WASHINGTON (MaceNews) – The next steps for the U.S. economy and the monetary policy that nurtures and sustains it beyond Friday’s strong jobs report are the same as before the report, a long slog of many more such reports before the recovery approaches, re-employment becomes new employment and rates edge up to normal.
The phase change from a fractured and hobbled American work force, that brings it anywhere near the Fed’s definition of full employment, is still a long way away, even as markets try to jump ahead and see it around the corner.
Old benchmarks don’t really count, so more than 900,000 (916,000) payroll slots are only another stride forward. There will have to be many more equally good or better reports.
Take leisure and hospitality. What a rebound, with 280,000 mostly returning workers. That takes the unemployment rate for that beleaguered sector to – take a guess – 13.0%. Services employment overall is still in a very bleak place, as evidenced by downtowns that are still ghost towns, with shuttered stores and restaurants and largely empty office buildings.
Construction employment grew by 110,000, a huge number, yet the unemployment rate among construction workers is still 8.6%.
The government numbers show it will take another net 8.4 million restored or new jobs to catch up to where the labor market was a year ago. More months of progress will be necessary to catch up to where the economy would have been had there been no pandemic.
Why don’t old benchmarks count? Because historical series that are shattered by exogenous thunderbolts make that old series up to the break point indicative of nothing. And yet those old numbers remain in memory and keep perceptions from moving into the current context.
Federal Reserve Chair Jay Powell has been repeating the usual unemployment rate, down to 6.0% in March, is only one of the gauges it follows. Another important element is the “U-6” broad rate, down but only to 10.7%, far above the headline 6.0%. The March total of permanent job losers was still 3.4 million. Job losers were 6.2 million. Newly laid off were 2.03 million.
So when Powell reappears Thursday, at the International Monetary Fund debate on the global economy, he’ll doubtless tamp down all the amazement at million-a-month prospects for payrolls. So it will go, as the waves of strong data come in, he’ll be emphasizing how the tide is still out.
Wednesday’s FOMC minutes, by the way, will add little if anything to Fed policy hints since that subject was pretty well exhausted by Powell’s post-FOMC news conference. It was then when he said the American Rescue Plan’s trillions on top of the CARES Act accelerated the return to full employment. But he didn’t say by how much.
The week ahead includes March factory orders on Monday, the IMF’s update World Economic Outlook estimate of global growth and country by country performance Wednesday and the March Producer Price Index Friday. All the upcoming week’s data points listed below:
Upcoming U.S. Economic Data and Federal Reserve Events
Monday, April 5, 2021 – 9:45a ET US Markit non-manufacturing PMI index
Monday, April 5, 2021 – 9:45a US ISM NY index
Monday, April 5, 2021 – 10a – US ISM non-manufacturing/composite PMI index (53.9 expected)
Monday, April 5, 2021 – 10a – US March factory orders (-0.5% expected)
Tuesday, April 5, 2021 – 8:55a – Redbook wkly retail same-store sales
Tuesday, April 5, 2021 – 10a – US JOLTS job oenings, hires, fires
Tuesday, April 5, 2021 – 10a – IBD-TIPP Optimism Index
Tuesday, April 5, 2021 – 10:30a – IMF Global Stability report/briefing
Wednesday, April 6, 2021 – Vienna talks on Iran nuclear pact begin
Wednesday, April 6, 2021 – 7a – US MBA mortgage applications
Wednesday, April 6, 2021 – 8a – IMF Fiscal Monitor
Wednesday, April 6, 2021 – 8:30a – US Feb international trade deficit
Wednesday, April 6, 2021 – 10a – IMF – G20 briefing
Wednesday, April 6, 2021 – 10:30a – IMF Managing Dir Press Briefing
Wednesday, April 6, 2021 – 10:30a – US EIA oil stocks
Wednesday, April 6, 2021 – 2p – FOMC minutes
Wednesday, April 6, 2021 – 3p – Fed Consumer Credit
Wednesday, April 6, 2021 – 8:30a – IMF’s World Economic Outlook
Thursday, April 7, 2021 – 8:30a – US initial jobless benefit claims
Thursday, April 4, 2021 – 10:30a – IMF IMFC press briefing
Thursday, April 7, 2021 – noon – Fed Chair Powell at IMF on global economy
Friday, April 8, 2021 – 8:30a – March US Producer Price Index (+0.5% expected)
Friday, April 9, 2021 – 10a – Feb Wholesale Inventories
Friday, April 9, 2021 – 11a – World Bank Pres Malpass/WHO Covid-19 briefing
Friday, April 9, 2021 – 1p – Baker-Hughes oil rig count
Saturday, April 10, 2021 – Chi Fed’s Evans speaks
—
Contact this reporter: denny@macenews.com.
Content may appear first or exclusively on the Mace News premium service. For real-time delivery in entirety contact tony@macenews.com. Twitter headlines @macenewsmacro.