Good News 428,000 Jobs Added in April, Bad News April Employment Drops by 363,000 Workers


Posted originally on the conservative tree house on May 6, 2022 | Sundance

Good News 428,000 Jobs Added in April, Bad News April Employment Drops by 363,000 Workers

May 6, 2022 | Sundance | 112 Comments

The employment news has everyone confused.  The Bureau of Labor and Statistics (BLS) reports today 428,000 jobs were added [DATA HERE] which is good.  We want to see people getting back to work.  However, simultaneously the number of people employed dropped by 363,000 and the labor participation rate dropped from 62.4 last month to 62.2 this month [Table A, DATA].  The unemployment rate remains unchanged at 3.6 percent.

That wildly conflicting set of data has led to a seriously frantic discussion about what is going on.  Here’s my take….  The majority of the irreconcilable data can be reconciled on this one basic Main Street employment scenario that is never tracked, people are job jumping.

Inflation is crushing main street workers at an astounding pace.  Housing, energy, gas and food prices -all the unavoidable stuff- are hitting blue collar workers the hardest.

However, in reality the key businesses inside the sectors with the most rapid employment gains, Leisure and Hospitality, are the last to raise prices.

Generally those jobs fall under the category of service workers.  The leisure and hospitality sector gained 78,000 jobs last month.

What we are seeing in the sporadic data is wage growth being driven in majority by increased entry wages on the hiring end of the employment relationship.

Because inflation is hitting so hard, so high and so quickly; and because businesses are slower to respond to the wage needs of current payroll staff; people are quitting one employer to take a linear job at another employer at a higher entry wage.   This is the fastest way to get a raise. This is job jumping.

Job jumping is the fastest way to increase your wages in an employment market where labor demand exists and price inflation is high.  As this process takes place at a national scale, we end up seeing data skews on job “creation.”   Lots of jobs added (+428k) and yet on the alternate side of the ledger, net employment losses (-363k) because there is a lag in the labor data collection.

Obviously, there are other aspects, but ‘job jumping’ is a significant contributor to the skewed and seemingly contradictory data.  We’ve all done it, especially in times when good dependable workers (like you) are a prized resource.

All of the shifting employment data (in almost every sector) is being hit by inflation.  High costs of living and higher costs of operation, combine to create shakeups in the employment picture.  Stable things become unstable as all elements impacted by inflation (workers and businesses) look out for their best interest.

Everyone is trying to survive, deal and cope with big price increases in food, fuel and shelter.  Inflation can be extremely destabilizing and destructive.

On CNBC Rick Santelli drives home another facet that emphasizes the problem.  These price increases are structural and most of them are unavoidable. The prices will never come down because the costs are fully embedded.   WATCH:

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Rick Santelli does the pantomime with panache’.

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