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DOL's Shierholz: Labor Market Fundamentals Still Strong (Audio) · Bloomberg Intelligence

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  Speaker 1: business splash. You're listening to taking stock with Kathleen Hays
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  Speaker 1: and pim Box on Bloomberg Radio. US companies slowing their
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  Speaker 1: hiring in May to just thirty eight thousand jobs. The
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  Speaker 1: unemployment rate, though it fell as many people dropped out
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  Speaker 1: of the workforce. Here to tell us more about today's
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  Speaker 1: report is Heidi Scherholtz, Labor Secretary. Tom Paris is chief
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  Speaker 1: economist at the Department of Labor. Heidi, thank you very
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  Speaker 1: much for being with us. Oh, thank you for having me. Now,
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  Speaker 1: I want to give you first the opportunity to just
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  Speaker 1: explain a little bit about your takeaways from this report,
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  Speaker 1: and then I just want to ask you about job opening.
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  Speaker 1: So go ahead, gotcha. So the number, when we saw
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  Speaker 1: the numbers, they were below expectations. Um. But a key,
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  Speaker 1: big chunk of what was of the softness in today's
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  Speaker 1: numbers was the Verizon strikers who are out on strike.
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  Speaker 1: The good news on that is that those workers are
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  Speaker 1: now back on the job. Um. If you add those
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  Speaker 1: Verizon strikers to the thirty eight thousand jobs we get,
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  Speaker 1: you're into this. You're into sort of the seventy seventy
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  Speaker 1: five thousand range that and sort of. So if that's
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  Speaker 1: more the underlying job growth that we saw in May
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  Speaker 1: It's still pretty weak, isn't it. Because we were averaging
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  Speaker 1: we were averaging two hundred thousand plus. Then we ranched
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  Speaker 1: it down about a hundred and sixty net new jobs,
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  Speaker 1: and to suddenly dive down to seventy thousand and change
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  Speaker 1: is quite a pullback hiding. And of course there were
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  Speaker 1: other signs of weakness. That unemployment rate fell because so
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  Speaker 1: many people left the labor force. He said, Typically the
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  Speaker 1: kinds of things you see when the labor market is
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  Speaker 1: getting weaker, not stronger. What do you think is going on?
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  Speaker 1: So one thing to always keep in mind is that
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  Speaker 1: these numbers are really volatile months to months. So anytime
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  Speaker 1: of the week month we don't get too upset, and
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  Speaker 1: time there's a really strong month, we don't get too
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  Speaker 1: giddy about it. If you look over the last three months,
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  Speaker 1: it's a much more stable measure. That, though, is still
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  Speaker 1: lower than what we've been seeing. So if you look
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  Speaker 1: at job growth over the last three months is a
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  Speaker 1: hundred and sixteen thousand, that's lower than the rates we
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  Speaker 1: were seeing in two fifteen UM. One point on that, though,
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  Speaker 1: is that as the labor market tightens, those are the
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  Speaker 1: kinds of numbers we may expect to see going forward.
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  Speaker 1: It's sort of as you get close. We're not there yet,
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  Speaker 1: but as you get closer to have a really tight
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  Speaker 1: labor market, you're just gonna see the job growth slow
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  Speaker 1: a little. One of the things that helps to to
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  Speaker 1: or sort of comes along with that, is that we
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  Speaker 1: will also start seeing faster wage growth, and we did
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  Speaker 1: see stronger wage growth so far this year. We're seeing
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  Speaker 1: an annualized rate of wage growth at three point two percent.
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  Speaker 1: So what's going on right now is not completely unexpected,
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  Speaker 1: but we do where we will be looking to next
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  Speaker 1: month to see into definitely monitoring the situation to see
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  Speaker 1: if we're if we see that UM rebound next month,
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  Speaker 1: I do you know, I don't want to put lipstick
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  Speaker 1: on a pig here, But looking at the job's openings
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  Speaker 1: report from last month five point eight million job openings
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  Speaker 1: as of the last business day of March. That's from
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  Speaker 1: the Bureau of Labor Statistics, is it possible that the
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  Speaker 1: statistics that we're talking about today matter slightly less because
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  Speaker 1: there is a job's mismatch that is only being intensified
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  Speaker 1: because all those people that have the skills that are
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  Speaker 1: wanted by employers already have jobs or job offers, so
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  Speaker 1: the job One of the things that job openings numbers
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  Speaker 1: highlight is a great deal of churn that goes on
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  Speaker 1: in any labor market. So there were also I'm not
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  Speaker 1: going to get this number exact, but I think there
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  Speaker 1: were about five point five million hires in the in
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  Speaker 1: March five point three. There you got, Okay, So the
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  Speaker 1: so the most of those job openings get filled every
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  Speaker 1: month because you just have a lot of you just
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  Speaker 1: there's just a sort of, um perhaps surprising amount of
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  Speaker 1: turn in the labor market. But one thing that I
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  Speaker 1: do think those strong job openings numbers point to is
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  Speaker 1: that the softer jobs numbers we UH saw today are
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  Speaker 1: happening in this context of a lot of other economic
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  Speaker 1: indicators that are much stronger. So the jewels numbers were strong.
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  Speaker 1: We also see strong retail sales, strong consumer spending. Unemployment
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  Speaker 1: insurance claims have been below three hundred thousand per week
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  Speaker 1: for the last sixty five weeks. That's the longest record
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  Speaker 1: for the longest streak below three three UM. So there's
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  Speaker 1: other indicators out there that suggests um that the fundamentals
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  Speaker 1: of the labor market are still quite strong. Gets it
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  Speaker 1: is definitely a mixed picture because you've seen a lot
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  Speaker 1: of weakness in manufacturing numbers. Uh this you know, it
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  Speaker 1: isn't across the board. If you manufacturing a weak spot,
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  Speaker 1: a strong dollar, etcetera. Although the services component of this
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  Speaker 1: job report is troubling because services in a normal month,
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  Speaker 1: services jobs are up at least hundred and fifty thou
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  Speaker 1: this latest month, private services up only around seventy thousand,
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  Speaker 1: so that seems to be troubling. And another thing, the
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  Speaker 1: hours worked actually pulled back a bit that correlates with GDP.
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  Speaker 1: That's another sign of perhaps a slowdown. Something hit the
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  Speaker 1: economy in May. But I take your point, maybe it
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  Speaker 1: tause it's been so strong now it's slowing down. I
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  Speaker 1: think that ours work remained flat. It was something that
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  Speaker 1: I remained flat at thirty four point four hours on
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  Speaker 1: as the average link of the work week. It was
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  Speaker 1: that's the same as it was a month ago, which
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  Speaker 1: is something that I track closely because exactly what you're
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  Speaker 1: talking about. One thing that you we wouldn't want to
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  Speaker 1: see is ours declining and a week job jobs numbers
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  Speaker 1: because that can indicate larger softness. And so the fact
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  Speaker 1: that ours remained sort of in the band we've been
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  Speaker 1: seeing in the recovery. UM there's somewhat down from where
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  Speaker 1: they were a few months ago, but in May had
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  Speaker 1: bedn't declined further, and so UM actually thought of that
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  Speaker 1: as an encouraging sign that we, you know, hours held
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  Speaker 1: on even though the job numbers were some of the
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  Speaker 1: lok okay hid Thank you so very much for joining
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  Speaker 1: us chief economists of the Labor Department. Hey, there's a
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  Speaker 1: red hot sticky out. Turns out that there's a minority
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  Speaker 1: stake in Lebron's Cleveland clavind leers to be said to
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  Speaker 1: be for sale. I mean, is that because they lost
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  Speaker 1: last night to the Golden State Warriors will find out
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  Speaker 1: this is wimbed radio coming off. On taking stock, Will
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  Speaker 1: the Federal Reserve race interest rates in June or July
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  Speaker 1: after these week employment figures for May or will they
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  Speaker 1: wait until September. That's next on taking stock