If you go by the Labor Department’s statistics, the job market was very hot in November. Then it became cold in December.
Average the two out and — in true Goldilocks fashion — the economy (like the porridge) may now be just right.
I’ve always told you that the government’s employment stats are flaky. Various adjustments are supposed to take care of things like Christmas hiring and new companies just coming into being.
But they don’t. They only confuse things.
And only after many months or even years of revisions do we learn what the job market was really like. Wall Street may find the monthly numbers convenient for trading, but you can go crazy trying to determine if Washington is telling us fairy tales with its statistics.
So, for a break from that nonsense, I spoke on Friday with Becky Frankiewicz, president of North America at ManpowerGroup, the third-largest job staffing company in the world.
The Labor Department had just announced that the nation’s economy added only 145,000 jobs in December. That was well below expectations and well under the 256,000 revised new job total for November.
“I can give you a real-world view from employers and employees,” says Frankiewicz, whose company finds jobs for millions of people each year. “We still have more jobs than people looking for work in our country.”
Even though job growth has been steady over the past year, government numbers say that average incomes for Americans have been growing only moderately. That might change soon, according to Frankiewicz.
“We are seeing the power shift from being more employer-driven to employee- driven,” she says. “Meaning, skilled labor can call the shots.”
So, if she’s right, salaries and benefits should start to rise. People aren’t going to be afraid to change jobs. And more folks are going to want to do what they want to do, not just work for a paycheck.
And the top thing that workers want nowadays, says Frankiewicz, is flexibility. “The fastest-growing non-wage benefit is remote working,” she says. And because of the shortage of workers, Frankiewicz says, companies are starting to give in to workers’ demands.
If the trends that Frankiewicz sees continue, how might they affect the economy as a whole? For one thing, inflation will soon become a lot bigger problem for the Federal Reserve as people who start earning more are often willing to pay higher prices for the things they want.
And there’s also a warning here for the real estate market. If workers really do get their employers to allow them to work remotely — which is a nice way of saying “at home” — companies won’t need to rent as much office space. That’s not good for the real estate market, especially in big cities like New York.
What does this mean for the upcoming presidential election? The Labor Department numbers will rise and fall between now and Election Day. But if the job market is really as strong as Frankiewicz says, then this’ll help President Trump enormously.
Like Becky, voters know in their gut what is going on in the economy. And right now, it’s not a grim fairy tale.
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