Fed interest rate hikes hits US: no more zeroes

 

Last week’s news of a hike, or rather a series of hikes, of the Fed interest rate gave some consolation to some people in some places, or to paraphrase Lincoln, to some of the people some of the time. It’s been clear for some time that inflation in the US had come to be the defining economic problem and after the Federal Reserve Bank had their two-day meeting there was rapt attention to what could be done to stem the tide of higher and higher prices on goods, that had been fed upon by consumer demand after the Covid lockdowns across the country.

With most Americans subsequently holding fat checking accounts, by not spending more that they could get from the supermarket, or the internet, and uncertainty abound, the flood gates were then thrown open, after the variants were tamed with vaccinations, and the lifting of mask mandates, the demands for new sofas, food processors, and the like became the norm.

Soon, production could not keep up with demand, as many of the overseas factories had been shuttered for fear of Covid, and ports were clogged with uncharted goods, due to a dearth of warehouse space and workers to unload.

At that time, it was thought to be transitional, and temporary but as the months grew it became a major economic problem, or as Sonai Desai Executive Vice President, chief investment officer, Franklin Templeton Fixed Income, told the Financial Times, “it’s the single most significant issue for America.”

The Fed has prepared to raise interest rates six more times this year, and five times in 2023, subject to change and Chair, Jerome Powell feels confident that the economy is durable enough to absorb these higher rates, designed to slow spending, as well as investments.

Observers, and media analysis, in part from The New York Times, have suggested that Powell  is hoping for a “soft landing,” while others have said that this is too little, too late, but with inflation reaching a 40 year high, desperate times called for desperate measures, says the old cliché.

Fueling all of these purchases are higher wages, as employers lure much needed workers. The issue, as seen by others, as well as the chair, is whether unemployment can remain low, with its recent figure of 3.8 percent, and some seeing this as optimistic.

Last fall the Financial Times noted that “labour infiltration” was becoming the norm, and cited Amazon as a major employer who identified the growing trend, along with McDonalds and Starbucks.

For Powell, it’s not only optimism but careful calibration by he, and members, to stave off a recession. And, that is no easy feat. 

Another feat is tapering the reserves, or asset purchases, which have long preoccupied GOP lawmakers; taking a look at what consumers can expect to face, is also of interest, for consumer expenditures fuel the American economy. 

FT also noted that “higher pay packages” were “showing wages and benefits rising at their fastest pace since 2001.”

As has been noted before, higher wages are offset by inflation causing a conundrum, if Powell wants to keep wages steady, but with the scheduled pay raises, tied to that goal, as well as avoiding recession, this is tricky business, for low to middling incomes, as Diane Swonk chief economist at Grant Thornton noted previously: “The costs for low-wage households to cover their commuting cost, grocery bills and rents are eating into the jump they have seen in wages.”

There is some good news on the financial front for consumers: “current federal student loan borrowers aren’t affected because those carry a fixed rate set by the government,” according to The New York Times; but those holding private loans can “expect to pay more.”

For those dependent on car ownership, that most have seen rise exponentially, can  expect to see an increase with average rates taking a rise to 4.39 in February, but some faith in the used car market has taken a decrease in interest rates from 7.83 percent, also, in February, down from 8.25 percent.

Think again about those aforementioned fattened bank accounts, yes, the bank “will pay more interest on deposits,” but not right away, with banking policies increasing rates, when they want increased deposits, and they have tons, ergo no incentive to do otherwise.

In a tilt to online banks they “pay better rates more quickly than larger institutions, according to Ken Tumin, founder of DepositAccounts.com . . ., according to The New York Times.

They also noted that CD’s can be poised to gain higher moves, again, especially with online banks; and, also equally true for money market mutual funds, with a corresponding rise from the feds.

Taking it all in, there are months ahead that will bear watching, taking into account both the expected and the unexpected. What happens, or doesn’t happen, especially with the invasion of Ukraine, is a deciding factor, and with possible shortages of grain, the road ahead for the US economy, not in isolation, but in concert with the world won’t make for an easy road, but this is a 21st century world.

Executive Vice President, Chief Investment Officer, Franklin Templeton Fixed Income

For US economy February Jobs Report roars in like a lion

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.”

US celebrates surge of 467,000 jobs in January

 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.”

For Martin Luther King voting was essentially American

It’s 2022 and It’s also the annual anniversary of the birthday of Dr. Martin Luther King, it’s a long way from the “Dream” speech that he uttered at the Lincoln Memorial in 1963, when he appealed to the better nature of the United States to go forward and light the torch of hope, of humanity and morality to assuage the battered spirit of Black Americans so that they can participate as full citizens of the United States, with the freedom to vote as its central linchpin.

Today the assault on voting rights has battered and nearly broken that right in a series of proposals, most seriously in Georgia to undermine such traditions as Sunday voters for Black worshippers, labeled “Souls to the Polls,” and even criminalizing those who might give water to those same voters standing in line underneath the hot Georgia sky.

No matter the subsequent tweaks, the die is cast especially for Black voters, who helped propel Joe Biden into the White House, and who Republicans are determined to keep it that way, to defeat a Democrat candidate in the 2024 presidential election, and to either re-elect Donald Trump, or another standard bearer.

Call them sore losers, or another name, the battle is on for the GOP and Biden faces an insurmountable hurdle to pass any changes to restore, or ensure, equality, and has powerful opponents, among them Supreme Court Chief Justice John Roberts, W. Virginia Sen. Joe Manchin, and Arizona Sen. Krysten Sinema, who opposes changing the filibuster to allow for a rules change despite the pseudo-sob story of how much she supports voting rights, in the Senate, even as Biden’s car was pulling up to the front door.

As Vice President Harris said recently, “The assault on our freedom to vote will be felt by every American, in every community, in every political party,” she noted, and added “And if we stand idly by, our entire nation will pay the price for generations to come.”

That generation, the future that Dr. King spoke about with his four children holding the hands of white children has been only a piecemeal success, and may continue to deteriorate if that dream does not contain the core of American democracy, the right to vote.

In 1981 just after the extension of the landmark 1965 Voting Rights Act, and the restoration of several key provisions that had weakened its structure; and Roberts was furious by it.

He sounded the alarm, and said, as Vox recalled: “Something must be done to educate the Senators on the seriousness of this problem,” Roberts wrote his boss, Smith, just a few days before Christmas. In a subsequent memo, he argued that the rapidly advancing bill — which now forms much of the backbone of American voting rights law — was “not only constitutionally suspect, but also contrary to the most fundamental tenants [sic] of the legislative process on which the laws of this country are based.”

President Reagan bowing to political pressure did not weaken the revision but did say that it was “humiliating to the South,”

While presidents were outflanked in the past by weakening the bill, especially with the preclearance requirement, they were outnumbered by liberals, but now with a slim majority in the Senate, with Harris as the tiebreaker, things have not progressed as they once did.

In 2013, the preclearance requirement was legislatively abandoned, that aspect that required, “As originally enacted, the Voting Rights Act required jurisdictions with a history of racist voting discrimination to “preclear” any new voting-related laws with the Justice Department or with federal judges in Washington, DC.”

Justice Antonin Scalia branded preclearance as a “racial entitlement” and Roberts helped to draft the talking points to defy those in favor of it, and, “As the voting rights journalist Ari Berman writes, “Roberts wrote upwards of 25 memos opposing an effects test for Section 2.”

The late Justice Ruth Bader Ginsburg, quipped in her dissension: “Throwing out preclearance when it has worked and is continuing to work to stop discriminatory changes is like throwing away your umbrella in a rainstorm because you are not getting wet.”

Further assaults in North Carolina and Texas have made the battle even more urgent for American civil rights and in South Dakota the fight to remove rights was also promulgated to Native Americans and to remove such conveniences as the Motor Voter Act and tribal leaders joined in a lawsuit against lo0cal lawmakers, including the Lakota Rosebud, the Sioux Tribe in what amounts to a return to Jim Crow laws.

While Biden has received some blowback from some Black leaders that he spent too much time on Build Back Better, the truth is, as we have seen, he faces a road that is fraught with opponents, and despite his eloquent and hard hitting speech, will require more than words to preserve our democracy.

For the president, Dr. King’s words fit him at this time, “The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy.”

Nose Dive for December US Jobs Report

 For the last several months hope has often exceeded expectations for the US economy, and now after being buffeted by supply bottlenecks and shuttered oversea factories producing semiconductors and computer parts, the positive outlook for jobs seemed on an upward trajectory, but on Friday, the US Labor Dept. released its monthly jobs report showing a disappointing 199,000 jobs for December.

Following thes rise and fall of the jobs report has begun as a see-saw, and has evolved into an anybody’s guess, especially with an unemployment rate of 3.9. But, of course this is the marquee rate, with more accuracy coming in from the household survey which shows continued movement, but still not as strong as it would be in a “normal”  month, that is pre pandemic.

We’ve seen the effects of the Delta Variant in prior months, but we can only guess at the effect of Omicron, since the report was garnered in the week of Dec. 12; but many economists and observers remain flummoxed at the decline and some rough guesses are being made to the continued path of resignations among many working classes, especially those at the service level looking to end physically demanding jobs that take them away from their families for long hours.

The labor force participation rate remained unchanged from November at 61.9 causing many to wonder what kept it the same with resignation coupled with retirements, many of which were early. The answer may lie in this: that for those that retired, jobs were kept with the greater bargaining power that job seekers have with employers, causing little movement.

Adding to the conundrum is that the jobless rate was its lowest rate since March 2019, and significantly wages were up 4.6% over the year, welcome news but probably attributable to that same bargaining power.

Some optimism has been seen, according to The Hill, who reported that accounting for the two upward revisions for October and November, to 141,000 with Joe Brusuelas, chief economist at tax and audit firm RSM, stating “the change in total employment is 390K. While that is disappointing to the trading community, that is quite strong from the point of view of the underlying real economy.”

Of significance is that leisure and hospitality gained only 53,000 jobs, possibly reflecting that area’s resignation, and health care was flat seemingly due to lack of interest in an area besieged by Covid.

Nearly two years into the pandemic it is apparent that it can take and shake the US economy, in ways that are not predictable.

Waiting on the sidelines are those who want to work, unchanged at 5.7 million, but have seemed to adopt a wait and see approach especially with many offices still closed, its employees working from home, (11.1 %) and some restaurants cutting staff, or closing its restaurant dining rooms with “must show” vaccine cards, such as New York and Chicago, rather than find staff to check guests at entry.

We can’t forget that despite earlier gains, the benchmark of Feb. 2020 jobs are still down 3.6 million, and the Federal Reserve has taken a strong look, with its mandate of full employment and 2 percent inflation, although it has signaled that it is willing to “wave” that figure as needed, along with rate hikes to stem inflation.

In a report that was similar to November, before revision, and with an anticipated revision, hope springs eternal.

What Manchin doesn't want, Biden can't get

Sen. Joe Manchin’s behavior around the Build Back Better bill makes him seem like the boyfriend that you can’t live with, or without. Just a week before Christmas he played Scrooge and denied President Biden a vote on his signature piece of social legislation, many of which contain pieces that Democrats have wanted for decades, and all of it hinging on the budget reconciliation process, in other words consensus, that the Democrats were forced to adopt since no Republicans would join them on this historical reform bill.

Now in the face of the upcoming midterms and low poll ratings for the president, Biden is forced to find some type of working relationship to salvage his presidency and to avert a possible departure of Manchin to the Republican party, leaving the slim majority the Dems have in the Senate fractured.

Yet as the old saying goes, “You can lead a horse to water but you can’t make him drink.”

This is an unenviable position and after seeing companion pieces like the voting rights bill dormant, the president also faces losing a key constituency, Black voters, that helped propel him to office. 

For progressives, like Pramila Jayapal (D-Wash.) and Alexandria Ocasio-Cortez (D-N.Y.) who have given up so much, asking for more cuts risks losing the progressive wing that Biden needs for further legislation.

Some accused them, and also White House Press Secretary Jen Psaki, of saying too much when they collectively accused the West Virginia senator of negotiating in bad faith and betraying the president, but, yet this is exactly what he did, and there is no amount of sugar coating that will change it.

Putting it mildly, to say the least, and using an old southern (G rated) expression he “messed” with the president; and, seemingly to all ears, had no intention of signing the bill.

Whether it was child tax credit extension, preschool advancements, or paid family leave it was always “no”, say Capitol Hill observers.

Attempts at wooing Manchin with a watered down bill will produce just that, a watered down bill.  And his grandstanding. That can’t be taken to the polls.

With Congress as well as the president in their home states celebrating the holidays, the post holiday buzz is how to advance ahead, and that is a road ahead that no one wants to imagine, but must be done.

Glancing into the rear view mirror, the president and voters are remembering the withdrawal from Afghanistan where right wing voters, one in particular, told us that “Biden deserves a bullet in his head for leaving all that equipment behind.”

Moving behind that dangerous rhetoric, and Jan. 6th aside, there was also the optics of Border Patrol whipping Haitian immigrants in the Rio Grande, alienating Black congressional leadership; some in the Beltway see the president riding for a fall.

A recent NPR/PBS NewsHour/Marist poll released last Monday said that 41 percent of Americans approve of his job, with 55 percent disapproving.

That old curmudgeon Sen. Lindsay Graham, said on FOX news,’I think Build Back Better is dead forever, and let me tell you why: because Joe Manchin has said he’s not going to vote for a bill  that will add to the deficit.”

Jayapal has noted that “I am sure that the conversation about legislation will continue, and we will continue to be involved in that. But, no one should think that we are going to be satisfied with an even smaller package that leaves people behind or refuses to tackle critical issues like climate change.”

And, as a final coda, The Hill reported that progressives “watched some of their biggest priorities stall out.”

Sen. Ron Wyden of Oregon, according to The Hill has proposed an idea that would cobble together a few key pieces such as prescription drugs, a ramped up Obamacare, clean energy and a “beefed up child tax credit”, and using the same revenue stream that his Senate Finance Committee, of which he is chair, from the same legislation earlier proposed.

Getting approval from Manchin might be like getting blood from a turnip, and after most of the year trying to woo him, it’s possible that the Democrats could push Manchin to the GOP where he seems most at home, and persuade a switch from the GOP to make this all come together.

He has also promoted overhauling the 2017 Tax Code, an effort that could simply mire the Dems in a long slog, that could reach nothing, but endless detail, and hot air; a clever and disingenuous move by Manchin.

Majority leader, Chuck Schumer has said that he wants to take a floor vote, that has surprised some observers, but would flush out Manchin’s true intent, on record, for as he has said, “I can't guarantee anything upfront, just vote, you’ll find out where I am.”

November Jobs Report: on a see saw

 

For all of those who are still scratching their heads over last Friday’s Jobs Report, from the Labor Dept. the news of only 210,000 jobs, when 500,000 were expected, might see a revision next month to temper their spirits.

It’s still a market for job seekers as they continue to reevaluate their future roles, and especially for low income workers who have spent countless hours on their feet for low wages, which is probably why retail jobs sunk to 28,000, and in an especially dangerous era for Covid concerns, working with the uncertainty of vaccine status among coworkers and customers makes for a worrisome time.

Add the danger of being shot, or conked over the head, by marauding gangs stealing luxury goods to be sold on the internet’s  black market, and the die is cast.

The good news is that the labor force participation has risen to 61.8 percent, a reflection perhaps of those who have managed to gain, thanks in part to the extended unemployment benefits to find better jobs at better job conditions, and at a better rate that helped to push up hourly wages by 0.3 percent; seen especially for lower income workers.

“To me, the most important question in the economy going forward is: Will companies improve jobs enough to entice people back into employment, and to face those higher risks?” said Aaron Sojourner, a professor at the University of Minnesota and a former economist at the Council of Economic Advisers for the previous two administrations, reported The New York Times.

While no one wanted to dance in the streets at the dismal report, President Biden tried to put a better spin on it and attributing the higher wage participation and wage increase to his Build Back Better plan, and at the White House he said, “he hailed the drop in the unemployment rate as a vindication of his administration’s policies — while acknowledging the mixed signals in the jobs report, according to the TImes, but added “Our economy is markedly stronger,” . . .  and went on to say: “It’s not enough to know that we’re making progress. You need to see it and feel it in your own lives — around the kitchen table, in your checkbooks.”

“This is a miserable jobs report, there’s no spinning it any other way,” said Rep. Kevin Brady to The Hill.

Some saw light at the end of the tunnel:a  slight uptick in women’s employment, overall, and that of Hispanics, have given some rise to optimism, but it’s still too early to see this as a true indicator of note.

Fears of the new variant Omicron are also not present in the report taken ahead of the detection by South African virologists, so the December report will be able to add to concerns.

Meanwhile pressure is up on Federal Reserve Chair Jerome Powell to  intervene on inflation, but he, along with Treasury Secretary Janet Yellen, feel that these figures will eventually dissipate; but others disagree, but as we’ve noted there is little that the federal government can do, except wait and see, say most economists.

The Times noted the discrepancy between the two reporting methods and that the household with its smaller sample might be the culprit: Part of the puzzle in the data released on Friday arose because the Labor Department report is based on two surveys, one polling households and the other recording hiring among employers.

“For about the past half-year, the survey of households had been showing significantly weaker job growth than its sister survey — until last month, when it was much stronger. It showed overall employment, for example, growing by 1.1 million, seasonally adjusted.”

They added, “Economists generally put more trust in the employer survey, which has a much larger sample size. So the recent pattern suggests that the household survey had been undercounting employment and, in effect, caught up in November.”

This is not always the case, and some economists feel that the household survey is more accurate, despite its size because of the direct nature of the methodology, but then failure is an orphan, while success has many fathers. 

“Average hourly earnings for nonsupervisory workers were up 8 cents in November, to $31.03, and are 4.8 percent higher than a year ago, according to the report on Friday.”

Wages, while up, are only part of the challenge in hiring, say many employers and it seems to be a steady progress to other areas: increasing paid time off (PTO), increasing employer contribution to health care, among others.

Wage growth, however, has not kept up with high cost of living, especially in urban areas, such as Chicago, Los Angeles and New York where housing costs are high, and going higher, and some sources have reported that even cities outside of those areas are seeing a struggle to stay afloat, especially for families; middle class as well as working class.

In consideration, the Times acknowledged that, “The latest University of Michigan survey of consumer sentiment pointed to “the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation.”