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Jobs, jobs, jobs!

U.S. payroll gains slowed in March while the jobless rate unexpectedly dropped to the lowest in almost a decade, suggesting the labor market is returning to a more sustainable pace of progress.

The 98,000 increase followed a 219,000 rise in February that was less than previously estimated, a Labor Department report showed Friday in Washington. The median forecast in a Bloomberg survey of economists called for a 180,000 advance. The unemployment rate fell to 4.5 percent from 4.7 percent, and wage gains slowed to a 2.7 percent year-over-year pace.
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The labor-force participation rate, which indicates the share of working-age people who are employed or looking for work, was unchanged at 63 percent. It touched 62.4 percent in 2015, the lowest since the 1970s.

The underemployment rate, a measure that includes those working part-time who would take a full-time job if it were available, fell to 8.9 percent, the lowest since December 2007, from 9.2 percent in February. The number of people working part-time who would prefer a full-time job fell by 151,000 to 5.55 million.

Meanwhile in Canada McJobs, McJobs, McJobs!

The two-faced nature of Canada’s labor market was on full display as employers continued to hire but resisted raising wages.

Canada added 19,400 jobs in March, for an employment gain of 276,400 over the past 12 months, Statistics Canada said Friday from Ottawa. Yet, the pace of annual wage rate increases fell to 1.1 percent, the lowest since the 1990s.
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•The average hourly wage rate for all workers was C$26.12 in March. That’s a 1.1 percent raise from a year earlier, which is the slowest pace since 1998. For historical perspective, wage gains have averaged 2.7 percent over the past decade.
•Permanent workers are doing even worse on the wage front. They had a 0.9 percent wage increase in March, which is the lowest in data going back to 1997.
•The weakness in wage gains seems to be an Ontario phenomenon. The province, which has led employment increases over the past year, recorded an annual 0.1 percent increase in wages in March, also the lowest on record.
•The unemployment rate ticked up slightly to 6.7 percent as more people entered the labor force.
•On the brighter side, manufacturing looks like it came back in March, with a gain of 24,400 positions, the most since 2002.
•Also, there was an acceleration in the total number of hours worked in the Canadian economy, which is an indicator of how much income workers generate. That helps offset the wage weakness. Hours worked jumped 1.1 percent during the month, the biggest one-month gain since 2009, following almost three years of practically no growth.

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Glass-Steagall may be making a comeback:

The former Goldman Sachs Group Inc. executive who is the top White House economic adviser told lawmakers he could support legislation breaking up the largest U.S. banks, according to people familiar with the matter, a development that bolsters congressional efforts to reinstate the Depression-era Glass-Steagall law.

The comments by Gary Cohn, director of the White House National Economic Council, came in a private meeting with lawmakers on the Senate Banking Committee Wednesday, these people said. His remarks were reported earlier by Bloomberg.
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Glass-Steagall was adopted in the 1930s as a way to keep securities businesses separate from taxpayer-insured banks. The separation between lending and investment banking slowly eroded in the latter part of the 20th century, as banks won regulatory exceptions to diversify their businesses.

Since Congress repealed the law in 1999, liberals have pushed for reinstating it, calling such a move a simple way to make the economy more stable by removing a taxpayer backstop from risky activities. Proponents of bringing back the law also say it would diminish the size and political influence of large Wall Street banks.

The 2010 Dodd-Frank regulatory-overhaul law took a half-step toward Glass-Steagall when it mandated the Volcker rule, which bars banks from certain activities unless they are trading on behalf of their customers. Many banks have since closed so-called proprietary trading desks.

I support reimposition of Glass-Steagall – particularly in Canada. The Credit Crunch illustrated the perils of having the payments system too closely integrated with the investment system.

This entry was posted on Saturday, April 8th, 2017 at 12:37 am and is filed under Market Action. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.