Saturday, May 4, 2019

Update: Jobs Report

The current U3 rate of 3.6% is a good measure of a relatively strong labour market and a net number of 236k new jobs is good especially considering that a small percentage of the labour force makes minimum wage/around minimum wage. However, this rate is interesting given what U6 and prime-age EPOP numbers are saying(stagnant). There's also a dip in the LFPR, but that's mostly just noise considering we're still having good NGDP growth which makes me less wary of a minor dip.

All this considered, the job market is strong, but not as hot as U3 implies. (Given inflation and wage growth) I'd also like to add that the natural rate of unemployment is probably going to go down from the expected 4 percent to around 2-3. In my opinion, since society is more accepting of potential workers who may have a drug history or other racial/sexuality/gender factors, you'll probably see a lower natural rate. Investments into transportation and occupational licensing reform could reduce this rate further.

3.6% is a good number, but it's not the best in 20-50 years.  We probably shouldn't be expecting it too due to our changes in productivity and since we live in a low point of innovation.

Ironically trade, immigration, and capital flows could aid in helping wages, etc. But don't tell Trump and Bernie.

No comments:

Post a Comment