More Good Economic News Heading Into The Labor Day Weekend

The disloyal anti-democracy MAGA/QAnon personality cult of Donald Trump is betting against America, praying for a recession to give them a shot at convincing enough voters to put them in charge so that they can implement their evil designs to destroy American democracy and to replace it with a GQP authoritarian tyranny of the minority of White Christian Nationalists.

Not today, Fascists! There ar no signs of a recession. The Washington Post reports, Labor market added 315,000 jobs in August, a bright spot in the economy:

The U.S. labor market added 315,000 jobs in August, hitting a 20-month streak in strong job growth that’s powering an economy through ominously high inflation. [Which was zero in July, due to continuing falling gas prices.]

The unemployment rate ticked up slightly to 3.7 percent, according to a monthly jobs report released by the Bureau of Labor Statistics on Friday [because more people are returning to the job market], with 344,000 more people unemployed than the previous month.

Note: Donald Trump is the only president in the last 80 years to net job losses during his presidency [due to the  government-induced Pandemic Recession.] President George W. Bush is the runner-up with only 1 million jobs added during his administration.

The August jobs gains were the lowest monthly pick-up so far this year, but the labor market remains an area of strength for the economy, especially as the Federal Reserve raises interest rates to rein in blistering inflation.

The biggest gains were in professional and business services, which added 68,000 jobs in August, with strong gains in computer systems design, management and technical consulting, and architectural and engineering services.

Employment in healthcare rose by 48,000 jobs, with notable additions in physicians, hospitals, and nursing and residential care facilities. Retail trade added 44,000 jobs and manufacturing continued to trend up by 22,000.

Employment in leisure and hospitality saw little change after average monthly job gains of 90,000 in the first seven months of 2022. The industry still remains below its pre-pandemic levels.

The economy has more than recovered the 20 million jobs lost during the pandemic. Meanwhile, other indicators, such as a decline in economic output and persistent higher prices for just about everything, suggest a less rosy picture, raising questions on how much longer the hot job market can last.

The old rules of economics do not apply to a global pandemic economy. This is not a quote unquote “normal” economy. New rules for a global pandemic economy are being learned and developed every day. Economists really are making it up as we go. If the old rules of economics applied, we would have seen increasing unemployment this year. Didn’t happen. So stop applying old metrics to a new economic situation, it is misleading, like this:

The mixed signals have led many economists to warn that workers will eventually face a weaker job market, especially if there is a recession. [Well, duh! They pay you the big bucks for this?] And although inflation eased slightly while remaining high in July and workers have continued to see historic wage growth this summer, paychecks have not kept up with inflation, hitting low-income households the hardest. [Always searching for the negativity, not permitted to say anything positive.]

“Broadly speaking, the economy is slowing even though the job market has been very hot,” said Daniel Zhao, lead economist at Glassdoor. “But the overall economy and job market can’t be out of sync for too long. I think the labor market still has gas left in the tank and clearly more than we expected a few months ago, but eventually it will have to fall back to earth.”

Or maybe the supply chain issues are working themselves out and “deflation” will continue from July. We’ll see. If this guy’s thinking is “out of synch” because the old rules do not apply, why should I care what he thinks?

The economy added 528,000 jobs in July, more than doubling forecasters’ expectations and substantially reducing recession fears.

“Things are still very hot, but July’s report was more of a fluke than the start of an accelerator,” Zhao said.

Industries that are more sensitive to interest rate hikes, including construction, durable goods production, mortgages and temporary help services, will see a decline in jobs first if the labor market weakens, economists say.

“When we stop seeing growth in those industries, that’s when you think the first shoe is beginning to drop. It hasn’t yet,” said Erica Groshen, an economics adviser at Cornell University and the commissioner of the Bureau of Labor Statistics from 2013 to 2017.

The strength of the job market has emboldened the Fed to take aggressive action to fight inflation. Speaking in Jackson Hole, Wyo. last week, central bank Chair Jerome H. Powell said the Fed will not stop raising rates until inflation is more under control, though he expects that will probably soften the labor market.

Booming jobs creation has also meant fierce competition between employers for a limited labor supply. There continue to be roughly two open jobs for every job seeker, according to July job openings report, and workers continued to quit their jobs at an elevated rate in July, in a phenomenon, that has been dubbed the Great Resignation.

[T]he tight labor market, combined with inflation at 40-year-highs, has also fostered an environment ripe for union activity, as workers struggling to pay for gas, food and housing have more power to make collective demands of employers facing widespread labor shortages. The National Labor Relations Board has reported a 56 percent uptick in petitions for union elections in the first nine months of fiscal year 2022 compared with the prior year.

This reporter is trying to sell you a wage-price spiral from the 1970s [inherent anti-union bias.] There is no evidence to support this.

The main reason for a tight labor market is the lack of immigrant labor in labor intensive sectors. See,  America’s labor shortage is actually an immigrant shortage, and Could Immigration Solve the US Worker Shortage?, and Immigration Can Help Fill Gaps in Tight Labor Market, and As foreign workers return, economists see help for labor shortages and inflation.

But don’t tell this to the MAGA/QAnon White Christian Nationalists who want a “fortress America” for white U.S. citizens, and to begin deportation of everyone else. In GOP ads, ‘invasion’ language is everywhere. That dystopia would spell the decline of America.