Joe Biden’s Nightmare Economy Keeps Adding Jobs, But What About Inflation? Oh, It’s Down Too.

The Labor Department’s monthly jobs report for June is out, showing the economy added 209,000 new nonfarm jobs during the month, a tad lower than the Dow Jones forecast of 240,000. The unemployment rate was virtually unchanged from May, dropping by .1 percent to 3.6 percent. The Labor Department points out that unemployment has ranged between 3.4 percent and 3.7 percent since March 2022, which is pretty darn impressive — we’re continuing to enjoy some of the lowest unemployment in history.

But wait, is there a way to spin this as bad news? CNBC finds a cloud!

The total, while still solid from a historical perspective, marked a considerable drop from May’s downwardly revised total of 306,000 and was the slowest month for job creation since payrolls fell by 268,000 in December 2020.

This is where we remind you that since last year, the Federal Reserve has been raising interest rates in hopes of curbing inflation, and when jobs numbers were far better than expected, economists all agreed the Fed would probably do another interest rate hike, because why wasn’t job growth slowing? Now we have a slower month of job growth, as the Fed was shooting for, and it’s disappointing somehow?

Fuck ’em, we’re gonna call it a sign of that “soft landing” the boffins like talking about.

State and local government hiring was one of the drivers of employment last month, although the report notes that, in contrast to the private sector, total government jobs are still a tad below the pre-pandemic total. Private jobs returned to pre-pandemic levels last summer and have continued growing ever since.

CNBC notes that stocks were down a bit this morning, probably because the official report fell well short of ADP’s private-sector growth report yesterday, showing 497,000 new jobs, which sets up this month’s analysis McNugget from an economist:

“A 209,000 increase in payrolls can hardly be described as weak,” said Seema Shah, chief global strategist at Principal Asset Management. “But after yesterday’s ADP wrongfooted investors into expecting another bumper jobs number, the market may be disappointed.”

The economists interviewed by the New York Times were more upbeat; Rachel Sederberg, senior economist at labor market analytics outfit Lightcast, said that the numbers reflect “the slow contraction in numbers we wanted — it’s comforting to see.” See? Fuck you, CNBC. Also too,

Ellen Zentner, the chief economist at Morgan Stanley, whose firm has been an outlier by not forecasting a recession in the past year, said the recent upturn in consumer sentiment could be connected to a “realization that the economy has been much more resilient to a sharp tightening in the stance of monetary policy than previously expected.”

It’s like people don’t even want there to be a recession!

Even though job growth cooled a bit, economists think the Fed is still likely to do another interest rate increase at its meeting later this month, because wages continue to grow, says the Times:

Many paid especially close attention to the pay data: Average hourly earnings climbed 4.4 percent in the year through June, versus an expectation for 4.2 percent, and wage gains for May were revised higher. After months of slowing, those earnings figures have held roughly steady since March.

Fed officials are closely watching wage data, because they worry that if pay growth remains unusually rapid, it could make it difficult to bring elevated inflation fully back to their 2 percent goal. The logic? Companies that are compensating their workers better are likely to try to raise their prices to cover heftier labor bills, and families earning more will be more capable of paying higher prices.

The June inflation report will be released next week; we should note that the most recent report, for May, showed another decline, to four percent, down from 4.9 percent in April. On the whole, inflation has been declining since last summer when Republicans were sure the issue would win them the midterms and then it didn’t.

All in all, things continue chugging along pretty well, which means we should expect a mix of cautious optimism and gloom and doom reporting predicting a recession, since that would be more exciting than sustained growth the end.

[Bureau of Labor Statistics / CNBC / NYT]

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