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Labor Market

10/06/2017

Even though the United States LOST 33 thousand jobs in September, the jobs-market is HOT!  The unemployment rate is only 4.2%.  The more important U-6 level of unemployment, which includes the long-term unemployed and those only marginally attached to the workforce, like those who hold serial part-time jobs, has fallen to only 8.3%, which is the lowest level since 2007.

The only reason the U.S. lost jobs last month was due to the hurricanes.  Many of our economic data points will be skewed by this over the next few months, so we have to “look around” the data.  If you look around today’s jobs-report, you will see the jobs-market is HOT!

If you still have a kid living in your basement, who believes he/she cannot get a job, NOW would be a good time to evict them forcefully if necessary.  Do them a favor and EVICT them.  It is not even tough love, it is just love to evict them. Of course, there is something called “frictional unemployment” that recognizes a job in Oklahoma is not much good for a person in North Carolina, who doesn’t even know a job opening exists.  That’s why they call it a job-search, which is so simple on the internet.

Despite the good news that the jobs-market is HOT, the stock market was not happy.  The conventional wisdom is that the Fed is more likely to raise interest rates when the job-market is HOT.  Interestingly, the current Fed-head, Janet Yellen, finds the relationship between jobs and inflation is not as strong as before.  With unemployment so low for so long, inflation should be a problem now, but it is not, contrary to what hand-wringers say.  I do believe Yellen will again raise interest rates in December anyway, not because she wants to preclude an inflationary outbreak but because it will be her last opportunity to do so before her term expires — a fitting “swan song.”

Did I mention the jobs-market is HOT?  Now, go worry about something else . . .

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