Last Friday (May 7, 2021), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – April 2021 – which showed that the recovery since the catastrophic labour market collapse in March and April 2020, has substantially slowed after signs in March that the revovery was accelerating. The change in payroll employment fell from 770 thousand in March 2021 to a miserly 266 thousand and unemployment edged up slightly to 6.1 per cent. The broader labour wastage captured by the BLS U6 measure fell by 0.4 points to 10.7 per cent. The US labour market is still 8,215 thousand jobs short from where it was at the end of February 2020 and the unemployment to job openings ratio also suggests significant slack remains.

Last Friday (April 2, 2021), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – March 2021 – which showed that the recovery since the catastrophic labour market collapse in March and April 2020, which had stalled in recent months, has got back on track as States open up their economies. Payroll employment growth was very strong and the unemployment rate fell by 0.2 points to 6 per cent. The broader labour wastage captured by the BLS U6 measure fell by 0.4 points to 10.7 per cent. Whether the vaccination process in train allows businesses to remain open is an unknown at present. Time will tell.

Last Friday (February 5, 2021), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – February 2021 – which is consistent with a view that the US labour market recovery is stop-start at present and not reducing the jobs lost since March 2020 at any reasonable rate. prediction. Payroll employment growth was stronger in February. The labour force survey data showed consistent employment growth but not strong enough to really do anything about unemployment and the broader labour wastage captured by the BLS U6 measure which was constant at 11.1 per cent. Participation was steady in February, which when coming off a recession is a sign that employment growth is subdued. I remain wedded to the view that the US will have to stabilise the health situation before they will be able to sustain any reasonable economic recovery. Whether the vaccination process in train allows for that is an unknown at present. But with states like Texas seemingly in denial with respect tot the virus, I suspect bad outcomes will emerge in the month ahead. And with the Blue Democrats trying to be Republicans (denying a reasonable stimulus) that doesn’t augur well.

Payroll employment highly subdued. 408 thousand workers exit the labour force due to lack of jobs. Overheating potential zero. In last month’s assessment – US labour market – things are getting worse again as the virus spreads (January 18, 2021) – I predicted things would get worse given the trajectory of the virus. I have formed a strong view that nations have to deal with the health issue before they can expect the economy to open up again. No nation can ignore a spiralling death rate and avoid some restrictions which damage the economy. The evidence demonstrates that the nations that have largely suppressed the virus are doing the best in economic terms. Last Friday (February 5, 2021), the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – January 2021 – which is consistent with my prediction. Payroll employment growth has slowed rapidly (only increasing by 49 thousand). But the labour force survey data is a bit difficult to interpret this month due a population benchmarking changes (see below). In terms of the household survey, employment rose by 201 thousand and the labour force was reduced by 408 thousand, meaning that official unemployment fell by 606 thousand and the unemployment rate fell by 0.4 points. Taking out the population control effect, the labour force shrank by 200 thousand. While the signals are a little confused, the data is showing there is no strong recovery going on at the moment as the health crisis intensifies. There is an elevated degree of excess capacity. I consider that the US will have to stabilise the health situation before they will be able to sustain any economic recovery. And we can disregard New Keynesian macroeconomists who are suffering from attention deficit problems it seems, and claiming that the economy is close to overheating and cannot absorb the proposed stimulus from the new Administration. The stimulus is actually too little!

It has been clear that with the virus infections in the US increasing rapidly and with the lack of fiscal support from government, that the labour market conditions would probably start to deteriorate after a brief period of recovery following the first blush with the virus. I have been predicting that since December 2020. The latest data reveals that assessment was accurate. On January 8, 2021, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – December 2020 – which reveals a deteriorating or static situation, depending on the weight one gives to the payroll data relative to the household survey. Payroll employment fell by 140 thousand. In terms of the household survey, with employment and the labour force hardly moving, unemployment and the unemployment rate was unchanged. While the signals are a little confused, the data is showing the recovery has ended as the health crisis intensifies. I consider that the US will have to stabilise the health situation before they will be able to sustain any economic recovery. The US appears to be going in the opposite direction to that.