Employment Report and Retail Sales

The government is still in catch-up mode but did release some employment data this week covering October and November.  Media non-sources, like the Star Tribune, are painting the gloomiest possible picture, but in reality the reports were pretty good.  For example the unemployment rate supposedly rose a bit, to 4.6%, in November, but that is all due to more people entering the work force and looking for work, not because people are losing their jobs.  It is a positive thing for more people to stop living on government handouts and actually go work and pay taxes and do something productive with their lives.  We need a lot more of that.  But we have a combined 8 million people who claim they want to work but haven’t had a job for a long time and/or aren’t really looking for one.  Makes you wonder if they really want to work and as I said, if a big chunk of those people went to work it would be good for the economy and for government spending, and most importantly for them.

Another example is that supposedly a bunch of jobs were lost.  (Remember, these numbers from the workplace survey are jobs-based, not people based.  The unemployment survey is people based.)  But all those lost jobs were in government, notably the federal government, where all the layoffs have fully kicked in.  The private sector had job growth.  This is positive, we have a horrific government spending problem, so losing government workers is big plus.  A lot of the job growth was in health care and social assistance, which I don’t consider a good sign.  Another growth area was construction and I am assuming all the AI data center investment and other investment forced by the tariff policies is going to really cause a boom there.

A puzzling trend was a big drop in full-time jobs and an equally large gain in part-time ones.  We will need to see if that is real or some artifact resulting from the non-collection of data for a while and a restarting of the surveys.  Native-born and foreign-born workers both showed increases, so the worst of the illegal immigrant wash-out may be over.  The number of people working more than one job increased, but without knowing how many hours those people were employed per week, it is hard to attribute that to needing to work extra hours to keep up with expenses.  Wage growth was solid, above inflation rates, but could be better.

You would also read in the traditional media that retail sales were weak.  They weren’t.  Car sales were low, largely because the expiration of the electric vehicle credit pulled sales forward into earlier months.  Again, it is a good thing that the government is no longer wasting money paying people to buy electric cars they don’t really want.  And how much consumers don’t want them is shown by the collapse in sales of such cars.  Online shopping and shopping at retail stores actually had a healthy increase.  The core less volatile sales group showed growth far higher than expected.  So it looks like the consumer is doing okay.