March Jobs Report show resiliency but worries of inflation

Resilience has proven to be the key component of the recovery of the US economy from the ravages of the Covid pandemic and Friday’s Jobs Report for March, underscores this, but the fly in the ointment is inflation, and more inflation, buoyed up by higher wages, that have continued to climb higher and higher, than in 40 years, bringing the matter to both a political, and an economic problem.

For those watchers of the marquee number, unemployment fell to 3.6, but again this was accompanied by higher wages, but with a robust increase is leisure and hospitality, retail and manufacturing, which hit, 112,000, 49,000, and 35,000; and, for the latter, a sizeable increase in a field that had been wobbly for some time, has given hope to many observers.

Much of the increase can be attributed to the increase in vaccination availability, if not always increased vaccinations, but enough to bring those who were worried in working in close quarters with others, and this can be attributable to the rise in retail jobs, but also the higher wages that employers are offering to meet demand.

Bringing some people from the sidelines also increased the payrolls, as much as the dollars behind them, and there has been grave concern that increased wages will be passed onto consumers with higher prices, and as we noted last month, many households are finding that they have eaten into their paychecks, especially by working families.

Add the lack of affordable housing in America’s large cities and the problem can become acute, for even high earning families as they face restrictions from established communities preventing expansions into existing housing stock.

The Brookings Institution noted in a recent report the lack of housing being built in certain areas that affects even those with higher wages, and holding professional degrees, and an added strain on the household budget.

For Federal Reserve Chair, Jerome Powell, wage increase is very much on his mind, and with some reservation earlier said, “The promise of wages moving up is a great thing,” after last month’s interest climb, but noted that they are “running at levels that are well above what would be consistent with 2 percent inflation — our goal — over time.”

Since then wages have shot up to 5.6 percent, over the past twelve months, higher than what Powell said at that time. And, while some economists in the past have suggested winnowing wages as a leveling tool, for inflation, those are not on the horizon with many employers leaning hard to find the right employee.

This is a hot labor market, say most , and, as The Wall Street Journal noted, "service costs, including rent and other housing expenses, are increasing rapidly."

Digging deeper, continued inflation, as a core problem, as well as recession, are also concerning, with continued demand by more affluent families for services, as well as goods, despite  a continuing problem with bottlenecks still  causing rifts.

This Thursday's CPI report, nervously anticipated by the White House and others with its figure of 8.5% increase made everyone nervous, and the measure of what people will pay for goods and services will hit those larger paychecks even harder, especially for lower income households.

Many observers are mentally pushing Powell to increase the interest rate even further than the one-half point anticipated in early May,

While President Biden extolled the virtues, and benefits of the March Report, noting, “Over the course of my presidency, our recovery has now created 7.9 million jobs — more jobs created over the first 14 months of any presidency in any term ever.  And that’s striking.,” and added, “In fact, there have been only three months in the last 50 years where the unemployment rate in America is lower than it is now.”

Those higher wages, as we have seen are contributors to increased inflation, by some, and for others a cut in their spending lowers the drive of the American economy, creating a conundrum, or a perfect storm for a recession.

Biden’s polls, now in the 40s, are as much a political concern, as an economic one, and with the Republicans nipping at his heels, before the November midterms, Biden is trying to broaden his efforts, in the eyes of the public, and the recent release of oil reserves has been one.

The Hill reported that “The White House on Thursday announced plans for the largest-ever release of oil from the United States’ strategic reserves. 

It said in a fact sheet that it would release an average of 1 million barrels per day for the next six months, resulting in a total release of about 180 million barrels.

In remarks on the plan on Thursday, President Biden called on the oil industry to produce more, while also criticizing industry profits. 

“Enough of lavishing excessive profits on investors and payouts and buybacks when the American people are watching, the world is watching,” Biden said. 

“This is not the time to sit on record profits. It’s time to step up for the good of your country, the good of the world, to invest in immediate production that we need to respond to Vladimir Putin, to provide some relief for your customers, not investors and executives,” he added.

Lael Brainard a Federal Reserve governor and candidate for the position of vice-chair, in remarks before a recent Wall Street Journal panel said, "Inflation is too high, and getting inflation down is going to be our most important task.

Meanwhile the March report also showed a negligible increase in labor force participation at 62.4 percent; and, equally the employment population ratio inches to 0.2 percent, which showed that while some did come from the sidelines, in certain industries, but not enough to move the dial, despite some economist’s assertions.

Black employment was at 6.2, lower than it was a year ago, but still higher than that of whites at 3.2, ,and adult women over age 20, was 3.3, little changed from last month, but better than 5.1 a year ago, with lack of child care, still the reason, for many..

For those with less than a high school degree, it was 5.2 versus 4.3 in February.

For those that were able to complete bachelor’s and professional degrees, many are loaded with debt, and with inflation added to debt repayment, the burden is acute, and many in the Democratic party are urging loan forgiveness, especially Sen. Elizabeth Warren and Chuck Schumer to extend the pause beyond the looming May deadline, and ultimately provide loan cancellation

In a letter to Biden, they along with other lawmakers, said, "The payment pause has been a significant federal investment throughout the pandemic, providing essential relief to millions of families during the economic and public health crisis and saving them an average of $393 per month," the letter asserted, later adding that most borrowers "are not financially prepared to shoulder another bill as they face skyrocketing costs for necessities like food and gas."

“The majority of Americans support you taking action; recent polling shows that over 60% of likely voters support continuing to pause student loan payments and canceling student debt, with support strongest among likely voters of color,” the letter added.

Figures show that at the end of the Fourth Quarter of 2021 is 1.7 trillion dollars, much of it held by Black students who borrow more to attend college, continue to borrow more while enrolled, and have a harder time paying it back, once working.

 

Updated Feb. 14, 2022 at 4:30 p.m. CST

Jackson hearings were a GOP opening salvo for midterms

 The recent Senate confirmation hearings for Judge Ketanji Brown Jackson had scores of critics bemoaning the severe questioning of the Supreme Court candidate, but despite assurances given to the chair, Sen. Dick Durbin of Illinois, that they would  behave in a professional manner, nothing of the sort occurred, and has been well documented, especially the behavior of Sens. Ted Cruz, Marsha Blackburn, and John Cornyn. 

This became obvious as they hit Jackson with a barrage of questions regarding hot button social topics, or, more accurately wedge issues, such as transgender youth, Critical Race Theory, or what they deemed as such, but this was really about the 2024 midterm election where those issues would be paramount, as the senators played to their base.

Joined by Sen. Josh Hawley of Missouri who was hellbent on her so-called leniency in sentencing non-producing child phonography possessors, was a definite dog whistle to the base that Democrats were soft on crime, an old trope, but one that was resurrected by Donald Trump repeatedly during his one term presidency.

The truth was that there were two cases out of seven that bore a closer look and that involved the crucial role of judicial oversight and analysis, and were only two, not the five that Hawley described, but as Factcheck.org pointed out, “Jackson’s sentences in five of the seven cases mentioned by Hawley were consistent with, or above, probation’s recommendation. The reality was that there were two of Jackson’s sentences were below the government and probation’s recommendations.”

Moreover, this bipartisan group “compared Jackson’s average sentence in those seven cases to the government prosecutors, who on average sought a minimum of 71 months. That means Jackson’s average was more than two years below the minimum.”

Underneath the political play was a seemingly frail woman who handled the barrage of questions, accusations, and pointed fingers, in a dignified manner; one that many Black professionals have come to experience, over a lifetime of job interviews, job performances; and, by Black women in particular, who, in recognition, have rallied to her cause.

As we were told, “Watching her brought back every nightmare from my corporate life, and service to the government. My heart bled for her.”

Listening to the audio, it was also clear that Judge Jackson had some delays, hesitation and even sighs, in her answers, or multiple attempts to answer; as she was constantly interrupted, when she tried, especially with Graham and his demand to state her faith, to which she flatly replied, “Protestant.”

Graham, perhaps not realizing, or maybe intentionally not remembering, that there was no religious test for lawmakers, continued on a rampage, as he later revisited a case of sour grapes for California Sen. Diane Feinstein's prior questioning of President Trump’s Supreme Court nominee Amy Coney Barrett, and her conservative Catholicism, with the signature tagline, ‘The dogma lives loudly within you.”

Graham’s level of chicanery was the opening salvo in the battle for control of the House, and Senate in the seven months leading to the midterm elections.

The Republican party, still stinging from the loss of the White House to Joe Biden, is now at a stalemate, in their attempt to regain the presidency as well as to retake the House and overcome the Senate.

As we’ve noted before the road ahead is paved with far less good intentions, than even realized, and earlier efforts had placed abortion on the hot seat, and centered by not only antiabortionists, but wearing the robes of gerrymandering to take states like Texas who had no overwhelming opposition to abortion, as a way to leapfrog over local positions.

Now, racism a la Ted Cruz, and his “racist babies” is tilting in the much maligned and mostly misunderstood realm of Critical Race Theory, which is taught in some colleges, and graduate school programs since the 1970s, but is hardly mainstream, in elementary schools.

That torch was clearly handed off this week to Florida Gov. Ron DeSantis with his legislative bill, titled the  “Parental Rights in Education” bill [which] prohibits teachers from leading classroom lessons on gender identity or sexual orientation for students in kindergarten through third grade. It also bans such lessons for older students unless they are “age-appropriate or developmentally appropriate, “ reported Politico.

DeSantis, of course is positioning himself as a 2024 presidential candidate, in case Trump decides, or is forced to not run; but, this bill and others, takes a relatively new phenomenon and upends it for political gain, thus proving that all politics are local.

While the bill has many moving parts,” it became apparent after the Virginia governor’s race, where Republican Glenn Younkin beat Terry McAuliffe in large part by pushing parental rights in education, that Florida Republicans had tapped into a growing sense of frustration from parents.”

This was sharply evident with Blackburn’s questioning of Jackson, when she asked, “What is a woman?”, and not satisfied with Jackson’s reply that she was not a biologist, the senator feigned genteel shock, and bewilderment.

Finally, the elephant in the room question: abortion, or more specifically Roe v. Wade, and with correspondingly conservative justices on the Supreme Court in recent memory, and with many pro-lifers wanting, and even expecting a reversal, Jackson was again the scapegoat.

The National Catholic Reporter noted that, “Jackson was asked a few times March 22 about her abortion views. Sen. Dianne Feinstein, D-Calif., asked Jackson, as she has asked the last three court nominees, if Roe v. Wade, the court's 1973 decision legalizing abortion nationwide, was settled law. Jackson, as other nominees before her have done, agreed that the court's decision was a binding precedent.”

Sensing a possible trap, when “Later when she was asked by Sen. John Kennedy, R-La., if she has a personal belief on when life begins, she said she did.

"I have a religious belief that I set aside when I am ruling on cases," she told the committee.

With Blackburn rounding the coroner and questioning her for her belief should Roe be overturned, Jackson replied, she replied, as she would “as any other precedent.”

It’s not as if the November midterms are just around the corner, or are they? Graham has since said that he would not vote for Jackson’ ‘I will oppose her and I will vote ‘no’” Graham stated from the Senate floor, and weakened the Biden’s administration for bipartisan support, and to avoid a tie breaker from Vice-President Kamala Harris.

Meanwhile Maine Senator Susan Collins has said that she will vote yes for the judge, but cynics have noted a familiar pattern for her, when the die is cast, and she faces no great political loss, unlike her support for Brett Kavanaugh for the Supreme Court.

As we have noted before, it’s all over but for the fighting.