For many the past Labor Day weekend was hot, sunny, and often miserable, and for those suffering from the effects of hurricanes, and floods, the possibility of the American custom of barbequed ribs, and potato salad took a backseat to survival, but for many in the country whose lives lay outside of those tragedies, the August Jobs Report issued by the US Dept, of Labor, last Friday, showed that the American economy was still resilient, and many who had been on the bench joined the workforce.
187,000 non farm jobs were created showing that Americans were working, albeit at lower wages, and handling inflation as best they could, despite unemployment inching up to 3.8 percent, and wages a notch lower at 4.2 percent, much of this was good news as Federal Reserve Chair Jerome Powell probably was pleased at the numbers, the most significant was, of course, that inflation has leveled off to 3 percent, and why that figure is encouraging is it is still above the level of 2 percent, the mandate of the Feds, along with full employment.
Economists are speculating whether the Feds will raise interest rates again, or hold off, but at the annual Jackson Hole, Wy. meeting Powell was noncommittal, and as usual gave a data driven response.
"We will proceed carefully as we decide whether to tighten further or, instead, to hold the policy rate constant and await further data," Powell said in a keynote address. "It is the Fed’s job to bring inflation down to our 2% goal, and we will do so,” reported Reuters two weeks ago from that meeting.
Overall the economy is at a much better place than previously thought in the dark days of the pandemic, and nearly all of those jobs have been recovered, a fact that was not lost on President Joe Biden as he addressed a rally in Philadelphia on Monday, tagging onto previous remarks in the White House Rose Garden, when he noted, “Take note of the fact that America is now one of the strongest job creating periods in out history.”
Monday brought out the strongest remarks, to date, that Biden has uttered, when he said: “jobs you can raise a family on, union jobs,” Biden told the crowd. Instead of standing at the podium, the president held the microphone in his hand and walked around the stage behind signs that read “UNION STRONG,” reported the Associated Press.
As the president faces low polls, union support is crucial to a strong primary showing, so his remarks do have a dual purpose.
Unions are making a resurgence after some dormant years, under the Biden administration, and as a tagline he stressed, in a victorious tone, “Now you’re going to get paid overtime,” the president told the crowd.
“Biden has used executive actions to promote worker organizing, has personally cheered unionization efforts at corporate giants like Amazon and has authorized federal funding to aid union members’ pensions. Just last week, the Biden administration proposed a new rule that would make 3.6 million more U.S. workers eligible for overtime pay, the most generous such increase in decades, “ added the AP.
With labor force participation increasing by 2 percent, the evidence of resilience could not be underestimated. This is also the 29th month without a dip below 200,000 jobs gained, and the increase of labor force participation is an encouragement, of sorts, say many economic observers.
Black unemployment was 5.3, generally at a higher rate than white unemployment, There was, for August, a slight decrease from 5.8 in July.
Foremost, for those Cassandra’s of doom, there is no imminent sign of a recession, despite many people earnestly telling us, “You know there is going to be a recession”.
Employers are still being cautious and overtime is not being made mandatory in many jobs, and the offer of super benefits are no longer dangled before job seekers, as an inducement.
There are, however, some wrinkles in the outlook, for example the bankruptcy of Yellow Trucking that axed 30,000 employees and auxiliary staff. That sent trucking transport to the basement with a decrease of 34,000, along with warehouse work.
Another is a possible showdown between Democrats and Republicans, and the specter of a government shutdown looming this September. And, as the AP also reported, “A short term funding measure to keep government offices fully functioning will dominate the September agenda . . . “
With the political battle lines drawn between Speaker of the House, Kevin McCarthy, and President Joe Biden, the losers, if there is a shutdown, will be those who are employed by the federal government, seniors, and others receiving federal benefits.
The good news was that leisure and hospitality increased to 40,000 jobs as it struggles to reach pre pandemic levels in February 2020, or 1.7 percent; construction added 22,00 jobs and ambulatory (outpatient healthcare jobs) increased to 40,000, and overall showed progress to 71,000 jobs; but perhaps, most significantly for observers is that the labor force participation inched up to 0.2 percent, but maybe a concern for the Federal Reserve, as it watches for any salary bumps, but as we have seen wages have flattened and employers are reluctant to give significant increases.
Wages over the last 12 months increased by 0.2 percent, or $33.82, and for non-supervisory production workers there was a 6 cents increase, also at 0.2 percent, or $29.00 per hour.
Resilience is still the watchword for the US economy, but with the dips, as well as the gains, the future is anyone’s guess, but the fight is on by the Reserve to tame inflation.
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