Posted on 01/09/2023 10:18:50 AM PST by Old West Conservative
Not long after Friday’s Employment Report multiple analysts and commentators were calling it a “goldilocks” report, by which they meant it showed that the economy was neither “too hot” nor “too cold,” but instead, “just right.”
In turn, the theory goes, the Federal Reserve could stop raising short-term rates earlier and at a lower peak than previously expected, inflation would continue to cool, and the economy could pull-off an elusive “soft landing.”
The biggest headlines from the Employment Report were definitely good news. Nonfarm payrolls rose 223,000 in December, beating the consensus expected 203,000.
Meanwhile, civilian employment, an alternative (although volatile) measure of jobs that includes small-business start-ups, surged 717,000.
Rapid job creation helped push the unemployment rate down to 3.5%, tying the lowest level since Joe Namath was a reigning Super Bowl champion. (If you’re a Millennial or Gen Z, yes, that’s the same guy in the Medicare commercials.)
But, behind the headlines, the data were not as good.
Temporary help service jobs (temps) fell 35,000 in December, the fifth straight monthly decline, to a level of temp jobs below a year ago.
Why are these jobs important to watch? Because, when businesses face increased demand, the quickest way to respond is hiring temporary help. And the same thing happens in the opposite direction.
Meanwhile, the total number of hours worked in the private-sector ticked down 0.1% in December, the second consecutive monthly decline.
Even though payrolls were up, total hours worked data show less work was done.
Putting it all together, this is the equivalent of losing 125,000 jobs in December, not gaining jobs.
Instead, pay attention to an actual economist who is able to ANALYZE the report instead of just being intellectually lazy and saying the government lied about the jobs report.
The numbers were accurate -- but what the numbers needed was real analysis to show that the USA job market is far weaker than the headline numbers show.
The BLS unemployment numbers are very accurate, but you have to understand how they define being employed and being in the work force. Since they have stuck with their definitions for more than 50 years, their data is consistent.
Ping
My company has hired on consultants and an ad agency to increase frontline hiring, even offering sign-on bonuses. People are just not interested.
You just pointed out the fallacy of the numbers, kind of hidden in plain sight type of information.
The numbers may be accurate, and it takes an economist to dig into them to see what’s really happening.
But when the numbers are released, the MSM business analysists got excited and reported how great the Biden economy as doing and all is fine, the Fed can slow down or reverse interest rate hikes, etc..
Then days later after real analysis it shows something different, but at that time it’s to late, a false impression has gone out to the public.
It’s like when the government reports inflation numbers, the same confusion is reported.
The CPI number from what I know excludes food and energy, the two things people can’t live without.
The CPI numbers may show moderate inflation, but food and energy have gone up 15-20%, the public hasn’t been lied to, it’s been misled.
and the labor participation rate is???
Pretty sure the CPI-U and CPI-W use the basket of good approach for essentials like food.
The problem is, they will pick the cheapest beep item for all beef items and use it as their baseline (e.g. sirloin steak may be 6.99 a pound while 75% lean ground beef is 2.99 a pound). They will then interpret that as beef being 2.99 a pound regardless of cut or quality. Thus, last year you might’ve been able to afford NY strip, but this year the same dollars buys a pound of ground beef - to the CPI-W or -u it’s all the same, so they base the inflation rate on the ground beef, not on quality of life or quality of goods in the basket. This is one way to make the inflation rate, or cost of living look rosier than it actually is.
Just like when we used to buy a pail of ice cream (5 quarts) for 4.99 and now we are getting a pail that is 3 quarts for 5.25. Again, they consider it a pail and say inflation is modest because the pail only went up 26 cents, but in reality the price per given volume went way up.
We both are partially right, the CPI does include food and energy, but when you hear the term “Core Inflation”, that excludes food and energy, supposedly because the prices fluctuate to wildly to include.
To the average person, food and energy are things that are essential.
Here’s an article that sort of explains it.
My original point is true, inflation and unemployment number that get reported are accurate, except it takes someone with real knowledge to know what they really mean, what gets reported by the MSM and Business channels is often time misleading and meant to sway public opinion.
This country has a severe shortage of jobs you can support a family on but a boatload of crap jobs that nobody wants.
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