Category: Jobs

Is Biden’s Economic Plan Working? Real Disposable Personal Income Down -6.4% YoY In 2022 (Worst Since The Great Depression)

President Biden touts his economic plan as being a great success. But the data says otherwise. Real Disposable Personal Income, for examplge, was down -6.4% year-over-year (YoY) in 2022. That is the WORST reading since The Great Depression.

And to cope with inflation, Americans have expanded their credit useage, but credit card delinquencies are through the roof.

So much for “Middle Class Joe” and The Forgotten Man. Biden hasn’t forgotten, he just doesn’t care.

Inflation Nation! US REAL Average Hourly Earnings Negative For 22 Staight Months In January As Inflation Heats Up … Again (CPI Rises 0.5% MoM, Food Rises 11.3% YoY)

The January US inflation numbers are out and they were grim.

US REAL average hourly earnings fell … again … to -1.8% year-over-year (YoY) from a revised -1.6% YoY in Deember. That makes 22 straight months of negative hourly earning growth.

CPI Month-over-month (MoM) was revised upward for December, and increased from 0.1% in December to 0.5% in January. CORE CPI remained unchanged from the upward revision in December to 0.4% MoM.

Components of inflation include FOOD AT HOME (up 11.3% YoY), utility (piped) gas service (up 26.7% YoY) and shelter (up 7.9% YoY). So, the middle-class inflation tax (food, heating, housing) remains high.

Do I detect a trend in shelter inflation??

Hey, I thought Treasury Secretary Janet Yellen said inflation was transitory. 22 straight months of negative hourly earnings growth seems more permanent than transitory.

Don’t Be Misled By The Low US Unemployment Rate, It Goes Low Just Prior To A Recession (Treasury Curve Remains Deeply Inverted, Mortgage Rates Rise)

Biden’s State of the Union address saw him bragging about his record job creation (actually, it was the private sector, not Biden than created jobs) and historic unemployment rate. What Biden didn’t mention (along with not discussing the porous Mexican border with fentanyl pouring across or why he failed to shoot down a Chinese spy balloon until after it has passed over numerous military reservation) is that the unemployment rate always hit a low point just prior to a recession.

So, here we sit at 3.4% unemployment. But we also see the US Treasury yield curves (10Y-3M and 10Y-2Y) remaining deeply inverted.

The US Treasury 10-year yield is up 5.5 basis points today.

And Bankrate’s 30-year mortgage survey rate is up slightly today.

Wooden Head! Biden’s Claim Of More Jobs Created In His First Two Years Was Blatantly False, Trump Added 12,539k Jobs In 9 Months After Covid While Biden Added 12,104k Jobs (Nonfarm Payrolls UP 517k In January While ADP Jobs Lost Almost 1 Million?)

While Joe Biden may not have a wooden heart, he definitely has a wooden head. Particularly given the number of whoppers he told during the State of Joe Biden’s Mind speech last night.

Biden took credit for creating more jobs in two years than any administration had in four years. Well, that is incredibly misleading (but it is Joe Biden after all). The US economy saw an economic shutdown in 2020, then a “revival” after the government shutdowns ended.

What Biden failed to mention in his SOTU address was that 12,539k jobs were added under Trump from May 2020 through January 2021. Once Biden was installed as President, jobs added under Biden was 12,104k through January 2023. Heck, Biden didn’t even beat Trump’s last year in office!

I am using the BLS numbers which showed that amazing January jobs report of 517k jobs added. Amazing, particularly since M2 Money growth YoY has stalled.

But ADP jobs added in January shows a different picture: -986,000 jobs lost in January.

BLS or ADP, what’s it going to be?

About That Surprisingly Strong Jobs Report: 3.30% Growth In Jobs Added On YoY Basis As Fed Slow Walks Shrinking Balance Sheet (Negative REAL Hourly Earnings Growth Not Something To Brag About)

The Hill has an interesting story: 5 takeaways on a surprisingly strong jobs report.

“The U.S. economy added 517,000 jobs in January, more than doubling Wall Street expectations and turning up its nose at prognosticators of an imminent recession. The unemployment rate dropped to 3.4 percent, the lowest level since 1969. Analysts were expecting it to move in the opposite direction, ticking up to 3.6 percent.”

Yes, I was expecting U-3 unemployment to increase to 3.6% as well. What happened? Seasonal adjustments (BLS doens’t provide non-seasonally adjusted data). But the shocking headline (mostly due to seasonal adjustements) was not as surprising if we consider that jobs added in January grew at 3.309% year-over-year. Well, THAT isn’t all that surprising. Particularly since The Fed is slow walking its shrinking of The Fed balance sheet.

And with over 100 MILLION not in the labor force (apparently, the US labor force never really recovered from the Wuhan China virus), the U-3 unemployment rate touted by the media is misleading.

Bear in mind that employment is a LAGGING indicator. For example, the unemployment rate was 4.7% in November 2007 just prior to the beginning of the 2008-2009 Great Recession. So Biden’s bragging about the lowest unemployment rate since 1969 is meaningless in predicting recessions.

So, the January jobs report isn’t as surprising and strong as talking heads screamed about. I wish BLS would release non-seasonally adjusted (raw) data. But since we have a dysfunctional Federal government, I am not holding my breath.

And I wouldn’t consider averrage hourly earnings growth YoY of 4.42% when headline US inflation is 6.42% particularly brag worthy.

Of course, Biden lied about inheriting inflation from Trump. Inflation was 1.28% YoY in December 2020 just before Biden was sworn-in as President. Then again, Biden lies about everything. At least he just refused to comment on the Chinese Spy Balloons.

Strange Days! US Adds 517k Jobs In January While ADP Adds Only 106k Jobs (Avg Hourly Earnings At 4.4% YoY While Headline Inflation At 6.5%)

Strange days indeed!

Today’s jobs report from the Bureau of Labor Statists (BLS) was stunning. 517k jobs added! Very strange since the ADP jobs added report on Febuary 1st was only 106k. THAT is a huge discrepancy (probably a seasonal adjustment in the BLS reporting).

Average hourly earnings rose to 4.4% YoY. Too bad headline inflation is still roaring at 6.5%. So, the inflation tax is still overwhelming wage growth.

The spread between the January jobs report (BLS) and the ADP jobs added report (ADP) is similar to the infamous jobs report that the Philly Fed “corrected” (orange circle).

Here is the summary of the BLS numbers.

And on the strange jobs report, US Treasury 10-year yields are up 10+ basis points.

Where were the jobs added? How about “Hey Bartender!” since leisure and hospitality added 128k jobs in January.

  • Leisure and hospitality added 128,000 jobs in January compared with an average of 89,000 jobs per month in 2022. Over the month, food services and drinking places added 99,000 jobs, while employment continued to trend up in accommodation (+15,000).
  • In January, employment in professional and business services rose by 82,000, led by gains in professional, scientific, and technical services (+41,000). Job growth in professional and business services averaged 63,000 per month in 2022.
  • Government employment increased by 74,000 in January. Employment in state government education increased by 35,000, reflecting the return of university workers after a strike.
  • Health care added 58,000 jobs in January. Job growth occurred in ambulatory health care services (+30,000), nursing and residential care facilities (+17,000), and hospitals (+11,000).
  • Employment in retail trade rose by 30,000 in January, following little net growth in 2022 (an average of +7,000 per month). In January, job gains in general merchandise retailers (+16,000) and in furniture, home furnishings, electronics, and appliance retailers (+7,000) were partially offset by a decline in health and personal care retailers (-6,000).
  • Construction added 25,000 jobs in January, reflecting an employment gain in specialty trade contractors (+22,000). Employment in the construction industry grew by an average of 22,000 per month in 2022.
  • In January, transportation and warehousing added 23,000 jobs, the same as the industry’s average monthly gain in 2022. Over the month, employment in support activities for transportation increased by 7,000.
  • Employment in social assistance increased by 21,000 in January, little different from the 2022 average gain of 19,000 per month.
  • Manufacturing employment continued to trend up in January (+19,000). In 2022, manufacturing added an average of 33,000 jobs per month.
  • Employment showed little change over the month in other major industries, including mining, quarrying, and oil and gas extraction; wholesale trade; information; financial activities; and other services.

The source of the jobs miracle? Changes in how jobs are measured.

Changes to The Employment Situation Data |
| |
| Establishment survey data have been revised as a result of the annual benchmarking |
| process, the NAICS 2022 conversion, and the updating of seasonal adjustment factors. |
| Also, household survey data for January 2023 reflect updated population estimates. |
| See the notes at the end of this news release for more information. |
|_________________________________________________________

Challenger Job Cuts Rise 440% In January As Fed Liquidity Shrinks (US Treasury 10Y Yield Down -3.5 BPS)

President Biden had better give his State of the Union Address before the economy worsens any more.

In January, the Challenger, Gray and Christmas jobs cuts index was a doozy. Jobs cuts rose 440%. This is happening as The Federal Reserve keeps its feet on the monetary brake pedal.

The Challenger report shows a big jump of 135.8 percent in layoff intentions to 102,943 in January, up from 43,651 in December and 440.0 percent higher than the 19,064 in January 2022. Many of the job cuts are in the tech sector, but job cuts are now spreading across the economy as a recession looms.

This morning, the US Treasury 10-year yield is down only -3.5 basis points, but it is Europe where the action is. UK is down -16.2 basis points and Italy is down -14.8 bps. UPDATE: US 10Y yield down -5.3 BPS, Italy 10Y down -29 bps.

Slow Down! ADP Jobs Added Slows To 106k In January, Lowest Since August 2021

The US economy is slowing down. In fact, ADP jobs added just printed at 106k in January, the lowest reading since August 2021. ADP jobs added follows the slow down of M2 Money growth YoY as The Fed tightens its monetary policy.

Do I detect a trend (orange line)?

Speaking of trends, check out ISM Manufacturing New Orders. Lowest since Great Recession of 2008 (if I exclude the government economic shutdown Covid recession).

I doubt that January’s ADP report or the ISM Manufacturing report will be mentioned in Biden’s State of the Union address.

7 Months Of Night! US GDP Real Disposable Income Fell For 7 Straight Months As Fed Removes Punchbowl (Biden’s Economy Lost $4 TRILLION In Real Disposable Income Since March 2021, A -21% Loss)

Welcome to the wonderful world of Bidenomics, giving the US 40 year highs in inflation leading The Federal Reserve to remove its enormous monetary stimulus (known as “The Punch Bowl.”

I previously pointed out that US Real GDP was actually less than 1% year-over-year (YoY) in 2022, hardly a fantastic number given the trillions in Biden/Pelosi/Schumer spending (Omnibus, Infrastructure, etc) and Powell/Fed’s whopping monetary stimulus in 2020. But real disposable income, the amount households have left to spend after adjusting for inflation, had been falling for 7 straight months.

In fact, REAL disposable personal income peaked in March 2021, shortly after Biden was sworn-in as President in Janaury 2021 at $19,213.9 billion (or $19.214 TRILLION). As of December 2022, real personal disposable income had fallen to $15,213.0 or $15.213 TRILLION. That is a loss of $4 TRILLION since March 2021. Or a -21% Loss in Real Disposable Income.

Here is the campaign video for Joe Biden from 2020.

Biden’s campaign photo.