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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

#61

Post by BurningFrog »

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.)

You're anthropomorphizing the stock market into some club of mustache twirling billionaire villains.

In reality it's mostly just math in action.

And, of course, headline writing doing its job of making you engaged (angry).

Re: Astonishingly strong US jobs report sends stocks wavering

#62

Post by Reason077 »

dougmwne wrote: post #43
looping__lui wrote: post #18

Earlier quoted context omitted.

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 suppo…

> "Inflation benefits people in debt"

Only if that debt is at fixed rates of interest, like corporate bonds or a fixed-rate mortgage. If your rate is variable, then inflation leads to higher interest rates which increases the cost of servicing that debt.

Note that the US mortgage market is unusual in that 30-year fixed rates are quite common. In most of the world, mortgages are variable-rate, or fixed for much shorter periods.

Re: Astonishingly strong US jobs report sends stocks wavering

#63

Post by dougmwne »

Loughla wrote: post #35
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.

Context, for those that were interested like I was. According to Investopedia, based on SSI data. Top .1% is $3,212,486/year 1% is 823,763 5% is 342,987 10% is 173,176 I am waaaaay under that. Education is a joke.

I am seeing significantly lower numbers which I look at the 2020 SSA data. I question if Investopedia got their number right. 5th percentile would appear to be about 150k.

https://www.ssa.gov/cgi-bin/netcomp.cgi?year=2020

Re: Astonishingly strong US jobs report sends stocks wavering

#64

Post by looping__lui »

melenaboija wrote: post #50
looping__lui wrote: post #18

Earlier quoted context omitted.

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.

I’m not sure I follow your cynicism: I celebrate ICs making 500k or 1M working for a company in the US instead of making “the same with a PhD in physics as an assembly line worker at Volkswagen”.

If an IC delivers 100MM in cost savings for a company because his software scales almost arbitrarily and gets paid highly: that’s a win for the working class population.

Re: Astonishingly strong US jobs report sends stocks wavering

#65

Post by gymbeaux »

Reason077 wrote: post #62
dougmwne wrote: post #43

Earlier quoted context omitted.

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 suppo…

> "Inflation benefits people in debt" Only if that debt is at fixed rates of interest, like corporate bonds or a fixed-rate mortgage. If your rate is variable, then inflation leads to higher interest rates which increases the cost of servicing that debt. Note that the US mortgage market is unusual in that 30-year fixed rates are quite common. In most of the world, mortgages are variable-rate, or fixed for much shorte…

Actually, higher inflation doesn’t necessarily correspond to higher variable interest rates. Indirectly, yea, but only because the fed is raising the benchmark rate to “fight inflation”.

Re: Astonishingly strong US jobs report sends stocks wavering

#66

Post by lapcat »

pjc50 wrote: post #52
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.

> The Fed operates according to the interests of the wealthy. Eh, the Fed is playing business cycle PID controller with the standard economic model that's worked to keep inflation low since the 1970s; having employment above a certain level ("NAIRU") causes a "wage-price spiral", and the side effects of the resulting inflation are deemed worse than those of artificially keeping employment higher than it otherwise mig…

> the side effects of the resulting inflation are deemed worse

Deemed worse by whom?

People complain about inflation in the 1970s, but just like now a significant part of that was caused the supply chain (OPEC then, Covid now), and in any case US income and wealth inequality are actually much worse now than in the 1970s.

Re: Astonishingly strong US jobs report sends stocks wavering

#67

Post by tootie »

zdragnar wrote: post #8
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.)

You should have read the article. The fear is that we are going to see yet another round of interest rate hikes to slow down inflation. Unemployment (according to the article) is also closer to 3% than 4 at the moment.

As much as it's biased take, OP isn't wrong. Yes, the proximate motivating factor is interest rates, but it does show how economic incentives have gotten misaligned. So long as investors fear something that is a positive for workers, there will be conflict. An educated observer will know this is an emergent conflict and not a conspiracy, but it's still a problem.

Re: Astonishingly strong US jobs report sends stocks wavering

#68

Post by Longlius »

This is going to keep happening because the underlying issues of why the labor market is tight still haven't been internalized by managers. Baby boomers are retiring and there comparatively aren't many zoomers entering the labor market. Aggregate supply of labor is shrinking every year.

I don't think rate hikes are going to be able to solve this problem because it's not an issue of "there's too much money" but rather an issue of "there's just not enough labor."

Re: Astonishingly strong US jobs report sends stocks wavering

#69

Post by GAN_Game »

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

Sure, the heirs from Rich Kids of Instagram are living off their rentier expropriation as a "reflection of people’s contribution to a economy", while the people doing the work and creating the wealth are contributing less to the economy, in your view.

The fruits of the economy are swallowed up by these parasitic heirs expropriating surplus labor time from those who work and create wealth, but your view is parasitism is somehow the greater contribution to the economy.

Re: Astonishingly strong US jobs report sends stocks wavering

#70

Post by hedora »

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…

Also anecdotally: We went to $CASUAL_DINING_MEGACHAIN recently. The food was much better than I remembered, but they were so understaffed the greeter was also working the kitchen. It took 20 minutes to be seated (due to the greeter stand being unmanned; there were plenty of tables), and about 2 hours to eat and pay.

I suspect people are still being very picky about where they work.

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