Bill Mitchell — US labour market – weaker than 2018 with occupational polarisation evident

Last week’s (August 2, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – August 2019 – reveals a labour market performance that is below the performance achieved in 2018 although there has been considerable month-to-month volatility. The US labour market is still adding jobs, albeit at a slower pace than last year. The Broad labour underutilisation ratio (U-6) remains high even though the official unemployment is plumbing new (recent) lows. And there has been a significant hollowing out of jobs in the median wage area (the so-called ‘middle-class’ jobs), which is reinforcing the polarisation in the income distribution and rising inequality.

Crapification continues.

Bill Mitchell – billy blog
US labour market – weaker than 2018 with occupational polarisation evident
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — US Labour Market still adding jobs but scope for further expansion

Last week’s (July 5, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – June 2019 – reveals a steady labour market with month-to-month volatility. The US labour market is still adding jobs, albeit at a slower pace than last year. The unemployment rate remains low (at 3.67 per cent) and the participation rate has moved up a tick, which is a good sign. It is also clear that there is still a substantial jobs deficit remaining and considerable scope for increased participation....

Bill Mitchell – billy blog
US Labour Market still adding jobs but scope for further expansion
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — US labour market steadies in March 2019

Last week’s (April 5, 2019) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – March 2019 – is still being affected by the variability in the sampling and benchmarking changes made by the BLS. However, working through those impacts, one concludes that the US labour market is still adding jobs, albeit at a slower pace than last year. The unemployment rate remains low (at 3.81 per cent) and the participation rate has come off a bit, indicating a slowdown in underway, although month-to-month variability should not be taken as a trend. It is also clear that there is still a substantial jobs deficit remaining and considerable scope for increased participation.

Overview for March 2019

• Payroll employment rose by 196,000 – big shift from February.
• Total labour force survey employment fell by 201 thousand net (-0.12 per cent).
• The seasonally adjusted labour force fell by 224 thousand (-0.14 per cent).
• Official unemployment fell by 24 thousand to 6.211 million.
• The official unemployment rate was unchanged at 3.82 per cent.
• The participation rate was fell by 0.2 points to 63 per cent but remains well below the peak in December 2006 (66.4 per cent). Adjusting for age effects, the rise in those who have given up looking for work for one reason or another since December 2006 is around 3,693 thousand workers. The corresponding unemployment rate would be 5.8 per cent, far higher than the current official rate.
• The broad labour underutilisation measure (U6) was unchanged at 7.3 per cent.

Further, for those who are confused about the difference between the payroll (establishment) data and the household survey data you should read this blog – US labour market is in a deplorable state – where I explain the differences in detail....

Bill Mitchell – billy blog
US labour market steadies in March 2019
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Gina Heeb — There's a 'blue-collar wave' taking place in America — but it may not last

• Firms are having a more difficult time finding blue-collar workers than white-collar workers.
• The shortage is expected to continue to put upward pressure on wages for blue-collared workers.
• But economists say a tight labor market could incentivize companies to shift toward automation in attempt to reduce costs, lessening the demand for manual labor.

Business Insider
There's a 'blue-collar wave' taking place in America — but it may not last

Gina Heeb

Bill Mitchell — US labour market moderated in November and considerable slack remains

Last week’s (December 7, 2018) release by the US Bureau of Labor Statistics (BLS) of their latest labour market data – Employment Situation Summary – November 2018 – showed that total non-farm payroll employment rose by 155,000 and the unemployment rate was essentially unchanged at 3.7 per cent. Participation was steady. While the US labour market is reaching unemployment rates not seen since the late 1960s, the participation rate is still well below the pre-GFC levels and a substantial jobs deficit remains. Other indicators suggest there is still considerable slack in the labour market, especially outside the labour force (marginal workers) and among the underemployed. Taken together, the US labour market moderated in November but remains some distance from full employment.

Bill Mitchell – billy blog
US labour market moderated in November and considerable slack remains
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — US labour market – muddling along and real wages growth goes negative

On July 6, 2018, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – June 2018 – which showed that total non-farm employment from the payroll survey rose by 213,000 and the unemployment rate rose by 0.2 per cent to 4 per cent in June 2018. The employment-population ratio was unchanged in June at 60.4 percent and has been largely stable since February 2018. The Labour Force Survey data, however, showed that employment only rose just 102 thousand in June 2018 and was accompanied by a substantial rise in the labour force (601 thousand) on the back of a surge in participation (up 0.2 points), which meant that total unemployment rise by 499 thousand. The broad labour underutilisation measure (U-6) also signalled weakness, rising by 0.2 points. There is still no evidence of a wages breakout going on although wages growth for blue-collar occupations has surpassed the white-collar occupations over the last 8 quarters. However, the data shows that real wages fell in June 2018 by 0.4 points. Taken together, the US labour market is showing no definite trend up or down at present and it is still some distance from being at full employment.…

Bill deconstructs and interprets the latest US BLS report.

Bill Mitchell – billy blog
US labour market – muddling along and real wages growth goes negative
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — US labour market reality debunks mainstream view about structural impediments

An enduring myth among mainstream economists is that so-called ‘structural’ impediments in the labour market prevent aggregate spending initiatives from government being an effective solution to mass unemployment. According to this view, if the government attempts to reduce the unemployment rate below some ‘natural rate’ then accelerating inflation will be the only outcome. The ‘natural rate’ can, in turn, only be reduced by structural policies – attacks on trade unions, welfare state retrenchment, cutting the minimum wage, and the rest of the litany of neoliberal policies. And, in this view, the unemployed are to blame for their own state – a lack of effort on their part to adequately present themselves to the labour market. The prior view that mass unemployment is a systemic failure to create enough jobs is rejected. A piece of this fiction is that one of long-term unemployed (and other disadvantaged workers) are not capable of being absorbed into employment without extensive re-training and other personal rehabilitation and this also prevents the unemployment rate from falling quickly. The problem with all of these related propositions is that reality interferes and generates outcomes that contradict the assertions. It is quite obvious that if the economy is run at high pressure then firms are forced to scrap prejudice for disadvantaged groups and offer on-the-job training to them to ensure they can maintain market share. In other words, the long-term unemployed do not present an impediment to growth. Events in the US labour market at present are demonstrating this reality....

Bill Mitchell – billy blog
US labour market reality debunks mainstream view about structural impediments
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — US labour market – improves in June but still no growth trend is apparent

A friend just enquired abut this.

Bill Mitchell – billy blog
US labour market – improves in June but still no growth trend is apparent
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — US labour market continues to improve but a jobs deficit remains

Digging into the stats.

Bill Mitchell – billy blog
US labour market continues to improve but a jobs deficit remains
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — US labour market deteriorating

In September 2017, I assessed that – The US labour market is nowhere near full employment. This was in the context of an increasing number of commentators claiming that the US economy had already returned to full employment. The IMF World Economic Outlook is also estimating that the output gap in the US (actual relative to potential) has turned positive (meaning the US is beyond full employment). By way of contrast, the Congressional Budget Office considers the US had an output gap of around 0.9 per cent (actual below potential) in the December-quarter 2016. The facts point to even higher output gaps. The current BLS data release – Employment Situation Summary – January 2017 – has not altered my view. It showed that total non-farm employment from the payroll survey rose by 227,000 and the unemployment rate remained “little changed” at 4.8 per cent. But from the perspective of the labour force survey (Current Population Survey), total employment fell by 30 thousand. See below for an explanation of that paradox. The point is that employment still remains well below the pre-GFC peak and the jobs that have been created in the recovery are biased towards low pay. Additional research reveals that the losses from this sluggish economic performance will be long-lived and undermine the prospects of future generations. Fiscal austerity is bad for our grandchildren! In general, the problem is less job creation as quality of the work being created and the capacity of US workers to enjoy wage increases.

Bill Mitchell – billy blog
US labour market deteriorating – the losses from GFC will be long-lived
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — US labour market – some improvement but still soft

Last week (June 8, 2016), the US Bureau of Labor Statistics published the latest – Employment Situation – June 2016 – and the data shows that “Total nonfarm payroll employment increased by 287,000 in June, and the unemployment rate rose to 4.9 percent” on the back of rising labour force participation. The Household Survey measure showed that employment grew in net terms by 67 thousand (0.04 per cent), which presents a more modest picture than the media reports, that focus on the payroll data, are portraying. Clearly, the 287,000 net jobs added according to the payroll data is a lot better than the 11,000 added according to the same measure in May 2016 (which was revised downwards from 38,000). Further, hours and earnings data suggests a fairly moderate labour market outlook rather than any boom conditions. Broad measures of labour underutilisation also indicate a worsening situation. Underemployment (persons employed part time for economic reasons), which had risen sharply in May (by 468,000) fell by 587 thousand in June, which along with the rising participation rate (a fall in the discouraged workers by 36 thousand), suggests a better state of affairs that was anticipated in May. It remains to be seen whether this renewed jobs growth reduces the bias towards low-pay jobs – which I most recently examined in this blog US jobs recovery biased towards low-pay jobs continues.…

Bill Mitchell – billy blog
US labour market – some improvement but still soft
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Bill Mitchell — The US labour market continues to weaken

Interesting with respect to what's going in the US labor market, but more significant for showing how to analyze a labor market. The U3 unemployment rate is hardly indicative of the state of the market and little can be concluded from it alone. 

While Bill Mitchell is an MMT economist, his area of specialization is employment, beginning with his PhD dissertation. This is key to the MMT JG, which Bill was instrumental in developing as a buffer stock of employed instead of the current buffer stock of unemployed.

Pavlina Tcherneva is following in Bill's footsteps here as an expert in the MMT approach to employment and how to achieve truly full employment with MMT policy including a job guarantee.

Bill Mitchell – billy blog
The US labour market continues to weaken
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Constantin Gurdgiev — Three Facts from the U.S. Labor Markets & Reality of the U.S. Economy

Here’s the real problem, folks: U.S. economy is struggling to sustain growth absent real investment and absent new technological improvements. It is that simple. And the jobs markets are starting to show the strains of this. Productivity growth being weak, while employment rising and remaining high amidst rising labour costs means only one thing: the U.S. is currently running above its potential rates of growth. It is, in other words, overheating. And that at roughly 2% annual growth rates against pre-crisis averages above 3%. One of two things will have to happen:

• One: employment moderates and labour costs growth abates; or
• Two: business investment has to rise (note: explicitly not public investment, because raising public investment in these labour markets conditions will simply exacerbate the twin problem of tighter labour markets and low productivity growth).

Good luck taking an investment strategy on one. Which leaves us with taking a strategy on two… or going defensive on an expectation that stagnation will be setting in...

True Economics
Three Facts from the U.S. Labor Markets & Reality of the U.S. Economy
Constantin Gurdgiev