Shocks can happen, and they can happen to the US economy in more ways than one, and one that has some economists reeling, and President Joe Biden exultant, as the January Jobs Report revealed “the U.S. gained 467,000 jobs in January despite fears the economy lost jobs amid the omicron-driven surge of COVID-19 cases, the Labor Department reported Friday,” according to The Hill, on Friday.
After a moribund report last month, many feared, including the White House, that the US economy was going further south in a dip that would further damage the pandemic riddled country.
Even more remarkable is that 6 million Americans missed work either due to being ill with Covid, or were taking care of someone who had it, double the amount from December, and some economists are saying that resilience is the key to the US economy.
The New York Times also reported that “America has recorded 6.6 million new jobs since January 2021, giving Mr. Biden the strongest first year of job gains of any president since the government began collecting data in 1939. The unemployment rate has dropped precipitously since the worst of the pandemic, and wages rose a rapid 5.7 percent in the year through January.”
This news comes at a good time for the president as he faces falling poll numbers with a load of policy and performance gaffes, both perceived and real, in his first year in office, leading with the pullout from Afghanistan and high inflation, not his fault, say many, but as Harry Truman noted the buck stops at the Oval office; and, many are blaming him for the economy, as much as any president can be blamed for single handedly moving the needle on the economic dial.
While the Federal Reserve has shown that it will probably raise interest rates in March to stem the tide of inflation, all eyes will be on the demands that consumers face in the coming months, as increased wages, depending on geographic location, might be eaten up with inflated prices, from groceries to housing.
Wages rose by 23 cents to an average hourly wage of $31.63, but for those at, or even below, there are discrete challenges in how they will be spent.
Increased rents are a major factor, especially since many are leery of buying a home; and, for people of color, rental increases will show increased pressure on the family budget
Last year the National Low Income Housing Trust, in a long-term study, found that minimum wage earners faced increasing demands to meet even basic housing needs:
“In no state, metropolitan area, or county in the U.S. can a worker earning the federal or prevailing state or local minimum wage afford a modest two-bedroom rental home at fair market rent by working a standard 40-hour work week,”
This is even more true in 2022, than ever, and as they stressed, “Meanwhile, affordable units are increasingly rare. An analysis shows that only in 218 of more than 3,000 counties nationwide can a full-time minimum wage worker afford a one-bedroom rental home at fair market rent without dipping into income that should be used for all other living expenses and savings.”
And, just to even things out, they added this: “Even in places where a higher minimum wage has been implemented, lower income non-homeowners face extreme financial hardship. California, where 45% of households are living in rentals, ranks number one as the most expensive rental market, despite the fact that the statewide minimum wage is as high as $14 an hour, depending on the size of the company.”
With the rising price of used cars reaching nearly a $5,000 increase, it will be hard to absorb January’s numbers outside of the context of inflation, and Powell and Treasury Secretary Janet Yellen will have to keep their eyes on the till to ensure that wage inflation does not occur, a concern shared by Federal Reserve Chair Jerome Powell.
Overall, while many economists have praised the report, after expecting a loss of 5,000 or more, the revisions that were given to both November and December (647,00 and 510,00 respectively) have given a bump to the emotional reaction of economists, as witnessed by Becky Frankiewicz of Moody’s who said, “We’re seeing a more robust, more prosperous U.S. Labor Market,” but there are still concerns.
One of the more salient is that women have not made gains in the market as much as men have, once again showing the lack of subsidized child care and the patchwork of COVID protection for schools, resulting in some school closures that causes many parents, especially single mothers, balancing work responsibilities, and childcare is a never ending battle.
CNBC reported that “New research from the National Women’s Law Center shows that over one million men joined the labor force in January, compared to just 39,000 women.
Men have now recouped all of their job losses since the pandemic began, while women are struggling to catch up. There are nearly 1.1 million fewer women in the labor force now compared to February 2020, the NWLC reports.”
“This report was not a pleasant surprise,” Jasmine Tucker, the NWLC’s director of research, tells CNBC Make It. “While I was happy to see the boom in hiring, the sharp contrast in men and women working or seeking jobs is baffling and incredibly troubling.”
In addition, “Of the 467,000 jobs added to the economy last month, 188,000 (about 40%) went to women. The NWLC estimates that it would take about 10 months of growth at January’s rate, however, for women to recoup all of their pandemic job losses.”
Going deeper into the report, we see the following,”Retail trade and leisure and hospitality saw significant job gains last month, adding 61,400 and 151,000 new positions, respectively. Women only gained 52,000 jobs in leisure and hospitality, or about 34%, but took 45,000, or about 73%, of the jobs added in retail trade. Women lost 17,000 jobs in the education and health services sector, while men gained 29,000.”
“It’s clear from these numbers that child-care and school closures have hardly impacted men,” Tucker says. “Women are shouldering the impact of these disruptions, and it’s leading to a huge disparity in their ability to work.”
On the macro side, the US, there are still 2.9 million fewer jobs than before March 2020, making gains while, at first glance significant, but still needing moxy to give Biden’s remark that “America is back,” some real gas.
Omicron is the culprit here and with low vaccination rates across many parts of the country, the South, in particular, it has made women’s work that much harder to obtain, or balance.
This is especially true for Black women who are continuing to look for work, albeit, a struggle and as The Washington Post said, “Those numbers were led by Black workers, specifically Black women, whose participation rate jumped eight-tenths of a percentage point for the month, to 61.9 percent.”
“I don’t think anybody would dispute that we’re moving in the right direction,” said Valerie Wilson, labor economist at the left-leaning Economic Policy Institute. “That being the case, as we often see, there are pretty significant differences in terms of the pace of recovery by race and ethnicity.”
