8.10.19

SHOULDN'T CONSUMPTION RATES CHANGE LESS RAPIDLY IN THE NEIGHBORHOOD OF EQUILIBRIUM?

There's a reason the Marshallian Cross is a useful teaching device.  US unemployment rate hits a 50-year low even as hiring slows.  I have enough suspicions about the legacy press to be just a bit fearful that somebody is interpreting reported figures in such a way as to raise recession fears.

Here's the lede.  "The U.S. unemployment rate fell to 3.5% in September, the lowest level in nearly five decades, even though employers appeared to turn more cautious and slowed their hiring."  Burn your economics textbook if you ever read something like "there is a price at which the production and consumption rates are the same," let alone something that suggests "in the neighborhood of equilibrium those rates are unlikely to change by much."

Here comes the editorializing.
The economy added a modest 136,000 jobs, enough to likely ease worries that an economy weakened by the U.S.-China trade war and tepid global growth might be edging toward a potential recession. The government on Friday also revised up its estimate of job growth in July and August by a combined 45,000.

Still, a drop-off in the pace of hiring compared with last year points to rising uncertainty among employers about the job market and the economy in the face of President Donald Trump's numerous trade conflicts. Pay growth has also weakened, reflecting the hesitance of employers to step up wages.
Large increases in hiring accompany the first few months of recovery from recession, or they might be markers of a rapidly growing sector that well might turn into a bubble.

It might be that tightness in the labor market is manifesting itself in the form of different contracts.
Julia Pollak, a labor economist at jobs marketplace ZipRecruiter, said the pay that employers are advertising has declined this year after rising sharply in 2018. And she noted that the number of part-time workers who would prefer full-time work has risen over the past two months.

Those trends "show that employers are increasingly risk-averse as global uncertainty and recession fears rise," Pollak said.
Possibly, although in an environment where there's a lot of labor force participation by women and a lot of talk about work-life balance, perhaps employers are rethinking their one-size-fits-all terms of employment.

In addition, we might be seeing employers in some sectors looking for ways to make use of people who might not have the usual credentials.
The big gains last month were in health care, which added 41,400 jobs, and professional and business services, which include such higher-paying areas as engineering and accounting but also lower-paying temp work. That sector added 34,000 positions.

Friday's jobs data underscored the benefits of a hot job market for lower-paid Americans and traditionally disadvantaged workers. The unemployment rate for workers without high school diplomas fell to 4.8%, the lowest level on records dating to 1992. The rate for Latinos fell to 3.9%, also a record low.

Amy Glaser, senior vice president at Adecco USA, a staffing firm, says companies are still willing to raise pay for blue collar workers. Some are also paying retention and signing bonuses and in some cases double pay for overtime.

"We're still seeing strong demand, we're still seeing more job opportunities out there than candidates," Glaser said.
The so-called broadly shared prosperity of the Victory Dividend years was in part a consequence of manufacturing technologies that could augment the powers of people with modest skills (at the cost of a lot of soul-deadening jobs) in a way that made those people richer. I suspect the incentives to develop such technologies are still present, if, perhaps, harder to find, in the presence of new information technologies.

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