Welcome back to cheddar News is closing Bell and Manitoba
in for kristen Schoeller a pleasant surprise on the labor
front, the U. S. Economy adding a
much stronger than expected 467,000 jobs in january despite a
surge in covid 19 cases that many thought would send
workers back to the sidelines. The unemployment rate did
tick slightly higher to 4%. But the report also
showed massive revisions to the November and December jobs totals
. The initial counts for those months were revised upward
by over 700,000 joining us. Now William Rogers,
vice president and director of Institute for Economic Equity at
the Federal Reserve Bank of ST louis. Welcome to
the show sir, we're so happy to have you
. So no one was expecting january's report to show
these sorts of gains amid a surge of american variant
cases that we're seeing throughout the country. As you
well know, what does this report tell us about
the state of the labor market currently? Well,
I think it tells us several things on the employment
side, it tells us that uh you know,
we ended 2021 with a strong, strong crescendo to
a recovery that had taken the pick and hold and
it looks like we've started 2022 Um in on in
good fashion. Um typically if you look at the
non seasonally adjusted numbers, these are the numbers that
just you see that the raw numbers from each month
that you would have predicted about 2.8 million people would
have lost their jobs. And that's largely because of
the holiday season ending and people being let go.
But part of that 476,000 increase? I think it
was hopefully by employers who have been facing skills shortages
? Labor shortages right? Looks like they held on
to a variety of people who had who they brought
on during the holidays and extended their time. And
and so the hope would be that those those tenures
will be extended into the year. Um You know
on the wage front we did see some see year
over growth that was strong. Um And you know
there are two caveats to it though, you know
one is that it seems like a large part of
the growth in wages. Strong growth and wages was
for white collar higher educated occupations as opposed to um
leisure, hospitality or education services, some of the
health services and other personal care services. And then
the other caveat on this roughly 5% increase in wages
is that we're going to get a more recent consumer
price index number this coming week. But still compared
to what we've been seeing in terms of inflation price
inflation that that's that any gains that people are seeing
and their wages are being eaten away. So one
level with the glass half full or glass half empty
. But growth is the operative phrase here. Absolutely
. Let's talk about those upward revisions for november and
december. There were certainly a pleasant surprise you mentioned
some of the weak spots in the january report.
Are there any others that stuck out to you?
And do you think we'll see another blockbuster revision for
the month of january? Well I I served on
a Bureau of Labor Statistics technical advisory committee before I
came to the Fed and I was back at Rutgers
. And you know the BLS folks do the best
job ever in terms of their analysis and collection of
the data. Um They're always looking to strengthen what
they their products that they produce. But this revision
in the benchmarking that you speak of this is typically
done. And actually if you sort of extend the
the increases of the changes over across months, it's
it's it's it's it's still relatively very small adjustments.
Um But but the good news is they were adjustments
in the in the affirmative way in terms of some
other softness or some current concerns that might have is
Um even though it's come down, we still have
about a third of people who are unemployed who are
actively searching for a job have been unemployed for 27
weeks or longer. That's what we call long term
unemployed. Why do we care about that? Well
after you've been unemployed for a period of time you
may get discouraged. Your skills may start to atrophy
confidence may wane and no confidence and has been a
big issue for a lot of people during this pandemic
. So um that's why you know we need to
consider um job training, we need to consider improving
and strengthening our mental health parity laws across states or
consider doing that. Or also just considering providing more
resources to help people emotionally as they return to the
labor market bill. Despite january's gains, there are
still groups having a hard time entering the workforce.
We're talking about women, black and hispanic workers.
What are the biggest issues at play here and how
can we get them back into the workforce? Well
, the first answer to that question is continued strong
economy, overall economic growth. That there is a
tight correlation between strong economy and improvements, but most
importantly has some work that Richard Freeman and I did
in the late 1990s. The boom is that you
also have to have this sustained. Sustains that have
increased improvements in the macro economy or strength over 12
months, 24 months. Uh we need that because
that also changes the changes attitude changes perceptions removes barriers
. Like one group that we've been focusing on at
the institute have been people with disabilities, you know
, they've recovered but their participation levels are still um
still too low for where we feel they should be
. Um also with regards to women and minorities,
you mentioned uh there's been a strong recovery but relative
to their white male counterparts, their participation levels,
their earnings still lag and we're also still not back
to where we were prior to the pandemic. So
a lot of work still needs to be done.
And one of my staffers low rickets, He's calling
this saying that we're basically the 2022 is going to
be the period of transition. And as we start
to pull back relief and recovery efforts, we need
to make sure we do it in a very smart
way because we have a lot of low and moderate
income individuals and families and communities that are still,
you know, living living very, very on the
edge as just that work prior to the pandemic.
And so what we're going to be doing at the
institute that will surround the State of the Union address
by the president. But we're going to be issuing
a public publishing what we're calling the State of Economic
Equity, the State of Economic Equity and that's going
to lay out our agenda or are set of menus
of solutions and practices and policies that um at the
local, state and federal level we hope people will
consider so. We're looking forward to sharing that with
the next few weeks. Yeah, we hope you
come back to discuss that. We really appreciate your
time. Really fantastic insight. William Rogers, Vice
President and Director of Institute for Economic Equity at the
Federal Reserve Bank of ST Louis. Thank you again
for your time