February Jobs Report ‘Not Good Enough’
The February jobs report came in hot Friday, suggesting the US labor market is on the mend again after stumbling during a vicious winter COVID surge.
Critics of the Biden administration's stimulus plan will almost surely cite the numbers as "evidence" to support the case that injecting another $1.9 trillion in stimulus into the veins of the economy risks an overheat.
Of course, anyone who fell asleep in, say, December of 2019, and woke up today, wouldn't even recognize most of the charts one c
Is the Mona Lisa supposed to be upside down? I feel like there’s some metaphor I’m missing.
Actually, I’ve always been curious: do you do the artwork for the top of each post yourself? I always enjoy their visual style.
October 2018, from James Bullard: “If you put it in a murder mystery framework—‘Who Killed the Phillips Curve?’—it was the Fed that killed the Phillips curve”.
He also said: “policymakers have to look elsewhere to discern the most likely direction for inflation.”
Here’s a recent bit from Fed on inflation direction: https://www.clevelandfed.org/our-research/indicators-and-data/inflation-expectations.aspx
It seems to me that there isn’t going to be an explosion of new jobs through this year, simply because the labor market is now more efficient in producing stuff. That lack of labor demand will tamp down inflation, possibly spinning things towards stagflation and slower output, snuggled up to a lame duck Congress and a burned out population that isn’t gonna suddenly go crazy because the pandemic ended in Texas.
A lot of very new virus variant models point to a far more extended linger bout of Covid-like flu that may be a part of the new brave world, which will tend to make most people cautious.
If anything, the main word for the future will be caution (maybe fatigue). That’s apparently why Mona is upside down?
The numbers were good- but your headline is accurate. Labor participation rate is still awful. Also what is sustaining the labor market is partly a result of vaccination aid/help, partly a result of extra unemployment and checks going out plus the economy adapting. However, the aid comes to an end unless a new package is approved. If a robust package is not approved you can bet the employment and consumption numbers go right back down. Stimulus is really the wrong term here. It is economic bridge payments. The aid is meant allow the country to withstand the worst economic effects of the pandemic until the vaccines get to 60-80% of the population and we can take reasonable chances to open up. Like sending the kids all back to school in the fall, going to restaurants and cultural events etc. Very few proposals in the US get a 70% approval rating. In this case, the public is better informed than many of our federal politicians….
For most persons laid off from hospitality and food service jobs, unemployment is largely replacing their lost income and their skills do not atrophy even after a prolonged period of unemployment.
As hotels and restaurants continue to reopen, job recovery in those sectors will initially be very rapid. Restaurant owners tell me that they are actually struggling to find workers when they expand hours or indoors dining.
However, many such businesses have permanently shut. New ones will open – there are a lot of vacant locations whose rent is lower than before – but maybe not by the time UE runs out.