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jobs report
'Wowza': Economy Added 254,000 Jobs Under Biden-Harris in September
"This labor market," said one economist, "is the result of policy choices that prioritized full employment—as it turns out putting people first, works."
Oct 04, 2024
Friday's job report from the Bureau of Labor Statistics offered a "better than expected" picture of job growth as federal unemployment hit 4.1% and more than a quarter-million people were added to the payroll last month alone.
In what ABC Newsnoted was "one of the last major pieces of economic data before the presidential election," the jobs report offered an indication of economic strength—a possible boon to outgoing President Joe Biden's legacy and a political advantage to Democratic presidential nominee Vice President Kamala Harris ahead of November 5.
"U.S. hiring surged in September," the news outlet reported, "blowing past economist expectations and rebuking concern about weakness in the labor market."
Former Labor Secretary Robert Reich responded to the new data Friday morning by pointing out that "more jobs have been created during the Biden-Harris presidency than during any single presidential term in history."
Donald Trump "doesn't often tell the truth, but he was right about this," added Reich, who quoted the GOP presidential candidate in 2004 admitting that "the economy does better under the Democrats than the Republicans."
More jobs have been created during the Biden-Harris presidency than during any single presidential term in history.
Trump doesn't often tell the truth, but he was right about this:
"The economy does better under the Democrats than the Republicans." — Donald Trump in 2004 pic.twitter.com/32XQnqbbb1
— Robert Reich (@RBReich) October 4, 2024
"Wowza," said economist Justin Wolfers, a professor at the University of Michigan and a senior fellow at the Brookings Institute, in response to Friday's report.
Mentioning how payrolls grew by over 254,000 in September—"well above expectations"—and that large upward revisions were made to the August and July payroll numbers, Wolfers said the overall picture shows an "economic expansion that is motoring along."
September jobs report: US economy adds 254,000 jobs vs. 150,000 expected pic.twitter.com/fUZvzx8tuK
— Yahoo Finance (@YahooFinance) October 4, 2024
"It was 'wow' across the board, much stronger than expected," Kathy Jones, chief fixed income strategist at Charles Schwab, toldCNBC. "The bottom line is it was a very good report. You get upward revisions and it tells you the job market continues to be healthy, and that means the economy is healthy."
Pointing to a recent analysis by her colleague Josh Bevins, Economic Policy Institute (EPI) economist Hilary Wething on Friday credited the strong performance represented by the new jobs numbers as the result of specific policies by the administration.
"You might think we just magically stumbled upon a consistently strong labor market—but no, this labor market is the result of policy choices that prioritized full employment—as it turns out putting people first, works," said Wething.
Elise Gould, a senior economist at EPI, also championed the "strong" figures:
In a blog post on Thursday, ahead of Friday's report—Gould detailed the strength of the labor market, despite the real pain that many workers and families still feel in their day to day lives:
It is indisputable that the U.S. labor market is strong. The share of the population ages 25–54 with a job is at a 23-year high, median household incomes rose 4.0% last year, and real wage growth over the last four years has been broad-based and strong. The economy has not only regained the nearly 22 million jobs lost in the pandemic recession, but also added another 6.5 million.
Are some folks still having a hard time? Absolutely. Even when the unemployment rate is low, there are still sidelined workers, and it remains difficult for many families to make ends meet on wages that are still too low. Unfortunately, that's a long-term phenomenon stemming from a too-stingy U.S. welfare state, rising inequality, and the legacy of anemic wage growth during past economic recoveries. But when comparing the labor market with four years ago (during the pandemic recession) or even before the pandemic began, the answer is clear: More workers have jobs and wages are beating inflation by solid margins.
With the Federal Reserve easing interest rates, in part based based on the strength of the hiring trends alongside lower inflation, Friday's jobs report was welcomed as a show of strength for progressives who have argued since the Covid-19 pandemic that pro-worker policies—as opposed to endless fealty to the demands of corporate powers and Wall Street—alongside public investments can work together to create strong economic foundations for the nation.
"Today's strong jobs report confirms once again that we never had to throw millions of people out of work to tame inflation," said Kitty Richards, a senior fellow with the left-leaning Groundwork Collaborative.
"Thanks to big investments in [pandemic] relief, manufacturing, and green energy, inflation is low, and the economy is still delivering for workers," Richards said. "The pundits who said we couldn't have low unemployment, growing wages, and stable prices at the same time have been proven wrong."
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The Really Great February Jobs Report
If wage growth is now more or less in line with the 2% target, then the Fed can hold off on further rate hikes.
Mar 12, 2023
The failure of Silicon Valley Bank on Friday overtook the really big event of the day, the February jobs report. The 311,000 jobs were far more than I had expected. I thought the huge January number was a fluke of seasonal adjustments and unusually good winter weather. For that reason, I expected the February number to be very weak, not because I thought the labor market had crashed, but just as a correction to the high number in January.
I was wrong in a very big way. The January number was obviously real and the economy is still creating jobs at a very rapid clip.
This is somewhat concerning in that there is no way the economy can keep creating jobs at this pace without seeing some serious inflationary pressure, but this is where the other part of the good news story comes in. Wage growth slowed in February. The slower growth in February, combined with a downward revision to the January number, gave us a 3.6% annual rate of wage growth over the last three months.
This pace of wage growth is consistent with the Fed’s 2% inflation target. We had wage growth at this pace through much of 2018 and 2019 even as inflation was coming in slightly under the targeted rate.
I ordinarily would not be cheering slower wage growth, but the reality is that the Fed is determined to bring inflation down towards its target. If wages are growing at a pace that is faster than is consistent with its target, it will keep raising rates, and throwing people out of work, until wage growth slows.
If wage growth is now more or less in line with the 2% target, then the Fed can hold off on further rate hikes. Hopefully, it would then allow the economy to continue to grow with the unemployment rate remaining near 3.5%.
Of course, we do need to see real wage growth and inflation has been running faster than 3.5%. However, there are good reasons for believing that inflation will be slowing in the months ahead. Most importantly, we know that inflation in rents will slow sharply, as private indexes measuring rents of units coming up on the market have showed little or no inflation in recent months. The CPI rent index, which measures the rent of all units (both those that come up on the market and those with a continuing tenant) follows these indices with a lag of 6-12 months.
It is also likely that we will see further drops in many of the supply chain goods, most importantly cars, where temporary shortages sent prices soaring in the pandemic. This will help put downward pressure on inflation in goods, and also services like car repairs, where the cost of goods is a large part of the price.
And, we are also likely to see less inflation in food prices. The wholesale prices of many items, most notably eggs, has fallen sharply in the last couple of months. This should show up in lower prices in stores.
If we have a story where wages are rising at a 3.6% annual rate, and inflation falls to under 2.5%, then we would be seeing a respectable pace of real wage growth. We can hope for better, and also that we continue to see disproportionate growth at the bottom, but low unemployment and modest real wage growth is a pretty good picture.
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'Bad News for Workers' as Wage Growth Slows Amid Fed Rate Hike Barrage
"If the Fed continues with its dangerous interest rate hikes," warned one expert, "we should brace ourselves for more hardship for working people and an unnecessarily painful recession."
Jan 06, 2023
The U.S. Labor Department released data Friday showing that wage and job growth slowed in December as the Fed explicitly targets the labor market and worker pay in its push to tamp down inflation, which has been cooling in recent months.
According to the new figures, wages grew at a slower-than-expected rate of 0.3% last month, and November's hourly earnings number was revised down from 0.6% to 0.4%—a trend that one observer called "bad news for workers."
Pointing to the "huge downward revision to November wage growth," Dean Baker of the Center for Economic and Policy Research wrote, "Hold the rate hikes please."
"Hold the rate hikes please." —Dean Baker, CEPR
While CEO pay has continued to surge, many ordinary workers across the U.S. have seen their wages lag behind inflation as living costs have risen sharply over the past two years.
Elise Gould, an economist at the Economic Policy Institute (EPI), said slowing wage growth is critical for Fed policymakers to consider as they mull additional interest rate hikes, which risk unnecessarily hurling the economy into recession.
"Wage growth decelerated in December no matter how it's measured," Gould noted. "Annualized wage growth between November and December was 3.4%. It is decidedly not driving inflation."
Gould's EPI colleague Heidi Shierholz agreed, describing recent wage growth as "completely non-inflationary."
"By this measure, the Fed's work is done," she wrote on Twitter.
\u201cWhen Wall Street is betting against workers, it's even more proof that the stock market is absolutely not the economy. #WeAreTheEconomy\u201d— Groundwork Collaborative (@Groundwork Collaborative) 1673018030
Job growth, meanwhile, remained strong in December even as it cooled compared to the torrid pace of early 2022. The Bureau of Labor Statistics said the U.S. added a better-than-anticipated 223,000 jobs in the last month of 2022, the fifth consecutive month of slowing growth.
The new jobs data comes days after the Fed released the minutes of its mid-December meeting, after which the central bank raised interest rates to their highest level in 15 years despite growing warnings from a range of experts about the potential for a damaging recession and mass layoffs.
According to the minutes, Fed officials are not yet satisfied with evidence showing that inflation is slowing significantly and intend to stay the course with higher rates. Central bankers also suggested they believe the labor market is still too tight and wage growth is too strong, reiterating their goal of "bringing down" the latter even as they admitted there are "few signs of adverse wage-price dynamics."
"You know the Fed's priorities are warped when they suggest too many Americans have jobs," Liz Zelnick, director of the Economic Security and Corporate Power program at the watchdog group Accountable.US, said Friday. "It seems the more Americans find work, the more the Fed embraces job-killing interest rate hikes that disproportionately hurt low-income workers and struggling mom-and-pop shops. And for what?"
"The Fed's single-minded strategy has done little to blunt the real driver of inflation—corporate greed," Zelnick added. "Across industries, corporations continue to mark up prices on working families despite posting record profits and rewarding wealthy investors with billions in giveaways. Raising interest rates only hurts American families in the long run by pushing the economy toward a cliff. Recession is not inevitable, but that depends largely on deliberate decisions made by the Federal Reserve and Chairman Jerome Powell."
Michael Mitchell, director of policy and research at the Groundwork Collaborative, echoed that warning ahead of Friday's jobs report, cautioning that "as workers and families are struggling with higher prices, Chair Powell is hell-bent on bringing down wages and pushing more people out of work with his aggressive interest rate hikes."
"If the Fed continues with its dangerous interest rate hikes," Mitchell said, "we should brace ourselves for more hardship for working people and an unnecessarily painful recession."
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