— It’s Friday, January 7. 2022.
— It’s the 17th day of winter, but the first time we’ve gotten measurable snow where I live.
When it snows for the first time each winter, I like to post the words of Lou Grant, the news director of WJM-TV in Minneapolis. This, from a 1972 episode of “The Mary Tyler Moore Show,” sums my attitude on this topic.
“I hate snow. I don’t like its color. I don’t like its shape. I don’t like its temperature. I don’t like how it feels. Or what it does. I don’t like it in snowballs. Or on hills. I don’t like anything about it. It’s a soft, wet, white, mushy, melting, freezing mess. I hate snow as much as I hate anything in the entire world.
Two things about this: One, my wife took the shovel out of my 67+-year-old hands and retained someone to plow our driveway. So snow is not a physical burden. That doesn’t diminish its annoyance factor.
Second, this is the first winter season that I’ve sent the Lou Grant quote since the passing of the man who actually uttered it, Ed Asner. It’s been a sad year for fans of “The Mary Tyler Moore Show,” with the deaths of its four remaining principal actors – Asner, Cloris Leachman, Gavin MacLeod and Betty White.
So this quote is part of what survives. It’s an awesome legacy. May his memory be a blessing.
— The December jobs report released at 8:30 a.m. ET today was really interesting to someone like me who has been involved in putting out the news about the numbers.
The general understanding we had was that the more important number was what’s officially called the establishment number, a survey of organizations that hire people. The headline is the change in people working anywhere but a farm.
In today’s report, the number was 199,000. In a simple world, you would think it’s good when the number goes up and bad when it goes down.
But economists and investors don’t quite see it that way. That’s because they’ve spent the past few weeks making forecasts about the number – and they expected something more than twice as big.
So if you’re a novice to this and don’t understand why anyone would be disappointed with a 199,000 gain when, hey, at least it didn’t go down like it did when COVID began, that’s why.
— But the nonfarm number isn’t the only one that’s widely reported.
There’s the number based on a completely different survey – the Labor Department calls people on the phone and knocks on doors and asks them if they’re working. This is the household survey and its headline number, famously, is the unemployment rate.
That number came in this morning a 3.9%, a 0.3 percentage point decline from November.
That is inarguably better. It’s the lowest level since before the pandemic.
— Both of these numbers have some cautionary factors.
The nonfarm reports for October and November were both revised higher, reflecting data received after the gathering deadline in the middle of the named month. October, in particular, was revised higher by 103,000, to an amazing 648,000.
That’s a good thing. There’s a strong chance the December number won’t look quite so weak after it’s revised in the next two months.
On the other hand, a deeper dive into the unemployment rate shows that white, Hispanic and Asian people fared pretty well last month, the same wasn’t true for Black people. The unemployment rate among Black people rose by 0.6 percentage point, to 7.1%.
That’s not a good thing.
— Overall, it would be fair to call today’s report – which includes a lot of other really important data – positive. And now you’re going to get the explanation on why that could be not completely good news.
It’s great when more people are working. And it’s great when, as today’s report also showed, people are getting paid more for what they do – the increase in pay for people who aren’t the boss was 0.7% month over month, an amazing 8.4% if extrapolated over the course of a year.
Can you imagine the glee in your household if you got an 8.4% raise? That actually happened last month.
But somebody’s gotta pay for that 8.4% raise. And it’s very likely that we all did – employees traditionally hike prices when they have to pay more to workers.
You’ve heard a lot about inflation in recent months. That’s one of the ways it shows up.
The Federal Reserve has two jobs. One is to make sure as many people as possible are working. The other is to keep inflation under control.
At a 3.9% unemployment rate, the Fed’s going to get good grades for job one. But a 6.8% inflation rate, as the Labor Department reported for November, doesn’t quite cut it.
Which means that the Fed will need to raise interest rates, probably sooner rather than later. That will slow the job growth – employers will pay more to borrow money to boost their businesses.
It will also mean if you want to get a mortgage for a new home, you’re going to pay more.
Still, it’s better to have a fast-growing economy that needs the government to apply brakes than a sour economy that requires action to undo individuals’ misery.
The degree the Fed gets this right will determine a lot about our collective economic situation in the coming year.
— Because the jobs numbers affect the economy so much, there’s always a political component to its reporting.
President Biden, fresh off his widely acclaimed Jan. 6 anniversary speech, gave remarks about the report this morning. And, as presidents or their staff are wont to do, he put the rosiest picture he could on the numbers.
He focused on the unemployment rate, the number that puts the report in the best light. As far as the nonfarm payroll picture, he didn’t mention the 199,000 figure specifically, but included it as part of an annual overview that shows phenomenal total job growth in the first year of his administration – an increase of more than 6 million since last December.
While crowing about the numbers and what his administration to help produce them, Biden also showed that he knows he has to be cautious. He mentioned his understanding the Fed’s role – independent of his administration – to get inflation under control.
Democrats are rightly anxious about inflation. It contributed to undoing Jimmy Carter’s presidency and helped secure Ronald Reagan’s when his administration – aided by the Fed chairman Carter appointed – got it under control.
With all the issues confronting Democrats in a midterm election that could make or break democracy in this country, Biden needs the best possible economy.
The jobs numbers are, overall, a big plus. Taming inflation without weakening those jobs data should be very high on the administration’s list of 2022 priorities.