By Ken Zino
The U.S. labor market added 175,000 jobs in April, the White House said via its Council of Economic Advisors, according to the latest official data. More than 60% of private-sector industries added jobs. The unemployment rate ticked up slightly to 3.9% – it went from 3.83% to 3.86% – and the labor force participation rate (LFPR) held steady at 62.7%. Wage gains continued to outpace inflation. I saw nothing in the report that was practically worrisome to the auto industry I’m involved with, or the economy as a whole, for that matter, when it was issued.
That said, Russia-Ukraine, Israel-Hamas and other regional wars, the Federal Reserve’s policies and our own Supreme Court and federal courts present serious challenges. The Putin wing of the Republican party, the ones who use Russian talking points and informants, are also not Greene, so to speak, but black areas impinging on growth. At least Biden isn’t sleeping through the official proceedings.
From here on, what will be significant is if companies -- many of them global -- can adjust supply and pricing to fluctuating demand without incurring huge losses to increase unemployment. Consumer confidence and consumer demand are at the heart of the American economy.
“We learned at least two things” May 3 “about the U.S. labor market. First, most importantly, we learned that employers continue to hire at a strong pace, helping to generate record spells of both low unemployment and high women’s LFPRs. Second, we learned that as the pandemic continues to fade into the rear-view mirror, some key economic misalignments are realigning in a manner consistent with steady, stable, sustainable growth,” the Council of Economic Advisors said.
Adarsh Jain, director of financial markets at GlobalData, a consultancy I use and respect, put it thus: “2024 started strong with labor market witnessing an unprecedented three consecutive months (January through March) of 15%+ month-on-month growth in job postings, signaling robust jobs demand. It is natural to anticipate a pullback from this rapid pace as companies adjust their demand, given that job postings, indicating hiring intentions, experience their first double-digit decline in four months in April, with a 12% month-on-month decrease.
“In terms of sector trends, consumer driven sectors like retail, automotive and consumer have been strong, despite persistent inflation, whereas tech sectors like telecom and IT have exhibited weakness. It will not be surprising if advances in AI continue to have a dampening effect on the demand for labor in these sectors,” Jain said.
With all the excrement flying about, just remember that under Trump you couldn’t even buy toilet paper. And bleach was recommended as a cure for Covid. The “T” in the Trump economy stands for “Tanked.” We have met the enemy before, and the enemy this time is some of us in our own House and Senate. The Biden Administration continues to work on solutions, not create further problems.