SAYING IT, KEEPS ON TWEETING IT, THERE HAS BEEN NO NEW WALL
BUILT.
BUILT. GEOFF, THANKS VERY MUCH.
GEOFF BENNETT AT THE WHITE HOUSE
FOR US.
FOR US. >>> THE OTHER BIG STORY IS THE
JOBS RATE.
JOBS RATE. IT’S ACTUALLY A PRETTY GOOD JOBS
REPORT.
REPORT. THIS IS THE FIRST JOBS REPORT
SINCE THE GOVERNMENT SHUTDOWN
AND IT DID BEAT EXPECTATIONS.
ECONOMISTS HAD WORRIED THAT THE
SHUTDOWN WOULD SLOW HIRING DOWN.
NOW, JANUARY’S NUMBERS MEAN THAT
WE HAVE HAD 100 CONSECUTIVE
MONTHS OF JOB GAINS.
THAT’S A RECORD RUN.
LET’S LOOK AT THIS.
THE UNEMPLOYMENT RATE WENT UP TO
4%.
4%. IT WENT UP BY 1/10 OF 1%.
WE’RE GOING TO DISCUSS THAT IN A
MINUTE.
MINUTE. I ALWAYS SAY THIS IS -- THERE
ARE A LOT OF REASONS WHY THIS
SHOULD NOT BE THE NUMBER YOU PAY
THE MOST ATTENTION TO.
THIS IS THE NUMBER YOU SHOULD
PAY THE MOST ATTENTION TO OR AT
LEAST SOME ATTENTION TO.
304,000 NET NEW JOBS.
IF YOU TAKE ALL THE JOBS CREATED
MINUS ALL THE JOBS LOST, YOUED
END
END YOU END UP WITH 304,000.
IN NOVEMBER THE JOBS REPORT WAS
REVISED UP BY 20,000 JOBS TO
196,000 ADDED, WHICH IS A
RESPECTABLE NUMBER.
RESPECTABLE NUMBER. DECEMBER WAS REVISED DOWN BY
90,000.
90,000. THAT’S A BIGGER REVISION THAN WE
TYPICALLY GET.
TYPICALLY GET. STILL, THE REMAINING NUMBER WAS
222,000 WHICH IS A PRETTY GOOD
NUMBER, BUT THE INITIAL NUMBER
WAS 90,000 MORE THAN THAT.
SO WE GOT AN UPWARD REVISION OF
20,000 IN NOVEMBER, DOWNWARD
REVISION OF 90,000 IN DECEMBER,
FOR 2018 WE CREATED 223,000 NET
NEW JOBS PER MONTH, WHICH IS
PRETTY GOOD.
PRETTY GOOD. THIS NUMBER FOR JANUARY IS YET
BETTER THAN THAT.
THE QUESTION REMAINS AS TO
WHETHER WE’LL SEE REVISIONS TO
THAT IN THE FOLLOWING COUPLE OF
MONTHS.
MONTHS. >>> OKAY, HERE’S WHERE THE
RUBBER HITS THE ROAD.
WAGES, THIS IS WHAT MATTERS TO
PEOPLE.
PEOPLE. WE HAVE SEEN A NET WAGE INCREASE
OF 3.2% YEAR OVER YEAR.
YOU HAVE TO FACTOR INFLATION
OVER THAT.
OVER THAT. INFLATION IS LOWER THAN THIS
AMOUNT.
AMOUNT. PEOPLE ARE SEEING A SMALL
INCREASE.
INCREASE. THIS IS THE NUMBER WE WANT TO
SORT OF SEE ON A CONSISTENT
BASIS WITHOUT HUGE INFLATION.
>>> ALL RIGHT.
AND THEN LET’S TALK ABOUT
SOMETHING CALLED THE U-6
UNEMPLOYMENT RATE.
UNEMPLOYMENT RATE. THIS IS BROADER THAN THE INITIAL
UNEMPLOYMENT RATE WE USE.
IT INCLUDES EVERYBODY WHO IS IN
THE OFFICIAL JOBLESS RATE.
IT ALSO INCLUDES THOSE PEOPLE
WHO HAVE TRIED TO FIND A JOB IN
THE LAST YEAR AND WHO HAVE NOT
LOOKED IN THE PAST FOUR WEEKS
BECAUSE THEY’VE BEEN DISCOURAGED
OR THEY DON’T THINK THEY’RE
GOING TO GET A JOB OR WHATEVER
THE REASON MAY BE.
THIS ALSO INVOLVES PART-TIME
WORKERS WHO QUALIFY AS BEING
EMPLOYED BUT THEY WOULD RATHER
HAVE A FULL-TIME JOB.
WHEN YOU PUT THAT ALL TOGETHER,
WE HAVE A NUMBER OF 8.1%.
THERE ARE REASONS TO LOOK AT
THIS NUMBER AS OPPOSED TO THE
4%.
4%. AND THE REASONS TO LOOK AT THE
OTHER NUMBER AS WELL.
THIS ONE IS UP BY 5/10 OF A
POINT.
POINT. THESE ARE THE FOUR BIGGEST.
74,000 JOBS WERE ADDED IN
CONSTRUCTION, 52,000 IN HEALTH
CARE.
CARE. HEALTH CARE IS ALWAYS A BIG
GAINER.
GAINER. EVEN THROUGH THE RECESSION YOU
SAW HEALTH CARE JOBS INCREASING
LARGELY BECAUSE OF OUR AGING
POPULATION.
POPULATION. TRANSPORTATION ADDED 42,000
JOBS.
JOBS. AND WAREHOUSING ADDED 27,000
JOBS.
JOBS. SO THAT’S THE TOP LINE PICTURE
OF THIS EMPLOYMENT REPORT.
>>> I WANT TO DIG INTO THIS A
LITTLE MORE WITH DIANE SWONK,
ECONOMIST AT GRANT THORNTON.
DIANE, GOOD TO SEE YOU.
THE QUESTION I’M GETTING ON
TWITTER FROM PEOPLE, WHERE DOES
THE SHUTDOWN FIGURE INTO THIS?
>> IT’S INTERESTING IT’S MORE IN
THE UNEMPLOYMENT DATA AND ALSO
THE NUMBER OF PEOPLE TAKING
PART-TIME JOBS INSTEAD OF HAVING
FULL-TIME JOBS.
FULL-TIME JOBS. THAT ACTUALLY ADDED TO THAT U-6,
THE STRESS FIGURE OF
UNEMPLOYMENT POPPED IT OVER 8%
DURING THE MONTH.
OVER HALF A MILLION PEOPLE
JOINED THOSE RANKS OF PEOPLE
HAVING TO TAKE PART-TIME JOBS
INSTEAD OF FULL-TIME JOBS FOR
WHAT WE CALL ECONOMIC REASONS.
THEY WANTED FULL-TIME JOBS.
A LOT OF THOSE WERE CONTRACTORS
THAT WEREN’T PAID AND FURLOUGHED
WORKERS THAT WEREN’T PAID.
AND SO SOME OF THE GAINS THAT WE
SAW WERE ACTUALLY THESE PEOPLE
TAKING PART-TIME JOBS TO OFFSET
WHAT THEY WERE LOSING ELSEWHERE.
SO THERE IS A LITTLE BIT OF
DOUBLE COUNTING IN THERE.
WE ALSO SAW AN INCREASE IN THE
UNEMPLOYMENT RATE FOR GOVERNMENT
WORKERS.
WORKERS. THAT PICKED UP A BIT.
AND FOR WORKERS THAT WERE ON
TEMPORARY UNEMPLOYMENT, 175,000
OF THE 340,000 WORKERS THAT WERE
FURLOUGHED IN WASHINGTON AS A
RESULT OF THE SHUTDOWN.
THAT’S REALLY INTERESTING,
THOUGH, THAT SO MANY WORKERS --
THE GOOD NEWS IS IN A GOOD
ECONOMY, WORKERS WHO WERE LIVING
PAYCHECK TO PAYCHECK AND HAVING
SUCH A DESPERATE TIME WERE ABLE
TO GET OFFSETTING JOBS TO
SUPPLEMENT THEIR INCOME EVEN
WHEN THEY WEREN’T GETTING PAID.
THE BAD NEWS IS THAT’S WHAT THEY
HAD TO DO.
>> DIANE, LET ME ASK YOU ABOUT
SOMETHING.
SOMETHING. DONALD TRUMP WAS ONE OF THOSE
PEOPLE WHO WHEN HE WASN’T
PRESIDENT CRITICIZED THESE
NUMBERS FROM THE BUREAU OF LABOR
STATISTICS, THE DEPARTMENT OF
LABOR SAID THEY’RE NOT TRUE.
NOW HE TOUTS THEM A LOT.
I GET OTHER PEOPLE WHEN WE HAVE
STRONG NUMBERS DON’T LIKE DONALD
TRUMP SAYING THE NUMBERS AREN’T
BELIEVABLE.
BELIEVABLE. THERE ARE REASONS WHY ONE WOULD
BE CRITICAL OF THE NUMBERS, BUT
THE TREND IS CONSISTENT.
IN OTHER WORDS, IF YOU DIDN’T
LIKE THEM TEN YEARS AGO, YOU
HAVE THE SAME REASON NOT TO LIKE
THEM NOW.
THEM NOW. IF YOU LIKED THEM TEN YEARS AGO,
NOTHING’S CHANGED IN THE WAY
THEY GATHER THESE NUMBERS.
WHAT SORT OF STOCK DO YOU PUT IN
THIS -- THESE STIGSATISTICS?
>> THEY’RE INCREDIBLY IMPORTANT.
THEY ALWAYS TRY TO IMPROVE THE
WAY THEY DO THE DAT SA AS WELL.
ONE OF THE BIGGEST PROBLEMS WE
HAVE IS BECAUSE OF ATTACKS ON
INSTITUTIONS AND CONCERNS ABOUT
PEOPLE’S PRIVACY.
PEOPLE’S PRIVACY. I WORK WITH THE STATISTICIANS
ALL THE TIME AND THEY’RE TRYING
TO PROTECT THE OTHER PARTS OF
GOVERNMENT FROM GETTING AT SOME
OF THE DATA, WHICH IS REALLY
IMPORTANT AS WELL BECAUSE YOUR
PRIVACY NEEDS TO BE PROTECTED.
BUT WE DON’T HAVE -- IT TAKES
MUCH LONGER TO GET THESE SURVEYS
RIGHT BECAUSE FEWER PEOPLE WANT
TO ANSWER THE QUESTIONS WHEN
IT’S SOMETHING LIKE A HOUSEHOLD
SURVEY.
SURVEY. THEY ACTUALLY CALL YOU UP AND
ASK YOU SPECIFIC QUESTIONS.
SO IT’S REALLY IMPORTANT THAT
WE’RE NOT GETTING THE COMPLIANCE
WE ONCE DID.
AND THAT’S IN LARGE PART BECAUSE
OF ALL THIS NOISE WE HEAR
EXTERNALLY WHEN THEY’RE REALLY
TRYING TO GET THE RIGHT DATA.
ALSO ON THE FRONT PAGE OF THIS
REPORT, IT SAYS RIGHT THERE.
OH, BY THE WAY, THERE’S A HALF A
MILLION INCREASE IN WORKERS
LOOKING FOR PART TIME INSTEAD OF
FULL TIME FOR ECONOMIC REASONS.
AND WE THINK THIS IS BECAUSE OF
THE FURLOUGHED WORKERS AND
BECAUSE OF THE CONTRACTORS.
SAYS IT RIGHT ON THE FRONT PAGE
OF THE DOCUMENT.
SO IF YOU ACTUALLY READ THESE AT
ALL, TO THE 4 R FOURTH PARAGRAPH
OF THE FRONT PAGE, YOU GET THIS
INFORMATION.
INFORMATION. >> I DO OFTEN RECOMMEND,
ACTUALLY, PEOPLE GO TO THE
BUREAU OF LABOR STATISTICS.
IT HAS A GREAT DATA SET.
YOU CAN LEARN MORE ABOUT THE
ECONOMY THAT DOESN’T COME OUT IN
THIS STUFF.
THIS STUFF. >> IT’S AMAZING.
>> IS THERE ANY DATA MISSING
BECAUSE OF THE SHUTDOWN?
>> NOT IN THIS PARTICULAR ONE.
THERE IS IN THE MORE DETAILED
REPORTS.
REPORTS. THEY COULDN’T DO THAT -- BUREAU
OF LABOR STATISTICS WHICH DOES
THIS REPORT, THERE IS A REPORT
THAT DIDN’T GET DONE.
WHAT IS IMPORTANT IN THIS NUMBER
AS WELL, I THINK, IS THAT THERE
WAS -- WE FORGOT, WE’RE IN THE
MIDDLE OF POLAR VORTEX.
I JUST GOT OUT OF IT FOR THE
LAST TWO DAYS IN CHICAGO.
IT WAS COLDER THAN ANTARCTICA.
EVERYTHING WAS SHUT DOWN.
IT IS NOT GOING TO SHOW UP IN
ANY EMPLOYMENT REPORTS.
IT WASN’T THE SURVEY WEEK.
THE WEEK OF THE VINITA NAIR WAS
AN UNUSUALLY WARM WEEK AND
THAT’S WHY YOU HAVE STRONG
CONSTRUCTION DATA IN THIS
NUMBER.
NUMBER. THE UNSEASONABLY ADJUSTED DATA
FELL.
FELL. THOSE ARE IMPORTANT THINGS TO
UNDERSTAND ABOUT WHAT HAPPENED
AS WELL AS THERE IS A LOT OF
MIXED MESSAGES AND A LOT OF
NOISE IN THIS PARTICULAR REPORT.
AT THE END OF THE DAY, TAKE
100,000 OFF, TAKE 150,000 OFF.
IT’S STILL A GOOD REPORT.
>> STILL A GOOD REPORT.
LET ME ASK ABOUT REVISIONS.
THAT’S ANOTHER THING PEOPLE ASK
ABOUT.
ABOUT. THE REPORT REVISED DECEMBER VERY
BIG GAINS OF 312,000 JOBS, DOWN
TO, AS YOU SAID, 222,000, WHICH
IS GOOD.
IS GOOD. WHAT DO WE NEED TO KNOW ABOUT
REVISIONS?
REVISIONS? >> REVISIONS COME IN, AGAIN, AS
MORE DATA COMES IN, THEY TRY TO
GET -- THERE IS THIS BALANCE
BETWEEN GETTING THE SPEED AND
THE QUALITY OF THE DATA.
WHAT THEY CAN GET US FAST IS THE
FIRST CUT.
FIRST CUT. THEY GO BACK AND GET MORE
INFORMATION FROM EMPLOYERS ON
THE ESTABLISHMENT SURVEY THAT
FILLS IN THE GAPS.
AND THAT’S REALLY IMPORTANT TO
DO OVER TIME.
AND SO WE DO SEE THESE
REVISIONS, THESE WERE BENCHMARK
REVISIONS.
REVISIONS. WE DO SEE THESE REVISIONS THAT
PEOPLE SAY, WAIT A MINUTE, CAN
WE EVEN READ THIS DATA?
DON’T PUT TOO MUCH WEIGHT IN THE
MONTH TO MONTH NUMBERS.
THE UNDERLYING TREND, 100
MONTHS, WOW.
MONTHS, WOW. >> WE -- YOU AND I HAVE TALKED
ABOUT THE IDEA THAT WE MAY BE
COMING INTO A SLOW DOWN IN 2019,
2020.
2020. SOME OF THAT WOULD JUST BE ABOUT
EXPECTED, BUT WE’VE BEEN IN AN
EXPANSION FOR A LONG TIME.
THESE ARE REALLY, REALLY GOOD
NUMBERS.
NUMBERS. HOW DOES THAT WORK WHEN WE START
LOOKING AT A SLOW DOWN?
DO THEY SUDDENLY SLOW DOWN OR
ARE WE AT A GOOD NUMBER?
TO BE SEEING 2, 2 PLUS 100,000
NET NEW JOBS A MONTH IS PRETTY
GOOD.
GOOD. >> IT IS EXTREMELY GOOD.
AND IT GIVES US A LOT OF
CONFIDENCE THAT THE RECESSION
ISN’T TOMORROW.
ISN’T TOMORROW. IT DOESN’T GIVE US ANY
CONFIDENCE WHETHER THE RECESSION
IS IN 8 MONTHS OR 12 MONTHS OR
24 MONTHS.
24 MONTHS. THAT’S WHAT THE HARD PART IS.
WE SHOULD BE SEEING SOME KIND OF
SLOW DOWN COMING IN THROUGH THE
NUMBERS.
NUMBERS. IT MEANS EMPLOYERS ARE STILL
CONFIDENT ENOUGH TO HIRE.
I MADE THE POINT THAT, YOU KNOW,
LUCKILY THE ECONOMY IS STRONG
ENOUGH AND LABOR MARKETS ARE
TIGHT ENOUGH IN A DIFFERENT
ECONOMY THOSE WORKERS WHO WERE
FURLOUGHED WOULDN’T HAVE THE
OPPORTUNITY TO PICK UP SOME
EXTRA MONEY AND AT LEAST TRY TO
COVER SOME OF THEIR BILLS WITH
PART-TIME WORK.
PART-TIME WORK. SO THAT’S REALLY GOOD.
SO RIGHT NOW THE NUMBERS ARE NOT
SIGNALLING, YOU KNOW, RED, THIS
IS A RECESSION.
NOR ARE THEY SIGNALLING YELLOW
YET.
YET. WE HAVE OTHER NUMBERS THAT WE’RE
WORRIED ABOUT, BUT THEY HAVE YET
TO FULLY WORK THEIR WAY THROUGH
THE DATA.
THE DATA. WE HAVEN’T SEEN A LOT OF
BUSINESS INVESTMENT.
BUSINESS INVESTMENT. THAT’S A SIGN THEY’RE WORRIED
ABOUT THE FUTURE.
WE’VE SEEN HOME SALES AND BIG
TICKET SALES PEAK IN 2017 AND
THAT’S A LONG TIME TO HAVE A
SLIDE IN THOSE WITHOUT STARTING
TO SORT OF WORRY ABOUT BEING ON
THIN ICE SOMEWHERE DOWN THE
ROAD.
ROAD. >> I WANT TO ASK MY CONTROL ROOM
TO PUT UP THE WAGE INCREASE
NUMBER 3.2%.
NUMBER 3.2%. CAN YOU PUT THAT INTO
PERSPECTIVE FOR ME?
HOW DO YOU THINK ABOUT A NUMBER
LIKE 3.2% YEAR OVER YEAR
INCREASE IN WAGES AND HOW DO YOU
THINK ABOUT IT IN RELATION TO
INFLATION?
INFLATION? >> IT CERTAINLY IS MUCH BETTER
THAN WE’VE HAD AND BECAUSE
INFLATION HAS BEEN LOW, THAT’S
AN EVEN BETTER NUMBER BECAUSE
OIL PRICES, PRICES AT THE PUMP
HAVE NOT BEEN SO BAD LATELY.
THAT’S HELPED FREE UP SOME
FUNDS.
FUNDS. ALMOST ALL THE FUNDS HAVE BEEN
CONCENTRATE ED IN LOW WAGE JOBS.
THAT’S GOOD NEWS FOR LOW WAGE
HOUSEHOLDS THAT ARE SEEING
ACCELERATION IN WAGES.
WHAT IS UNFORTUNATE IS MANY LOW
WAGE HOUSEHOLDS USED TO BE
MIDDLE INCOME HOUSEHOLDS.
AND MIDDLE INCOME HOUSEHOLDS
HAVE SLID INTO LOWER WAGE SLOTS
OR THEY AREN’T SEEING THE WAGE
GAINS THEY ONCE DID.
WE’RE NOT SEEING IT MOVE UP THE
FOOD CHAIN.
FOOD CHAIN. MAYBE THAT WILL COME LATER THIS
YEAR.
YEAR. THAT’S NOT HAPPENED YET.
IT’S ONE OF THE REASONS THE FED
IS STILL ON THE SIDE LINES AND
IT’S STILL SMALL SHADOW OF ITS
FORMER SELF IN WAGE GAINS SAY
COMPARED TO THE 1909s OR EARLY
2000s.
2000s. >> DIANE, I HAVE REALLY TRIED TO
GO THROUGH THE QUESTIONS THAT MY
VIEWERS TWEET ME AND ASK ME
ABOUT THE UNEMPLOYMENT REPORT TO