April Jobs Report gives U.S. economy high and lows

More than hoped for, but less than what we deserved, seems to sum up the April Jobs Report released by the Labor Department on Friday which showed 263,000 jobs added the US Labor Market. With unemployment under 3.6 percent, and continued growth of 100 months in a row.

Many economists cheered after hearing the news, along with some bankers, and President Trump, who tweeted that the US is “the ENVY of the WORLD”.

As the celebratory confetti, and balloons, appeared, accompanied by a steady stream of praise, the glow was off for some, concerned about the slow wage growth that  says to many in the media, that “this is not your father’s economic recovery; and as The New York Times reported, the “. . . current expansion doesn’t resemble past booms.”

Of particular concern, was the stubborn labor force participation rate which remained the same at 62.8 percent, contributing to the still abysmally low wage increase of 3.2 percent that has weakened the “larger more durable expansion” that Michael Gapen, chief US economist at Barclays, described.

Others have attributed the low wages to the dearth of qualified workers, and others to the popularity of non-compete clauses for departing workers, the lack of organized labor for some of the big retailers, or wage freezes for those companies captured by venture capitalists; but the simple fact is that the story behind the headline numbers is not as rosy, as some would have us believe.

There are some observers, that say, at least, talks of inflation have receded, and Fed vice chair Richard Clarida said, in prepared remarks, also released on Friday: “The U.S. economy is in a very good place,” and Chair Jerome Powell has resisted pleas from Trump, and Vice-President Pence, to cut interest rates, stating that he will not bow to political pressures.

Terming wage growth as “appropriate” the Fed’s core indicator is the personal consumer expenditures and that rate was 1.6 percent in March, well below the Fed target of inflation, the traditional 2.0 percent.

There are also some that see April’s good news as a blunt to talks of a recession, something that was prevalent in January, but now might be stilled; and, extended even further are those that see global concerns such as Brexit, or the US and China trade wars will have no effect, but some critics of that assertion, think that view as overly optimistic.

There is good news for certain areas, and especially business and professional services, a catch-all category for a variety of clerical and administrative workers, including those working for temporary agencies, but has increased its numbers to 76,000 jobs and some like Diane Swonk of Grant Thornton, told the Times that their increased duties, especially technical, have placed them in greater demand.

“These people are handling the logistics of implementing this stuff,” forcing businesses to hire more administrative and support workers, Ms. Swonk said. “These are not the kind of admin jobs like we used to have. They’ve moved up significantly in terms of skills.”

As with earlier coverage, in previous months, some employers have turned to other methods to lure prospective and qualified employees, with hefty sign-on bonuses, child care, and for some, the absence of a college degree, or marijuana convictions, are no longer the impediment, that it once was - unheard of even a year, or so ago.

Justin Holland, founder and chief executive of HealthyJoy, shared with the Times, that he “is also considering workers who might not have been as appealing a decade ago. “I don’t look at a college degree as a gatekeeper”.

Interestingly, the Times coverage noted that some of the most popular search terms, on Indeed, are “felony friendly” - up 37 percent, and “no background check” - up 148 percent; all indicators that show future employers are looking beyond traditional barriers, to get the people that they need; which in turn might partly contribute to greater labor force participation.

Despite these concessions, the U-6 rate, which shows those that are underemployed, as well as those still searching, remained the same for both February and march at 7.3 percent.

Further complicating an analysis is the example of manufacturing, which showed an increase of 4,000 jobs added, but omits the previous loss of 6,000 in March.

Additionally, the jobless claims rose to 23,000 on “ a seasonally adjusted basis” but fell in the final full week of April, Yahoo Finance reported.

For those that are still looking for a silver lining, they get it with the news of the GDP which was 3.2 percent, in the first quarter, belying predictions that it would only be 2.3 percent.

Finally, just to mix apples with oranges, Amazon, has increased its hourly pay to $15 an hour, followed by Costco; and in April, Target increased its hourly pay to $13 an hour.