Private-Sector Jobs Went Negative in October. Will the Fed Panic Again?

According to the most recent report from the federal government’s Bureau of Labor Statistics, the US economy added only 12,000 payroll jobs during October. This was the smallest month-to-month employment gain in nearly four years. Moreover, total private jobs fell in October by 28,000.

This is the worst employment report since 2020, and it reflects an overall downward trend in employment growth since 2022. In addition to the drop in private employment, the report also shows drops in full-time employment and ongoing stagnation in the total number of employed workers. This is an economy in which whatever lackluster growth there is in employment, it’s being driven by part-time jobs and taxpayer-funded government workers.

Government Jobs vs. Private Employment

Total government jobs grew by 40,000 during October, meaning total job growth for the month would have been negative were it not for the immense amounts of deficit spending that props up growth in government hiring. This has been a growing trend over the past year. Proportionally, government jobs over the year have grown one-and-a-half times more than private-sector jobs.

For most of the past year, however, there were—at least according to the establishment survey— some gains in private employment. But that wasn’t the case in October meaning private employment fell in October for the first time in 46 months.

But, 12,000 more people had jobs in October than in September, right? Not quite. That number comes out of the so-called “establishment” survey which counts only jobs, but not employed workers. According to the federal government’s other employment survey—the household survey—the total number of employed workers in the United States fell in October, month over month, by 368,000 workers.

Over time, this has led to stagnation in total employment in the household-survey numbers. Over the past eighteen months, total employed workers has gone nowhere, and as of October, there are 370,000 fewer employed workers in the United States than there were eleven months ago:

Yet, over this period, total jobs in the establishment survey has grown by more than 2 million jobs. So why are there job gains in the establishment survey but job losses in the household survey? One probable explanation is that much of the job growth we see is driven by part-time jobs and by people holding more than one job to make ends meet.

Not surprisingly, the household survey does indeed show that full-time employment fell in October both month-to-month and year-over year. Part-time jobs, on the other hand, continued an upward trend in growth, year over year.

In fact, year-over-year full-time job growth has now been negative for nine months in a row, for the past thirty years, that has only happened when the economy is in recession:

There is other bad news in the report, as well. Temp jobs continue their long march downward, and total temp work is now at the lowest level reported in more than a decade. Year-over-year, temp work has been down for two full years. For more than thirty years, this has only happened during recessions.

Average weekly overtime hours remained at 3.6 hours in October. For more than 30 years, average overtime has been at this level only during recessions. The total number of permanent job losers also spiked in October, rising to the highest level reported—outside the covid crisis—in 90 months.

These jobs numbers weren’t the only bad news released today, either. The PMI manufacturing index, released by the Institute for Supply Management, fell to 46.5 percent. This was the lowest reading of the year, showing “economic activity in the manufacturing sector contracted in October for the seventh consecutive month.” The report showed new orders, production, and employment were all in contraction territory during October.

Will the Fed Panic Again? 

The question that now faces markets is this: what will the Federal Reserve do in response to the October job report? The bond markets may give us hint.

Today, after the release of the jobs report, the 10-year yield rose quickly to a four-month high. Overall, the yield curve steepened today as the 5-year, the 10-year and the 30-year also all experienced significantly rising yields.

This strongly suggests that bond investors expect the Fed, in the face of increasingly bad economic data, will totally throw in the towel on its alleged war against price inflation. With government debt levels at nosebleed levels, and now with this jobs report, there is every reason to believe that the Fed simply doesn’t have to stomach to do anything but lower the target policy rate in an effort to keep government debt cheap and to stimulate the job market.

That points to rising price inflation, and that points to rising yields in the longer term. Thus, we now see that rise in the 10-year and 30-year bonds.

The bond markets are probably right. At this point, it’s nearly a sure thing that the Fed will cut the target rate by at least 25 basis points as already expected. After all, at the September meeting, following a middling jobs report that was better than this one, the Fed panicked and chopped 50 basis points off the target rate. It may do so again.

This all points to a hard pivot toward more dovish policy and more price inflation moving forward. Of course, price inflation could fall in coming months. But that won’t be thanks to the Fed, it would be thanks to recession and a collapse in demand. On the other hand, given the immense amounts of monetary inflation that has occurred over the past four years, we could get both recession and ongoing inflation. Then we’ll get stagflation and Powell will go down in history as the worst Fed chairman since Arthur Burns. The bond markets seem to be entertaining the possibility.

 


Originally Posted at https://mises.org/


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    The Miserable Cost Of An Open Border

    The Miserable Cost Of An Open Border

    Authored by Seth Barron via RealClearPolitics,

    The Biden-Harris experiment in dissolving the U.S. border has wrought massive changes to American society, most of which will not be understood for years, if not decades. Since 2021, U.S. border officials have had at least 10 million “encounters” with migrants, many of whom were allowed to enter the country. There is no telling how many more aliens entered the country without encountering enforcement agents. The population of the United States may have increased by as much as 15 million people in just a few years.

    This massive flow of humanity crosses multiple national borders, involves every mode of transportation, accounts for billions of dollars paid in fees to smugglers, and describes a fantastically complex economy of suffering and hope. In an effort to get a handle on this human tide, noted muckraker James O’Keefe – known for his hidden camera “gotcha” interviews with abortionists, media executives, progressive nonprofit executives, and other degenerate types – traces the migrant onrush from its source, and seeks to trace the machinery of profit and influence that is conducting it from great removes.

    “Line In The Sand,” the resulting documentary, is a remarkable and humane exposition, revealing perspectives and images American audiences have mostly been prevented from seeing. O’Keefe and his intrepid team begin on the U.S. side of the Mexican border, where we witness migrants crossing the border through holes that their guides have cut in a fence that serves as a target as much as a barrier. Infrared cameras show dozens of illegal aliens streaming toward “pick-up” vehicles on the U.S. side while smugglers – presumably cartel members – a few feet away taunt O’Keefe and his group. “What if I were to run up to them right now, what would happen?” O’Keefe asks his guide. “I would highly advise you against that,” he is told, in a classic understatement.

    The fact that coyotes and other human traffickers are paid to assist northbound migrants with their passage is no scandal; we all know what their motivations are and why they are doing what they do. But O’Keefe documents multiple examples of U.S. Border Patrol agents standing idly by while illegal aliens cross, virtually under their noses. “Why aren’t you doing anything?” he asks. “Have a good day, guys,” a border agent desultorily responds before driving off in the general direction of the episode. Later, a migrant stands in front of a Border Patrol truck, clearly trying to alert the agents of his intention to surrender, but is studiously ignored until O’Keefe and his team call their attention to him.

    There is a kind of sad comedy in the operations of U.S. border security, and O’Keefe is not unsympathetic to the absurd position that border agents have been put in. Trained to defend the national border and to serve as the first line of defense of American soil, these agents have been recommissioned as a perverse Welcome Wagon for illegal aliens, charged with making their undocumented and uninvited entrance to the United States as commodious as possible.

    Looking to get deeper into the heart of this migratory avalanche, O’Keefe went deep into Mexico, to the city of Irapuato, about 150 miles northwest of Mexico City. Irapuato is a popular railway junction where thousands of migrants climb aboard “La Bestia,” or “The Beast,” a cargo train that chugs northward toward the United States. In the film’s most remarkable footage, O’Keefe and his team join with migrants, mostly from South and Central America, to ride The Beast, also known as “el Tren del Muerto,” or the Train of Death. O’Keefe talks to the migrants without condescension, asking them their destinations and what they plan to do when they get there, and their concerns about the perilous nature of the journey. We see the film crew race to jump on a moving train and clamber on top to sit in a pile of coal; O’Keefe is shocked at how truly dangerous this small element of the trip is and sympathizes with the migrants’ difficult choices. These scenes are among the film’s most affecting, along with the crew’s random encounter with a little girl who had just crossed the border after journeying from Guatemala by herself. There is a human dimension to illegal immigration, and O’Keefe does not ignore it. 

    However, there is also an impersonal dimension to this massive population transfer, and O’Keefe determinedly aims to uncover it – to put a face to the institutions and administrators that benefit from the rough injection of millions of people into American society. From government agents to bus companies to nonprofit resettlement groups to private contractors running huge, walled compounds housing thousands of children, O’Keefe doggedly tries to penetrate the mechanics of a system that resolutely hides itself behind a screen of silence, usually in the name of “safety” and “privacy.”

    Some of the film’s more comical moments pertain to these segments, such as when the team follows some just-arrived Chinese migrants in San Diego to an employment agency, where other Chinese aliens, already in the country for several months, complain that it’s much harder to live in the United States than they had imagined. O’Keefe tries to sniff out a connection between the owner of the agency and more powerful actors, but it emerges that there really isn’t much going on; in fact, the owner asks O’Keefe if he knows of a way to apply for government grants.

    Elsewhere, O’Keefe tries to get information about the operations of several huge residential centers for unaccompanied minors and tries to spin their refusal to give him access to the centers or submit to interviews as evidence of the existence of vast, government-funded child sex trafficking networks. But it seems more likely, though no less troubling, that the open borders policy of the last four years has created a tremendous humanitarian crisis of alien children roaming the continent by themselves, and the government is probably trying to keep them from becoming prey to sex traffickers while they sort out where to send them. Though O’Keefe does not uncover a salacious network of child predators, his vigorous pursuit of the truth does reveal the existence of a large, shadowy, government-funded, and lucrative system of child “welfare.”

    So, “Line In The Sand” is correct in the larger sense that billions of dollars are being spent managing this human flow, and many people are getting rich off of it. The last thing these parasitical administrators of the nonprofit industrial complex want is for the border to close. O’Keefe does a great job of capturing in real time the corruption of a local New York City nonprofit called La Jornada, whose leader, Pedro Rodriguez, evidently perpetrates fraud, demanding fees for services that the city provides for free. O’Keefe also sends a Spanish-speaking reporter undercover into the Roosevelt Hotel, New York City’s main processing center for newly-arrived migrants, which offers him free housing, medical care, and even airplane tickets, even though the reporter explains that he has no identification of any sort. How, O’Keefe asks, in our post 9/11 security-obsessed era, are we to make sense of a system that admits millions of unvetted foreigners into the country, and then offers to fly them anywhere they care to go?

    “Line In The Sand” is rough in parts, but intentionally so. Its subject is so sprawling and tangled that a neat and clean representation would be a lie. Even with a nine-figure budget – which this film assuredly did not have – a documentary about the border and the 30 million-footed human swarm that has crossed it would be messy and incomplete. But James O’Keefe and his small team have done something remarkable. They have taken on the decade’s biggest story, given it form, and preserved the humanity of its subjects. It is worth watching.

    Seth Barron is a writer in New York and author of the forthcoming “Weaponized from Humanix.”

    Tyler Durden
    Sat, 12/07/2024 – 17:30

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