According to official data released earlier on Wednesday, America’s labor market seems to be on the up an dup, with new claims of United States jobs benefits falling again mid-November, thus continuing a record streak of low levels.
The data was collected and analyzed by the Labor Department via a survey. However, the bad news is that as jobless claims fall and the labor market gives signs of rejuvenation, the Federal Reserve may profit from this opportunity to raise interest rates (again) during their next meeting in December.
The new claims for unemployment insurance as per the week ending Nov. 18th decreased by 13,000, standing at 239,000, while the 4-week average rose a little bit reaching 239,750. There are 142 weeks in a row during which jobless claims held below 300,000, making for the longest streak in 47 years. However, considering the increase in US population for the past half century, these levels are at an absolute low. The US Federal Reserve also reported that employers are having problems with filling vacant jobs with qualified workers, hence we can actually talk about a widespread labor shortage.
Moreover, despite these figures, wage growth was not impressive, even if companies are reluctant to allow their employees go, due to the difficulty of finding a replacement. What is really interesting about this is that Trump put a freeze on government hiring, so it seems like government employment is decreasing and private sector employment is increasing.
However, if you ask me, these numbers were cooked under Obama and now under Trump. The jobs being created are low wage service jobs that cannot support a family (Amazon-type), and the labor force participation rate is still down in the 60% range. This is all nonsense. When more than half the population cannot afford a $500 emergency and when 14% lives in poverty, the economy is not doing so great.