Episode Transcript
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Speaker 1 (00:00):
The news taking the world to business. By surprise is
job numbers reported from much of the last year have
been overestimated some eighty thousand non farm positions and.
Speaker 2 (00:10):
Meaning that the jobs market that according to the Bureau
of Labor Statistics, is not nearly as strong as we
were told going back to April of twenty twenty three.
This new sparking some confusion among the public. So joining
us now to clear up some of that confusion on
the KOA Commet Spirit Health Hotline. Colorado State University Economics
Professor Stephan Weiler, Professor, thanks for joining us again. Our
Business and Money editor Pat woodd is with us on
(00:31):
this discussion. When you saw those numbers, and I know
a lot of diletons and average folk were making hay
about it, but it is concerning. But when you saw it,
what was your thoughts? And how are these things counted
in the latter part of it after we get the estimates,
how are they counted on the back end.
Speaker 3 (00:47):
Yeah, that's a really good question. First of all, the
job count was revised by actually eight hundred and eighteen thousand,
So that's a big that's a big number, nearly a
million people. But I'd take a look at it, and
it's growth by months, which is way we have been
talking about jobs, you know, to our conversation. So it
goes from two hundred and forty two thousand jobs new
(01:08):
jobs per month, which is which is strong growth, to
one hundred and seventy four thousand jobs per month, which
is more like treading water growth. And that when you
combine that with the rising unemployment rate, it's slowly rising.
It's come up zero point eight percent in the last year.
(01:29):
It now sits at four point three. Basically, the job
market is weaker than the people thought, and that puts
the spotlight on the FED, particularly since the Chairman Powell
of the FED we'll be speaking in just over an
hour in Jacksonville.
Speaker 4 (01:44):
Does this revision then change the perception or the reality
for overall how well the economy is doing.
Speaker 3 (01:52):
I think it shows that the job market is in
fact weaker, that the economy is maybe not generating as
much job as many jobs as we had thought over
the last year. Just keeping in mind, the dual mandate
for the said they are responsible to keep inflation low,
that's what they've been fighting with the high interest rates,
but they also have a commitment to full employment, and
that's what's becoming a question is that maybe labor market
(02:15):
isn't quite as solid as we thought. But the idea
is that the inflation has been falling and so now
they can turn their attention more towards the employment angle.
Jobs are slowing, but there's no collapse. I mean to
keep in mind that we're still talking about growing jobs.
We've been growing jobs since the pandemic, so that's a
long stretch, and unemployment is rising slowly, but actually this
(02:37):
relatively huge layoffs, which is something that we worry about
as economists as well. Consumers are still spending from what
we can tell from retail spending reports, GDP is still rising.
So what that does is it actually gives chairman power
and the said kind of an open field now for
gradually cutting interest rates and heading towards that sauce landing
(02:59):
that we've been talking about for what two years.
Speaker 4 (03:01):
Now, Professor Weiler.
Speaker 1 (03:04):
When it comes to this decrease in the job numbers,
I mean, what job sectors actually saw that greatest downward adjustment?
And I think we should probably again reiterate that these
weren't job cuts. This was literally just a no difference
in counting what they thought were the jobs added.
Speaker 3 (03:22):
Exactly thanks Genie's that's exactly that's exactly right. It was
actually a fairly broad based There weren't any particular sectors
that stood out, but these are right. It's not as
much growth as we expected. Keep in mind, as I
said that, even with the new numbers, we've still got
one hundred and seventy four thousand new jobs per month
(03:44):
over the last year between March twenty third and March
twenty in March twenty March twenty four. So this is
what they're going to be discussing at Jackson Hole today
where the world central bankers show up and fly fish
up in the Grand Tetons and it. But more importantly,
they these central bank leaders are going to be taking stock,
(04:06):
comparing comparing what their policies have been, and sort of
taking that take take the temperature of the world economy.
Speaker 2 (04:12):
I may be misstating this, but I thought I some
somewhere and I didn't get a chance to look it up.
The Colorado of all the states in that revised job report,
if you want to say, lost the most amount or
had the most amount of those jobs that didn't exist
or happened something like seventy six thousand. I don't know
if you saw that, but at the same time, and
maybe you answered this, but I'm trying to see more clarity.
(04:34):
How could the report that they had initially be so
off from what we have now? I mean is that
it's not by intent, though A lot of people want
to throw hay saying, well, they're covering for that, But
how is it so different now that we see this,
and how do they how are they off in the numbers?
Speaker 3 (04:48):
I guess, yeah, no, that's a really good question. The
problem is that taking the temperature, taking look at the
jobs months by month is it is the difficult, difficult process.
So what they do is they take a representative number
of companies out there and asking them how much they
have grown or lost jobs. And that representative sample can
(05:12):
be off because again, I mean they can only can
they can only talk to less than ten percent of
companies out there. So when it's only after a full
year when they get the full count, can they get
a sense of what the actual job growth was. The
actual job growth was again eight hundred thousands less than
(05:33):
than they expected. As far as Colorado goes, I'm not
sure when you saw that, but I would, you know,
take a look into that. But I do believe it
partially because Colorado has actually been one of the slower
job growers anyway. So if they were one of the
slower job growers, the likelihood is that they also probably
(05:53):
got got hit with this Jesus decrease in the job
growth rates.
Speaker 4 (06:01):
Well, given the jobs revision, the speech from fed haired
Powell today looms pretty large, and he sometimes keeps his
cards kind of close to the vest. What are you
expecting to hear today?
Speaker 3 (06:11):
Yeah, that's a good point. He will continue to play
his cards close to his chest. They're going to talk
about broad policy as opposed to specified targets, and that
what that means is in general, what you use these
you know, sort of large you know, sort of broad terms,
(06:32):
you know, in terms of we see inflation sought, we
see inflation softening, we see the job market softening, and
it suggests that policy may be useful going forward, specifically
in terms of interest rate cuts. That's about as that's
about as precise as Powell is going to get so
(06:53):
and and in some ways he's right because he's still
got a little under a month before they have to
make this decision. They're going to be beating September seventeenth
and eighteenth. On September eighteenth, they'll announce the interest rate policy.
But they still have four more large data points to
talk about. They say that their data is driven. GDP
is coming out, the personal consumption expenditure inflation rate is
(07:16):
going to come out, the consumer price index is going
to come out, and then really the big the jobs
numbers for August are going to be a big deal.
So that's what's going to guide what most people believe
to be either twenty five basis points or point twenty
five a percent decrease in interest rates, or a point
(07:37):
five or fifty basis point decrease in interest rates that
we are looking for in the September meeting.
Speaker 1 (07:43):
We'll continue following all this with the latest on the
job's revisions and a preview of the discussions we could
see from jacksonvill today. It sees you Economics Professor Stefan
Weiler