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Three questions for the labor market’s near future

In the past two months, the U.S. economy has added a total of 826,000 jobs, according to the latest Bureau of Labor Statistics (BLS) numbers for May and…

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By Makada Henry-Nickie, Anthony Barr, Regina Seo

In the past two months, the U.S. economy has added a total of 826,000 jobs, according to the latest Bureau of Labor Statistics (BLS) numbers for May and upwardly revised numbers for April. During that same period, overall unemployment has held steady at 3.6%. Black unemployment is still almost double that (at 5.9% in April and 6.2% in May), but the Black labor force participation rate has increased, as has the overall number of Black workers currently employed. 

Despite solid job gains, inflation has reached a 41-year high of 8.6%, and households are reeling from unrelenting increases in the price of gas, rent, and food. June’s preliminary Index of Consumer Sentiment plummeted 8 points from May, to 50.2—the lowest rate since the 1980 recession, revealing that households are deeply worried about their financial circumstances. 

In this blog, we highlight three key economic concerns for the summer, including women leaving the labor force, economic contraction erasing job gains by Black workers, and the heightened risk of food insecurity. 

Will more women leave the workforce this summer than usual? 

In the past three months, 465,000 women aged 20 and over have entered the labor force. In May alone, 397,000 women entered the workforce, 44% of whom were Black. This surge of women into the workforce is helping regain jobs lost during the pandemic, but labor force participation rates for women—including white, Black, and Latino or Hispanic women—are still below pre-pandemic levels.  

Despite the recovering trend in women’s employment, research by the National Women’s Law Center found that almost one-third of the jobs women regained since the start of the pandemic are in the leisure and hospitality sector—a finding consistent with our prior analysis on recent job creation. These jobs are low-paying, have volatile schedules, and are vulnerable to economic downturns. 

In addition, female labor force participation typically drops every summer as school closings push many mothers to reduce hours or quit their jobs. A recent paper found an average summer drop of 1.1% in the employment-to-population ratio among prime-age women. This drop is pronounced among mothers of school-age children who do not have affordable or reliable access to child care. The ongoing pandemic will likely continue to exacerbate this cyclical trend, consistent with our prior research, including our recent survey data revealing that child care concerns and inflexible work schedules continue to hurt female workers. 

Will economic anxieties erase gains for Black workers? 

Runaway inflation pushed the Federal Reserve to adopt a 75-point interest rate hike at its June meeting to regain the confidence of investors. If the Fed follows the recommendation of some commentators to induce a 1980s-style recession through a series of steep interest rate hikes in order to reduce consumer spending and stabilize prices, Black workers will bear the brunt as companies downsize—just as they did in 1983, when the unemployment rate reached 20% for Black men and 16.7% for Black women. 

But even if the Fed remains a stabilizing force for the broader economy, the market itself may not remain calm. Major companies such as Redfin, Twitter, and Coinbase have rescinded job offers, while several leading tech companies such as Robinhood and Netflix have announced layoffs as a cost-saving strategy. But if industry leaders and investors take this as a broader signal and panic based on negative feelings about the current economy, it could create a ripple effect of fear across sectors and lead to layoffs and a recession. 

Another worrying indicator is that BLS’ broader measure of labor market weakness, the U-6 unemployment rate, rose to 7.1% in May, driven by frictional unemployment and a 295,000-person increase in part-time workers. This coincided with the retail sector shedding 51,700 jobs. Major retailers have noted that cutbacks in household spending left them with bloated inventories; for example, Target cut profit expectations twice in a single month and surprised investors with a mass sales campaign aimed at trimming inventory. This is a leading indicator that the sector will shed additional jobs. Additionally, big-box retail chains, including Amazon, hired more workers than normally needed to avoid hiring delays and COVID-19 illness disruptions amid the tight labor market. But Walmart’s CEO recently explained that this strategy has led to overstaffing concerns—suggesting that even without diminished spending, job cuts will continue. 

All of this bodes poorly for Black workers, particularly Black men. In the past three months, Black men have gained 56,000 jobs, and their current labor force participation rate of 68.9% is now higher than it was prior to the pandemic. While some of these job gains reflect a slight uptick in the number of Black men entering the labor force, most represent men who had previously been in the labor force and have now been rehired. As Figure 2 shows, Black men only benefited from the labor market recovery at the tail end of it.  

Black men are re-entering the labor force

Even a slight economic contraction could imperil these recent job gains for Black workers, especially workers crowded into low-wage cyclical sectors like retail. The current labor market—in which there are more job openings than there are job seekers—has pushed firms to tap into Black talent that they would otherwise overlook due to discrimination. But if the labor market weakens, additional Black workers will be less likely to be hired, and Black workers who were recently hired will be among the first to be let go during layoffs. 

Will depleted savings and the end of the school year heighten food insecurity? 

As household savings are quickly depleted due to inflation, the risk of food insecurity is heightened. In April, the personal savings rate for Americans hit a low of 4.4% (compared to 33.8% in April 2020 and 12.6% in April 2021). At the same time, according to the Federal Reserve Board’s Consumer Credit report, revolving debt (such as credit card debt) increased by an annualized rate of 19.6%, while non-revolving debt (such as car loans and mortgage loans) rose at a slower rate of 7.1%. Overall household debt increased at an annual rate of 8.3% in the first quarter of 2022. Taken together, these metrics suggest that inflation is making it harder for families to sustain current levels of consumption while also putting money away, even as they face markedly lower savings to pay for necessities. 

It is likely that without the advanced Child Tax Credit payments or any other form of income stimulus, many low-income families will face a harsh summer. Low-income parents are caught in an impending storm of precarious retail jobs, over-representation in part-time jobs, and a weakened child care economy. This is especially true for families with school-aged children who benefited from free meals during the school year. 

Even a ‘soft landing’ poses economic risks 

In the last few months, Federal Reserve Chairman Jerome Powell has told reporters that he believes the Federal Reserve can engineer a “soft landing”—in other words, curbing inflation without throwing the economy into freefall. But even if the Fed can pull this off, it will not fully address the three concerns we identified in this piece. 

Beyond the Fed’s monetary policy actions, we need robust fiscal policies such as stronger unemployment insurance and a renewed monthly Child Tax Credit to ensure no one will slip through the cracks. Ultimately, responding to food and housing needs will require a collaborative effort from the federal government, states, philanthropy, and local community-based organizations to support vulnerable families in the coming months. 

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate…

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Low Iron Levels In Blood Could Trigger Long COVID: Study

Authored by Amie Dahnke via The Epoch Times (emphasis ours),

People with inadequate iron levels in their blood due to a COVID-19 infection could be at greater risk of long COVID.

(Shutterstock)

A new study indicates that problems with iron levels in the bloodstream likely trigger chronic inflammation and other conditions associated with the post-COVID phenomenon. The findings, published on March 1 in Nature Immunology, could offer new ways to treat or prevent the condition.

Long COVID Patients Have Low Iron Levels

Researchers at the University of Cambridge pinpointed low iron as a potential link to long-COVID symptoms thanks to a study they initiated shortly after the start of the pandemic. They recruited people who tested positive for the virus to provide blood samples for analysis over a year, which allowed the researchers to look for post-infection changes in the blood. The researchers looked at 214 samples and found that 45 percent of patients reported symptoms of long COVID that lasted between three and 10 months.

In analyzing the blood samples, the research team noticed that people experiencing long COVID had low iron levels, contributing to anemia and low red blood cell production, just two weeks after they were diagnosed with COVID-19. This was true for patients regardless of age, sex, or the initial severity of their infection.

According to one of the study co-authors, the removal of iron from the bloodstream is a natural process and defense mechanism of the body.

But it can jeopardize a person’s recovery.

When the body has an infection, it responds by removing iron from the bloodstream. This protects us from potentially lethal bacteria that capture the iron in the bloodstream and grow rapidly. It’s an evolutionary response that redistributes iron in the body, and the blood plasma becomes an iron desert,” University of Oxford professor Hal Drakesmith said in a press release. “However, if this goes on for a long time, there is less iron for red blood cells, so oxygen is transported less efficiently affecting metabolism and energy production, and for white blood cells, which need iron to work properly. The protective mechanism ends up becoming a problem.”

The research team believes that consistently low iron levels could explain why individuals with long COVID continue to experience fatigue and difficulty exercising. As such, the researchers suggested iron supplementation to help regulate and prevent the often debilitating symptoms associated with long COVID.

It isn’t necessarily the case that individuals don’t have enough iron in their body, it’s just that it’s trapped in the wrong place,” Aimee Hanson, a postdoctoral researcher at the University of Cambridge who worked on the study, said in the press release. “What we need is a way to remobilize the iron and pull it back into the bloodstream, where it becomes more useful to the red blood cells.”

The research team pointed out that iron supplementation isn’t always straightforward. Achieving the right level of iron varies from person to person. Too much iron can cause stomach issues, ranging from constipation, nausea, and abdominal pain to gastritis and gastric lesions.

1 in 5 Still Affected by Long COVID

COVID-19 has affected nearly 40 percent of Americans, with one in five of those still suffering from symptoms of long COVID, according to the U.S. Centers for Disease Control and Prevention (CDC). Long COVID is marked by health issues that continue at least four weeks after an individual was initially diagnosed with COVID-19. Symptoms can last for days, weeks, months, or years and may include fatigue, cough or chest pain, headache, brain fog, depression or anxiety, digestive issues, and joint or muscle pain.

Tyler Durden Sat, 03/09/2024 - 12:50

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February Employment Situation

By Paul Gomme and Peter Rupert The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000…

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By Paul Gomme and Peter Rupert

The establishment data from the BLS showed a 275,000 increase in payroll employment for February, outpacing the 230,000 average over the previous 12 months. The payroll data for January and December were revised down by a total of 167,000. The private sector added 223,000 new jobs, the largest gain since May of last year.

Temporary help services employment continues a steep decline after a sharp post-pandemic rise.

Average hours of work increased from 34.2 to 34.3. The increase, along with the 223,000 private employment increase led to a hefty increase in total hours of 5.6% at an annualized rate, also the largest increase since May of last year.

The establishment report, once again, beat “expectations;” the WSJ survey of economists was 198,000. Other than the downward revisions, mentioned above, another bit of negative news was a smallish increase in wage growth, from $34.52 to $34.57.

The household survey shows that the labor force increased 150,000, a drop in employment of 184,000 and an increase in the number of unemployed persons of 334,000. The labor force participation rate held steady at 62.5, the employment to population ratio decreased from 60.2 to 60.1 and the unemployment rate increased from 3.66 to 3.86. Remember that the unemployment rate is the number of unemployed relative to the labor force (the number employed plus the number unemployed). Consequently, the unemployment rate can go up if the number of unemployed rises holding fixed the labor force, or if the labor force shrinks holding the number unemployed unchanged. An increase in the unemployment rate is not necessarily a bad thing: it may reflect a strong labor market drawing “marginally attached” individuals from outside the labor force. Indeed, there was a 96,000 decline in those workers.

Earlier in the week, the BLS announced JOLTS (Job Openings and Labor Turnover Survey) data for January. There isn’t much to report here as the job openings changed little at 8.9 million, the number of hires and total separations were little changed at 5.7 million and 5.3 million, respectively.

As has been the case for the last couple of years, the number of job openings remains higher than the number of unemployed persons.

Also earlier in the week the BLS announced that productivity increased 3.2% in the 4th quarter with output rising 3.5% and hours of work rising 0.3%.

The bottom line is that the labor market continues its surprisingly (to some) strong performance, once again proving stronger than many had expected. This strength makes it difficult to justify any interest rate cuts soon, particularly given the recent inflation spike.

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Spread & Containment

Another beloved brewery files Chapter 11 bankruptcy

The beer industry has been devastated by covid, changing tastes, and maybe fallout from the Bud Light scandal.

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Before the covid pandemic, craft beer was having a moment. Most cities had multiple breweries and taprooms with some having so many that people put together the brewery version of a pub crawl.

It was a period where beer snobbery ruled the day and it was not uncommon to hear bar patrons discuss the makeup of the beer the beer they were drinking. This boom period always seemed destined for failure, or at least a retraction as many markets seemed to have more craft breweries than they could support.

Related: Fast-food chain closes more stores after Chapter 11 bankruptcy

The pandemic, however, hastened that downfall. Many of these local and regional craft breweries counted on in-person sales to drive their business. 

And while many had local and regional distribution, selling through a third party comes with much lower margins. Direct sales drove their business and the pandemic forced many breweries to shut down their taprooms during the period where social distancing rules were in effect.

During those months the breweries still had rent and employees to pay while little money was coming in. That led to a number of popular beermakers including San Francisco's nationally-known Anchor Brewing as well as many regional favorites including Chicago’s Metropolitan Brewing, New Jersey’s Flying Fish, Denver’s Joyride Brewing, Tampa’s Zydeco Brew Werks, and Cleveland’s Terrestrial Brewing filing bankruptcy.

Some of these brands hope to survive, but others, including Anchor Brewing, fell into Chapter 7 liquidation. Now, another domino has fallen as a popular regional brewery has filed for Chapter 11 bankruptcy protection.

Overall beer sales have fallen.

Image source: Shutterstock

Covid is not the only reason for brewery bankruptcies

While covid deserves some of the blame for brewery failures, it's not the only reason why so many have filed for bankruptcy protection. Overall beer sales have fallen driven by younger people embracing non-alcoholic cocktails, and the rise in popularity of non-beer alcoholic offerings,

Beer sales have fallen to their lowest levels since 1999 and some industry analysts

"Sales declined by more than 5% in the first nine months of the year, dragged down not only by the backlash and boycotts against Anheuser-Busch-owned Bud Light but the changing habits of younger drinkers," according to data from Beer Marketer’s Insights published by the New York Post.

Bud Light parent Anheuser Busch InBev (BUD) faced massive boycotts after it partnered with transgender social media influencer Dylan Mulvaney. It was a very small partnership but it led to a right-wing backlash spurred on by Kid Rock, who posted a video on social media where he chastised the company before shooting up cases of Bud Light with an automatic weapon.

Another brewery files Chapter 11 bankruptcy

Gizmo Brew Works, which does business under the name Roth Brewing Company LLC, filed for Chapter 11 bankruptcy protection on March 8. In its filing, the company checked the box that indicates that its debts are less than $7.5 million and it chooses to proceed under Subchapter V of Chapter 11. 

"Both small business and subchapter V cases are treated differently than a traditional chapter 11 case primarily due to accelerated deadlines and the speed with which the plan is confirmed," USCourts.gov explained. 

Roth Brewing/Gizmo Brew Works shared that it has 50-99 creditors and assets $100,000 and $500,000. The filing noted that the company does expect to have funds available for unsecured creditors. 

The popular brewery operates three taprooms and sells its beer to go at those locations.

"Join us at Gizmo Brew Works Craft Brewery and Taprooms located in Raleigh, Durham, and Chapel Hill, North Carolina. Find us for entertainment, live music, food trucks, beer specials, and most importantly, great-tasting craft beer by Gizmo Brew Works," the company shared on its website.

The company estimates that it has between $1 and $10 million in liabilities (a broad range as the bankruptcy form does not provide a space to be more specific).

Gizmo Brew Works/Roth Brewing did not share a reorganization or funding plan in its bankruptcy filing. An email request for comment sent through the company's contact page was not immediately returned.

 

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