also see a worker shortage. One goes to a restaurant to see a third of the tables empty, but also experiencing long waits because of shortages in the kitchen, or with the wait staff.

    Not too many people are talking about the Yield Curve inversion yet, but the 10 year/2 year bellwether has been inverted for over a month now, with the 1 year and 6 month inversions close behind. The longer the Yield Curve stays inverted, the worse the recession will be – they say.

    It seems to me that the negative impacts arising from the shutdown were so extreme, so painful, that now that the shock is wearing off, a recession is a relief by comparison. What happens when it becomes a financial crisis though? There certainly seem to be world-wide contagion features to this one, too.

  6. Neil Dutta said in a note. “Talk of recession and a monetary policy pivot is premature.”

    There have been some modest signs of moderating inflation and economic softness, so that spurred some crazy talk (IMO) about how the Fed will stop raising rates soon and they might even cut rates in (the first half?) of 2023. I’m guessing that because of that, we’ve seen a substantial rally in stocks for 2 or 3 weeks.

    https://www.msn.com/en-us/money/indexdetails/fi-a3oxnm?duration=3M

    The Fed was super slow to raise rates and will likely be late in lowering rates. That is, no lowering in 2023. A counterpoint is that they were late in raising because Powell was waiting to be reappointed by Biden.
    _____

    My understanding is that a large portion of those new jobs are likely multiple jobholders, or people who have more than one job. — Nonapod

    I wonder how many people are working one job (or more) under the table and so are not scored by labor statistics, and collecting unemployment benefits. Are we becoming Greece where half or more of the economy is gray or black market and off the books?

  7. Also a lot of part-time jobs, consistent with the idea that they are second jobs.

    But don’t jobs often go up in the summer because of summer jobs?

    The 578,000 number is “seasonally adjusted,” meaning the actual number is tweaked by whatever “July effect” usually takes place.

    And just now getting back to pre-Covid levels is pretty weak, considering the growth in population over that time.

    Meanwhile, we’ve had an increase of something like 3.3 million jobs since the first of the year but GDP is down. So what is everyone doing?

  9. I read recently the 70% of the drop in the labor force participation rate in the last decade was due to baby boomer retirement. It was at a high of 67% in 2000 and is at 62.1% today.
    Here’s a good story explaining the jobs number and the labor participation %. What’s missing is any opinion why we’re seeing these anomalies. Seeming low unemployment, negative GDP growth and high inflation. Something is going to give.

    https://www.cnsnews.com/article/national/susan-jones/611-labor-force-participation-falls-july-239000-more-americans-drop

  11. So quick question, does that mean when KJP made the claim more people are working today than ever before she was wrong? (I won’t hold my breath waiting for a fact check if that’s the case.)

  12. we have a larger population, but not a larger percentage of workers, that’s u6, the labor participation rate, the regime seems to work perfectly to ‘bend, spindle, and mutilate’ isnt that what mario savio called it, so it shuts down the pipeline, eliminating our energy leverage, it makes air travel difficult if not impossible, it hinders the delivery of food and other critical materials, it lets Taliban terrorists in, but keeps those who worked with us, in third countries almost a year later, it mutilates the minds and bodies of children, it threatens the law abiding, and liberates the criminals. it allows the ravagers from two years ago a free pass, and it puts cancer stricken grandmas in stir, it sends the lions share of our weapons to ukraine, then does everything to reduce our force readiness,

  13. Most of the above comments are accurate but again usually when you are two quarters into a recession you have had multiple months of job losses often hundreds of thousands a month with a rapidly increasing unemployment rate and labor participation problems.

    This weird ass economy is not acting like anything we have seen before in this country in recent times because not only is employment an outlier but several other areas are not contracting either. It may well happen but people have been saying that for months now.

    It is just not as simple as saying ‘this is a recession’.

  14. This shows where the jobs were added. Lots of service jobs but again you aren’t supposed to add this many jobs in a recession.

    https://www.cnbc.com/2022/08/05/heres-where-the-jobs-are-for-july-2022-in-one-chart.html

    I hate when conservatives play games with these things for partisan reasons. The economy is messed up in many ways but it is not as bad as many on the right want it to be.

    https://www.cnbc.com/2022/08/05/danger-ahead-the-us-economy-has-yet-to-face-its-biggest-recession-challenge.html

    Another balanced article addressing the bizarre economic environment we are in.

  15. As others have pointed out, increase was mostly part-time jobs. But it does explain how the “great” number and still have the labor participation down. 71,000 fewer full time jobs.

    “… Fox’s Charles Payne indicates: You can see here from the chart how the labor force participation is continuing to go down from May. So what does this all mean? Payne notes that full-time jobs are down by 71,000. What’s up are part-time jobs by 384,000 and people holding multiple jobs, up by 92,000.”

    https://redstate.com/nick-arama/2022/08/05/charles-payne-points-out-problem-in-jobs-report-peter-doocy-drives-it-home-to-wh-n607615

  16. Brian E,

    I suspect that is because the gains were so heavy in hospitality and other service industries which may tend towards part time.

    There are other indicators that the average time to find a new job after losing a prior one is 8.5 weeks which is actually pretty good historically speaking. Also temp agencies seem to be going great guns right now which probably supports the part time job numbers.

    The bigger picture is that the economy is doing pretty good for the service sectors and so-so in the goods sector and that is the exact reverse of much of the last two and a half years.

    But again every month they say ‘ok, ok but now it’s gonna get bad’. Guess they will be right eventually.

    Every single politician that recommended the crazy lockdown and other economy warping measures needs to be gone, gone, gone or not allowed to return. Right or left.

  18. CNBC isn’t making up the numbers sorry, jeez it’s BLS chart. The second piece I linked is by Jeff Cox who is a very balanced writer. He’s not a cheerleader but also not freaking out at every turn.

    Of course they are biased but I’ll take them over something like Zero Hedge and their non stop apocalyptic articles.

  19. And the current U6 is lower than it was for all but about four months of the Trump presidency (9/19-12/19) and is flat from last month.

    I’m not claiming that the economy is doing great or that these idiots in charge deserve any credit for the job market but people on the right are so attached to this narrative that they can’t accept that at least right now there are parts of the economy that aren’t doing that bad.

    Focus on inflation and out of control spending that is where the problems are found.

  22. I was at Sam’s Club a few weeks ago and there were no carts inside the building. They said they didn’t have anybody to round them up and bring them in.

  24. I remember Obama’s employment charts from his last term that simply excluded people that had been laid off for too many years (my brother was one) – they had shrunk the pool they were referencing. There are help wanted signs at nearly every shop, store, gas station, fast food place, and restaurant where I live and have been for a year and a half. I could take pictures of 30 of them within a square mile of my house. The faces I do see working seem to change biweekly. I don’t buy this for a second.

  25. Yeah, this is all a straight up effort to make the whole economy SEEM better before the 2022 elections, to soften the red-blow to their power.

    They can pull shit — including outright lying — to make things seem better — to people not Paying Attention.

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