Good Jobs Day everyone. Today we see if the slow pace of reduction in continuing (not initial) extended and supplemented unemployment claims is again reflected in the #BLS data for June. Estimates for job growth of ~600K private and ~700K total sound reasonable, but its dicey.
If we get a big jump in jobs, we should see a slump in wages as most of the jobs seeking worker are low-wage/low-hours jobs. And they are not likely the type to draw in people off the bench from either the unemployed OR those who have left the labor force:
nytimes.com/2021/06/01/opi…
#BLS Non-farm payrolls rise by 850,000
The U-3 unemployment rate remains at 5.9%
Sorry U-3 up a little because of a small jump in the labor force. But labor force participation is flat at 61.6% and employment-population is flat too. Now let's dig in to the details.
470K of the 662K in private payroll growth is in leisure and hospitality (343K); retail (67K); administrative and waste (40K) and healthcare/social assistance (20K) - as low-wage/low-hours jobs wiped out during the pandemic are slowly being restored.
We'll be out with our @jobqualityindex #JQInstant read in a bit, but my guess is that it will show that we gained overwhelmingly in the restoration of low paying positions we can see that in the decline in weekly hours (1/10th) and the cresting of weekly income growth.
Hourly wages, which rose by a dime in June, should reverse between now and October as the millions of lower wage jobs left to be filled are restored. (Assuming that they are taken up!).
We should spend a moment to look at the dramatic explosion in government employment in June (up 188K). This was all in education at both the local and state levels as teachers returned to the classroom. The important thing to note is that this is impacted by seasonal adjustments>
>Normally, June begins to see teachers exit for vacation and the BLS smooths that out in its calculations to avoid volatility. But my guess is that June saw countervailing post-vaccine re-entry by some teachers in June that wrecked havoc with normal seasonal adjustments.
Thus the 224K aggregate rise in state and local education jobs may really have thrown off the headline #NFP number due to statistical reasons, not health of the economy.
Here's an interesting observation from the @jobqualityindex #JQInstant. It comes in at 46.16% for June. Even though most of the jobs added were in super-sectors that generally feature low-wage/low-hours jobs, the sub-sectors that filled jobs were those better paying...
There is a related measure here that I will draw your attention to. In June, production and non-supervisory jobs accounted for only 76% of new job formation, as opposed to the 85% level typically. So people are taking up the better paying management positions disproportionately.
And here is the revised @jobqualityindex for May (it runs with a one-month lag). As average incomes dance around with low-income jobs still remaining unfilled, the #JQI ticks up again by 0.39%. This will very-likely adjust itself out in the fall:
@jobqualityindex And that's a wrap on today's job's print. On the whole - especially if you throw out the distortion from those state and local education jobs, discussed above - pretty much as expected. But nothing to write home about given the millions of jobs and workers still displaced.
The full @jobqualityindex report for today can be found here:
bit.ly/2021JQIJune

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More from @DanielAlpert

4 Jun
Good Jobs Day morning! Hopefully we will see a renewed acceleration in the restoration of jobs during May. But after we dissect the data at 8:30am EDT. the remaining question will be which sectors still have not returned to prepandemic employment levels?
Answer: Mostly low income
We know that the re-employment gap is mostly in the low income sectors (below) because there are many workers receiving unemployment benefits exceeding incomes from their old jobs.
What we don't know is whether all their old jobs are really still there!
nytimes.com/2021/06/01/opi…
With the above as prologue, stay tuned for the data in 5 minutes....
Read 15 tweets
3 Jun
On @NPR @MorningEdition this morning with @NPRinskeep chatting about unemployment and my @nytopinion essay from yesterday...
npr.org/2021/06/03/100…
...and here is a link to the @nytimes piece:
Americans Don’t Want to Return to Low Wage Jobs nyti.ms/2S1Jzbx
Continuing on the U.S. Employment front this morning, we just had a really good number out of #ADP of 978,000 jobs added in May. We'll see tomorrow if that squares with the #BLS numbers and offers a "catch-up" from the disappointing April data. But now, Unemployment Claims...
Read 8 tweets
19 Oct 20
IMPORTANT THREAD RE: CHINA 1/n
Back in March, near the beginning of the US lockdown, I warned those predicting a US economic "supply shock," stemming the fall in exports by China not to count China out. That China would battle back with a vengeance,...
2/n
...using every tool at its disposal, including currency devaluation, industrial subsidies and household support - in addition to its overwhelming attack on #COVID19. I said then that China would be playing an aggressive game of economic "catch-up. >>
3/n
And China has done exactly that, with astounding success in terms of restoring growth to its economy:

"With Covid-19 Under Control, China’s Economy Surges Ahead" reported by @KeithBradsher
>>
nyti.ms/2T8bkMG
Read 14 tweets
13 Sep 20
1/5
Thank you, @andrewrsorkin, for compiling these - largely, appropriately critical - essays on Milton Friedman's work of a half century ago. But one critical argument is absent: The change in composition of share ownership over the past 50 years.>> nyti.ms/2GRaXTK
2/5
As Hyman Minsky wrote sometime after Friedman's disturbing exegesis on corporate capitalism, even by the 1970s - larger by magnitudes since - the shareholders for whom profits are being generated have become isolated from corporate governance/oversight by "money managers.">>
3/5
This "money manager capitalism" is not really focused on profits, but on values reflected in stock prices. Regardless of profitability, manager-intermediaries seek, at all costs, price gains that place them in a competitive, or at least equal, position with other managers.>>
Read 5 tweets
3 Apr 20
MARCH 12th - keep that date in mind this morning. We will have lots to talk about regarding the #BLS employment situation report at 8:30am EDT. But remember that the test date for "jobs day" data is the 12th of the month being reported. And March 12 was before the lock downs.>>
>>Consequently, today's Non-farm Payroll data won't come anywhere near reflecting the reality of the #COVID19 pandemic impact.
Nevertheless, will be back at 8:30 and expect to see a material, if early, loss of front line low-wage/low-hours - see why, here: jobqualityindex.com
#BLS #NFP Payrolls decline by 701,000 with the unemployment rate at 4.4. This is just the tip of the iceberg as the reference date for the data is the week ending March 13th, before the social and economic lock downs. But really bad.>>
Read 14 tweets
11 Mar 20
If I had a $ for each time I have heard MMT used positively over the past month, I could monetize the debt of an average US household! The markets, CEOs and not just a few pols are cutting from "mainstream" economists. My prediction: An epochal change, the likes of 1932 and 1980.
See, for example, this from today:

Rishi Sunak to signal end of austerity with huge leap in borrowing - giftarticle.ft.com/giftarticle/ac… via @FT
And, you might see my piece from the weekend as to why this is happening - and should be (in which I never actually refer to MMT - just its essential logic):
businessinsider.com/coronavirus-bo…
Read 4 tweets

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