- Anemic employment & wages growth depresses the odds of near-term interest rate hikes
- Why energy costs increases are experiencing a lull, keeping inflation lower than many expected
- The demographic arguments for deflation
- Why the US is becoming more vulnerable to a repricing of natural gas — vs oil — in the coming decade
If you have not yet read Part I: When Every Country Wants to Sell, Who Buys?, available free to all readers, please click here to read it first.
The most recent US jobs report was once again a disappointment, despite the headline number of 192,000 jobs created. Over the past two years, the economy has reliably created about 150,000 jobs per month. This has been just enough to keep up with population growth, but alas, not enough to put the long-term unemployed back to work. The concerning data in the report came in the details of the jobs created: as usual–and this has been a trend for several years now–mostly in the lower wage sectors. A few wrap-up tweets from Dan Alpert of Westwood Capital summed up the facts rather nicely:
Other notable observations from recent trends in US jobs reports include the fact that job creation in 2013 was no higher than in 2012. Not exactly an encouraging trend for those who would be looking for inflation risk, or strong growth in 2014.
But perhaps worst of all has been the number of workers leaving the workforce. Part of this can be explained, of course, by demographic retirements. It's no secret that the US has an aging population, and there's a bulge of retiring workers that will admittedly create some gaps in the labor market over the next decade. But the large numbers of workers exiting the workforce is also explained by discouraged workers, and that unemployment benefits for many have started running out.
What many in the public do not understand, is that workers taking unemployment checks are counted as active seekers of employment. They are added to the composition of the workforce, and when they continue to take unemployment checks but do not find work, they serve to keep the unemployment rate elevated. But when unemployment benefits expire, and workers leave the workforce, the unemployment rate may…
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