Þe Real Job Growth Number for August Is: 77,000
A 187,000 estimated seasonally adjusted change in employment from mid-July to mid-August, on top of a -110,000 revision to þe estimate of July's level. Exactly what a soft landing would look like...
Exactly what a soft landing would look like, were we to be having one.
A 187,000 estimated seasonally adjusted change in employment from mid-July to mid-August, on top of a -110,000 revision to the estimate of July's level. Thus the real job-growth number you should be looking at is: 77,000. We think employment in mid-August was, seasonally adjusted, 77,000 more than it was in mid-July.
That is definitely a cooling labor market.
And wage growth from July to August in fact undershoots what is in line with a 1%/year productivity growth trend, a 2.5%/year CPI inflation-rate target, and a constant labor share:
And the unemployment rate jumped from 3.5% to 3.8%, as many more people told survey workers that they are now looking for jobs but have not found them yet.
Yep, yep, yep and yep! Three-month moving average of payrolls is about 150K, markedly softer than the 300-350K range earlier in the year. More participation to boot. This is the good way to get a cooling labor market as opposed to from layoffs. Fingers crossed.
Hrmm. RGDP ending in 2Q23 was 2.4. Old-school empop (NSA) is 60.4, almost the same as August 2018. 25-54 empop (NSA) is 80.9 - above January 2020. OECD 15-64 Employment rate (NSA) is 72.12, just above 4Q19, but still below 4Q06. Old school CPI is 3.3%, sticky core CPI (July) is 3.2, above July 2019 but below August 2019. Wheee!
IF you were primarily interested in running the economy for the benefit of right-wing billionaires, what you are looking for is ultra-low inflation, easy acquisition of new employees due to having a large reserve army of the poor, and super-cheap loans so you can fund all your idiot ideas and pay yourself giant bonuses even when your company never makes any money. So what you´d want to do here is raise rates while muttering about getting inflation to the 2% (read: re-inflicting the 2% ceiling), and maybe talk about the employment market is way too tight and you are obviously at ´full employment´ (whatever TF ´full employment' means aside from ´I want to inflict some pain on workers´), and maybe mutter something about people not wanting to work, the national debt and really needing to remove tariffs on trade with China.
If, on the other hand, you wanted to maintain steady growth while leaving some cushion for external shocks (oil prices, China), a rate cut to 5% seems like the extremely conservative response here. Maybe go to 4.5% instead given that CPI is 3.3, employment growth is starting to sputter, you had a minor banking crisis in the spring, and oil prices are stable at the moment, plus you are perhaps clued in to the fact that all that muttering about hyperinflation and bitcoin is a marketing scam.
I know which way I´d bet on the Fed going. (Also, Macron seems to think he should get a third terms, which is a completely predictable thing for Davos Men to want.)
I´d like to add here, Brad, given what you said a couple of months ago: personally I think Powell´s driving kind of sucks. He gets the bone in his month and he just keeps on going way past any need to do so. By my count he´s down for trying to kick off two (unnecessary) recessions - the whole ´silent financial crisis´ of August 2019 that presumably would´ve turned into a recession in 2020 if we hadn´t been awarded Covid instead. Now we´ve got the double dip Almost-Recessions of 2022 and maybe 2023. (I´d add, given that this activity is all about being obsessed with inflation - we had action by hostile foreign powers in August 2021 and the again in 2022 to drive oil prices as high as possible. We also had the Fed itself pumping 60 billion a month into the mortgage market in 2019 and continuing through Feb. 2022, even though housing prices recovered to pre-pandemic levels in early 2021. We had the Thing Nobody Mentions As A Cause of Inflation in the form of 2.2 billion for business relief in April 2020. We also had various and assorted supply shocks due to shipping jams and the like. There was also the requirement to turn the economy ´back on´ when the vaccines became available. So yeah, we got a burst of inflation. Such is life during pandemics and wartime. Not really seeing how peeling out and merging in an overly aggressive way, weaving in and out of traffic like a maniac and then slamming on the brakes qualifies as good driving. Luckily, the American economy, unlike Ex-Twitter, Elon Musk´s mind, neo-classical models and econodudes mental states, is extremely resilient.)
elm
the strangeness of our current difficulties seems to stem from so many old people being lost in right-wing fantasias