So where does this leave us? Let's take a look at my labor economic model launched on April 7, 2020 and see where we are today.
1. The current situation in the labor market is the result of a series of events, with COVID-19 being an important trigger. I created his COVID-19 recovery model on April 7, 2020 and retired it on December 9, 2020. By then, the preliminary recovery phase had been completed and it was necessary to model when the lost jobs would be regained.
2. In the early stages of the labor market recovery, when I observed weak employment statistics, I remained confident that the recovery would reach 10 million job openings. Despite the unexpected jobs report in May 2021, I remained confident in the recovery trajectory. The number of job openings reached 12 million, and now he has 8.5 million. The labor market isn't as tight right now, but the Fed wants that number to fall even lower, to 7 million.
Currently, job turnover and hiring data are below pre-COVID-19 levels. We're getting closer to having a unified view of this data, which means that any Fed member who talks about a tight labor market is smoking a good thing if it comes from a high standard.
3. I wrote that all jobs lost to COVID-19 should be regained by September 2022. This would be a rapid recovery in the labor market, and it happened on time.
Four. This is the important point at this point. If COVID-19 had not occurred, there would be between 157 million and 159 million jobs today, based on February 2020 job growth rates. Currently, that number is 158,286,000. This is very important because given this level, employment growth should now be slowing. It would be more in line with what the labor market should be, with an average of 140,000 to 165,000 people. monthly.
today's work print 175,000 Still above and close to my target level for what employment should be. 159 million Total non-farm employment.I would be shocked if it continues to trend upwards. 165,000 Monthly after breakover 159 The total number of employees is 1 million. That being said, the labor market still outperforms my model.
Looking at the six-month average of employment growth data. 242,000, Even with all the revisions.i still surpass myself 165,000/month level, but we're heading in that direction.
from BLS: Nonfarm payrolls rose by 175,000 in April, while the unemployment rate remained little changed at 3.9%, the U.S. Bureau of Labor Statistics announced today.Employment increased in health care, social assistance, and transportation and warehousing..
Jobs created and lost in the last month include:
In this employment statistics, the unemployment rate by education level is as follows:
- Less than high school diploma: 6.0%
- If you are a high school graduate but have not attended college: 4.0%
- College or Associate Degree: 3.3%
- Bachelor's degree or higher: 2.2%
A key part of the report is that wage growth is slowing, which is the key to many of the Fed's concerns. The Fed believes productivity is 1%, so it prefers a 3% wage growth trend. As you can see below, wage growth continues to trend in that direction.
There is evidence that the labor market is not as tight today as it once was. The Fed is considering this because they are currently talking about a dual mission rather than a single mission Fed. This is positive for mortgage interest rates. This is because once interest rates pivot, there will be a sustained downward movement in interest rates that will have to be addressed from 2022 onwards. We still need to work to get wage growth back to 3% to 3.5%. % level, but at least it's heading in that direction.
