The federal April jobs report shows a gain of 211,000 new jobs amid a 2.5% year-over-year growth in wages, bringing the latest national unemployment rate to 4.4% or what the federal economists call the ‘cusp’ of full employment. They are, well, ‘positioning’ an advanced narrative.
DATA – •Construction payrolls rose by 5,000; •manufacturing payrolls increased by 6,000; •leisure and hospitality payrolls jumped by 55,000; •professional and business services payrolls rose by 39,000; •healthcare and social assistance employment increased by 36,800; •retail payrolls gained 6,300.
That’s the official interpretation of what the jobs gains mean. However, to reconcile the “slacking” the quantifying economists are now halving the customary growth figure used for inbound newly economically matriculated workers.
Historically it takes 150k new monthly jobs to retain employment rates as static; therefore any job growth beyond 150k must lower the unemployment rate. The fed is now using 70-100k as the new labor market number to retain stasis.
Bloomberg – […] Removed from the weather-related distortions of the previous three months, the April figures indicate solid trends in employment, while measures of those left behind in the recovery — favored by Federal Reserve Chair Janet Yellen and President Donald Trump alike — are at or near pre-recession levels.
While the tighter labor market failed to translate to a breakout in wages in April, analysts are penciling in bigger paychecks in the months to come.
“Labor-market slack is getting absorbed pretty quickly,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC. “As long as the labor market is tightening as it has been recently, it’s a very safe bet that we’re going to see wages accelerate.” (link)
Overall, the economy is doing what we anticipated it would do. But it is also important to remember we are in the space between two economies which are impacted by a change in policy. Prior fiscal policy was driven to the benefit of ‘Wall Street’s’ economic engine. Trump policy is driven to the benefit of ‘Main Street’s’ economic engine. We are in the space created during the shift in fiscal emphasis.
Politically speaking the fed is positioning on behalf of ‘the big club’. Remember, behind all of the expressed data, policies, impacts and outcomes, are people – connected people. They run in the same circles, attend the same meetings, host the same cocktail class circuit etc. There are influential people, mostly globalists, behind federal economic policy. This is the economic influencing group we call ‘the big club’.
You can see the agenda in its formative stage being constructing within media excerpts, usually buried. If you know how to spot the catch phrases, and you know the general disposition of the club, you can see the narrative form. That economic narrative will eventually translate into legislative action.
Watch closely, emphasis mine:
(Via AP) […] The labor force participation rate, or the share of working-age Americans who are employed or at least looking for a job, fell to 62.9 percent from an 11-month high of 63 percent in March. It has rebounded from a multi-decade low of 62.4 percent in September 2015, and economists see limited room for further improvement as the pool of discouraged workers shrinks.
[…] there are signs wage growth is accelerating as labor market slack diminishes. A government report last week showed private-sector wages recorded their biggest gain in 10 years in the first quarter.
With the labor market expected to hit a level consistent with full employment this year, payroll gains could slow amid growing anecdotal evidence that firms are struggling to find qualified workers. That could also boost wages. (read more)
We shared two years ago, right after candidate Trump announced, that his economic policy objectives -if instituted- would necessarily drive middle-class wages higher, Bigly.
The Trumponomic formula is a long-term strategic policy, with quick results; because he immediately flips the beneficial emphasis on the two economic engines.
Wall Street becomes “less than”, and Main Street becomes “more than”. Drive main-street policy and you necessarily drive middle-class wage rates.
[…] As the wage rate increases, and as the economy expands, the governmental dependency model is reshaped and simultaneously receipts to the U.S. treasury improve. More money into the U.S Treasury and less dependence on welfare programs have a combined exponential impact. You gain a dollar, and have no need to spend a dollar. That is how the SSI and safety net programs are saved under President Trump. (more)
The Big Club are not inherently favorable to growth in wage-rates, it’s against their interests. Free market profit margins are squeezed when productivity is strong and wage-rates (payrolls) increase.
For three decades U.S. productivity measures have skyrocketed, jaw-droppingly so. The production value (output) of a single U.S. worker, in comparison to the cost of that worker (wages) is at historic highs.
Now we see the big club positioning to try and keep wage rates from growing. This is the basis for their ‘open-border’ ‘global-worker’ outlook. The tell-tale indicators are surfacing where they will begin demanding high levels of low to moderate skill immigration, ergo comprehensive immigration reform. [This Make Sense Now]
The “full employment” measure, is false. There are millions of workers within the U.S. who can/will upgrade their own employment if the market price for their employment increases (wages). However, this process is antithetical to the best interests of the big club.
Their arguments are easy to deconstruct. If “full employment” was accurate, then why are there historic numbers of people on welfare programs?
The “full employment” measure/narrative is how the big club positions their legislative sales pitch. It’s a political game; the politicians are the paid performance artists who create the legislative policy of the people who pay for it.