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

vash1012

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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.
 
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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
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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
 
obama couldnt create a job even if he had two hammers and a stop watch
Deep response. So glad you engaged the argument. :lamo
 
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.
 
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.
 
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.
 
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.
 
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
 
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.

fredgraph.png


The next four years will be just too easy. :lamo
 
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.

fredgraph.png


The next four years will be just too easy. :lamo

It's like trump taking over from Obama as coach of a football team at halftime leading 34-0 .
 
It's like trump taking over from Obama as coach of a football team at halftime leading 34-0 .

He is draining the swamp..... directly into the White House! :lol:
 
Yes, we all know about the BLS "statistics" that say the unemployment rate is "very low".

But why is Sears and K-Mart -- cheap-price stores -- closing so many stores if there are supposedly so many employed Americans with money to spend?

And why is Macy's -- medium-price stores -- closing so many of their stores now if there are supposedly so many employed Americans with money to spend?

And, of course, why is the left so adamant that the minimum wage be raised and shored up, you know, the minimum wage, the wage paid to part-time considerably less than 40-hours/week employees?

Could it be that the vast majority of the new jobs under Obama paid considerably less money than the old job the person previously had?

Could it be that the vast majority of the new jobs under Obama were .. wait for it .. .. part-time jobs?

Hmmmm ...
 
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.

fredgraph.png


The next four years will be just too easy. :lamo

no we worship trump cause it skyrocketed when he won.
 
Yeah. Obama has done a great job keeping our transition as smooth as possible into a low pay, no benefits service sector economy where everyone is part time.
 
Yes, we all know about the BLS "statistics" that say the unemployment rate is "very low".

But why is Sears and K-Mart -- cheap-price stores -- closing so many stores if there are supposedly so many employed Americans with money to spend?

And why is Macy's -- medium-price stores -- closing so many of their stores now if there are supposedly so many employed Americans with money to spend?

And, of course, why is the left so adamant that the minimum wage be raised and shored up, you know, the minimum wage, the wage paid to part-time considerably less than 40-hours/week employees?

Could it be that the vast majority of the new jobs under Obama paid considerably less money than the old job the person previously had?

Could it be that the vast majority of the new jobs under Obama were .. wait for it .. .. part-time jobs?

Hmmmm ...

It looks like you're starting with a premise - Obama sucks - then cherry picking your stats to prove the premise. For example, here's the long term trend for retail sales. You'll note it's been going steadily up. There is no reason why the fate of specific retailers with a failing business model, or perhaps less than optimal management, are a better reflection on the economy than the larger trends.

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

fredgraph.jpg
 
no we worship trump cause it skyrocketed when he won.

Fact: Obama has presided over the second largest bull market in U.S. history. Want to take a guess what president presided over no.1?

:lol:
 
Yeah. Obama has done a great job keeping our transition as smooth as possible into a low pay, no benefits service sector economy where everyone is part time.

He did a 'great job' as opposed to who?

mfgemployfred.jpg
 
Yes, we all know about the BLS "statistics" that say the unemployment rate is "very low".

But why is Sears and K-Mart -- cheap-price stores -- closing so many stores if there are supposedly so many employed Americans with money to spend?

And why is Macy's -- medium-price stores -- closing so many of their stores now if there are supposedly so many employed Americans with money to spend?

And, of course, why is the left so adamant that the minimum wage be raised and shored up, you know, the minimum wage, the wage paid to part-time considerably less than 40-hours/week employees?

Could it be that the vast majority of the new jobs under Obama paid considerably less money than the old job the person previously had?

Could it be that the vast majority of the new jobs under Obama were .. wait for it .. .. part-time jobs?

Hmmmm ...
Amazon.

Hmmmm ...
 
Can't do a detailed post now, so I will leave my most overriding thought of where I think the economy is going under the new administration:

"Inflation"
 
Fact: Obama has presided over the second largest bull market in U.S. history. Want to take a guess what president presided over no.1?

:lol:

president trumps america is already improvin the disaster from obama hussien. stock market goes up an insane amount the day trump won lol

lol at obama
 
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.

This is my assessment as well. I know there's been some limited success getting people retrained and relocated in some parts of mining country that are dying towns, but there are places all over this country that have no prospects. I think we are simultaneously going to have huge areas of economically depression and high unemployment and also areas where there is huge competition for labor and rising wages. It's unlikely Trump's policies can fix that.
 
president trumps america is already improvin the disaster from obama hussien. stock market goes up an insane amount the day trump won lol

The stock market is up over 200% during the Obama administration. By your own admission, this is as far from a disaster as could be.
 
But why is Sears and K-Mart -- cheap-price stores -- closing so many stores if there are supposedly so many employed Americans with money to spend?

And why is Macy's -- medium-price stores -- closing so many of their stores now if there are supposedly so many employed Americans with money to spend?
Because buying habits and preferences have changed and sales at many department stores have been dropping for a while. That one segment of the economy is failing. The category of "general merchandise stores" lost 29 thousand jobs last month.


Could it be that the vast majority of the new jobs under Obama paid considerably less money than the old job the person previously had?
If that were the case, then we would see average weekly wages going down (due to lower pay and fewer hours). Let's check:
fredgraph.png


Huh. gone up, so I would say no, it could not be that the vast majority of the new jobs under Obama paid considerably less money than the old job the person previously had.


Could it be that the vast majority of the new jobs under Obama were .. wait for it .. .. part-time jobs?
Let's check:
fredgraph.png


Total employment went from 142,152,000 to 152,111,000. Change of +9,595,000
Usually work full time went from 115,818,000 to 124,248,000 Change of +8,430,000
Usually work part time went from 26,377,000 to 27,895,000 Change of +1,518,000

So I think no, it could not be that the vast majority of the new jobs under Obama were part-time jobs?
 
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