October, 06 2023, 03:21pm EDT
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Jobs Jump in September, but Wage Growth Moderates
Analysis by economist Dean Baker
The establishment survey showed an increase of 336k jobs in September. The prior two months’ numbers were also revised sharply higher, bringing the average for the last three months to 266k. In spite of the strong job growth, wage growth actually slowed somewhat, with the average hourly wage rising at just a 3.4 percent annual rate over the last three months. This is well below the average for 2018-2019, when inflation was under the Fed’s 2.0 percent target.
In spite of the strong job growth, unemployment remained unchanged at 3.8 percent. After the huge 736k jump in the size of the labor force reported for August, the September increase was a much more modest 90k. These huge fluctuations in monthly changes are largely the result of measurement error. Over the last year, the labor force has increased by 3,310k, an average of 276k a month.
Job Growth Strongest in Sectors Still Hit by Pandemic
Job gains were widely spread across sectors, but the largest gains were in the sectors that took the biggest hit from the pandemic. The category of leisure and hospitality added 96k jobs, accounting for almost 30 percent of the month’s job gains. Employment in this category is still down by 184k (1.1 percent) from its pre-pandemic peak.
Within this category, restaurants added 60.7k jobs, putting employment above its pre-pandemic peak for the first time. The arts, entertainment, and recreation sector added 19.3k jobs, which also put it above its pre-pandemic peak. The hotel sector added 15.6k jobs, but employment is still 217k (10.3 percent) below its pre-pandemic peak. This is likely due to the huge growth in Airbnb and other vacation rentals over the last four years.
State governments added 29k jobs, while local governments added 38k. Employment in state governments is still down by 21k (0.4 percent) from pre-pandemic levels, while employment by local governments is down by 85k (0.6 percent) from pre-pandemic levels. There will likely be some more catchup in these sectors, but a drop in relative pay and deterioration in working conditions, notably in teaching, has made public sector jobs less attractive.
Job Growth in Cyclically Sensitive Construction and Manufacturing Still Solid
Since construction and manufacturing have always been the hardest hit sectors in a downturn, those expecting a recession always look to employment trends in these two sectors. Both are still adding jobs at a respectable pace. Construction added 11k jobs in September, while manufacturing added 17k. Even housing construction added 12.6k jobs.
The one cyclical sector that has shown job loss is credit intermediation, which has been hit by the decline in home purchases and crash of the mortgage refinancing boom. This sector lost 7.5k jobs last month. Employment is now down 61.6k (2.3 percent) from its peak in April of 2021.
Job Surge in Health Care Slows
The health care sector added 40.9k jobs, after adding an average of 68.6k jobs over the prior three months. This is still more than twice as fast as the average growth in the years before the pandemic. Nursing homes added just 2.4k jobs, while child care centers added 1.1k jobs. Employment in these two sectors is down by 154.2k (9.7 percent) and 39.4 (3.8 percent), respectively, from pre-pandemic levels.
Index of Aggregate Hours Rises 0.2 Percent
Hours growth had been lagging employment growth somewhat, as the length of the average workweek had been getting shorter. These are roughly in line for September, with the index of aggregate hours rising at a 1.5 percent annual rate in the third quarter. With GDP growth likely to be over 3.0 percent for the quarter, this would imply another quarter of strong productivity growth, although a sharp rise in self-employment (mostly incorporated self-employed) will dampen reported growth in the quarter.
Women Again Account for More than Half of Payroll Job Growth
The growth in payroll employment for women was 185k in September, putting them at 49.8 percent of total payroll employment. It will likely be several more months until they hit their peak share, which was just over 50.0 percent in some months before the pandemic.
Unemployment Rate Unchanged at 3.8 Percent
The extraordinary jump in the size of the labor force reported for August raised the possibility that the 0.3 percentage point jump was an anomaly. With the September survey showing the same number, it appears that the rise is real. This rise does seem difficult to reconcile with the extraordinary pace of job growth reported in the establishment survey.
While the overall labor force participation rate (LFPR) was unchanged, the labor force participation rate for prime-age men (25-54) rose to 89.6 percent, tying its pre-recession peak. It was unchanged for prime age women.
There was an increase of 0.1 pp in the unemployment rate for men over age 20 to 3.8 percent, coupled with a decline of 0.1 pp to 3.1 percent for women. This is the largest gap between men’s and women’s unemployment rates since September of 2013. (There were much larger gaps the other way, with women’s rate exceeding men’s rate, at the peak of the pandemic.)
Unemployment Due to Quits Edges Lower
The share of voluntary job leavers in the unemployed edged down to 12.7 percent. This is well below the peak of 15.7 percent hit earlier in the recovery. It is also below peaks above 15.0 percent reached in 2019 and 2000.
The duration measures of unemployment also increased in September, with the median duration of unemployment spells rising 0.5 weeks to 9.2 weeks, and the average duration up 1.1 weeks to 21.5 weeks. The number of people working part-time involuntarily fell by 156k, reversing most of the jump in August, however, the figure is still above lows hit last fall.
Mixed Story in September Jobs Report
The job growth reported for September was far above virtually all predictions. The prior two months’ numbers were also revised up by 119k. This goes against the general perception that job growth is slowing.
However, the slower wage growth reported in recent months is certainly not consistent with an overly tight labor market. Also, there is nothing in the household survey that would suggest the labor market is continuing to tighten. The unemployment rate, while still very low by historic standards, is 0.4 pp above its low hit in the spring. The lengthening of the duration of unemployment spells also is not consistent with a tightening of the labor market, nor is the fall in the share of voluntary job leavers among the unemployed. It would be unfortunate if the Fed overreacted to this report with further rate hikes.
The Center for Economic and Policy Research (CEPR) was established in 1999 to promote democratic debate on the most important economic and social issues that affect people's lives. In order for citizens to effectively exercise their voices in a democracy, they should be informed about the problems and choices that they face. CEPR is committed to presenting issues in an accurate and understandable manner, so that the public is better prepared to choose among the various policy options.
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'Too Much Is At Stake': First House Democrat Calls On Biden to Step Aside
"President Biden saved our democracy by delivering us from Trump in 2021," said Rep. Lloyd Doggett. "He must not deliver us to Trump in 2024."
Jul 02, 2024
Crediting U.S. President Joe Biden with spearheading "transformational" changes since taking office three-and-a-half years ago, Rep. Lloyd Doggett on Tuesday became the first federal lawmaker to call on the president to withdraw from the 2024 electoral race, warning that a potential victory by former President Donald Trump would "usher America into a long, dark, authoritarian era."
With just four months until Election Day, and weeks until the Democratic Party formally nominates its presidential candidate, Doggett (D-Texas) said in a statement that the party's "overriding consideration must be who has the best hope of saving our democracy from an authoritarian takeover by a criminal and his gang."
Doggett spoke out five days after Biden faced Trump in the first debate of the presidential campaign and alarmed viewers, Democratic strategists, and aides with his performance. The president, speaking in a raspy voice and appearing to lose his train of thought several times, struggled to make the case for his achievements and to call out Trump's repeated lies.
The debate reportedly sent a wave of panic through the Democratic Caucus, with one party insider telling Politico that names of potential replacements for Biden were being floated.
In his statement, Doggett noted that Biden's poll numbers compared to Trump's were cause for concern for several months before the debate.
"Too much is at stake to risk a Trump victory—too great a risk to assume that what could not be turned around in a year, what could not be turned around in the debate, can be turned around now," said Doggett. "President Biden saved our democracy by delivering us from Trump in 2021. He must not deliver us to Trump in 2024."
Doggett's comments came as CNN released a poll showing that Trump is leading Biden by 49% v. 43%, while his lead over Vice President Kamala Harris in a potential matchup is smaller. Trump leads the vice president by two points.
Among Independent voters, Harris has a three-point edge over the former president, while Trump leads Biden by 10 points.
A separate poll released Tuesday by the progressive grassroots group Our Revolution showed that 67% of respondents supported Biden suspending his reelection campaign.
Doggett noted that the days following the debate have made increasingly clear the danger of a potential second Trump term, as the U.S. Supreme Court on Monday ruled that Trump has "absolute immunity" regarding "official acts" he committed while he was in office—casting doubt on whether he can be held accountable for trying to overturn the 2020 presidential election results and rendering any U.S. president, as Justice Sonia Sotomayor said, "a king above the law."
"Newly empowered with immunity," said Doggett, Trump would be "unchecked by either the courts or a submissive Republican Congress."
The congressman noted that while Biden has spearheaded some far-reaching legislative reforms, the president signaled earlier in his term that he planned to serve only one term.
"He has the opportunity to encourage a new generation of leaders from whom a nominee can be chosen to unite our country through an open, democratic process," said Doggett. "Recognizing that, unlike Trump, his first commitment has always been to our country, not himself, I am hopeful that he will make the painful and difficult decision to withdraw. I respectfully call on him to do so."
Doggett told Matthew Choi of The Texas Tribune that he had notified the White House of his decision to speak out in favor of Biden stepping aside last Friday, the day after the debate.
"After the debate, the risk of a Trump presidency has grown so much that I felt forced to take this action," Doggett said.
Another survey released Tuesday by Puck News showed alternative candidates including Harris, Transportation Secretary Pete Buttigieg, California Gov. Gavin Newsom, and Michigan Gov. Gretchen Whitmer polling ahead of Biden in a potential matchup with Trump.
In light of the the new polling numbers, said former Rhode Island lawmaker and lawyer Aaron Regunberg, Democratic leaders who are "trying to shut down this debate are actively helping Trump."
Regunberg called Doggett's statement "courageous."
"Biden cannot beat Trump," he said. "But another Democrat absolutely can! Whether it's a handoff to VP Harris or an open convention, we don't have to resign ourselves to fascism. It's time for Biden to do the honorable thing and pass the torch."
Also on Tuesday, longtime Democratic National Committee (DNC) member James Zogby wrote to Chairman Jamie Harrison outlining a process through which the party could select its presidential nominee over the next month, ahead of the Democratic National Convention.
Potential candidates could work to secure the endorsements of at least 40 current DNC members and the party could then host two televised events in which the candidates would "make their cases before Democratic voters across the country" before the formal nomination process at the convention starting August 19.
"The excitement generated by this process and the attention it will be given will be a plus for our eventual nominee," said Zogby.
In an interview with The Nation national affairs correspondent John Nichols, Zogby concurred with Doggett's suggestion that Biden's ability to continue serving as president is not what has caused growing concern.
"The focus of this election shouldn't be on the president's age, on his capacity to campaign, on his capacity to govern," said Zogby, founder of the Arab American Institute. "It should be on the danger that Donald Trump presents to the country, on the threat that Donald Trump poses."
"We have to face reality here," he said. "Do I think that Joe Biden is capable of governing? I would say 'yes.' Is he capable of forming a team that can govern? Yes. But can he win an election under these circumstances, when these questions about his abilities will be the constant focus? When the Republicans and the media are looking for the next gaffe, waiting for the next time he forgets something, watching his every step to see if he will stumble? This is not what the election should focus on. And, yet, that's where it's headed."
"I would trust Joe Biden on his worst day more than Donald Trump on his best day. But I don't want his last campaign to be one where all people talk about are his weaknesses," Zogby added. "To go out as the gracious warrior, who fought the great battle to defeat Donald Trump in 2020, served four years and then decided to pass the torch, would absolutely solidify his place in history as somebody who thought more about the good of the country than himself."
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'Screaming the Quiet Part': Trump Advisers Say He's Ready to Embrace King-Like Powers
The U.S. Supreme Court's immunity decision has reportedly emboldened the presumptive GOP nominee to pursue his far-right agenda and authoritarian aims "without fear of punishment or restraint."
Jul 02, 2024
Presumptive Republican nominee Donald Trump—who has pledged to be a dictator on "day one" if elected to another four years in the White House—is reportedly preparing to exploit the U.S. Supreme Court's ruling Monday that current and former presidents are entitled to sweeping immunity from criminal prosecution.
Citing unnamed advisers to the former president, Axiosreported Tuesday that if Trump is reelected in November, he "plans to immediately test the boundaries of presidential and governing power, knowing the restraints of Congress and the courts are dramatically looser than during his first term."
"They're screaming the quiet part, and yet Democrats are mostly focused on renominating a sundowning 81-year-old losing to him in key swing state polls," The Lever's David Sirota wrote in response to Axios' reporting, referring to President Joe Biden.
Facing mounting calls to drop his reelection campaign following his disastrous debate performance against Trump last week, Biden said in an address following the Supreme Court's decision in Trump v. United States that the ruling means "there are virtually no limits on what a president can do."
"I know I will respect the limits of the presidential power, as I have for three and a half years," said Biden. "But any president, including Donald Trump, will now be free to ignore the law."
Among the steps Trump—who celebrated the ruling—intends to take swiftly upon assuming office following a possible November victory, according to Axios, are setting up "vast camps" to "deport millions of people," moving to "fire potentially tens of thousands of civil servants" and replace them with "pre-vetted loyalists," and centralizing "power over the Justice Department," which the former president has repeatedly threatened to wield against his political opponents.
Trump has also pledged to gut environmental rules—which the Supreme Court also targeted in recent rulings—and ram through climate-wrecking drilling projects, moves backed by the powerful oil and gas industry that's helping finance his campaign.
"Thanks to Monday's Supreme Court ruling, Trump could pursue his plans without fear of punishment or restraint," Axios reported.
“It's coming, fast and furious, if he's elected.”
Being a dictator on Day One. Swapping civil servants for “pre-vetted loyalists.” Threatening to “target and even imprison critics.” Pardoning insurrectionists. Jacking up prices with new tariffs. And more: https://t.co/sEiORyvMOt
— Elizabeth Warren (@ewarren) July 2, 2024
While Trump made his support for such actions clear well before the U.S. Supreme Court's Monday ruling, the decision is likely to embolden the twice-impeached former president who, since leaving office, has been indicted by a federal grand jury on election-subversion charges and convicted of 34 felony counts of falsifying business records.
The high court's ideologically divided 6-3 decision in the immunity case has already impacted both legal proceedings, with Manhattan prosecutors agreeing Tuesday with the former president's request to delay his criminal sentencing on the 34 felony charges as the judge on the case examines whether the Supreme Court's ruling has any bearing on the conviction.
In the separate election-subversion case, the Supreme Court's ruling further pushes back a trial as the judge now has to determine which of the actions described in the indictment qualify as "official" duties that—according to the high court's right-wing supermajority—are entitled to "absolute immunity" from criminal prosecution.
"So, yes, all this will delay Trump's trial. In that sense, he gets what he craved," Michael Waldman, president and CEO of the Brennan Center for Justice, wrote Monday. "But the implications are far worse for the structure of American self-government."
"We read sonorous language in the majority opinion that 'the president is not above the law,'" Waldman added. "But just in time for Independence Day, the Supreme Court brings us closer to having a king again."
"The Framers of the Constitution, wary of reestablishing the monarchy they overthrew, carefully limited the chief executive's powers. And six justices just crowned him king."
Liberal Justice Sonia Sotomayor wrote in her dissent against Monday's decision that the Supreme Court's majority has effectively endorsed assassinations of political rivals, orchestration of a military coup to remain in power, and the acceptance of bribes in exchange for pardons as legitimate and unprosecutable uses of presidential authority.
"The relationship between the president and the people he serves has shifted irrevocably," Sotomayor wrote. "In every use of official power, the president is now a king above the law."
Slate legal journalist Mark Joseph Stern echoed Sotomayor, writing that "it is unclear, after Monday's decision, what constitutional checks remain to stop any president from assuming dangerous and monarchical powers that are anathema to representative government."
"The immediate impact of the court's sweeping decision will be devastating enough, allowing Donald Trump to evade accountability for the most destructive and criminal efforts he took to overturn the 2020 election. But the long-term impact is even more harrowing," Stern wrote. "All future presidents will enter office with the knowledge that they are protected from prosecution for even the most appalling and dangerous abuses of power so long as they insist they were seeking to carry out their duties, as they understood them."
"The Framers of the Constitution, wary of reestablishing the monarchy they overthrew, carefully limited the chief executive's powers," he added. "And six justices just crowned him king."
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'Historic' Category 5 Hurricane Beryl Offers Terrifying View of Future
"Beryl isn't 'unbelievable,'" one expert said. "it's what happens when you heat up the planet with fossil fuel pollution for decades."
Jul 02, 2024
As Hurricane Beryl barreled toward Jamaica on Tuesday after killing at least four people in the Caribbean's Windward Islands, climate scientists warned the record-breaking Category 5 storm is a present-tense example of what's to come on a rapidly heating planet.
Even before the Atlantic hurricane season began on June 1, the U.S. National Oceanic and Atmospheric Administration predicted an 85% chance of above-normal activity and 17-25 total named storms this year. Matthew Cappucci, a meteorologist for The Washington Post's Capital Weather Gang, highlighted some records Beryl has already broken.
"There is a strong, well-documented link between the effects of human-induced climate change and the development of stronger, wetter storms that are more prone to rapidly intensify," he wrote Tuesday. "Beryl sprung from a tropical depression to a Category 4 hurricane in just 48 hours, the fastest any storm on record has strengthened before the month of September."
Beryl is also the earliest Category 4 and 5 hurricane on record in the Atlantic, Cappucci pointed out. Previously, the earliest storm to reach the top level of the Saffir-Simpson Hurricane Wind Scale was Emily, in mid-July of 2005.
The Capital Weather Gang reported that Beryl "strengthened more Monday night, its peak winds climbing to 165 mph. It has surpassed Emily (2005) as strongest July hurricane on record. It's early July but Atlantic is acting like late August."
Certified consulting meteorologist Chris Gloninger emphasized that "the climate crisis has led to well-above-average ocean water temperatures and helped this storm explode."
As Stefan Rahmstorf of the Potsdam Institute for Climate Impact Research and Potsdam University explained: "The heat in the upper ocean is the energy source for tropical cyclones. This heat is at record level, mainly caused by emissions from burning fossil fuel. That's why an extreme hurricane season has been predicted for this year. It's off to a bad start!"
Colorado State University meteorologist Philip Klotzbach on Monday shared graphics showing that "Caribbean ocean heat content today is normally what we get in the middle of September."
While some expressed disbelief over the storm, CNN extreme weather editor Eric Zerkel stressed that "Beryl isn't 'unbelievable' or 'defying all logic,' it's what happens when you heat up the planet with fossil fuel pollution for decades. The oceans store roughly 90% of that excess heat. The ocean is as warm as it typically is... when Category 4 storms form. June is now August."
Acknowledging Beryl's strength, Steve Bowen, a meteorologist who serves as chief science officer at the global reinsurance firm Gallagher Re, concluded that "this is a massive warning sign for the rest of the season."
Looking beyond this hurricane season, which ends in November, University of Hawaii at Mānoa professor and [C]Worthy co-founder David Ho said, "Let's remember that things are just going to get [worse] as we continue to consume nearly 100 million barrels of oil every day."
The "historic" storm is sparking calls for action to phase out fossil fuels across the globe. Noting how Beryl "is breaking records and leaving a trail of destruction throughout the Caribbean," the U.S.-based Sunrise Movement argued that "we must prosecute Big Oil for their role in causing devastation like this."
In response to a climate scientist who shared a photo of some damage Beryl has already caused, Rahmstorf expressed hope that people around the world won't "wait with voting for climate stabilization until extremes hit their homes."
Beryl made landfall Monday as a Category 4 hurricane on Carriacou, a Grenada island, and also affected St. Vincent and Grenadines. According toThe Associated Press, at least four people were killed.
The U.S. National Hurricane Center said Tuesday afternoon that on its current path, "the center of Beryl will move quickly across the central Caribbean Sea today and is forecast to pass near Jamaica on Wednesday and the Cayman Islands on Thursday. The center is forecast to approach the Yucatan Peninsula of Mexico on Thursday night."
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