I keep hearing that "the Fed" is worried about "wage inflation" due to tight labor market. Hey, Mr Powell, have you been watching the southern border? Thousands of new workers flooding into the US.
California corporate farms will have endless supply of workers. Boston's pizza parlors, likewise. Hotel/motel services, no problem. We haven't heard any complaints from US unions mostly because there are "no" unions any more except in the public sector (government) and it's unlikely any of these new "undocumented citizens" will be applying for government jobs except perhaps as CIA agents and/or linguists for the State Department.
Whatever.
Today's links over at the Drudge Report:
Link here.
Yesterday: first-time-unemployment claims at 49-year low.
This is April. Three months, and it's July.
In July, 2019, the headline: longest expansion in US history. Note: the mainstream media may not carry that headline. For sure it won't be repeated on
ABC Evening News with David Muir.
Let's see what the linked article has to say:
U.S.
hiring rebounded more than forecast in March and the prior month was
stronger than first reported, potentially relieving some concerns about a
cooling economy.
Wage gains eased and the unemployment rate held near a
49-year low.
Payrolls
rose 196,000 after a 33,000 advance.
The median estimate in a Bloomberg survey saw an increase of
177,000 after an initially reported 20,000 gain in February.
The
jobless rate was unchanged at 3.8 percent, while average hourly
earnings increased ..... below all estimates
and down from the best pace of the expansion.
The
data signal the labor market is solid enough to support economic growth
in coming months even if job gains are moderating from last year’s
pace.
Unemployment near historic lows bodes well for consumer spending,
though weaker wage gains suggest inflation will be even more muted as
Fed policy makers wait to see how the U.S. economy weathers a global
slowdown.
That's a Bloomberg story. I'm sure "it" pained them to have to write all that, although the writer did throw in "potentially" for some odd reason. And, of course, "global slowdown" has been the buzzword for about a year now.
Yesterday CNN headlined that India slashed interest rates due to their slowing economy. That concerned me, that India would slash rates. I couldn't get the browser to load fast enough. It was breaking news, headline news, scary news, all in one headline. And then the story appeared. India's GDP growth went from over 8% to around 6.6% -- not particularly alarming. If only the EU and and the US would do so well. As far as slashing their interest rates, it turned out to be a quarter-percent cut (0.25%) -- something our own "Fed" does off and on every two months -- and I don't recall a similar headline that the US slashed rates. Wow, what a digression.
Let's see:
- the US is involved in no new wars anywhere
- any "wars" that the US is involved in are pretty much invisible, or forgotten, or not controversial, or not worth mentioning -- sort of peaceful right now in the big scheme of things; we don't even hear much coming out of Ferguson, MO, any more (or Baltimore for that matter)
- no new wars on the horizon any time soon
- peace on the Korean peninsula (though Kim did play Trump; Trump was snookered with regard to NK)
- the US labor shortage is mitigated by the thousands of new workers streaming across the southern border
- unemployment rate at 3.8% qualifies for "full employment" tag
- unemployment rate at a 49-year low -- at least that's what the article above says
- first-time-unemployment claims at a 49-year low (yesterday's news)
- no sign of wage inflation (today's news)
- glut of oil (in the old days, we would be talking about OPEC being in control)
- China can now get on with serious trade negotiations with Trump now that the Mueller report has been released
And the anti-Trumpers continue to resist. Resist what?
Hey, by the way, in that Bloomberg article linked above, did you notice that they referenced that the job picture in February was better than originally reported, but the article did not provide the details until deep into the article and then it was a bit of obfuscation, or a bit confusing. I did not see the actual February revision.
More from the article:
“This
a perfect report for the Fed because it actually corroborates what
they’ve been saying all along, which is there are no wage pressures,”
Subadra Rajappa, head of U.S. rates strategy at Societe Generale SA,
said in a Bloomberg Television interview. “There’s very little risk of
wage inflation.” [For those unfamiliar with Societe Generale SA , see this wiki entry. Societe Generale SA is my go-to source when I need to understand something about the US economy. LOL.]
The
data come as investors expect an interest-rate cut this year after four
hikes in 2018. The Fed early in 2019 removed projections for rate rises
in the near term while flagging increasing economic risks amid slowing
global growth.
I had forgotten it was four hikes in 2018; for some reason I thought it was three. Wow, Jerome Powell really did blow it. Bernancke / Yellen never did that for Obama. Thank you, Mr Powell.
But look at this, the participation rate:
The participation rate, or share of working-age people in the labor
force, decreased to 63 percent from 63.2 percent the prior month. The
rate, which faces continued downward pressure as older workers retire,
had ticked up in recent months as increased employer demand has pulled
in more Americans.
Bloomberg sees the cup as half-empty. I see it as half-full. If the participation rate decreased that means if employers need to they can entice folks back to work.
But, again, the "false precision" is stunning -- "... decreased to 63 percent from 63.2 percent." Really? Anything to get "decreased" into a jobs report as long as Trump is president.
