Bad, very bad, and terrible employment reports
Squint at the latest jobs report and you might find something to celebrate, but take a more measured look and you'll see that the economy is actually slowing and we're bracing for the effects.
The Bureau of Labor Statistics said on Friday Employers added 142,000 jobs in AugustThere was little to write home about, as it was the second straight month of numbers that had fallen well short of expectations, and with revisions to June and July taking a combined 86,000 jobs off the books, the three-month average is now a paltry 116,000 — a far cry from last year's monthly average of 202,000.
Looking specifically at the private sector, payrolls rose by 73,900 in August, below the consensus estimate of 136,000. Moreover, the private sector figure for the previous month was revised down to 74,000 from a middling 97,000. The three-month average was just 96,000. This suggests that businesses are not expanding their payrolls, Weakening demand for labor.
If we go a step further and subtract the so-called pro-government health and social assistance sectors, Private employment growth fell to just 73,900After revisions, the July figure was closer to a contraction at 15,200, while the June figure was 28,3000. The three-month average fell to just 39,100.Short of a full-blown recession and employment contraction, it is one of the weakest three-month periods recorded in the data. Dating back to 1990.
So where's the good news? August wasn't as weak as July and June, so the labor market downturn may not have gotten any worse. But given the history of big downward revisions, August reports are too high So maybe things are getting worse and we just don't realize it yet.
The unemployment rate fell from 4.3% to 4.2%. But the decline was not a sign of strength. Rather, it is rounding errors and statistical quirks.The increase to 4.34 percent was mainly due to temporary layoffs that were eliminated by August; the actual movement was from 4.25 percent (rounded up to 4.3 percent) to 4.23 percent (rounded down to 4.2 percent), meaning that the actual gain was only a 0.2 percentage point improvement, made larger by the revaluation.
The household survey, which is used to calculate the unemployment rate, showed that the number of employed people increased slightly by 168,000 in August. Discrepancies between the Establishment Survey and the Household Survey A problem that drew much attention earlier this year when several reports showed that household surveys were reporting much smaller job gains than establishment surveys appears to have been resolved. The two studies produce very similar results.
Rapid increase in foreign workers
The household survey focuses on The employment gap between native-born and foreign-bornIn August, the number of U.S.-born employees fell by 1.3 million, while the number of foreign-born employees increased by 635,000. Over the past 12 months, U.S.-born employment fell from 131 million to 129.7 million, removing 1.3 million U.S.-born people from the payroll. The number of foreign-born employees rose from 30.4 million to 31.6 million, an increase of 1.2 million.
This means that almost all of the job growth went to foreign-born workers. In reality, the household surveys don't capture most foreign-born workers, so the official figures may be undercounting the foreign-born. Biden-Harris Border Opening Crisis Newly Arrived Immigrants.
But this isn't a sign that foreign workers are taking American jobs. The number of Americans over the age of 16 who are what the government calls “civilian non-institutional” fell by 392,000 in the past year. The U.S.-born civilian labor force — the number of people who are able and willing to work — fell by 768,000. In other words, One of the main factors behind the decline in the U.S.-born workforce is the declining number of adults born in the U.S. People who are able and willing to work Indigenous people are aging, retiring and dying.
meanwhile, The foreign-born adult population grew by 2 million, and the foreign-born labor force grew by 1.2 million.That's on par with job gains. While that's no doubt good news for employers, who can now use foreign workers to replace born-and-raised Americans leaving the workforce and avoid having to compete for a shrinking pool of workers, it does lead to higher wages, but it's not clear that that's very good news for American voters.
Please remember The new workers will consume as much as they produce.Or almost. As a result, the US-born foreigners and the existing foreign population see little benefit from the new workers. The surplus goes to the wealthiest Americans. Falling wages are affecting the lowest-income households.
probably Inflationary effectNewly arrived workers tend to be less productive than U.S.-born or long-term immigrants, but they make everything from food to gasoline to housing more expensive. And as long as the U.S. faces real production constraints, the extra demand simply means higher prices. Indeed, Biden-Harris: The immigration crisis is a tax on US citizens Those who were born here and those who arrived here earlier.
One reason for the rapid growth in immigrant employment is Newly arrived immigrants tend to work fewer hours per week and fewer weeks per year.According to a study by the Federal Reserve Bank of Atlanta, these figures indicate a surge in demand for workers. As a result, when employers replace local and permanent foreign workers with newcomers, they have to hire more newcomers to achieve the same level of performance. This almost certainly creates an inflated demand for workers.
As I explained last month, these newcomers will eventually catch up to American labor levels. But that will take years. As long as the economy depends on new immigrant labor for growth, Employment levels are likely to be artificially inflated.
