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Astonishingly strong US jobs report sends stocks wavering

cnn.com

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Re: Astonishingly strong US jobs report sends stocks wavering

#21

Post by Loughla »

toomuchtodo wrote: post #14
lapcat wrote: post #12

Earlier quoted context omitted.

> The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases But there's a direct relation, because the Fed has been very explicit that they're worried about employment and wage growth, and they're raising interest rates in order to depress those. The Fed operates according to the interests of the wealthy.

Good luck to them. 10K boomers retire a day, there are less workers than jobs, and no benchmark rate will change that. https://news.ycombinator.com/item?id=34601350

Not interest rates, but tanking stocks and investments absolutely will change that. If my retirement investments lose 50% of their value, I'll have to go back to work.

Re: Astonishingly strong US jobs report sends stocks wavering

#22

Post by SaintGhurka »

Multicomp wrote: post #5

I can't read the article, so this is one of those shoot from the hip comments. With that health warning out of the way, I am surprised that a strong jobs report would sink stocks, unless those stocks expected to be able to get some benefit from a weak jobs report like slowing the increase in interest rates, or a cheaper labor market because there were lots of tech workers recently laid off and would therefore have do…

> unless those stocks expected to be able to get some benefit from a weak jobs report like slowing the increase in interest rates, or a cheaper labor market

I'm pretty sure it's the former. Higher rates wallop stocks in multiple ways. They slow the economy in general, they directly raise the cost of borrowing for debt-addicted corporations, and they create an attractive alternative for investors.

If you had a lot of money in 2020, you could buy 10-year treasuries yielding less than a percent, or you could take your chances in the stock market that was down 25% off it's highs. Today, it's completely flipped. You can make 3.5% in the bond market with no risk, or you can roll the dice on a stock market that's up pretty substantially.

Re: Astonishingly strong US jobs report sends stocks wavering

#23

Post by cscurmudgeon »

techdmn wrote: post #3

To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

> (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

So is everyone but it is easier to wish for something good publicly than have a logical way to get that.

The investors are not the ones that will cause loss of jobs it is the Fed that will soon.

Re: Astonishingly strong US jobs report sends stocks wavering

#26

Post by ianai »

toomuchtodo wrote: post #14
lapcat wrote: post #12

Earlier quoted context omitted.

> The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases But there's a direct relation, because the Fed has been very explicit that they're worried about employment and wage growth, and they're raising interest rates in order to depress those. The Fed operates according to the interests of the wealthy.

Good luck to them. 10K boomers retire a day, there are less workers than jobs, and no benchmark rate will change that. https://news.ycombinator.com/item?id=34601350

My hypothesis is the offered wages are below the market clearing rates. People have a willingness to work for every price offered for their labor. If they aren’t filling positions then the wage is too low.

Granted, if they raise rates to 10%+ they’ll drive the entire economy into the ditch. Then these jobs will disappear and prices will deflate-along with lots of horrific side effects.

Edit-The US minimum wage is 7.25/hr or 15,080 per year at full time. The US poverty level for a single person without children is 15,225. They have to specify it in a spreadsheet. Because of all the qualifications on that information.

https://www2.census.gov/programs-surveys/cps/tables/time-ser...

Re: Astonishingly strong US jobs report sends stocks wavering

#27

Post by baryphonic »

lapcat wrote: post #12
lr4444lr wrote: post #10

Earlier quoted context omitted.

People employed can afford to buy stuff though, which also increases profit. The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases, which will hurt stocks.

> The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases But there's a direct relation, because the Fed has been very explicit that they're worried about employment and wage growth, and they're raising interest rates in order to depress those. The Fed operates according to the interests of the wealthy.

> The Fed operates according to the interests of the wealthy.

That may me true (FWIW I think the Fed acts in the Fed's own and the US Government's interests). However, mainstream macroeconomics posits something called "demand-pull" inflation.[0] The symptoms of demand-pull inflation apply to the labor market, and look kind of like what we see today. I don't really believe in that myself, but the vast majority of professional economists do.

[0] https://seekingalpha.com/article/4488432-demand-pull-inflati...

Re: Astonishingly strong US jobs report sends stocks wavering

#28

Post by unity1001 »

lr4444lr wrote: post #10
techdmn wrote: post #3

To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

People employed can afford to buy stuff though, which also increases profit. The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases, which will hurt stocks.

> People employed can afford to buy stuff though, which also increases profit.

Such long-term thinking does not exist in the free market religion. They want maximum profits now, and everything else is "someone else's problem".

Re: Astonishingly strong US jobs report sends stocks wavering

#29

Post by adam_arthur »

techdmn wrote: post #3

To me the headline says it all. Those workers, being in demand, asking for higher wages. What about our profits! We need a level of desperation in our work force, at least that caused by 4% unemployment, if we can expect to maintain the wealth gap that has been built up over the last years! (If it's not clear from the above, personally I am in favor of low unemployment and higher income equality.)

Wages rising due to inflation does not lead to income equality.

Higher rates will lead to lower wealth disparity though. Asset values over the past decade have been largely driven by ZIRP

Buying power in real terms is mostly driven by productivity and technological advancement driving deflation of goods

Re: Astonishingly strong US jobs report sends stocks wavering

#30

Post by runnerup »

toomuchtodo wrote: post #14
lapcat wrote: post #12

Earlier quoted context omitted.

> The simpler reason is that it means that people believe Fed will read this as a license to not have to slow down rate increases But there's a direct relation, because the Fed has been very explicit that they're worried about employment and wage growth, and they're raising interest rates in order to depress those. The Fed operates according to the interests of the wealthy.

Good luck to them. 10K boomers retire a day, there are less workers than jobs, and no benchmark rate will change that. https://news.ycombinator.com/item?id=34601350

That wouldn’t inherently lead to CPI inflation though except that the supply of many, many things is so damned constrained.

Even the feds own reports acknowledge that slightly over half of inflation is from lack of supply, not high wages.

e.g. wages aren’t doubling the price of eggs.

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