Latest news with #EmploymentSituation
Forbes
02-05-2025
- Business
- Forbes
Labor Power Weakens: April Jobs Numbers Explain May Day Rallies
Los Angeles, CA - May 01:A coalition of labor groups and activists hold a May Day rally in Los ... More Angeles for International Workers' Day and to protest Trump's policies on Thursday, May 1, 2025. (Photo by Sarah Reingewirtz/MediaNews Group/Los Angeles Daily News via Getty Images) We economists think labor bargaining power tells most of the story. Alan Greenspan was obsessed with labor power. His enduring question at the Federal Reserve was whether the economy could lower interest rates, risk a little inflation, and still not see workers winning the kind of wage gains that would push prices even higher. Capitalists care deeply about worker power, too. If workers have it, they know they'll have to share more of their profits. So right now, all eyes are on labor power — the ability of workers to negotiate better wages, better benefits, and better working conditions. I practice good "data hygiene" by keeping close tabs on several key indicators of worker power: The Q1 2025 GDP number was strikingly sad: consistent with a coming recession. Friday's jobs numbers are also downbeat. The Employment Situation report, released by the Bureau of Labor Statistics for April 2025, reveals that despite relatively strong nominal wage growth, real worker confidence and power are eroding during the first 100 days of President Donald Trump's second term. The share of unemployed individuals who voluntarily quit their jobs is a direct measure of worker confidence — signaling whether workers believe they can find a better opportunity. In January 2025, 13.2% of the unemployed were job leavers; by April 2025, that number had fallen to 11.8%. The steep drop shows that fewer workers are willing to take the risk of quitting without another job lined up — an unmistakable sign that confidence is falling fast. I back up my interpretation of the job leaver data with numbers from the Job Openings and Labor Turnover Survey, which is released separately from the more famous first Friday "jobs report" each month. As discussed in my previous Forbes blog, I use both the Employment Situation and JOLTS data to better understand shifts in bargaining power. The JOLTS quits rate — the percentage of workers voluntarily leaving their jobs each month — peaked in 2021 at 3.0%. As of February 2025, the quits rate has dropped to 2.2%. The continued drop in the quits rate confirms the sharp decline in worker confidence already showing up in the main jobs data. Wage growth is one primary sign of labor market strength. In April 2025, average weekly earnings for all employees on private non-farm payrolls rose by 0.3% to $1,080. The increase in earnings can reflect an increase in pay and an increase in hours. So, these numbers aren't anemic. Over the past 12 months, nominal earnings have increased by 3.8% and seasonally adjusted. Wages are still up. Inflation has moderated: The Consumer Price Index for All Urban Consumers (also known as CPI-U) rose by 2.4% over the same 12 months. Thus, real wages increased by about 1.4% year-over-year — a modest but positive gain in purchasing power. Wages rose modestly across the major employment sectors between January and April 2025. In one of our big sectors — health care and social assistance — where about 20 million workers are employed, the average hourly wage (without adjusting for inflation) increased from $35.90 to $36.20, a gain of 30 cents. In retail trade, which employs around 15 million workers, average hourly wages rose from $22.17 to $22.50, an increase of 33 cents. The professional and business services sector, with approximately 22 million workers, saw hourly wages move from $41.60 to $42.00, a rise of 40 cents. Meanwhile, in leisure and hospitality, a sector that includes 14 million workers, average hourly earnings grew from $20.05 to $20.30, a 25-cent gain. Overall, across the private sector, covering about 130 million workers, average hourly earnings climbed from $34.55 in January to $35.00 in April, an increase of 45 cents. Long term unemployment is rising. The so-called U-1 rate (people unemployed 15 weeks or longer) is our number to capture the sadness and frustration — not to mention lost output — of people pounding the pavement and the keyboard looking for work for a long time (actually the labor department stops counting after 52 weeks, but people still look after a year). Expressed as a percent of the civilian labor force the numbers show how deeply entrenched unemployment is becoming. In January 2025, the U-1 rate stood at 1.5%. By April 2025, it had climbed to 1.9% — a 0.4 percentage point increase. An uptick like this suggests that it's getting harder for unemployed workers to get back to work, eroding their bargaining position even further. Underemployment also climbed. The broader underemployment measure (economists call it U-6) captures the 'officially unemployed' and also the people we know could work more but they are discouraged from seeking work and others don't have enough hours, they are working part-time for economic reasons. In January 2025, the U-6 rate was 7.5%. In April 2025, it rose to 7.8% — a 0.3 percentage point increase. And over the past year the U-6 rate is up by about 0.5 percentage points, showing a creeping rise in involuntary part-time work and broader underemployment. That's not good for labor power. In summary, although the stock market may be up today — generally bad news for workers is a good sign for capital — the signs for working Americans are not good. May Day rallies across the United States saw large crowds — estimates suggest over 100,000 people nationwide across dozens of cities called for stronger worker rights and better wages, Reuters reported. These signals point to weakening labor bargaining power during the first 100 days of Trump's presidency. And the jobs numbers punctuate the verve of the May Day rallies. The people there are many, and the people running the Trump presidency are few. So, if all signs point to weakening labor bargaining power during the first 100 days of Trump's presidency how will the economy — and the ballot box —judge its effects?. I don't want a recession. I'm keeping close watch for signs. For the sake of the standard of living of American households, I hope this weakening trend doesn't harden into a lasting pattern of lost worker gains.
Yahoo
07-02-2025
- Business
- Yahoo
January Nonfarm Payrolls Well Below Expectations
Pre-market futures pulled slightly into the red this morning upon the release of today's all-important Employment Situation report, even though the numbers — while lower than expected on headline — continue to depict a labor market near full employment. The Dow swung from +20 points to -20 in the moments after the report came out, the S&P 500 went from 0 to -5 points, and the Nasdaq from -2 points to -40. The small-cap Russell 2000 moved from +1 ahead of the release to -6 points quick-take on this reaction is that the market recognizes that a healthy labor market subtracts from the possibility a new interest rate cut is coming from the Fed, near-term. This also puts a bow on the Biden administration's custodial duties over the past four years (barring possible revisions over the next couple months), which ushered in the Great Reopening and led to high inflation rates, where the fight continues today. Perhaps we won't call +143K new jobs filled last month 'robust' labor market growth, but today's January headline on non-farm payrolls from the U.S. Bureau of Labor Statistics (BLS) still satisfies employment expansion above the margins of retiring Baby Boomers each month, which is estimated to be just beneath 100K or so. This is less than half the upwardly revised +307K headline for said, the Unemployment Rate came down to +4.0% for the first time since May of last year. Hourly Wages, a gauge for how labor affects inflation, rose unexpectedly by 20 basis points (bps) to +0.5% for the month, the highest rate in a year. Year-over-year, wage growth moved back up to +4.1% for the first time since March '24; analysts had expected a 20 bps drop to +3.7% for the were no real surprises in job gains by sector: Healthcare, Retail and Social Assistance all led the way, as we have seen in recent months. Average Workweek Hours dipped to 34.1 hours, while Labor Force Participation ticked up slightly to +62.6%, where it hasn't been since September. The U-6 (aka 'real' unemployment) came in at +7.5%, in-line with all, the economy performs well when we carry these labor market figures in this manner, and over a longer period of time. The issue for the stock market is that it keeps near-term interest rates elevated at their current 4.25-4.50%; these BLS figures do not make investors hopeful for lower rates at the next Fed meeting in March. Thus, 'having it all' remains elusive. After today's open, we're not done with economic report releases. Wholesale Inventories for December are expected to have sunk further, from -0.2% the prior month to -0.5% in today's print. Preliminary Consumer Sentiment for January is anticipated to come in at +71.3 versus 71.1 the previous month. Consumer Credit, again a December number, looks to swing to a positive +$14.0 billion from -$7.5 billion posted for the month reports continue their deluge next week, including household names like McDonald's MCD, Coca-Cola KO, Cisco Systems CSCO, Lowe's LOW, Shopify SHOP and Honda HMC, to name but a few. By the end of next week, we'll start to look at the end-game for Q4 earnings season, which generally brings us the big-box retailers in the following weeks. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO) : Free Stock Analysis Report Cisco Systems, Inc. (CSCO) : Free Stock Analysis Report Lowe's Companies, Inc. (LOW) : Free Stock Analysis Report McDonald's Corporation (MCD) : Free Stock Analysis Report Honda Motor Co., Ltd. (HMC) : Free Stock Analysis Report Shopify Inc. (SHOP) : Free Stock Analysis Report To read this article on click here. Zacks Investment Research Sign in to access your portfolio
