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Astonishingly strong US jobs report sends stocks wavering

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Re: Astonishingly strong US jobs report sends stocks wavering

#41

Post by lapcat »

mastax wrote: post #33
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.

Do you think that inflation doesn't affect the poor? Or do you think the Fed has some tool which can reduce inflation without reducing wages, which they are choosing not to use? Or some third option?

> Do you think that inflation doesn't affect the poor?

Yes, it affects the poor, but the only way out of poverty is employment and wage growth.

> Or do you think the Fed has some tool which can reduce inflation without reducing wages

No.

> Or some third option?

Wage inflation is not necessarily a bad thing, as long it outpaces the inflation of other products. Of course it all depends on whose wages are rising the fastest, the wages of the poor or the wages of the wealthy. What corporations don't like is when wage inflation cuts corporate profits.

Re: Astonishingly strong US jobs report sends stocks wavering

#42

Post by pjc50 »

looping__lui wrote: post #18
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.)

Did you read the article? It’s the anticipation of higher interest rates by the stock markets that send stocks down. And the Fed may do so because they want to raise them “just so much to counter inflation without drifting into a recession”. For Tech that may mean that the focus will shift towards profitability which may increase pressure on the workforce. What do you mean by “higher income equality”? E.g., people ea…

> Isn’t income equality (government interventions in some aspects aside) a mere reflection of people’s contribution to a economy and their ability to negotiate?

Watch the elision between this and the next sentence:

> So, are you assuming/applying everyone more or less has the same contribution or do you want everyone to be paid the same irrespective?

The bit that's gone is "their ability to negotiate", which depends to a great extent on how wealthy you are already. BATNA, and so on.

Also, conflating income from labour with income from capital confuses the issue further.

Re: Astonishingly strong US jobs report sends stocks wavering

#43

Post by dougmwne »

looping__lui wrote: post #18
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.)

Did you read the article? It’s the anticipation of higher interest rates by the stock markets that send stocks down. And the Fed may do so because they want to raise them “just so much to counter inflation without drifting into a recession”. For Tech that may mean that the focus will shift towards profitability which may increase pressure on the workforce. What do you mean by “higher income equality”? E.g., people ea…

Inflation benefits people in debt and light labor markets benefit people who earn a wage. It hurts people who already have accumulated capital in the form of bonds and stocks. The Fed acts to protect the interests of the very rich, at the expense of the lower and middle class.

It is a balance. The government is a democracy and corporations need customers, but the wealth gap must be maintained, lest you lose the support of the wealthy who fund politics and buy newspapers to shape public opinion. This tension between the rich and everyone else has existed in every society since the shift to agriculture.

Re: Astonishingly strong US jobs report sends stocks wavering

#44

Post by lotsofpulp »

mensetmanusman wrote: post #13

The wealthiest 10% of Americans own 90% of these stocks. Most of you reading this are in the top 10%. Stock prices are a game among the wealthy who haven’t demanded that workers should be paid more to lower the absurdly high corporate profits.

Most of the lowest paid workers are in low profit margin businesses, such as retail, hospitality, food service, etc.

Re: Astonishingly strong US jobs report sends stocks wavering

#45

Post by lapcat »

cscurmudgeon wrote: post #40
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.

If you have a way of reducing inflation without hitting wages or jobs, please share that with world.

I don't want to reduce wage inflation, at least not for the majority of the population.

Re: Astonishingly strong US jobs report sends stocks wavering

#46

Post by kolbe »

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 only thing that really causes inflation is wage growth, and an observed phenomenon is that overall wage growth does not increase the living standards of workers anyway, because scarce necessities like housing will just increase at a high enough rate to capture all excess wages. On the other hand, the real consequence of wage growth is supply chain and staffing disruptions.

If we could get wage growth without offsetting inflation, that would be great. But the "wealthy" boogeyman that you reference would never allow that to happen!

Re: Astonishingly strong US jobs report sends stocks wavering

#47

Post by pessimizer »

runnerup wrote: post #30
toomuchtodo wrote: post #14

Earlier quoted context omitted.

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.

> wages aren’t doubling the price of eggs.

No, that seems to be a crime of opportunity.

Re: Astonishingly strong US jobs report sends stocks wavering

#48

Post by lizzardbraind »

looping__lui wrote: post #18
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.)

Did you read the article? It’s the anticipation of higher interest rates by the stock markets that send stocks down. And the Fed may do so because they want to raise them “just so much to counter inflation without drifting into a recession”. For Tech that may mean that the focus will shift towards profitability which may increase pressure on the workforce. What do you mean by “higher income equality”? E.g., people ea…

Isn't the idea behind raising rates to combat inflation that it works to reduce demand by forcing people to tighten their belts?

"We need companies to fire a lot of people so that fewer people can afford nice things" is less politically palatable than, "we are aiming for a soft landing".

Stocks went up previously because the companies believe that with all the layoffs, people were getting desperate enough that the rate hikes would slacken off and they'd be able to start hiring at fire-sale prices. The strong January jobs data makes the companies and Fed alike worry that their workers might start to get uppity and ask for raises or benefits again soon.

Re: Astonishingly strong US jobs report sends stocks wavering

#49

Post by jjulius »

n8cpdx wrote: post #38
zelias wrote: post #6

Considering that most of the growth was in leisure/hospitality, I interpret this move as the official "end" of the lockdown era. We have achieved full reopening/replacement of the bars, restaurants, and hotels that shut down during COVID, who proceeded to hire back all their low wage service workers. This explains the explosion in job growth with a stagnant avg hourly earnings rate - the new jobs are mostly low wage…

Anecdotally, there has been a striking increase in the amount of new service workers in training at restaurants and coffee shops in Portland. There was a very acute sense of labor shortage for the last few years, and that has gone. I’m hoping that we might see coffee shops (other than Dutch Bros) open past 3 PM someday. Enough operators to keep the buses, trains, ambulances, and 911 call center working are probably h…

>Anecdotally, there has been a striking increase in the amount of new service workers in training at restaurants and coffee shops in Portland.

Continuing on that anecdote, I've read two reviews of restaurants in the Portland metro area in the past week where the customer left a negative review because they were being served by a new, untrained server (each time, the restaurant responded that their experienced server was sick that day). There's definitely a bump in hiring happening.

Re: Astonishingly strong US jobs report sends stocks wavering

#50

Post by melenaboija »

looping__lui wrote: post #18
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.)

Did you read the article? It’s the anticipation of higher interest rates by the stock markets that send stocks down. And the Fed may do so because they want to raise them “just so much to counter inflation without drifting into a recession”. For Tech that may mean that the focus will shift towards profitability which may increase pressure on the workforce. What do you mean by “higher income equality”? E.g., people ea…

> For Tech that may mean that the focus will shift towards profitability

Is it like tech or any other industry has ever focused (directly or indirectly) in something else? Maybe they just realized their superpowers are waning and they can’t keep hiring with obscene salaries indefinitely.

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