We will have to wait longer for a recession. October’s Jobs report showed even the unsettled labor strikes didn’t make much of a dent in the labor market. The usual suspects—leisure activities, healthcare, and a booming construction industry gave the most boost to hiring, but new government jobs were one third of the total 150,00 nonfarm payroll jobs created.
The loss of 33,000 in manufacturing was largely due to the UAW strikes, said the BLS.
The financial markets are loving the slowdown in hiring. Even the past two months were adjusted lower in the report. The change in total nonfarm payroll employment for August was revised down by 62,000, from +227,000 to +165,000, and the change for September was revised down by 39,000, from +336,000 to +297,000.
The Fed likes the report because since their recent lows in April the unemployment rate is rising. The unemployment rate is up by 0.5 percentage point and there are 849,000 more unemployed persons.
Yet calls for an imminent recession are still in the air. Why still?? Firstly, it takes months, sometimes more than one year to call a recession, because a downturn must be long enough that there is a prolonged decline in demand from consumers as well as employers.
Most of the pessimists are taking the Fed’s word that they will keep rates high enough until they reach the 2 percent inflation target. What if that takes another year? Then all bets are off on when a recession might happen.
And this month’s jobs report can’t be taken too seriously on what might happen next because of the ongoing labor strikes, including SAG-AFTRA’s 130,000 members.
And NPR reports, “Altogether, there have been 312 strikes involving roughly 453,000 workers so far in 2023, compared with 180 strikes involving 43,700 workers over the same period two years ago, according to data by Johnnie Kallas, a PhD candidate at Cornell University’s School of Industrial and Labor Relations, and the project director of the ILR Labor Action Tracker.”
Putting most of the striking workers back to work could bring the unemployment rate back down, and the higher wages goose the inflation rate again.
So, who really knows where we will land next year?
Harlan Green © 2023
Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen
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