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5 Nov, 16 tweets, 6 min read
October's payrolls report shows a resumption to growth: +XX351Xk jobs added, which changes the narrative a bit after a disappointing September.

Unemployment is down a touch to 4.6%, which is pretty remarkable after it fell dramatically last month.

THIS IS A GOOD JOBS REPORT.
Revisions are a game changer.

Previous we had thought employment growth had slowed to +194k in September. Revised to +312k. Likewise August revised from +366k to +483k.

Employment growth has now averaged +442k over the past three months.
If you don't revise your views about the state of the recovery after this jobs report, you're not really evidence-based.

The Fall hiccup is now at best a Fall deep breath.
Household survey largely confirms the top line from the establishment survey, with employment up +359k. The labor force grew, so this decline in unemployment is both notable, and not due to people giving up hope.
Recent employment growth hasn't just been leisure and hospitality and re-opening. Really solid job gains across the board, with gains evident in both goods- and services sectors.
Average hourly earnings rose an unremarkable 0.35%. October included Walmart's 7% pay hike, so this doesn't point to any trend break.

Over the year hourly earnings have risen at a rate of 4.9%, although these numbers are still hard to interpret given changes in composition.
Monthly changes in education continue to puzzle (and possibly distort monthly movements) a bit, as some of it is due to changing seasonality.

But since Feb 2020, we have lost -370k workers in local govt education, -205k in state education, and -148k in private education.
The fall in unemployment was concentrated among those who need it most:
Why was the October jobs report so strong?

It's always hard to interpret any single monthly figure, but it's worth noting that this was a period over which covid cases were falling dramatically.

Bad news: That decline has stalled...
Good news: 5-11's can now get vaccinated...
Home truths: We chat over breakfast about the jobs report, but come 8:30, the kids are at school & we're in our separate offices, furiously typing. I think @BetseyStevenson's in her office doing a tv spot now; I'm in mine, explaining what Betsey's doing.
@BetseyStevenson This is an extraordinarily interesting way to summarize the state of the labor market... It's at least half right, though today's labor market is a heckuva lot more interesting -- and the stakes feel a lot higher -- than mid-2016.
@BetseyStevenson To answer a question: Revisions this big are not unheard of. But these are important, because revision for both August and September are meaningful and positive.

And given the state of the world, it's unsurprising that data collection is taking a while.
@BetseyStevenson Okay, so I'm excited that the labor market is on the mend, but don't let that hide a deeper and equally important truth: We've still got a long way to go.

We're still 6 million jobs of where we ought to be. That's still a deep hole right there.
This jobs report confirms that we're all returning to the office. Gotta think vaccinations are a big part of this story.
Endorse @bencasselman's observation that while the rate of economic recovery is better than our worse fears over recent months, it's a lot slower than our pre-Delta optimism about about a rapid reopening.

Our lax vax rates have been costly.
@bencasselman Can confirm STAGFLATION (in the milk industry).

CNN's got the facts on milk prices, and today's jobs report confirms that employment in the "fluid milk" industry has kept falling throughout the pandemic.

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More from @JustinWolfers

Justin Wolfers Profile picture
11 Oct
The credibility revolution in economics.
Short version of the prize: We used to dig into the data, say "correlation ain't causation," quickly forget we said that, and make a bunch of causal-ish statements based on data that really couldn't support such claims.
Then David, Josh and Guido said: Hang on.

Their response wasn't the usual destructive "we can't make causal claims" stuff, but rather entirely constructive: Here's a toolkit and set of approaches to help you make credible causal claims.
Read 21 tweets
Justin Wolfers Profile picture
8 Oct
Oh dear.

Non-farm payrolls in September rose by only +194k, after +366k last month.

The recovery has stalled.

We're missing about 8 million jobs, and at this rate, we're not bringing them back any time soon.
Slightly brighter news in the revisions: Last month's gains were revised from +235k to +366k. The previous month's gains were revised up by an additional +38k. So the prior two months were in total +169k better than we thought.

But this month is about 300k worse than we hoped.
The unemployment rate fell from 5.2% to 4.8%, but celebrations on this score would be premature, as it partly reflects the labor force shrinking by about -183k.

Household survey is slightly sunnier than the payrolls survey, showing employment growth of +526k.
Read 10 tweets
Justin Wolfers Profile picture
23 Sep
Stunning new estimates suggest that the 400 wealthiest American families paid an average Federal tax rate of only 8.2%. whitehouse.gov/cea/blog/2021/…
Here’s why:
1. The rich rely on investment income, which is taxed at lower rates than labor income.
2. They pay no income tax on a big chunk of their investment income. (This is the “stepped up basis” loophole.)
This new estimate does something quite important: It analyzes a measure of income that includes unrealized capital gains. The rich earn a lot of this income, but because it’s difficult to calculate, few estimates of tax rates include it.
Read 7 tweets
Justin Wolfers Profile picture
15 Sep
The vax mandate solves a collective action problem:

Businesses want to vax their staff to provide a safe workplace. But they’re each worried that if they move first, they’ll lose staff to their rivals (who probably also want vaxxed staff). Mandating the vax solves this problem.
Point is in many industries all of the major players want fully vaccinated staff, but none wants to bear the political heat of announcing this first. Result: None of them require it even if all of ‘em want to.

The mandate solves the problem of waiting for a first mover to emerge
The vax mandate only applies to large employers, and so may be a competitive advantage for large companies, because customers know they’ll be safe there. Small businesses who do have vaccinated staff need a way to signal that they’re just as safe.
Read 6 tweets
Justin Wolfers Profile picture
10 Sep
Viewing Biden's vaccine mandate as simply economic policy, it's surely the cheapest and most powerful economic stimulus ever enacted.
Lemme explain: Covid is a tax -- a tax on all in-person interactions, paid not with dollars but with lives. Vaccinations are a tax cut, and your shot cuts both your your covid tax, and your neighbors taxes, too. More jabs = a bigger tax cut, which will boost the service sector.
The reason that cutting the covid tax is such a cheap stimulus, is that this is one of the few tax cuts that doesn't actually reduce government revenue. Indeed, it probably boosts revenue: People are more likely to work when they feel safe, which boosts the government coffers.
Read 5 tweets
Justin Wolfers Profile picture
17 Aug
This @DataColada finding of outright data fabrication in a high profile study is really a holy shit moment, and I hope that all social scientists pay attention, and not just psych.
datacolada.org/98
Three of the authors have given quite useful responses describing their roles and what they know. The fourth is notable for what it doesn't say.
Mazar: datacolada.org/storage_strong…
Gino: datacolada.org/storage_strong…
Bazerman: datacolada.org/storage_strong…
Ariely: datacolada.org/storage_strong…
Also, the original blog post is just a lovely example of forensic analysis. Well worth reading just to learn from such a clear and fair statistical prosecution.
Read 4 tweets

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