The temptation is to try and find another way to describe the American economy, besides resilient, but in Fridays Jobs report from the US Labor Dept, the word still applies, as does the redundant unemployment rate as a “near historic low”; all ways to say that things haven't really changed in the last few months, another headache for Federal Reserve Chair Jerome Powell, and another feather in the reelection cap for President Joe Biden.
187,000 new jobs is the banner headline, and yest, the unemployment figure is 3.5 generating that historic low, the term so beloved by all in the media; but, despite however cringeworthy the term may be, it does apply, and while there was a lessening of jobs, the economy, is still, dare we say it, resilient.
Certainly, the lessening of jobs from June is welcome, in the battle against inflation, but not still enough, and wage growth, good news, air quotes, here, is at 4.4%, still mostly present from June, and also keeping ahead of inflation, allowing most Americans to continue shopping, especially now that supply bottlenecks have eased and that new sofa, might be tempting, as manufacturers with surplus inventory on hand, is hanging a sale sign on their websites, and store windows.
A fly in the ointment might be the lowering of the US creditworthiness, by Fitch, to not triple A plus, but merely good; and, while everyone wonders why, the bruised feelings of Treasury Secretary Janet Yellen aside, in the scheme of things it might be a clarion call to the political headwinds that seem to be just around the corner.
Be that as it may, there are a few downturns: retail, that hazy term, called business services, and temporary agencies, which cautious employers are avoiding using, as they attempt to hang onto the employees they have, without incurring unneeded expenses.
Those that predict recession, much like the Biblical prophets of doom may prove to be disappointed, since that seems, at best, to be a soft recession if it occurs, at all; and, economists are still debating that as they individually count sheep to fall asleep at night.
Remaining steadfast is the the amount of people in the workforce, and as The New York Times reported on Friday, “Labor force participation remained steady overall, but that masks changes in the critical category of folks between the age of 25 and 54. Among those, 89.4 percent of men are now working or looking for work, exceeding their prepandemic level slightly. Among prime aged women, 77.5 percent are working or looking for work.”
If we want to remain optimistic, then once again, from the Times: ““We are converging towards a more sustainable pace,” said Lydia Boussour, a senior economist at the consulting firm EY-Parthenon, noting that wages and the rate of hiring don’t always move in tandem. “The labor market is rebalancing, but it’s a gradual process, and that explains why we’re still seeing some tightness.”
In that vein, trying to identify who were the winners and who were the losers might prove problematic, with previous highs in leisure and hospitality, now slowing to 17,000, and Tech is still dragging mud,and the aforementioned temporary services hitting rock bottom; but, health came came in at a plus of 63,000, and others merely flat. So, without a star, what does the casting look like?
With the pandemic in the rear view mirror, the fact that the US exceeded 2019 levels of employment gets top billing. And, who directs the publicity? One big guess?
President Biden: “Unemployment near a record low and the share of working age Americans who have jobs at a 20-year high: that’s Bidenomics,” he said in a statement. “This follows recent news that our economy continues to grow, while inflation has fallen by nearly two thirds and is at its lowest level in more than two years.“
Costarring is construction, who after shedding jobs in residential home building, more than made up for it with nonresidential construction. Once again, an opine from the TImes: “Residential builders cut 5,500 jobs in July. But those declines were more than offset by growth in nonresidential building. That could reflect in part the recent growth in factory building, which is almost certainly tied to government investments in manufacturing.”
For all the Fed watchers, and there are many, the September meeting of the Federal Open Markets Committee may show another rate increase, according to some forecasters which say that nothing is off the table, echoing Powell in his earlier comments. On the other side of caution, are others, and Yahoo Finance, gave the following:
"The July jobs report is just one data point before the September FOMC meeting, but we think it offers enough evidence of cooling labor market conditions to weigh in favor of no additional rate hikes," Nancy Vanden Houten, lead US economist at Oxford Economics, wrote in a client note on Friday. "However, an upside surprise in any of the forthcoming data on the labor market and inflation would put another rate hike back on the table."
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