Hope everyone had a great weekend. So the monthly jobs report in the US was out last Friday and there were a few interesting things that I wanted to talk about.
First if you recall from last month, it was reported that the US actually lost 33,000 jobs meaning the long running record smashing run of monthly jobs growth ended.
– The previous record was 48 months (July 86′ to June 90′)
– The current streak ended at 83 months (Oct 10′ to Sept 17′)
Well something we learned from last Friday’s report is that the previous months numbers were revised upward to a positive 18,000. Woohoo!
So that means the record smashing US jobs growth streak is still alive and well at 84 months and counting
So we’ll continue to watch with interest. A few other noteworthy things from the report. The unemployment rate fell to 4.1%. That’s the lowest level in over 17 years.
Now the way that the unemployment rate is calculated is interesting. It doesn’t include everybody of working age in the economy. It actually only includes those that are either working, or actively seeking work. Anybody who has left the job force or isn’t actively seeking employment isn’t counted.
This is why the “labour force participation rate” becomes a very important metric to track. If people are leaving the work force in droves the unemployment rate can actually fall, but that doesn’t necessarily mean that the employment picture is improving.
Looking at that chart, it’s certainly possible that the unemployment rate is falling simply because people are frustrated and leaving the workforce. And maybe not by choice, maybe there’s simply not enough jobs available.
That seems to align with the political commentary these days. We hear a lot about that actually. Jobs jobs jobs, we need more jobs. Where are all the jobs?
In fact the new GOP tax plan is primarily being marketed as a jobs plan. In the plan the bulk of the tax breaks are clearly going to the wealthy, but the rationale for this is that it will free up the capitalistic spirit and unleash the job creators so they can once again bring back more jobs to the working class.
I’m not going to discuss the merits of trickle down economics here, but let’s just take a step back and ask the simple question: Is there a lack of jobs right now?
Non farm job openings in the US are also at a multi decade high. This is not a complete analysis of course but on the surface it certainly doesn’t appear there is a lack of jobs right now. Quite the contrary, which does beg the question. Do the wealthy and corporations need a big tax cut right now?
If the US debt is going to be allowed to balloon further (which it will under this tax plan) am I the only one who’s wondering if perhaps that money could be better spent elsewhere?
to be continued…
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