Payrolls & wages jump, prior 2 months revised higher, solid bounce-back from Hurricanes and Boeing strike. 3-month average payrolls +173,000!
By Wolf Richter for WOLF STREET.
Payrolls jumped by 227,000 in November from October, and the prior two months were revised higher by a combined 56,000 jobs, which makes for an increase in payrolls of 283,000 for the month, according to the Bureau of Labor Statistics today.
The three-month average, which includes the revisions and effects of hurricanes and the Boeing strike, rose by 173,000 in November, a very solid increase.
Today’s figures reflect a big bounce-back from the October figures, which had gotten hammered down by the Boeing strike and the effects of the hurricanes in September and October that temporarily shut many work sites. By mid-November, the end of the reference period for today’s data, many of these sites were back in operation.
The Boeing strike ended on November 5, and many of these workers went back to work by the end of the survey reference period – the payroll that includes the 12th of November. So employment in Transportation Equipment Manufacturing jumped by 30,000 in November, after the strike-caused drop of 44,000 in October. Most of the remaining 14,000 workers that missed the mid-November cutoff will show up on the December payrolls data.
The Boeing strike had caused the unemployment rate in Transportation Equipment Manufacturing to spike from 2.2% in September to 5.3% in October. In November, it dropped back to 3.7%. As the remaining workers went back to work after mid-November, the rate will likely drop further in December.
Overall payrolls at employers rose by 227,000 jobs in November from October, and October was revised higher by 24,000 jobs and September by 32,000 jobs, for a total increase of 283,000 jobs, according the survey of establishments (blue line).
The three-month average job creation — which irons out the downs and ups from the hurricanes and the Boeing strike, other month-to-month squiggles, and the revisions — increased by 173,000 jobs in November, a healthy number of job gains, right in the middle of the Good Times before the pandemic (red line).
Average hourly earnings jumped by 4.5% annualized in November from October, and October’s gain was revised higher to +5.2% annualized (from the previously reported +4.5%), both the biggest wage gains since January (blue line).
The three-month average rose by 4.5% annualized. Due to the upward revisions for October, the October three-month average jumped to +4.8%, from +4.5% reported a month ago. It’s from this upwardly revised 4.8% gain of the three-month average in October, that the 4.5% gain in November decelerated. Both of them were the biggest increases since January (red line).
Year-over-year, average hourly earnings rose by 4.0% in November, same increase as in October, and both are the biggest year-over-year increases since March, and well above even the peaks of the 2017-2019 Good Times period.
These wage gains are adding to the reborn inflation worries.
The headline unemployment rate (U-3), based on the survey of households, edged up to 4.2% in November from 4.1% in October.
Over the past seven months, the unemployment rate has stabilized at the historically low range of 4.0% to 4.3%, with July having been the high point.
The unemployment rate = number of unemployed people who are actively looking for a job divided by the labor force (number of working people plus the number of people who are actively looking for work).
The Fed, at the time of its rate-cut decision in September, projected an increase in the unemployment rate to 4.4% by the end of 2024 and 2025, according to the Fed’s most recent Summary of Economic Projections released at the September meeting (it’s going to release an updated SEP at the December meeting). This projection of a continued increase in the unemployment rate was one of the reasons for the rate cuts. But the unemployment rate has stabilized below the Fed’s median projection so far.
The wave of migrants and the coming revision of the Household Survey data.
The recent tsunami of migrants – causing a net population increase estimated by the Congressional Budget Office of 6 million in 2022 and 2023, plus some in 2024 – is hard to track for the household employment data because proportionately fewer of them respond to the household surveys.
In addition, the BLS uses the Census Bureau’s population data to extrapolate the survey data to the overall population. But the Census Bureau’s data that the BLS uses hasn’t been updated to reflect the wave of migrants, which is why the CBO came up with its own estimates, based on ICE data in addition to Census Bureau data.
The BLS will revise the household survey data in January, hopefully based on updated population data that would include more of the migrants. And if that is the case, we expect large up-revisions of overall employment, the labor force, and related metrics. The household data has been in the fog for two years.
The up-revision of total employment in January should re-establish the historic relationship to nonfarm payroll jobs.
By not adequately accounting for the migrants, the household employment data started to massively diverge from the nonfarm payroll data in mid-2023.
Total employment, lacking the new migrants who are working, has been relatively flat since mid-2023 (red), while the nonfarm payrolls have continued to rise at a solid pace (blue).
We expect the up-revision in January to raise the red line and re-establish the typical difference to the blue line. That difference is mostly caused by certain self-employed workers and farm workers that are not included in the nonfarm payroll data:
The newly arrived immigrants who either already have a job or are looking for a job would count in the labor force, regardless of legal status. If they’re working, they would count as workers, regardless of legal status. Those that have not found a job yet, but are looking for a job, would show up in the unemployment rate regardless of legal status.
The unemployment rate rose earlier in 2024 due to this new supply of labor, not due to job losses – jobs have continued to grow at a solid rate. In a typical recession, the unemployment rate rises due to reduced demand for labor (job cuts and declines in employment).
The number of unemployed people looking for a job rose to 7.1 million. It has been in this 7-million range since June, with the high point in July (blue).
The three-month average remained at 7.0 million, same is in October, and down a hair from July and August.
This metric of the number of unemployed people does not take into account the growth of the labor force over the decades. But the unemployment rate (above) accounts for the growth of the labor force.
“Careful” with those rate cuts!
Today’s employment data is another reason why the Fed can be “careful” with its rate cuts. “Careful” is the new key word that Powell and Fed governors have used to describe their approach to future rate cuts: Slowing the pace of the rate cuts amid enormous uncertainty where that theoretical neutral rate is that the Fed aspires to meet with its rate cuts.
With current policy rates, the Fed may already be at the neutral rate – its policy rates may no longer be “restrictive” on the overall economy, but may be “neutral,” and we’ve been seeing evidence of that in above-average GDP growth, the solid labor market, stubborn and now re-accelerating inflation, and other economic data.
And if data like this keeps piling up, the Fed could and should do some wait-and-see, which it had already done for a big part of 2024.
But rate cuts are not permanent. If the Fed overdoes the cuts, and inflation re-ignites more seriously, it can always hike again. The Fed used to do that in the olden days, no problem.
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.
Thanks WR.
I guess it was a mistake to cut rates y 50bps in Sep and unleash the animal spirits in the asset markets or it’s all by design.
The labor market data was weakening dramatically in July and August just before that rate cut. It was kind of scary how fast that went, and I pointed that out at the time, and it came all at once in early September, with data for August and prior months, when a bunch of stuff was revised down all at once. And that’s the data they had. And they reacted to it. And then, starting two weeks after the rate cut, the weak data got revised away one after the other. So now we look at very different data for that period. But they’d reacted to the original data. That’s all they had. They had no idea about the revisions that came after their meeting.
I’ve discussed all this a bunch of times in my articles, with charts showing the revised and original data, including this one:
https://wolfstreet.com/2024/10/13/what-if-theres-no-landing-at-all-but-flight-at-higher-speed-and-altitude-than-normal-with-higher-and-rising-inflation/
Thanks for the reply WR.
I agree that labor market was weakening and hence FED cut 50 bps.
But FED should have not cut saying that this labor market weakening is “transitory” and it indeed is proven to be transitory.
Using the word transitory for easing biases is I am talking about.
so many jobs
so few qualified/skilled workers
keep feeding system and letting them go when they fail
got 2 new ones now – seem promising but will not provide keys to company until they have proven themselves
still a lot of gaming system-to many breaks not enough W O R K
Powell always says in press conferences that the Fed looks at ALL the data over time, not just a couple of numbers for a couple of months. However, they appear to have looked only at the employment numbers for just a couple of months (which turned out to be wrong!) when they cut 50 bp. They then have to compound the error by cutting again, and will likely cut again in eleven days. Otherwise they are afraid they will look like freaking idiots who made a huge mistake. Well, sorry, Jerry, you are a freaking idiot and you made a huge mistake.
Thurd2👍👍 On Point !
Yes, they got spooked. They lost their cool. Bowman dissented for those very reasons.
Question is will they do that mistake again in Dec 2024 by doing another cut?
In 2022 beginning, they dragged their feet to act and started with 25 BP. But while cutting, they went big with 50BP.
Last 2 month revised upwards and higher Wage increases clearly tell more Inflation risk is now than Labor market. Cleveland FED Now-casting is showing much higher numbers for Dec and Jan.
I hope they don’t cut in Dec meeting and clearly send a Message.
Markets are clearly expecting it and reflected in pricing. FED governors can do lot of tough talk, but if they don’t act then no use.
But the labor market deteriorated in late 2022 – 2023, correct for about 3 or so months. I guess it’s okay for us to have a big round of tech layoffs?
I think you’re being generous. At most the Fed should have cut 25-BP in Sept. It’s not that they went ahead and cut, is was 50-BP and the timing of it so close to the election. There’s really no way to spin the postmortem. The strong perception by anyone who’s halfway paying attention is that 50-BP drop was very questionable.
Time will tell to see how 2025 shakes out, but the totality of evidence suggests we’re looking at rising inflation.
Agreed. This is a Fed that was in love with ZIRP and very reluctant to acknowledge inflation, and then acted timidly in pulling back QE and started with a piddly 25bp rate increase. Then the second they get a minor indication that rates may be mildly stimulative (and ignoring asset price and services inflation), they drop 50bp when the data said they could have held it flat. Then they follow the election with an immediate 25bp drop that the data said was completely unnecessary. The Fed knew that drop was not needed but it was clear that they were signaling to the new chief (who will surely browbeat them a second time about rates being “too high”) that they were on his side, i.e. the extremely wealthy come first. It’s hard not to watch the Fed with disgust.
yes, digger dave. they’ve shown that, rather than keep rates as high as they can without damaging the economy, their instinct is to keep rates as low as they can without causing inflation that bothers the masses.
the third mandate is moderate long-term rates, but they’ve shown that they’d keep rates at 0-1% indefinitely if they could do so without causing inflation.
Wolf,
The Preliminary Jobs Data for July was 114,000 Jobs added,
The Preliminary Jobs Data for August was 142,000 Jobs Added.
When they made the 50 Basis Cut in September….,
…….they had Second Revision for July was 89,000 Jobs Added, and Preliminary for August at 142,000 Jobs Added. ( Eventually July came in at Final 144,000 Jobs)
Those Job Numbers do not call for Any Cuts Needed at All…, Let alone a 50 Basis Cut…… which they Did in September when they had this Data.
Yup, you know what i think, it was political because of election and succumbing to the Low Interest Rate Junkies to continue the Pumping up the S&P 500 (Stock Market)……. , but that is just my opinion….
#1. your numbers are bullshit. On Sep 6. these were the numbers:
5/1/2024: 216,000
6/1/2024: 118,000
7/1/2024: 89,000
8/1/2024: 142,000
So bullshit in, bullshit out.
#2. From my article on September 6:
https://wolfstreet.com/2024/09/06/the-fed-has-room-to-cut-rates-are-high-relative-to-inflation-and-job-growth-could-use-some-juicing-up-to-maintain-momentum/
“The three-month average — which includes the revisions and irons out the month-to-month squiggles — declined to 116,000 jobs, dragged down by the July report, and at the very low end of the three-month averages in 2018 and 2019 (red).
A month ago, the three-month average for July was 170,000 as reported then, which was decent compared to 2018 and 2019. But that drop of the three-month average from 170,000 a month ago to 116,000 now took it from decent to weak.”
That’s the chart from the Sep 6 article. The three-month average was in scary descent:
#3. Political conspiracy bullshit pollutes brains and prevents them from functioning properly.
” it came all at once in early September”
Long-term monetary flows bottomed then. Even Dr. Barnett gets it right this time.
They’re gonna cut in December too and there will be anger around here!
The FED should cut rates and accelerate QT.
I think this is the first comment (not from WR) that I’ve actually agreed with on this website. Bravo, spencer.
It’s like the type 2 statistical error in multiple linear regression.
Wolf!! If census and BLS update the immigration numbers, will it increase the unemployment rate ? What would be the effect on labor participation and unemployment rate? Also, a seperate question. If nations are buying Treasuries would it increase US dollar status as a reserve currency. Could you advise. Thanks
It will increase employment, the labor force, and the number of unemployed — that’s my guess.
I’m not sure how that will impact the unemployment rate (unemployed divided by labor force) because I don’t know by how much each of the three will increase. It could go either way, depending on how many of the new immigrants are working, and a lot of them are.
IMHO as one who was very well connected, couple decades past, with the folx who came into the construction industry with papers purchased to prove that they were ”legal” immigrant workers, papers that passed the scrutiny, e-verify, etc. , of a major corporation AFTER it had been busted for hiring ”illegal” workers, ALL of those folx came here TO WORK…
Just trying to help the guesses as to the current effect of the vast increase of recent years.
Clearly, it will take a while for this effect to be known.
Trying to focus my guess.
Immigrants are missing from the total pop. Do they still show in the employment data, payroll?
They are missing from the number of unemployed?
Will they be included there as a calculation between total pop and employment? They still can’t qualify for unemployment insurance?
If they’re employed by a company, and get paid through the payroll system, they show up in nonfarm payrolls (establishment survey). Which is why nonfarm payrolls kept growing.
But the household survey is different. The BLS extrapolates the base data from the survey to the overall population by essentially multiplying it by a US population factor in some complicated way. So if an illegal worker responds to the survey (many don’t), he would show up in the base survey data. But since the BLS population estimate is by now about several million people below the actual population, then the factor will be too small to extrapolate it to the actual population, and the resulting figure for total employment will be too small. That’s kind of what we’re seeing. In addition, there is this issue of illegal migrants not responding to government surveys. That’s always the case, and the BLS has a formula to compensate for it. But now there are suddenly so many of them since 2022 that the formula cannot take them into account.
That’s how I understand it. I think we will be in the fog about the size of this newly arrived labor force for a few years.
It sure looks like the Fed made a mistake by cutting rates 75 basis points, amid insane market rallies and asset bubbles, based on an imaginary cooling of the labor market.
And it looks like they intend to fix their mistake by…
…ha ha, just kidding. They don’t actually *fix* their mistakes until it’s literally years too late. But it appears that they don’t intend to compound it with more cuts at the next meeting.
.25% cut incoming! all this positivity is surely transitory. Bubbles aren’t going to blow themselves.
@SOL
So well said!
Wall Street, always needing another fix, definitely agrees with you, as all I see is Wall Street headlines saying that the data means a cut is almost certain. At least according to their interpretation.
I prefer the interpretation we see here.
It will be interesting to see what happens to Mr. Market if their fevered dreams are dashed.
I would be surprised if they don’t cut next meeting.
Careful likely means one more and wait….but the next cut is very very likely.
Any hawkish Fed talk is just soothing cheap words for the longer end of the yield curve from getting out of control. I would expect more of this to strategy in this cycle of rate cuts and policy normalization.
Wage inflation is the important takeaway from all this. This feeds back into price inflation, since businesses have to raise prices to pay higher wages. And then workers say they need higher wages to pay the higher prices. Looks like we might be seeing an upward spiraling wage-price feedback loop. In the face of strong employment data and impending tariffs (if they happen) and deporting millions of illegals (some who work), the Fed is in a difficult spot which looks like it will only get worse.
wage inflation is the only rational inflation. Like a suppressed spring, the energy release is explosive.
Hypothetically, two generations of American workers pitted against the Chinese Communist Party’s work force.
Hourly wages have a long way to rise to approach parity between the tax hating wealthy and the everyday people who payed for they’re success for free.
Fair assessment of what the Fed should do.
However I think this Fed has a bias towards cutting. They may be worried that persistent higher may precipitate the bubble quickly and do damage to the real economy. They would want to slowly take the air out.
The other factor may be the ballooning public debt and deficit. The Fed may want inflation to run hotter but not too hot. They would want to fool the fixed income market long enough for fiscal balance to be achieved.
For these reasons, I would expect they cut when inflation comes below 3% and hike when it is uncomfortably higher but never let it touch 2% or keep it there. If they can play this game for a decade they can shave off a good % of the public debt.
The mandate can go F**K itself now. There are other problems to worry about. Which I think is also the right course of action.
I would expect the above to be status quo till the bond market is in slumber.
So FED will move goal post to higher 2 or lower 3 but don’t accept or announce it?
Bond Markets will surely sense it someday.
But right now longer rates are well anchored. Still lot of demand at current yields. Just look at the cover to bid ratio in last few month auctions.
“So FED will move goal post to higher 2 or lower 3 but don’t accept or announce it?”
I too have been thinking the Fed wants higher-than‐target inflation, but can’t publicly admit as much because rates would ratchet higher.
I think Wolf has eluded to the same.
It’s important to remember that before 2022 the major topic on inflation at the Fed was why it was under the target rate and how to increase it. Basically 14 years they struggled to reach 2%.
I assume there are many inside that would prefer to deal with a little above vs a little below, as the policy tools are clearer in the former.
The fed spent a decade trying to prevent deflation with zero borrowing costs and massive QE. It barely worked – essentially giving out free money (mortgages with real interest rates of zero, car loans that cost nothing vs cash) couldn’t generate inflation. It is pretty surprising.
IMHO they believed things were different this time – the secular stagnation theory that developed – and inflation wouldn’t come back due to technology, globalisation and financial innovation. After the pandemic, I think they were genuinely shocked that it did and likely have no solid idea why it roared its head and started to embed itself again.
I think they are now genuinely concerned that if they over tighten too much the economy collapses into a depression and they have no way of pulling it out.
Everything fine, so if it ain’t broke don’t fix it?
SPY and Autozone made a new all time high, but within 45 days the new administration will hollow up DC, cut regulations and prohibit
healthcare from illegal immigrants. The Fed might cut rates to preempt
Ilan and to prevent the new gov from falling into the dems debt sinkhole.
Cut regulations LOL
Anyone that shops at AutoZone is brain dead. I stopped after breaking two of their Duralast CV axles in a row within a few months. Sure, there’s a lifetime warranty. But paying half of OEM (at internet, not local dealer prices) to get garbage parts stops working in your favor when you have to keep putting labor into the repairs. Best I can tell, AutoZone is for desperate DIYers and shops that could not care less about repair quality.
Got any suggestions for better aftermarket parts? I have duralast front CV joints & swaybar links in my car. I also read some iffy things about them online, but both parts cost somewhat more than all the no-names that google shopping returns.
I recently ordered TRQ-branded lower control arms on the recommendation of my buddy who’s been helping me work on my car. But they were quite a bit /cheaper/ than duralast’s version of the part. Not sure what to expect here.
I will say I was frustrated with getting only 4 years out of my last duralast gold battery that I paid like $150 for at AZ. Went with a diehard battery after that.
It’s for people with old cars to repair at low cost with cheap personal labor rates and conveniently located near where they live–aka illegal immigrants. If the deportation plan is real stocks like this should be taking a hit.
What’s going on with Canada and the US$0.70 loonie? About 50,000 jobs were created lately, but 45,000 was from government hiring, while the labour force increased by over 130,000 people.
Canada is a fake country their money is worthless I see $0.50 CAD for every $1 USD within two years
At least the monarch is symbolic and not real. Root word of monarch:
mono=one. One person IS the executive branch in the US. The cabinet is simply his employees. The media left and right agree on one thing: this is the most unusual cabinet proposed in US history.
Uh, ya. A sex predator for AG? Now gone. Next: a major, major drinking history to head the military: btw: a relative who had this prob, now dry, was NEVER carried from an event like this guy. This guy, twice removed from veteran groups for drinking. He worried Fox guys as he showed up late smelling of booze. But, but, he was on TEE VEE!!
That is his main qualification. But he’s only going to head the military: Ain’t nothing to see here folks.
Next: an anti-vaccine guy to head health? Try the math of THAT modest proposal on the economy over 5 years.
When Senator Joe MaCarthy was felled on the first TV Senate hearing. one sentence did it: ‘At long last sir, have you no decency?’
Would it work today? It would in Canada, and a few other places.
If the media is marching lock step…then most of America is relieved that they are the right people for the job.
What are you blabbering about? America could shoot itself in the foot a half dozen times and still have a valuable currency.
I’m sorry your favorite candidate lost the election though :'[
Not to make political as I dislike both the sides.
But I won’t trust any media left or right
This is the first thing I learnt by reading WRs articles as we all have seen how media seem to set particular narrative to suit its masters agenda
Anonymous: where did I say anything about currency? Just for a moment take your mind off money.
I said something about decency.
Nowhere else in most of the world, let alone the Anglo- sphere would these nominations or their ‘pussy grabber’ nominator even be considered for office because they lack decency.
What happened to “no politics” on this site?
Time to turn off MSNBC.
Next: an anti-vaccine guy to head health? Try the math of THAT modest proposal on the economy over 5 years.
I like what Governor Polis said on CNN last night.
Basically, it could be much worse. Like the last Trump term when he nominated a Pharma Lobbyist to guard the hen house.
Biden made a lot of progress with negotiating Medicare drug prices. Kennedy is likely to do the same.
Kennedy is an ultra wacky liberal but he has some good points with recommending diet and exercise over drugs to fix problems.
If we have a major polio or measles outbreak, he has failed. I trust most people will continue to be vaccinated since it has worked for the last 60 years.
Canada has tremendous natural resources, but the current leadership at the provincial and federal levels would rather protect the housing bubble at all costs while leaving the oil in the ground.
In Toronto, dubbed the NYC of Canada, many people can’t even find minimum wage jobs. The unemployment rate is about 7% nationwide. Probably around 20% for people under 30.
Maybe Canada should dollarize their economy like Ecuador and others have. Of course having that rebel George Washington replace the Queen may be a bit embarrassing for the loyalists.
While we’re at it, Mexico should dollarize too.
Frankly, annexation of both countries (and Belize) into an expanded United States would be good for all parties.
I’m surprised calling any country ‘fake’ made it past the moderator.
Doesn’t that qualify as offensive speech.
I thought it was a joke. And it’s obviously a joke. I cannot be anything else. But when he made the same “fake country” comment a second time, that comment got axed.
If UnitedHealth Group and MSFT, #1 and #2 in the Dow weight, will
turn down the Dow will slump.
In late January of next year when millions of deportations occur there will be additional pressure in the labor market. That and some turbulence in the market will create massive capital gains thus generating significant revenue. Next polar bears will develop wings and fly to safer pastures. Disneyland will be sold out.
I remember reading about polar bears. I think AL had a picture of the last one stranded on a lone piece of ice. Poor bear could have used a pair of wings.
Also Wolf, for October 2nd Revision did they get a much higher Response Rate for the Data Collection due to the Hurricanes and Strikes ?
Which the initial preliminary October Data was the lowest response rate since 1991.
TBill and chill strategy – this seems to have been a mistake?
No, it’s working just fine.
At the 28-day bill auction Dec 5, investment rate: 4.476%
At the 90-day bill auction Dec 2, investment rate: 4.511%
The power of compound interest
It’s working and its even better if you were late, but not too late. Happy chilling!
“Maybe Time for Some Wait-and-See”
Sarcasm?
Cynicism?
Wait and see.
1) The labor force participation rate is 62.5. The prime age (25 to 54) participation rate is 83.5%, which is good and above 2019 rate. The participation rate of 55 and older is only 38.4%. The boomers are retiring in droves flushed with money, ss, stocks and RE, protected by health insurance.
2) The participation rate of 20 to 24 is 71.5. Only half of college grads can a find job that require a college degree. Those 20 to 24 who are still in college and those with a college degree, that within a year couldn’t find a job that “fits” their qualifications and aspirations, are not participating the labor force.
3) The labor participation rate is lower than in 2019 bc the boomers and many 20 to 24 are not working. This ratio should be lower when BLS will count the illegal immigrants and add those who work for cash in an era when gov regulations, commodities and labor are too expensive, especially for small businesses.
Also worth considering that if you are a full time student that is your job unless you required to work to pay for education and other expenses. If you assume 15 hours of in class time a week then depending on major you are looking at an estimated 2 to 3 hours of study time per hour which can easily get you over 40 hours a week. Those who put themselves through college are burning it at both ends and likely ending up in debt unfortunately.
That said, only about 40% of 18-24 years olds are in a post secondary program. I find it amazing how much primary education pushes college versus trade schools and other options or at least pushes majors that are employable. Seems like AI will continue to reduce jobs in some areas, perhaps like journalism. Some jobs that are hyped as going away with AI like software development are a long ways from that. Finding qualified people in that field are challenging in my experience.
But then when you build a society mostly built around the service sector then not completely unexpected.
I was there when it burst into flames like the Hindenburg. We had watched the great Zeppelin that was the baby boom navigating toward its landing and expecting a controlled approach.
Then the pandemic hit!
So many boomers chose to retire early.
So many that couldn’t, retired when remote work ended.
This created a very large vacuum of experienced workers throughout corporate America.
This burned out a large number of Gen X who were blessed with a rebounding stock market.
Corporate supportive services of Finance, IT, Legal, and HR have been gutted.
We are in the curve of recovery. Business upskilling the less experienced workers and reorganizing.
The result is a shit show of inflation and poor customer service. Its a question of how long it will continue.
I believe the boomers in the best positions to retire already have and the rest will have a lesser effect as many will be in the less skilled service positions.
Gen X, too small to worry about. Don’t cry for me, Argentina needs your sympathy.
Wolf, you don’t worry that maybe we are still in very lose monetary policy mode? The stock market is now 70% of the global market for stocks and tech stocks now make up 40% of the total S&P500 index. Leverage has also gone to a new high. Do we really need more cash to drive this bubble further?
Central banks have been removing liquidity for two years. The Fed alone has removed $2 trillion. The ECB more than that. But they created a lot of liquidity during the pandemic, so there’s still lots of it that needs to be mopped up.
Yields are much higher as well, and that matters. The fact that spreads between Treasuries and corporates have narrowed, though corporate yields are higher as well, but not as much, has caused financial conditions to be “looser.” The narrower spreads = higher risk appetite shows that the market is euphoric. But we knew that. It will contribute to inflation and to keeping rates higher.
Back to economics: CNN has a bit: ‘There’s a rude awakening in store for the DOGE bros’
Whatever the politics, the proposal to cut the budget by 2 trillion is absurd.
It could only have come from persons completely unfamiliar with the budget. With a real hard, tough approach 200 billion might be possible. Ten times that is like a child thinking he can pay the mortgage by collecting empties. Read it and see if you think it’s slanted.
The time period for the proposed cut was not specified. 2 Trillion over the course of a decade is absolutely possible, the green energy pork alone could achieve most of that. Rollback of Medicaid expansion also, there is no reason at all that states couldn’t provide those funds if it a priority in a given state, if the usual ratio of roughly 50/50 federal to state funding was applied to the expansion, this would be tens of billions a year. Of course all of this is hard because both parties love pork and federal largesse, but it’s not impossible, just dial spending back to similar proportion as 2019 and things would be more than solved.