Always look under the hood. That's the subject of the
riff.
If you're going to buy a pre owned used car
like so many people have to do nowadays,
you can't just be impressed by a shiny new paint
job.
Instead, you got to look under the hood.
You got to check out the engine,
the oil, battery, brake fluid and spark plugs.
Well, today's release of the May jobs report is much
the same.
The shiny new paint job
was a significant
272,000 increase all right, although nearly half of that was
government and government related jobs.
That's what the non farm payroll showed.
However, when you lift up the hood,
what you see is an incredible
408,000 job loss from the household survey.
So what's the difference between the two?
Well, the payroll establishment survey is mostly larger established companies
where the Bureau of Labor Statistics dials up the human
resources department and gets a job headcount.
But for the household survey,
the BLS mainly calls families and individuals to ask if
they are employed or not.
Traditionally, the household survey is more heavily weighted towards small
businesses
and actually over the past year has produced only a
tiny
31,000 increase in jobs. Now additionally,
under the hood, the civilian labor force shrunk by 250,000
and
as a consequence the unemployment rate notched up to
4%. And another key indicator of the labor force is
the employment to population ratio,
which fell slightly in May to 60 point 1%.
Now aside the late great labor economist Ed Lazier,
former CEA chair, longtime professor at Stanford University,
Ed Lazier always pointed to the employment population ratio as
the single best indicator of Labor market strength or weakness.
He was, by the way,
a dear friend and mentor of mine.
Now, during the Trump years,
the employment population ratio reached
61.1%. That's 1% higher than today's number.
However, going further back, the peak in that ratio was
64.6% in May of 2000.
So the point here is more people ought to be
working.
And my guess is among the many complexities of the
job story,
both federal and state governments more and more are offering
overly generous benefits not to work.
But there's more concern with these job numbers.
Once again, full time jobs fell
605,000 in May. This is not a monthly problem,
this is a long playing record and it's the mirror
image.
Part time jobs gained
286,000. So if full timers are plunging and part timers
are surging,
that cannot be a healthy economic sign.
Additionally, in just May alone,
414,000 immigrants, both legal and illegal,
gain jobs, while
663,000 native born Americans lost jobs.
This discouraging pattern has been going on for quite some
time,
but the trend line has accelerated significantly during the Biden
years.
Now, in terms of the ongoing Biden affordability crisis,
if you call through the numbers over the past 12
months,
the combination of average hourly earnings,
that's wages for production people,
working folks that times hours worked,
you get a proxy for their income.
And that income number comes to only
3.4% increase, which is about the same as the consumer
price index,
which means they're not getting ahead of the ongoing inflation.
Indeed, over Biden's entire term,
real wages have fallen. All these prices have exploded.
So when you look at all these car parts under
the hood,
frankly, I think folks are going to buy a much
better model,
one that has lower taxes,
deregulation and drill, baby, drill.
We'll have to find a car that suits all that.
All right.