It might not yet be March Madness, but the February Jobs report issued this first Friday in March has given wholly, and not unexpected, news to economists and the White House as they have grappled with a menu of worries, the war In Ukraine, as the top international issue; but the recovering jobs market, got a shot in the arm, a second one, if you count January’s, that gave a whopper, minus the fries to that select group.
Now with 678,000 non farm jobs the US economy can see a stronger path forward from the pre pandemic, with its loss of 10 million plus jobs that hit the nation with what has now resulted in, as The Hill noted, “Unprecedented demand for workers and resilient consumer spending helped power another strong month of job growth.”
While nothing is guaranteed, and with the war in Ukraine’s potential to drain oil reserves and affect the world economy, the bump in service hiring alone might be the banner, which has led those lagging industries.
Specifically, that gain of 179,000 in leisure and hospitality, and a corresponding gain in 124,000 jobs in bars and restaurants, a significant employer across the US, but especially in urban areas such as New York, Chicago, Los Angeles and Miami can give some solace to their workers.
Couple that with the less deleterious effect of the Omicron variant and decreasing case and hospitalizations of all Covid cases, and where in many large cities, the dropping of mask mandates, and vaccine requirements, the die seems to be cast for a robust jobs outlook.
While manufacturing is slack, construction increased by 60,000 after flat numbers in January.
One important data point, to use the colloquialism of the day, is that labor force participation was dormant, and while there was some movement of other workers returning to the workforce this is a key area that economists look to measure the temperature of the market.
There is some conjecture that many of the people who have stayed on the bench are older retirees, some who have not seen the benefits of masking mandates lifted, or those too unsure of a healthy and well ventilated environment conducive for working shoulder to shoulder, or those that have simply gotten too comfy in retirement.
For many Americans the higher wages received by desperate employers has increased worries for the inflationary prices, most notably at the gas pump where we have seen signs that seem like slot machine windows, where an average gallon of gas in Chicagoland has hit over $4.00, and in some cases, $ 4.65, an increase of a dollar, from last week.
A quick trip to the supermarket has seen increases in almost every category, and even the venerable Dollar Tree, justifiably proud of their one dollar price points are now $1.25, and yet some people, according to The New York Times: “despite strong job numbers, polls show the public thinks the U.S. economy is headed in the wrong direction.”
They also reported that some famous economists, namely the Nobel winner Joseph Stiglitz, said “we are not facing an inflation crisis.”
Or, at least not like we had in the 1970s. But, that might not allay fears of the public, especially for an older public that remembers those days, and with the increasing aggression in the Ukraine, fuel might become an issue for the economy and also President Biden, who after his bump in the polls after the State of the Union address could face closer scrutiny, and criticism, much like Chicago mayors do after snow storms.
Despite all efforts “People are unhappy about inflation,” said former top adviser and economist Jason Furman, who also advised President Obama, added that rising wages are now being eaten up by higher prices.
Joined by Federal Reserve Chair Jerome Powell, who is going to raise interest rates for the first time in years, later in March, as a bulwark against the rising tide of inflation.
With a hot economy some are saying like Chris Waller, a Fed governor, that he is willing to “support more aggressive rate increases . . “.
As a refresh, high inflation begins with high prices and rising wages. And, some economists are predicting that wages may stagnate, thus creating the perfect storm, last seen in the 1970s.
Average hourly wages rose nearly 5.1 percent over the last year, down from January’s 5.7 percent, as employers tried hard to lure employees to handle increased demand for goods and services.
For women, Blacks, and Latinx people the needle has hardly moved since January, and for the former, the lack of affordable child care, still carries weight. Until Congress can agree on a plan forward without the politicization of policy, women will not be returning to work in great numbers.
Labor Force Participation has stayed flat at 62.3 and that worries some who would like to see a higher number, but as we have seen there are the happily retired, and those who, especially in service jobs, might not want to return to what they see as a still dangerous workplace, working shoulder to shoulder.
Another monetary concern is affordable housing and has resulted in many people leaving large urban areas in search of affordable housing as well as a slower pace of life. But, with housing especially in the American south, being cheaper, that leaves a void for a basic urban necessity.
The Brookings Institution has noted in a recent report the lack of housing being built in these areas affects even those with higher wages and professional degrees, with minimal housing built in affluent areas despite the desire from this group, but resisted by current residents.
They cited San Francisco as an example of adding “only one home for every seven new jobs created between 2010 and 2015, while rents increased more than 40% during the same period.”
The power of existing residents make their preferences known as better heeled and affluent, people call the shots, limiting housing for low and even moderate income families.
While these issues, especially inflation, play a role in how much to celebrate, as Daniel Zhao told The Hill, "Ultimately, however, today’s jobs report helps build confidence in the resilience of the recovery and its ability to continue driving jobs growth despite unanticipated headwinds.”
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