The American economy gained a whopping 467,000 jobs last month. We need 90,000 new jobs just to keep up with population growth, which means that net job growth clocked in at 377,000 jobs. The headline unemployment rate rose slightly to 4.0%.
This report incorporated the usual annual correction for the beginning of a new year. The revised employment numbers gained about 700,000 jobs in November and December as a result.
Nearly everything is good news this month. In addition to the million new jobs reported (counting both January and the revisions for last year), about 1.4 million people entered the labor force; the number of employed people went up by 1.2 million; and the participation rate went up from 61.9% to 62.2%. The gains were almost entirely in the service sector.
However, earnings were down sharply. Adjusted for inflation, overall wages declined at an annualized rate of about 4% and blue-collar wages declined about 5%. This is good news for inflation hawks, but not for anyone else.
When you say "earnings," it appears you mean workers' earnings, namely wages/salaries. Corporate earnings, unsurprisingly, are doing fantastic. It's great when you can pass price increases on to consumers, but not your workers. Ka-ching!
Sadly, yes.
The corrections for November and December were half again as large as the original estimates. The Great Recession showed up how poor our models of the finance sector were; now Covid-19 has shown how poor are models of the labor component. In both cases, we appear to have been measuring the wrong things, or using measures that are much noisier than we thought. Not faulting the modelers; everything in the human sciences is difficult. And it might take a millennium or two to have enough data to model once-in-a-century pandemics to any degree of accuracy ….
Josh Marshall was just pointing this out over at TPM as well. The problem is that the media jump all over the initial, not-so-great numbers, but then run the (inevitably) updated/corrected figures on the bottom of page A23. They still haven't grocked how this works now.
CNN.com was reporting this jobs news on the context of how bad it was going to be for the stock market. That was their top headline this morning. Simply amazing. I believe the headline called the jobs number a "crushing blow".
Heard that on NPR too....of course that was when the stocks were way down...
Apparently Facebook fail had nothing to do with that...
If it's been happening for a year+ and the modellers have not even tried to address it you are damn certain they deserve blame.
My question is why does the market respond so quickly to the initial numbers? Why not wait a month until actual data is released?
This is good news for inflation hawks, but not for anyone else.
It might well be good news for Joe Biden, Democrats and America. If the Fed has to induce a recession to get inflation down, we may well be looking at a one term presidency. So, I'm personally ok with signs the economy may be weakening.
This is good news for inflation hawks, but not for anyone else.
It might well be good news for Joe Biden, Democrats and America. If the Fed has to induce a recession to get inflation down, we may well be looking at a one term presidency. So, I'm personally ok with signs the economy may be weakening.
All news is bad news for Brandon (Biden). Dimcrats are always in disarray!!!
"This is good news for inflation hawks, but not for anyone else." Really? It knocks their only argument out from under their feet and they would be happy about that?
Well, the NYT manages to cling to the hawks’ narrative by ignoring real-wages trend in favor of nominal: https://www.nytimes.com/live/2022/02/04/business/jobs-report-january/economy-jobs-fed-politics
I think Kevin means people legitimately concerned about possible long term inflation risk, not the "inflation hawks" who just yell about inflation no matter the situation.
The Fox lead-up to the jobs report. Kinda funny, and not far off from how the rest of the media covers this White House either:
https://twitter.com/Craigipedia/status/1489634324857212941?s=20&t=eLBYgzgDP4q9mCyEPh1sOg
This is quite a chart. Workers absent due to illness spiking to an all-time record:
https://twitter.com/crampell/status/1489634239389876229?s=20&t=eLBYgzgDP4q9mCyEPh1sOg
Omicron may be fading, here in L.A. at least. In four weeks of school this year, my wife has had multiple kids our each day, topping out with 12 of 21 absent at the beginning of last week. Yesterday, only 3 kids missed school.
Businesses: "You can't force me and my employees to get vaccinated!"
Same Businesses: "Why are all my employees calling in sick with Covid?"
Been checking my Google News feed from time to time; jobs report hasn’t made the ‘Headlines’ list.
That is hilarious. Thanks for the links.
Average hourly earnings for all private workers is up 5.1% over the last 12 months.
Avg. hourly earnings for all private production and non supervisory workers is up 6.9%.
Avg hourly earnings for private, non supervisroy workers in retail, leisure and hospitality (lowest earning job sectors) is up 11%.
We can play with all the inflation adjustments we want to try to discount how good the labor market has been for low and middle class workers....but were seeing the best job market in most workers lifetimes.
+1
Unfortunately, if you look at the polling, the public does not love the economy. I WONDER, if the Obama like recovery might be politically better: Obama has a spike in jobs, then steady job growth with low inflation.
To be clear, Biden is in a difficult situation with Covid, supply chain etc. With that said, wage declines and high inflation are definitely hindering his popularity.
Re jobs, there is no question about which recovery has been faster:
https://twitter.com/TheStalwart/status/1489656265416527875?s=20&t=0UyoF817h9-siuKxmMvC7w
Sentiment may be choppy, but in the long run I believe a better economy is better politically too.
Joseph Harbin - agree on the numbers. As for the political impact I THINK it depends. So lets look at the two extremes:
- IF inflation is transitory, and returns to semi normal range quickly/within say six months, THEN clearly we agree.
- IF inflation stays high, GDP declines, we see the word stagflation, THAT would be a political killer.
The likely outcome is between these two poles. I admit I am surprised that Biden's polling is so weak...
Errr, why would they love this economy???? I mean, this is a stupid post. Cycles take years to grow through.
Spouse is state employing. COL is +6%, raise was +3%. Celebrate that -3%!
Also why is BLS always undercounting? Are they trying to sabotage Biden wtf is going on?
Color me confused. Krugman says "real income" is up over the past year. Is that because "real income" (and even more, "posttax" according to this chart) is different from "wages"?
https://twitter.com/paulkrugman/status/1488869544055775232?s=20&t=80RP5VJeuYRp5tL6PTnFww
‘Wages’ = wage rate, in $/hr; ‘income’ = total earnings, usually $/yr, but equivalently $/hr x hrs worked/yr (summed over each applicable wage rate; since some work more than one job; some will be paid overtime; some will receive raises. If either or both hours worked or the wage rate increases, and neither declines, income increases.
I also saw Krugman's tweet and didn't know what he means. What you typed makes sense. So even though inflation is up, almost everyone's income is keeping up with prices. That is really good news.
This was a major correction to underlying data with new business creation issue. For once, lfpr rose enough to offset household employment. I see a monthly lfpr at 62.8%=63.4% due to retirements. Not far away. This recovery is way faster than 2010's and a bit faster than 2000's shallow recession(and what it created was awful).
Average wage rates can be expected to move, in the short term, in the opposite direction to the unemployment rate. The reason is that a disproportionately large portion of the churn is at the low end of the wage scale. If low wage workers are the first to be laid off when a downturn hits, that will raise the average wages of those who still have jobs, and if new hires during boom times start at low wages, those new hires will drag the average wage down. Total payroll will move with the employment rate, but average wage will move contrary.
This forum really needs an edit function. I mean to write "Average wages can be expected to move, in the short term, in the opposite direction to the employment rate". "Unemployment rate" is a mistake.
Yes, and yes, more jobs at the lower wage end means wage average falls as employment goes up...
90,000 just to keep up with population growth? That number will start declining soon. We've had an astonishing run. Reagan, Clinton, Bush, Obama and now Biden created enough jobs to employ just about EVERY boomer. Now that they are retiring or dying a slow down in job creation may be in order. Unless of course we wish to deal with chronic worker shortages.
And in MORE "good" news
https://www.npr.org/sections/goatsandsoda/2022/02/04/1078035844/discovery-of-hiv-variant-shows-virus-can-evolve-to-be-more-severe-and-contagious
{snip}
*************A variant of HIV that is faster at progressing to serious illness and more contagious than other versions of the virus has been circulating in the Netherlands for decades, researchers have found.*****************
The findings, which were published in the journal Science on Thursday, demonstrate how HIV can mutate to create more severe disease and more rapid transmission.
"Even after 100 years of HIV infecting humans, it still has the capacity to evolve and change," says Joel Wertheim, associate professor of medicine at the University of California, San Diego, who was not involved in the study but wrote a perspective about the research findings, also published in Science on Thursday.
The study serves as a reminder — in the age of COVID variants — that viruses don't always weaken over time. "We should never underestimate the potential for viral evolution," Wertheim says. "Let this study stand in stark contrast to the claim that all viruses will inevitably evolve to be benign."
{snip}
THIS is an interesting study
The implications for COVID which is still raging compared to the spread of HIV are very serious
HIV is a dastardly disease....
And because of it, we've learned so much more about our immune system. We've also develop new types of vaccinations. They may not have been successful against HIV, but have been repurposed to fight other viruses.
golack
Unfortunately "we" are missing the point
SOME people here believed that Omicron may have been mutated within a person with HIV which is unfortunately an immuno compromising disease in and of itself. The new variant has been circulating, according to the story FOR DECADES. Add to that the number of people with OTHER immuno compromising diseases and you can see what the problem is.
We have developed a whole class of people to foster, and develop new variants of COVID BECAUSE of their compromised immune system,
Yes, the vaccines work - but - just like the immune system in our bodies they rely on MEMORY to effectively fight off new variants. We have been out right LUCKY in that the new variants so far have not been as dangerous as previous ones.
This study shows that the reliance on the theory of increased contagiousness equals LESS severity of the mutations to be WRONG.
It IS possible to get a mutation that is BOTH more contagious and more severe.
We need vaccine development to speed up and we should never, NEVER allow someone to make the decision to NOT make variant specific vaccines because the current one is "good enough".