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Thread: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

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    Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    Real Time Economics - WSJ creation slowed in December but other details pointed to a tightening labor market. The economy added 156,000 jobs last month, while the jobless rate rose slightly to 4.7% as more Americans entered the labor force. Workers’ hourly wages grew 2.9% over the past 12 months, the strongest yearly gain in more than seven years. Here’s how economists and analysts reacted to Friday’s report.

    “For the year, the economy averaged job creation of about 180,000 per month—a solid result, but one that represents the slowest pace since 2012. While this is partially reflective of the slowdown in the pace of economic growth, it also reflects a labor market that is increasingly tight. Employers are simply having a harder time filling open positions as the economy nears full employment.“—Jim Baird, Plante Moran Financial Advisors Economists React to the December Jobs Report: ?Very Close to Full Employment? - Real Time Economics - WSJ

    If we are at full employment, wages are rising, and the people who have dropped out of the work force still aren't coming back in, does it still make sense to gut our budget with tax cuts for the wealthy to spur job growth, try to balance the trade deficit with tariffs, and spend a trillion dollars in infrastructure spending we will have to borrow when the economy isn't really in need of the boost? I say no. There's a lot of good in Donald Trump's vision. Western universalism is a failed policy. We should start looking out for our own interests first and let go of trying to westernize China, Russia, and Islam. But with Trump's lack of ability to admit when he's wrong and lack of trust in official figures and academic analysis, I don't see how this ends well. It seems like we will have a Fed increasingly trying to counteract ill advised, inflationary moves by Trump.
    Last edited by nota bene; 01-07-17 at 02:20 PM.

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    Re: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    Quote Originally Posted by vash1012 View Post
    Real Time Economics - WSJ creation slowed in December but other details pointed to a tightening labor market. The economy added 156,000 jobs last month, while the jobless rate rose slightly to 4.7% as more Americans entered the labor force. Workers’ hourly wages grew 2.9% over the past 12 months, the strongest yearly gain in more than seven years. Here’s how economists and analysts reacted to Friday’s report.

    “For the year, the economy averaged job creation of about 180,000 per month—a solid result, but one that represents the slowest pace since 2012. While this is partially reflective of the slowdown in the pace of economic growth, it also reflects a labor market that is increasingly tight. Employers are simply having a harder time filling open positions as the economy nears full employment.“—Jim Baird, Plante Moran Financial Advisors

    “This solid report further underlines the Fed’s point in December that the economy is now very close to full employment. Job growth was decent and wage growth is picking up nicely. But the only real show in town is Donald Trump’s inauguration. The economy is doing well and doesn’t obviously need the shot in the arm that Trump is planning on providing. The interaction between the Fed and Trump, and the resulting policy mix, is likely to be the defining theme for investors this year.”—Luke Bartholomew, Aberdeen Asset Managementto-the-december-jobs-report-very-close-to-full-employment/

    “The rebound in hourly earnings reflects the unwinding of the calendar quirk which depressed the November data, and lifts the [year-over-year] rate to 2.9%, the highest since June 2009. With productivity growth trending at less than 1%, the Fed cannot allow wage inflation to rise much above 3% if it is to forecast 2% inflation with a straight face….In short, this report tells the Fed not to delay further tightening. We think rates will rise again as soon as March, provided we have some clarification on the likely extent of fiscal easing by then.”—Ian Shepherdson, Pantheon Macroeconomics

    “Looking at the breakdown, the 17,000 increase in manufacturing employment echoes the improvement in the survey evidence on the factory sector. Almost half of the total gain in employment came from just one sector—education and health care. The 15,500 decline in temporary employment last month is a concern, but it followed a 23,800 spike the month before.”—Paul Ashworth, Capital Economics

    “We believe the slowing in payrolls was largely due to weather effects, with the trend still quite strong—more than strong enough to keep the unemployment trending down. That interpretation is consistent with the pattern in jobless claims, which rose sharply during the sample week but then fell sharply after that. Although the unemployment rate rose a tenth in December, it had declined 0.3 points in the previous two months. Meanwhile, wage gains are accelerating, even if today’s 0.4% [month-over-month] reading was exaggerated by calendar quirks (opposite the pattern in November). We expect unemployment will keep falling and wage gains will continue to accelerate in the year ahead, putting pressure on the Fed to keep tightening.”—Jim O’Sullivan, High Frequency Economics

    “The take-home weekly pay rose by only 1.9% because the total hours worked declined. Even in real estate, where there is a need for increased home construction and more commercial spaces, the weekly hours worked fell to 38.7 hours. The typical hours worked had been 39 for most of 2016 and was 39.6 exactly one year ago. This declining hours imply weak future hiring since existing workers will first be allowed to get in extra hours before adding new hires.“—Lawrence Yun, National Association of Realtors
    "

    If we are at full employment, wages are rising, and the people who have dropped out of the work force still aren't coming back in, does it still make sense to gut our budget with tax cuts for the wealthy to spur job growth, try to balance the trade deficit with tariffs, and spend a trillion dollars in infrastructure spending we will have to borrow when the economy isn't really in need of the boost? I say no. There's a lot of good in Donald Trump's vision. Western universalism is a failed policy. We should start looking out for our own interests first and let go of trying to westernize China, Russia, and Islam. But with Trump's lack of ability to admit when he's wrong and lack of trust in official figures and academic analysis, I don't see how this ends well. It seems like we will have a Fed increasingly trying to counteract ill advised, inflationary moves by Trump.
    obama couldnt create a job even if he had two hammers and a stop watch

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    Re: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    Quote Originally Posted by 11Bravo View Post
    obama couldnt create a job even if he had two hammers and a stop watch
    Deep response. So glad you engaged the argument.

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    Re: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    My impression is that there probably are still people sitting on the sidelines, hoping for work. What is probably happening is that there is a skills and geography mismatch.

    E.g. there are a fair number of low-skilled workers who had better job opportunities 10 or 20 years ago, whose jobs were largely automated out of existence and, to a lesser extent, offshored. No amount of nostalgic Tweets will bring those jobs back. So those people likely want jobs, but don't have the skills needed to fill the better-paying jobs we do need, or aren't interested in that type of work (e.g. taking care of the elderly).

    I also have a feeling there's a geographical mismatch. Better jobs just aren't available in areas like the Rust Belt, and most of the sideliners may not have the ability or resources to move somewhere -- especially if they don't have social networks there, and don't know where the jobs are. Sometimes people can move, but it's difficult if you have a family, have kids, don't have much job security, have a mortgage on a house that is underwater or hasn't appreciated much.

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    Re: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    I am just wondering where all the Trump supporters are. But when you think about it, picking and choosing what aspects of reality to which they adhere is their specialty.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    [QUOTE=Kushinator;1066734015]I am just wondering where all the Trump supporters are. QUOTE]

    im right here. i posted on this thread before u even got here

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    Re: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    Quote Originally Posted by Visbek View Post
    My impression is that there probably are still people sitting on the sidelines, hoping for work. What is probably happening is that there is a skills and geography mismatch.

    E.g. there are a fair number of low-skilled workers who had better job opportunities 10 or 20 years ago, whose jobs were largely automated out of existence and, to a lesser extent, offshored. No amount of nostalgic Tweets will bring those jobs back. So those people likely want jobs, but don't have the skills needed to fill the better-paying jobs we do need, or aren't interested in that type of work (e.g. taking care of the elderly).

    I also have a feeling there's a geographical mismatch. Better jobs just aren't available in areas like the Rust Belt, and most of the sideliners may not have the ability or resources to move somewhere -- especially if they don't have social networks there, and don't know where the jobs are. Sometimes people can move, but it's difficult if you have a family, have kids, don't have much job security, have a mortgage on a house that is underwater or hasn't appreciated much.
    Given the recent developments regarding Chicago crime, i was part of a casual discussion where someone pointed out something interesting; how many people are locked out of the labor market due to both legal and privacy policies in the U.S.? I understand, from a risk management perspective, the need to screen potential employees. However, it seems that U.S. privacy takes a back seat with respect to the press and data management.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    Quote Originally Posted by 11Bravo View Post
    im right here. i posted on this thread before u even got here
    You didn't provide anything worthy of a response. It is worthy of noting job growth declined following the election.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    Quote Originally Posted by Kushinator View Post
    You didn't provide anything worthy of a response. It is worthy of noting job growth declined following the election.
    the stock market skyrocketed after they realized hildabeast and obama hussien would never be in the white house anymore

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    Re: Economists React to the December Jobs Report: ‘Very Close to Full Employment’ WSJ

    Quote Originally Posted by 11Bravo View Post
    the stock market skyrocketed after they realized hildabeast and obama hussien would never be in the white house anymore
    Just so i have this straight... you consider the stock market a major metric of economic prosperity?

    If so, you must worship the ground Obama walks on.



    The next four years will be just too easy.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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