For the month of February, employment rose by 379,000 well higher than market expectations. The official unemployment rate now stands at 6.2 percent, little changed from January. Most of these gains were in the leisure and hospitality sectors. In fact, nearly 3/4 of the gains came from restaurant and bar workers. Of course it is tough to classify these jobs as “gains,” as they are more realistically just call backs from being laid off due to the pandemic restrictions. Such gains are likely unsustainable in this area because so many small businesses have closed for good. Therefore, the places of employment are no longer available to readily employ the millions that remain out of work. Furthermore, those bars and restaurants that remain open will gain some market share. However, they will likely remain hesitant to expand their operations due to the uncertainties that exist, as well as limited access to capital to finance such expansions. Also, as commodity prices continue to rise, it is likely that dining out will become more expensive as well. There is no free lunch, even with all of the money printing. Especially because of the money printing. Revisions for the months of December and January combined, result in an additional 38,000 jobs than was previously reported.
In some other news, Q4 2020 data for productivity shows a decline of 4.2 percent, and unit labor costs increased by 6 percent (annual rates). This is the exact opposite of what we want to witness. However, with people not working, then how is productivity to truly increase? This becomes a double whammy of lower productivity and higher costs. If we had higher levels of productivity, then this would likely result in costs dropping. The US trade deficit widened in January. And net exports of goods and services hit a near record low of -$804 billion. The only reading worse than this was prior to the GFC, which stood at -$805 billion. The US has to contend with a very serious problem with respect to its dual deficits of fiscal and trade. Both measures are further evidence of a weakening economy, not a strengthening one. This need not be the case, but when such policies are enacted, this is the result. Stay diversified, stay vigilant, and stay with The Kapital News. Happy Birthday YiaYia! #Economy #Debt #Jobs #Inflation #Markets #Bonds #Gold #Silver #Commodities #Oil #EndTheFed #Liberty #USA #bananarepublic #FireCongress #Bailouts #Protests #Leadership