What is full employment? An economist explains the latest jobs data
Essentially, the idea of full employment is that so few workers are available that companies need to begin raising wages to attract help.
the Congressional Budget Office puts NAIRU at 4.6 percent, a little above the 3.9 percent unemployment rate.
That means the U.S. is at full employment – and that wages should be going up.
But until recently, they haven’t gained much, which has puzzled many economists.
In other words, full employment isn’t when everyone has a job. Instead, it is when
inflation starts to rise because businesses cannot find enough workers.
While the U.S. may be technically at full employment, according to the definition,
I won’t be convinced until paychecks start increasing.
https://www.rawstory.com/2018/05/full-employment-economist-explains-latest-jobs-data/?utm_source=feedburner&utm_medium=feed&utm_campaig n=Feed%3A+TheRawStory+%28The+Raw+Story%29
And if workers getting paid more means there is "cost push" inflation,
then the Fed will suppress wages by increasing the Fed rate to increase unemployment, aka, kill jobs.
And Capitalists put pressure on the Fed to raise rates so Capitalists' interest incomes rise, as well as increasing Capitalists' profits by suppressing Labor's wages.
iow, The Rigged House Always Wins
https://wolfstreet.com/2018/05/04/jo...by-store-type/
- U-6, the broadest measure that covers U-3 plus people who are “marginally attached to the labor force” plus those employed part time who want to have full-time employment, edged down to 7.8% in April, from 8.0% in March.
But the brick-and-mortar meltdown sectors (marked in red) – the heroes in my articles about store closings, bankruptcies, and liquidations – have shed a net of 60,000 jobs over the past 12 months, and they’re not done shedding, far from it, no matter how good the overall economy is.
The online-resistant sectors and online-related “nonstore retailers” are adding jobs: “Food and beverage stores” (with 3.1 million jobs), “Motor vehicle and parts dealers” (with 2.0 million jobs), “General merchandise stores & supercenters,” (with nearly 2 million jobs, including at Walmart, Costco, etc.), and gasoline stations (with nearly 1 million jobs).
It might be surprising that “information technology,” a category with 2.77 million workers in April, has been shedding jobs over the past 12 months. While up on a monthly basis, the sector is down 25,000 jobs from a year ago. Many of these tech jobs are at companies that are not tech companies. And they routinely offshore their tech jobs or eliminate them as part of cost-cutting. Also, many actual tech companies go through job cuts after their numerous small and large acquisitions.
we could talk about labor force participation. after all the unemployment rate doesn't count people who have been unemployed longer than (x) and are no longer looking for work.
did the panic of 2008 turn millions of able bodied people into worthless slugabeds?
https://data.bls.gov/timeseries/LNS11300000
Last edited by Winehole23; 05-05-2018 at 10:52 AM.
the "housing boom" must include the "DIY / remodeling / house expansion" activities, and not just new house construction.
what do you think "building material & garden supply" means?
https://www.nytimes.com/2018/05/04/b...ment-jobs.html“A 3.9 percent rate today doesn’t suggest as tight a labor market as 3.9 percent in 2000 or 3.9 percent in the late 1960s,” said Ellen Zentner, Morgan Stanley’s chief United States economist.
A lot has changed since the turn of the century. The share of working-age women in the labor force began to fall in 2000, after increasing for decades. Men have been dropping out for much longer. The upshot is that a smaller share of people are participating in the labor market, and it’s easier to get low levels of unemployment when fewer people are vying for jobs.
In fact, a shrinking labor force in April is part of why the unemployment rate fell to 3.9 percent from 4.1 percent even as payrolls grew by a fairly routine 164,000 jobs.
The population is also older than they used to be, on balance. The baby-boom generation has moved steadily toward retirement over the last two decades. And those still working have not helped push wages up. Generally, workers climb the economic ladder fastest when they are young, and so an older work force may weigh on average wages, economists say.
In 2000, wages for rank-and-file workers rose at an annual rate of around 4 percent. Part of the problem now is that some 60 percent of the jobs added since 2010 have been in low-wage, service-sector jobs, according to Morgan Stanley.
Fifty years ago, there were plenty of factory jobs paying a decent wage, and unions held much greater sway. Manufacturing accounted for one in four jobs; today it’s not even one in 10.
The tech explosion of the late 1990s gave rise to lucrative roles in companies based on new business models. The share of the economic pie going to workers rose steadily for the first time since the 1970s — a feat not repeated since.
https://www.vox.com/the-big-idea/201...conomics-aprilWhere did the idea of a “natural” rate of unemployment come from? The more technical term is “non-accelerating inflation rate of unemployment,” often rendered in shorthand as NAIRU. It’s described to undergraduates — in Blanchard’s popular macroeconomics textbook, for instance — as “the rate of unemployment required to keep the inflation rate constant.” The term was coined in Milton Friedman’s famous 1968 presidential address to the American Economics Association, “The Role of Monetary Policy.”
WHETHER AMERICA CAN AFFORD A JOB GUARANTEE PROGRAM IS NOT UP FOR DEBATE
the one critique that cannot really be put on the federal job guarantee is that it costs too much.
Or at least, you cannot say this without ignoring the mountain of taxpayer money we already employ for that intended purpose.
That existing money could be channeled into direct job creation pretty quickly.
It’s entirely reasonable to differ on how to accomplish the ultimate goal of ending poverty and the crushing burdens, both psychological and material, of unemployment.
But there’s no real debate on whether America can afford it.
We’re already picking up the tab.
https://theintercept.com/2018/04/30/federal-job-guarantee-program-cost/
The ability of unemployment to predict changes in inflation is essentially zero over the past 20 years, they found. As a result, there’s no ability to predict a range, much less a rate, of natural unemployment. They conclude that the “50-percent confidence band in 2014 ranges from 4.3 to 6.1” for the natural rate of unemployment.
That estimate range is so vast it simply can’t guide policy.
Even better, lower unemployment doesn’t just help workers: It can spur overall growth. As the economist J.W. Mason argues, as we approach full employment incentives emerge for greater investment in labor-saving productivity, as companies seek to keep labor costs in check as workers demand more. This productivity increase stimulates yet more growth.
"investment in labor-saving productivity"
but not available in the areas of major job creation, like health care, junk food, construction, etc
Wrong again. Robot fry cooks just hitting the market. Computerized order stations already out there. Robotic bricklayers hitting the construction industry. Its coming boo.
To be fair, whenever this was pointed out during Obummer's last year, there were a lot of 'but, but' and asterisks about the participation rate, how they were ty jobs, part time jobs, etc, from some of the same posters praising right now (not you, OP).
I think these last two administrations deserve credit on this, the first one for actually revitalizing an economy overall that was incredibly busted when they took power, and the current administration for not only not ing it up, but building on it.
One thing to keep an eye on is that when dubya did his tax cuts in his first term, the economy also grew for a while, but after a couple of year, the bottom fell off. Something to track down here too.
yeah, yeah, I've seen the vids, too.
so what is society going to do with the 10Ms workers who can't find jobs, because the jobs aren't there?
I'm sure the oligarchy doesn't GAF, so America, run by/for the oligarchy, will be unprepared to respond.
Not much you can do if someone lives to adulthood without learning any marketable skills. Maybe you think I'm a , but I don't feel like its my responsibility to support them.
And it will come a of a lot faster if you make unskilled workers minimum wage $15 an hour. Or even bou 's minimum wage of $52k
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