The good and bad news of the latest jobs report
The October 6, 2023, jobs report from the U.S. Bureau of Labor Statistics (BLS) shows an impressive increase in new jobs – 330,000 to be specific. That was more than anticipated.
Some analysts have suggested that the sudden increase is partly due to more of the post-Covid stay-at-homes returning to work. Economists and politicians had speculated how long so many could afford to stay at home. We may be seeing some of those answers in the latest jobs report.
The report has President Biden taking a victory lap around the White House – at a slow shuffle, of course. Nothing wrong with that if your only focus is on the number of new jobs. No argument. More jobs, in and of itself, is good news.
But there are some dark clouds around that silver lining.
The average wage of workers rose 8 cents per hour. That still leaves annual incomes falling below the inflation rate. The American family is still losing purchasing power. So, what you have is 330,000 Americans with new incomes and 330 million Americans with higher costs.
The unemployment number remained level at 3.8 percent. But in this era of high inflation that is not necessarily good news. The jobs report suggests that inflation is still uncontrolled – even after multiple record interest increases by the Federal Reserve.
We have to keep in mind that all those past interest increases had one primary objective – to INCREASE unemployment in order to drive down inflation. What this jobs report indicates is that the Fed is going to have to increase interest rates again and again until there is a real reduction in the rate of inflation. That is not good economic news for the American consumer.
It is the mystery of economics that the way to fight inflation is to increase interest rates that will ADD costs on the American consumer. The long-term cure has … hopefully … short-term side effects.
The economy is not yet sailing into calm waters. The issue of a soft or hard landing from inflation is still an open question. More and more economists are predicting a recession in 2024. This jobs report does nothing to assuage those fears. It may actually contribute to them.
So, there ‘tis.”