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LinkUp Predicts Disappointing Jobs Report For February But March Should Be Better
For the nearly 66 million voters who voted for Hillary Clinton, it is not the least bit surprising that the new administration has proven to be as horrifically inept, chaotic, mendacious, and nasty as we all expected. What is perhaps somewhat surprising, given where the bar was set, is that things have actually turned out to be even worse – a hellscape of lies, bigotry, racism, hypocrisy, corruption, and fear-mongering. And from the truly apocalyptic category, the President and his administration have already raced through the first few chapters of the autocrat’s playbook while desperately trying to fend off serious allegations of Russian influence and campaign collaboration.
The cavalcade of atrocities has been dizzying, to say the least, and I’m certain I’ve left out much, but the insanity reel of the first five weeks includes obsessing over (and lying about) inauguration day crowd size, Michael Flynn’s resignation on day 24, Russia, alternative facts, Russia, labeling the media the enemy of the people, banning major news outlets from the White House, Russia, the unconstitutional immigration ban, miserable cabinet appointees, incessant tweeting, Ivanka and Nordstrom, Russia, terror attacks in Sweden, Bowling Green, fake news, the wall, TPP, Jeff Sessions and the Russian ambassador, and the utter fallacy of repeal and replace (but of course, “nobody knew that healthcare could be so complicated”). And while Sean Spicer and Kellyanne Conway are great fodder for SNL, with the exception of Mike Pence, it is impossible to imagine two more terrifying human beings whispering in Trump’s ear than Stephen Bannon and Stephen Miller.
As Thomas Friedman wrote in an editorial entitled ‘Dear C.E.O.s‘, Steve Bannon was quoted by the Washington Post stating that he and Jeff Sessions were at the center of Trump’s Pro-America movement. “What we are witnessing now,” Bannon said, “is the birth of a new political order, and the more frantic a handful of media elites become, the more powerful that new political order becomes itself.” As Friedman advises, “When someone tells you he is giving birth to a new political order in America, be afraid.” No worries there – we couldn’t be more terrified.
And what about jobs? It was jobs, after all, that stood as the bedrock foundation of Trump’s electoral college victory. Through 5 weeks, other than a few trivial tweets targeting specific companies and vague mentions, completely devoid of details, of a terrific $1 trillion infrastructure plan, the administration has not taken a single step of any kind to fulfill Trump’s campaign promise to create 25 millions jobs in the next decade.
Despite Trump’s horribly misguided set of prescriptions, there is no debate around the diagnosis that millions of Americans have been decimated by a multitude of tectonic factors that have made it brutally difficult to make a decent living in the modern economy. As Friedman writes in that same editorial, “Yes, the acceleration in technology and globalization has particularly benefitted higher-skilled knowledge workers in the West and lower-skilled rising middle-classes in Asia. And yes, it did squeeze middle-skilled workers in the West, who were more vulnerable to outsourcing, algorithms, and automation. More needs to be done to help them.”
Unfortunately for the country (and Trump voters), Trump’s priorities around deregulation, immigration, tax cuts, repealing Obamacare, building walls, and reducing trade will only exacerbate the challenges the country faces in narrowing the income gap, restoring the middle class, helping lower-income workers, and providing more opportunity for all.
And factoring in the priorities of the conservative policy nihilists and Republicans in Congress (gutting the social safety net, deregulating Wall Street, eliminating major aspects of the Federal government, etc.) only adds gasoline to the inferno that is Washington these days. Who would have thought it possible that John Boehner, at least relative to the 115th Congress, could ever be regarded as a sensible moderate?
With the absolute train-wreck in Washington, it is nearly impossible to predict what this economy will look like in a few quarters, let alone where the country might be before the year is out. So for now, I’ll focus on what Friday’s jobs report for February will look like.
Based on the declines in new and total job listings on LinkUp in January, we are forecasting a net gain of just 150,000 jobs in February.
Our below-consensus forecast is further evidenced by the increase in LinkUp’s Job Duration which rose from 49 days in January to 53 days in February.
Our Job Duration metric measures the average length of time that a job stays in LinkUp’s job search engine (which indexes 3.2 million jobs daily from 30,000 company websites). As we have pointed out in the past, rising duration points to a slow-down in hiring due to either weakening labor demand or increasing difficulty in finding qualified applicants to fill open positions (or a combination of both).
Given the fact that we’ve been in a full employment environment for nearly a year, there is little doubt that companies are finding it increasingly difficult to find suitable candidates to hire. What is more challenging however, and what will be of paramount importance to the Fed, is determining to what extent labor demand is slowing down.
Although we’ll have one more data point for February when we compare February to March on April 1st, our initial data for February shows a slight increase for both new and total job listings over January. As a result, we expect to see continued wage gains and sustained strength in the labor market through at least March and likely through the 2nd quarter. Beyond that, however, is anyone’s guess, and speculating as to what Republicans in Washington will end up doing is virtually impossible.
What is certain, however, is that the long-term prescription for strengthening the American economy and improving conditions for the American workforce is the complete opposite of the policies that Trump and Congressional Republicans are likely to enact.
As Friedman writes at the end of his editorial, “The way we lift American workers is not by building higher walls, but rather stronger communities — where business, philanthropies, the local school system and local government forge adaptive coalitions to enable every worker to engage in lifelong learning and every company to access global markets and every town to attract the smart risk-takers who start companies.
That is exactly what is happening in America’s best communities, and the job of government is to scale it, and the job of big business is to defend it. So don’t be fooled by a Trump sugar high; your businesses will thrive only if America is the country that prepares itself and its workers to live in a world without walls, not one that goes around erecting them.”