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Private Sector Employment Passes Pre-Pandemic Level, Wage Growth Moderates

Wage growth continues to moderate, alleviating concerns about a wage-price spiral.
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Wage growth continues to moderate, alleviating concerns about a wage-price spiral.

The June employment report showed the economy created 372,000 jobs last month, with the private sector adding 381,000. Private sector employment is now 140,000 jobs above its pre-pandemic level. Total employment is still down 524,000, as local government employment is 599,000 below pre-pandemic levels, and state government employment is 57,000 below pre-pandemic levels. The unemployment rate was unchanged at 3.6 percent for the fourth consecutive month.

Wage Growth Moderates Further

Perhaps the best news in this report is further evidence of moderating wage growth. The annualized rate of wage growth, comparing the last three months (April, May, June) with the prior three months (January, February, March), was 4.3 percent. That is down from an annualized rate of 6.1 percent, comparing the winter (November, December, January) to the fall (August, September, October).

This is a huge deal because the Fed’s plans for aggressive rate hikes was based on a concern for a 1970s-type wage-price spiral. It is impossible to have a wage-price spiral when wage growth is slowing. As it is, the 4.3 percent annualized rate of wage growth is only a 0.9 percentage point higher than the 3.4 percent rate in 2019 when inflation was comfortably below the Fed’s 2.0 percent target.

Construction Again Adds Jobs, Manufacturing Employment Above Pre-Pandemic Levels

Construction added 13,000 jobs in June, with gains elsewhere offsetting a small decline in residential building. Overall employment in the sector is now 0.6 percent above pre-pandemic level. Lower housing starts will be a drag on employment in the sector, although this will be at least partially offset by easing supply chain problems, which is allowing for more completions. Manufacturing added 29,000 jobs, pushing employment in the sector slightly above its pre-pandemic level.

Air Transportation and Retail Add Jobs

Air transportation added 7,500 jobs in June. Employment in the sector is now 7.9 percent above the pre-pandemic level. The retail sector added 15,400 jobs, putting employment now 1.2 percent above the pre-pandemic level.

Healthy, but More Normal Job Growth in Hotels and Restaurants

Hotels added 14,800 jobs in June, while restaurants added 40,800 jobs. These are strong numbers but not out of line with what might be expected in a normal month with good job growth. These sectors were among the hardest hit by the pandemic.

Employment in hotels is still down 18.0 percent from its pre-pandemic level. Restaurant employment is 5.9 percent lower. It is likely that with a permanent decline in business travel, hotels will not recover their pre-pandemic employment levels. The same is likely the case with restaurants, where real sales are already well above pre-pandemic levels.

Nursing Homes and Childcare Centers Add Jobs, but Employment Still Far Below Pre-Pandemic Levels

Both nursing homes and childcare sectors have had difficulty adding jobs in the recovery as low pay and difficult working conditions make these jobs relatively unattractive. Nursing homes and childcare added 5,400 and 10,600 jobs in June, respectively. This leaves employment in the sectors 14.4 percent and 9.6 percent below pre-pandemic levels.

Local Government Adds 5,000 Workers, Employment Still Down 599,000 from Pre-Pandemic Level

Like nursing homes and childcare centers, state and local governments have had difficulty attracting workers in the recovery. Employment in local government is still down by 4.1 percent from pre-pandemic levels. More than half the drop is in local government education. State government employment is down by 57,000, or 1.1 percent from pre-pandemic levels.

U-6 Measure of Labor Market Slack Hits Record Low

While the unemployment rate was unchanged at 3.6 percent in June, a sharp drop in the number of people involuntarily working part-time lowered the U-6 measure of labor market slack to 6.7 percent, the lowest level on record.

Drop in Labor Force Participation Rates

The overall labor force participation rate (LFPR) fell by 0.1 percentage point to 62.2 percent. The LFPR for prime age (25 to 54) men dropped by 0.3 percentage point, while it fell 0.2 percentage point for prime age women. The June LFPR for men was 0.8 percentage point below its pre-pandemic peak, while it was 0.5 percentage point lower for women.

Length of Average Workweek Stable

The length of the average workweek was unchanged at 34.5 hours in June. For production and nonsupervisory workers, it was 34.0 hours, down from 34.3 hours last June. Employers that can’t find workers often increase workweeks. This does not seem to be a problem now.

Share of Unemployment Due to Voluntary Quits Rises, but Still Below Peaks

The percent of unemployment due to voluntary quits rose to 14.0 percent, still well below peaks of more than 15.0 percent hit in February of this year and peaks hit in 2000 and 2019. This is consistent with a strong, but healthy labor market.

Another Really Great Jobs Report

The June report showed considerably stronger job growth than was generally expected. It also showed a labor market that is looking more normal, although still very strong. We continue to see moderation in wage growth, which should alleviate concerns about a 1970s wage-price spiral. The unemployment rate remains near a 50-year low and the U-6 measure of labor market slack is the lowest on record. If the economy stays on this path, the second half of 2022 should look very good, as the supply chain issues get largely resolved and prices fall back to more normal levels in many areas.

CEPR produces same-day analyses of government data on employment, inflation, GDP and other topics.
Follow @DeanBaker13 on Twitter to get his quick-take analysis of government data immediately upon release.

The post Private Sector Employment Passes Pre-Pandemic Level, Wage Growth Moderates appeared first on Center for Economic and Policy Research.

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Survey Shows Declining Concerns Among Americans About COVID-19

Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat"…

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Survey Shows Declining Concerns Among Americans About COVID-19

A new survey reveals that only 20% of Americans view covid-19 as "a major threat" to the health of the US population - a sharp decline from a high of 67% in July 2020.

(SARMDY/Shutterstock)

What's more, the Pew Research Center survey conducted from Feb. 7 to Feb. 11 showed that just 10% of Americans are concerned that they will  catch the disease and require hospitalization.

"This data represents a low ebb of public concern about the virus that reached its height in the summer and fall of 2020, when as many as two-thirds of Americans viewed COVID-19 as a major threat to public health," reads the report, which was published March 7.

According to the survey, half of the participants understand the significance of researchers and healthcare providers in understanding and treating long COVID - however 27% of participants consider this issue less important, while 22% of Americans are unaware of long COVID.

What's more, while Democrats were far more worried than Republicans in the past, that gap has narrowed significantly.

"In the pandemic’s first year, Democrats were routinely about 40 points more likely than Republicans to view the coronavirus as a major threat to the health of the U.S. population. This gap has waned as overall levels of concern have fallen," reads the report.

More via the Epoch Times;

The survey found that three in ten Democrats under 50 have received an updated COVID-19 vaccine, compared with 66 percent of Democrats ages 65 and older.

Moreover, 66 percent of Democrats ages 65 and older have received the updated COVID-19 vaccine, while only 24 percent of Republicans ages 65 and older have done so.

“This 42-point partisan gap is much wider now than at other points since the start of the outbreak. For instance, in August 2021, 93 percent of older Democrats and 78 percent of older Republicans said they had received all the shots needed to be fully vaccinated (a 15-point gap),” it noted.

COVID-19 No Longer an Emergency

The U.S. Centers for Disease Control and Prevention (CDC) recently issued its updated recommendations for the virus, which no longer require people to stay home for five days after testing positive for COVID-19.

The updated guidance recommends that people who contracted a respiratory virus stay home, and they can resume normal activities when their symptoms improve overall and their fever subsides for 24 hours without medication.

“We still must use the commonsense solutions we know work to protect ourselves and others from serious illness from respiratory viruses, this includes vaccination, treatment, and staying home when we get sick,” CDC director Dr. Mandy Cohen said in a statement.

The CDC said that while the virus remains a threat, it is now less likely to cause severe illness because of widespread immunity and improved tools to prevent and treat the disease.

Importantly, states and countries that have already adjusted recommended isolation times have not seen increased hospitalizations or deaths related to COVID-19,” it stated.

The federal government suspended its free at-home COVID-19 test program on March 8, according to a website set up by the government, following a decrease in COVID-19-related hospitalizations.

According to the CDC, hospitalization rates for COVID-19 and influenza diseases remain “elevated” but are decreasing in some parts of the United States.

Tyler Durden Sun, 03/10/2024 - 22:45

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Rand Paul Teases Senate GOP Leader Run – Musk Says “I Would Support”

Rand Paul Teases Senate GOP Leader Run – Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump…

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Rand Paul Teases Senate GOP Leader Run - Musk Says "I Would Support"

Republican Kentucky Senator Rand Paul on Friday hinted that he may jump into the race to become the next Senate GOP leader, and Elon Musk was quick to support the idea. Republicans must find a successor for periodically malfunctioning Mitch McConnell, who recently announced he'll step down in November, though intending to keep his Senate seat until his term ends in January 2027, when he'd be within weeks of turning 86. 

So far, the announced field consists of two quintessential establishment types: John Cornyn of Texas and John Thune of South Dakota. While John Barrasso's name had been thrown around as one of "The Three Johns" considered top contenders, the Wyoming senator on Tuesday said he'll instead seek the number two slot as party whip. 

Paul used X to tease his potential bid for the position which -- if the GOP takes back the upper chamber in November -- could graduate from Minority Leader to Majority Leader. He started by telling his 5.1 million followers he'd had lots of people asking him about his interest in running...

...then followed up with a poll in which he predictably annihilated Cornyn and Thune, taking a 96% share as of Friday night, with the other two below 2% each. 

Elon Musk was quick to back the idea of Paul as GOP leader, while daring Cornyn and Thune to follow Paul's lead by throwing their names out for consideration by the Twitter-verse X-verse. 

Paul has been a stalwart opponent of security-state mass surveillance, foreign interventionism -- to include shoveling billions of dollars into the proxy war in Ukraine -- and out-of-control spending in general. He demonstrated the latter passion on the Senate floor this week as he ridiculed the latest kick-the-can spending package:   

In February, Paul used Senate rules to force his colleagues into a grueling Super Bowl weekend of votes, as he worked to derail a $95 billion foreign aid bill. "I think we should stay here as long as it takes,” said Paul. “If it takes a week or a month, I’ll force them to stay here to discuss why they think the border of Ukraine is more important than the US border.”

Don't expect a Majority Leader Paul to ditch the filibuster -- he's been a hardy user of the legislative delay tactic. In 2013, he spoke for 13 hours to fight the nomination of John Brennan as CIA director. In 2015, he orated for 10-and-a-half-hours to oppose extension of the Patriot Act

Rand Paul amid his 10 1/2 hour filibuster in 2015

Among the general public, Paul is probably best known as Capitol Hill's chief tormentor of Dr. Anthony Fauci, who was director of the National Institute of Allergy and Infectious Disease during the Covid-19 pandemic. Paul says the evidence indicates the virus emerged from China's Wuhan Institute of Virology. He's accused Fauci and other members of the US government public health apparatus of evading questions about their funding of the Chinese lab's "gain of function" research, which takes natural viruses and morphs them into something more dangerous. Paul has pointedly said that Fauci committed perjury in congressional hearings and that he belongs in jail "without question."   

Musk is neither the only nor the first noteworthy figure to back Paul for party leader. Just hours after McConnell announced his upcoming step-down from leadership, independent 2024 presidential candidate Robert F. Kennedy, Jr voiced his support: 

In a testament to the extent to which the establishment recoils at the libertarian-minded Paul, mainstream media outlets -- which have been quick to report on other developments in the majority leader race -- pretended not to notice that Paul had signaled his interest in the job. More than 24 hours after Paul's test-the-waters tweet-fest began, not a single major outlet had brought it to the attention of their audience. 

That may be his strongest endorsement yet. 

Tyler Durden Sun, 03/10/2024 - 20:25

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Government

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While “Waiting” For Deporation, Asylum

The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several…

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The Great Replacement Loophole: Illegal Immigrants Score 5-Year Work Benefit While "Waiting" For Deporation, Asylum

Over the past several months we've pointed out that there has  been zero job creation for native-born workers since the summer of 2018...

... and that since Joe Biden was sworn into office, most of the post-pandemic job gains the administration continuously brags about have gone foreign-born (read immigrants, mostly illegal ones) workers.

And while the left might find this data almost as verboten as FBI crime statistics - as it directly supports the so-called "great replacement theory" we're not supposed to discuss - it also coincides with record numbers of illegal crossings into the United States under Biden.

In short, the Biden administration opened the floodgates, 10 million illegal immigrants poured into the country, and most of the post-pandemic "jobs recovery" went to foreign-born workers, of which illegal immigrants represent the largest chunk.

Asylum seekers from Venezuela await work permits on June 28, 2023 (via the Chicago Tribune)

'But Tyler, illegal immigrants can't possibly work in the United States whilst awaiting their asylum hearings,' one might hear from the peanut gallery. On the contrary: ever since Biden reversed a key aspect of Trump's labor policies, all illegal immigrants - even those awaiting deportation proceedings - have been given carte blanche to work while awaiting said proceedings for up to five years...

... something which even Elon Musk was shocked to learn.

Which leads us to another question: recall that the primary concern for the Biden admin for much of 2022 and 2023 was soaring prices, i.e., relentless inflation in general, and rising wages in particular, which in turn prompted even Goldman to admit two years ago that the diabolical wage-price spiral had been unleashed in the US (diabolical, because nothing absent a major economic shock, read recession or depression, can short-circuit it once it is in place).

Well, there is one other thing that can break the wage-price spiral loop: a flood of ultra-cheap illegal immigrant workers. But don't take our word for it: here is Fed Chair Jerome Powell himself during his February 60 Minutes interview:

PELLEY: Why was immigration important?

POWELL: Because, you know, immigrants come in, and they tend to work at a rate that is at or above that for non-immigrants. Immigrants who come to the country tend to be in the workforce at a slightly higher level than native Americans do. But that's largely because of the age difference. They tend to skew younger.

PELLEY: Why is immigration so important to the economy?

POWELL: Well, first of all, immigration policy is not the Fed's job. The immigration policy of the United States is really important and really much under discussion right now, and that's none of our business. We don't set immigration policy. We don't comment on it.

I will say, over time, though, the U.S. economy has benefited from immigration. And, frankly, just in the last, year a big part of the story of the labor market coming back into better balance is immigration returning to levels that were more typical of the pre-pandemic era.

PELLEY: The country needed the workers.

POWELL: It did. And so, that's what's been happening.

Translation: Immigrants work hard, and Americans are lazy. But much more importantly, since illegal immigrants will work for any pay, and since Biden's Department of Homeland Security, via its Citizenship and Immigration Services Agency, has made it so illegal immigrants can work in the US perfectly legally for up to 5 years (if not more), one can argue that the flood of illegals through the southern border has been the primary reason why inflation - or rather mostly wage inflation, that all too critical component of the wage-price spiral  - has moderated in in the past year, when the US labor market suddenly found itself flooded with millions of perfectly eligible workers, who just also happen to be illegal immigrants and thus have zero wage bargaining options.

None of this is to suggest that the relentless flood of immigrants into the US is not also driven by voting and census concerns - something Elon Musk has been pounding the table on in recent weeks, and has gone so far to call it "the biggest corruption of American democracy in the 21st century", but in retrospect, one can also argue that the only modest success the Biden admin has had in the past year - namely bringing inflation down from a torrid 9% annual rate to "only" 3% - has also been due to the millions of illegals he's imported into the country.

We would be remiss if we didn't also note that this so often carries catastrophic short-term consequences for the social fabric of the country (the Laken Riley fiasco being only the latest example), not to mention the far more dire long-term consequences for the future of the US - chief among them the trillions of dollars in debt the US will need to incur to pay for all those new illegal immigrants Democrat voters and low-paid workers. This is on top of the labor revolution that will kick in once AI leads to mass layoffs among high-paying, white-collar jobs, after which all those newly laid off native-born workers hoping to trade down to lower paying (if available) jobs will discover that hardened criminals from Honduras or Guatemala have already taken them, all thanks to Joe Biden.

Tyler Durden Sun, 03/10/2024 - 19:15

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