Friday’s Jobs Report for February released by the US Labor Dept. gave a mix of numbers, some redolent fears of recession, and an edginess about inflation still haunting the nation's economy.
The good news, for some, was that the US still has a healthy job market with the results of 311,000 non farm jobs, when it was expected that there would be 225,000; but somewhat encouraging was that wages only increased by 0.2 percent, with an average of only 3.6 percent over the last three months,encouraging news that the Federal Reserve’s efforts of taming inflation with increased rate hikes is working.
Those numbers are still higher than what the Fed would like to see as it balances its inflation toolbox to lessen the numbers and increase the unemployment rate, to lower prices. But, on the consumer side, there are fears that taking this robust market in hand could easily lead to a job change to get higher earnings to meet inflationary prices, especially at the supermarket.
When Jerome Powell, president of the Fed appeared on Capitol Hill this past week he told lawmakers that, “we have covered a lot of ground and the full efforts of our tightening so far are yet to be fruitful,” and added that there is still much work to do battling inflation.
Meeting those remarks was Sen. Elizabeth Warren of Massachusetts, who at their meeting at the Senate Banking Committee replied by stating, “Once the economy starts shedding jobs, it’s kind of like an empty runaway train. It’s really hard to stop.”
Those fears are justified, but on the employer side there is a reluctance to cut jobs since consumer confidence has transitioned from the pandemic driven goods, enjoyed at home, to services such as travel and dining out, with a corresponding increase in leisure and hospitality to 105,000 jobs.
On the other hand they are not afraid to deplete their once bloated inventories and the truckers that delivered them, and in February, those jobs were decreased to 22,000; and, on the tail end the information tech people, needed to manage the flow of commerce, was cut to 25,000, leaving many to wonder what the future will hold.
Added to the conundrum is that there are approximately two jobs available for every job seeker, and this has nudged the dial for some to seek employment, or maybe come back from the ranks of the retired, and that number increased to 419,000 with a labor force participation rate of 62.5 from January’s figure of 62.4.
The New York TImes reported that there was an 83.1 increase in the working population aged 25 to 54, prime working years, but again, as employers try to find the right mix of stay, or leave on the balance sheets, those jobs might be risky as Powell increases the rates, from its current baseline of 5.1 percent.
All eyes are on the upcoming CPI report,to be released on Tuesday, and this closely watched inflationary can show the road ahead; but couple that with the next Open Market meeting of the Feds on March 21st and 22nd, might be a nail biter for many.
A fly in the ointment, for some, is that profits have ballooned, up 17 cents on the dollar from a previous figure of 12 cents in the last decade, despite creating concern in some areas, it does allow for greater job security, at least for now.
