Last week’s Jobs Report from the US Dept of Labor, for April, hit the surprise button on the expected numbers, economists expected 18,000 nonfarm jobs, but instead got a whopping 253,000, a figure that severely affects the US Federal Reserve’s attempts to tame inflation, and build upon the March Report that showed their previous efforts of lessening inflation that reflected a lessening, no matter how slight, of American employment, and what further measures could be taken to reduce the numbers further.
What the Fed did at their meeting in the first week of May was to increase the interest rate by another quarter point, dashing hopes that they would be able to hold off for a bit. No longer true, these high numbers also mean no recession, despite some soothsayers that say it is coming, almost shadowing the economic grim reaper.
The fear, as we have already seen, is that further cuts can become too much of a job killer and not only cost American jobs, but hurt America’s neediest families, a fear that Sen. Elizabeth Warren, the Massachuttes Democratic who has sounded alarms since the first increase.
March also showed that US employers are still trying to reach the brassring for the right type of employees to meet their specific needs, and more and more, or so it seems.
Mark Hamrick, senior economist analyst at Bankrate,said in a note, according to The HIll that, “once again, the job market has turned heads with its resilience.”
A bright spot is that the increase has shown in health care, education, and most notably leisure and travel industries, with an increase in legal immigration, to support the latter, in fact that has often been a stepping stone for recent immigrants to the US.
For Black Americans there is a record low, for March in the drop of unemployment to 4.7 percent, and shows a recovery from May of two years ago, when it was 16.8 percent, but community leaders are cautiously optimistic, concerned that these are mainly low paying service jobs.
With inflation still high, it may take one person working two jobs to support a family, and pay rent, especially with the nation’s lack of affordable housing, which has also hit middle income white families.
Consumer spending, the driver of the American economy, has dipped, but as Fed Chair, Jerome Powell stated to reporters there are still cautionary fears of a recession, and he said, ”but, I don’t rule that out either. It’s possible that we have a mild recession.”
If that sounds like what he and Treasury Secretary Janet Yellen called a “soft recession” a year ago, that fear, no matter how it’s labeled, is still around.
For the banner rate of unemployment, we are seeing 3.4 percent, down from 3.5 percent in March, and as The New York Times noted, it “matched the level in January which was the lowest since 1969.”
Employer response may be focused, in part, say some, to reverse the earlier massive layoffs in the early days of the Covid pandemic.
Wage gains increased to 0.5 percent, statistically significant, but also increased to 4.4 percent over the last year.
A revision, fairly standard due to mid month reporting, to the earlier two months, created a net effect of 149,00 jobs combined; creating a three month average to 222,000 jobs, “a slowdown from the 400,00 added in August 2022,” added the Times.
Mach was revised downwards from 236,000 to 165,000, and February from 326,000 to 248.000.
What could create a wreck of the US economy is that the Republicans won’t negotiate on raising the debt ceiling, without cuts, especially to the so called entitlement programs, such a Social Security benefits, and Medicare and Medicaid, which would send millions of people into near poverty, upset the markets, especially Treasury notes, and have a deleterious global effect, and the words of “the full faith and credit of the United States,” would become meaningless.
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