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What the Heck Is Really Going on in the Job Market?

By June 4, 2024Commentary

Multiple commentators over the last couple of years have noted the problems with the official employment related reports.  Constant revisions, low survey response rates and likely political manipulation all make it hard to understand what is real.  The massive influx of illegal immigrants likely affects the state of the labor markets as well.  Today “JOLTS” report was yet another example.  Openings were far lower than expected, and as we should expect by now, the prior month was revised downward signficantly.  The ratio of openings to unemployed workers has dropped substantially in the last few months.  A far more accurate Quarterly Census of Employment and Wages has a substantial time lag, but examination of last year’s data suggests that the BLS data overstated employment by over 700,000 jobs.  Something similar is likely happening this year, but we won’t even have a hint until August, when information on the first quarter of 2024 will be released.  Some commentators believe that as greater weakness becomes apparent in the job market, that will provide the excuse that the Federal Reserve needs to cut rates later this year.  I am somewhat dubious of this thesis, because I suspect inflation will remain higher than expected and I think the Fed has to have an eye on the massive upcoming debt auctions, where I anticipate that supply and demand factors will eventually wreak havoc and make cutting rates harder.  Buckle up.

(BLS Release)  (ZH Post)  (ZH Post)  

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