Friday, May 5, 2017

April jobs: a nothing burger

The April jobs report was a nothing burger. Nothing has changed: jobs are still growing at a modest pace, and that pace has weakened a bit over the past year or so. The economy is most likely still growing at slightly more than a 2% trend rate. Things won't get better until the burdens of taxes and regulations get lifted. The Trump administration is making progress towards this end, but there hasn't been enough so far to make a significant difference. Efforts to reform the tax code are more important than healthcare reform, in my view. If the economy can be boosted a higher trend growth rate path, then lots of reform becomes possible. 



These two charts are all you need to understand the jobs climate. Monthly reports can be very volatile, so you have to consider 6- and 12-month growth trends. Private sector jobs—the only ones that really count—have grown by 1.7% over the past 6 and 12 months. Ho-hum. That, plus the 0.5-0.6% rate of productivity over the past several years gives you overall GDP growth of a bit over 2%.

13 comments:

a countryman said...

A good sign in today's report was the year over year increase to usually full time, not seasonally adjusted, up 2.3%, at the expense apparently of usually part-time, down 2.1%. We haven't seen an increase like that since y/y in April 2006. Compared with April 2008, however, (the previous April peak in full-time n.s.a. before the full effects of the recession took over) total employment as a percentage of population in April 2017 lags April 2008 by about 2.4 million, using the 2008 rate on present population. Anecdotally, in my household the full-time job went away for the last time right after Obama got elected, and only came back right before Trump was elected, and at a 20% discount. Unfortunately our employment was the canary in the coal mine in 2006, pre-dating the catastrophe by just over two years. If anyone's job would be the last to recover, it would be ours, so color me skeptical about the future.

Alain said...

Canada report was not so hot either.

jmwSeattle said...

I've heard it reported that 40% of the jobs in the US are minimum wage. I wonder about the accuracy of that claim. Actually I wouldn't be shocked to learn that is the truth. I know the median family income is often reported as stagnant at about $55K/yr going back 15 years, which is actually a decline. The Federal job statistics mean nothing to me. I don't believe anything the Federal Govt. reports.

Scott Grannis said...

Re how many earn minimum wage or less: check out this post of mine for the correct answer (hint: it's MUCH less than 10%:

http://scottgrannis.blogspot.com/2015/04/surprising-facts-about-minimum-wage.html

a countryman said...

The Feds track the minimum wage earning or less population here:

https://fred.stlouisfed.org/series/LEU0203127200A

jmwSeattle said...

Thanks for info. I am actually wondering, as I think of it, how many people make $15 / hour or less, since that's the Democrat Party solution to it all. Recently, I knew a 36-year-old guy making $36,000 / Year who wasn't really making it. He came to us, anyway, with an old car and a $10,000 credit card debt, if you call that making it. He had a difficulty important job, in my opinion, but he was topped out in pay. The company said, "tough, if you don't like it go somewhere else." My take is that the country is filled with workers like this (40% ?) who are getting by don't have enough discretionary income to make the economy go.

a countryman said...

Social Security says roughly 9.66 million in 2015 made in the neighborhood of $15/hour ($31,200 annually). 80.5 million individual wage earners made less than that. About 90.6 million made more. You have to do the math yourself:

https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2015

I don't think more granular data exists, but if it does, I'd like to see it.

I'm not surprised $36,000 doesn't cut it in Seattle. The coasts cost the most. Is Ivar's Fish Bar still in operation?

a countryman said...

I think the left picked $15/hr because that puts you just above the middle . . . paean to the middle class and all that.

Kinda weird how they figured that out, huh?

Benjamin Cole said...

Did the US have markedly lower regs and taxes in the 1990s? Then, on a smaller economy, more than 300,000 net new jobs a month was common.

Alan Greenspan. Fed Chief, was oft-criticed for being too loose, I wonder.

Sure, cut taxes and regs. But jeez, can they loosen up at the Fed?

jmw_Seattle said...

COUNTRYMAN. Yes, his fish house chain steams on, but remember, as Ivar always said, "keep clam" about it. My problem is, I feel like a stranger anymore. Too many things in Seattle are gone...like The 3 GI's, Wig Wam, Chubby & Tubby's, Twin Teepees, Palladium, Hat's 'n" Boots, 5th Avenue Dog House, Parker's Ballroom, and the native troubadour who started a fish house (https://youtu.be/bJmfz37W_94). He used to appear on Captain Puget and join Don in singing ditties for us kids.

Benjamin Cole said...

FYI

"Copper, barometer of global economy, posts worst drop in 19 months on China growth worries
Copper futures for July delivery settled 3.49 percent lower for the worst decline since September 2015.
Manufacturing data in China came in weaker than expected this week."

Dr. Copper is turning a little green?

This is a clever pun, btw.

Scott Grannis said...

I have always had great respect for copper prices, and copper certainly appears weak relative to just about everything else. Currently, the CRB Metals Index, which has always been highly correlated with copper prices, is a bit weak on the margin, but still 50% above its level of early last year. I think this is one of those times when it makes sense to give more weight to the CRB than to copper. Industrial metals prices are saying there has been a clear pickup in global economic activity in the past year.

Benjamin Cole said...

"The widely-watched CBOE Volatility Index, which measures implied volatility of U.S. stock options and is often seen as an investor fear gauge, closed down almost 8% at 9.77 on Monday, its lowest since December 1993."

Trump? Korea? Le Pen? ISIS? Iran? Venezuela?

For whatever reason, Wall Street is yawning.

I think this is good, but I guess one could say we are not scaling a wall of worry...