Inwealthgroup, 456 Kent Street, Sydney (2026)

19/09/2021

U.S. nonfarm payrolls added 235,000 jobs in August, the third slowest of the 16-month recovery. The gain follows the addition of 1.053 million in July and 962,000 in June. Still, the August gain is the eighth in a row and 15th in the last 16 months, bringing the eight-month gain to 4.687 million and the 16-month post-plunge recovery to 17.029 million. This is still well below the 22.362 million combined loss from March and April of 2020, leaving nonfarm payrolls 5.333 million below the February 2020 peak (see first chart).

Private payrolls posted a 243,000 gain in August after a 798,000 gain in July and 808,000 increase in June. The August rise in private payrolls is also the eighth in a row and 15th in the last 16 months. The August addition brings the eight-month gain to 4.098 million and the 16-month recovery to 16.810 million versus a combined loss of 21.353 million in March and April of 2020, leaving private payrolls 4.543 million below the February 2020 peak (see first chart).
Weakness in August was concentrated in the Retail industry and Leisure and Hospitality industry. Within the 243,000 gain in private payrolls, private services added 203,000 while goods-producing industries added 40,000 versus a monthly average of 585,500 over the prior six months for services and 36,667 for goods.

Within private service-producing industries, Retail lost 28,500 jobs in August, the third decline in the last five months while leisure and hospitality was unchanged for the month after adding 415,000 in July and an average of 349,833 per month over the prior six months. Among other service industries, business and professional services added 74,000 in August, transportation and warehousing gained 53,000, and education and health care services increased by 35,000 (see second chart).

Within the 40,000 gain in goods-producing industries, construction was down 3,000, while durable-goods manufacturing increased by 31,000, nondurable-goods manufacturing added 6,000, and mining and logging industries increased by 6,000 (see second chart).
After 16 months of recovery, only one of the major private industry groups has more employees than before the government lockdowns – transportation and warehousing. Two industries – Leisure and hospitality (down 917,000 jobs), education and health services (down 687,000) – are down more than half a million jobs each (see third chart).

On a percentage basis, the losses are more evenly distributed. Three of the 14 private industries shown in the report have declines of 5 percent or more since February 2020. Leisure and hospitality leads with a 10.0 percent drop since February 2020, mining and logging comes in second with a 6.7 percent loss followed by information services at 5.1 percent. For the labor market as a whole, total nonfarm payrolls and private payrolls are down 3.5 percent since February 2020 (see fourth chart).

Average hourly earnings rose 0.6 percent in August, putting the 12-month gain at 4.3 percent. The average hourly earnings data should be interpreted carefully, as the concentration of job losses and recovery for lower-paying jobs during the pandemic distorts the aggregate number.

The average workweek was unchanged at 34.7 hours in August. Combining payrolls with hourly earnings and hours worked, the index of aggregate weekly payrolls gained 0.8 percent in August. The index is up 9.7 percent from a year ago.
The total number of officially unemployed decreased by 318,000 in August to 8.384 million. The unemployment rate fell to 5.2 percent while the underemployed rate, referred to as the U-6 rate, fell to 8.8 percent in August. In February 2020, the unemployment rate was 3.5 percent while the underemployment rate was 7.0 percent (see top of fifth chart).
The participation rate was unchanged in August, coming in at 61.7 percent versus a participation rate of 63.3 percent in February 2020. The employment-to-population ratio, one of AIER’s Roughly Coincident indicators, came in at 58.5 for August, up from 58.4 in July but well below the 61.1 percent in February 2020 (see bottom of fifth chart).

The August jobs report posted a disappointing gain of 235,000 in August. Private payrolls were slightly better at 243,000 but both are well below the monthly average over the prior six months. Retail and leisure and hospitality were the primary reasons for the disappointment in August and both are likely a result of the resurgence of new Covid cases. Despite the eight consecutive monthly gains and 15 increases in the last 16 months, payroll employment remains well below peak measures from before the pandemic.

Rising Covid cases and falling consumer confidence are boosting the risks for the economic outlook. A consumer retrenchment would hinder the recovery though the damage will be far less than the carnage caused by widespread lockdowns.

Furthermore, ongoing materials shortages, logistical and transportation bottlenecks, and labor issues in the manufacturing sector continue to restrain the ability of supply to recover as quickly as demand, resulting in significant upward pressure on prices. Overall, the outlook is for continued recovery but the threats and headwinds to growth have increased substantially.

16/09/2021

There are no fact-checkers for victory laps. Last week, New York Gov. Andrew Cuomo summarized his experience with the Covid-19 crisis: “Speaking for myself, it was a tremendous personal benefit.” Cuomo made that declaration in a speech concluding his one-year chairmanship of the National Governors Association. Because Cuomo’s spiel sought to rewrite history to exonerate politicians who ravaged Americans’ rights and liberties, it requires a rebuttal.
Cuomo declared that “we maximized the moment as governors. Governors have a new credibility. Governors have a new status.” Cuomo epitomized the rush to “absolute power” that occurred in governor’s mansions across the nation. After he fueled pandemic fears, the New York Times proclaimed, “Andrew Cuomo Is the Control Freak We Need Right Now.” A New Yorker profile, titled “Andrew Cuomo, King of New York,” explained that Cuomo and his aides saw the battle over Covid policy as “between people who believe government can be a force for good and those who think otherwise.” Cuomo denounced anyone who disobeyed his edicts, including condemning sheriffs as “dictators” for refusing to enforce his mask mandate inside people’s homes.
Cuomo justified placing almost 20 million people under house arrest: “If everything we do saves just one life, I’ll be happy.” Though his repressive policies failed to prevent New York from having among the nation’s highest Covid death rates, he became a superhero thanks largely to media scoring that ignored almost all of the harms he inflicted. Cuomo won an Emmy Award for his “masterful use of television” during the pandemic. Media valorization helped make Cuomo’s self-tribute book, American Crisis: Leadership Lessons from the COVID-19 Pandemic, a bestseller.
Cuomo had plenty of power-mad accomplices in the governors’ association. Oregon Governor Kate Brown banned residents from leaving their homes except for essential work, buying food, and other narrow exemptions and also banned all recreational travel. Michigan Governor Gretchen Whitmer imposed some of the most severe restrictions, prohibiting anyone from leaving their home to visit family or friends. Los Angeles Mayor Eric Garcetti even banned people from walking or bicycling outside. The CDC eventually admitted that there was almost no risk of Covid contagion from outdoors activity not amidst a throng of people. But that did not stop politicians from claiming that “science and data” justified locking people in their homes.
Some governors have acted as if their shutdown orders gave them unlimited sway to decree when normal life could resume. California Gov. Gavin Newsom decreed that Covid restrictions would be perpetuated in California counties based on voter turnout, alcohol availability, and other non-health factors. California assemblyman Kevin Kiley groused, “An entire county can be kept shut down because certain areas are judged to be lacking in ‘equity,’ even if the whole county has relatively few cases of Covid.” The end of Covid restrictions turned into hostage release negotiations with domineering rulers clinging to all their new prerogatives.
Cuomo was proud that, when he visits a school, he is no longer asked “‘What does a governor do?” because “people know what governors do and how important governors are.” Governors can wreck kids’ futures by shutting down schools and placing children under indefinite home detention, costing millions of children almost an entire year of learning. In some areas, private schools remained open and took precautions that kept children safe in the classroom. As Washington Examiner editor Tim Carney noted, students in Catholic schools in Montgomery County, Maryland continued attending school and were kept safer than public school students: “Kids learning remotely got Covid at 3 times the rate as kids learning in person.” Unreliable “distance learning” produced a more than 500 percent increase in the number of black and Hispanic students failing classes in Montgomery County government schools.
A Journal of the American Medical Association analysis concluded that shutting down the schools would reduce the current crop of students’ collective years of life by more than five million, based on “lower income, reduced educational attainment, and worse health outcomes.” School shutdowns blighted the lives of millions of children in part because the Centers for Disease Control proclaimed that six feet of “social distancing” was necessary to avoid contagion – an arbitrary standard pulled out of thin air that was denounced by former Food and Drug Administration commissioner Scott Gottlieb.
The lockdowns that governors imposed also pointlessly ravaged many Americans’ mental health. The Centers for Disease Control last month reported a 51% increase in emergency room visits for suspected su***de attempts by teenage girls in early 2021. A Kaiser Family Foundation survey found a 300% increase in the percentage of adults reporting symptoms of anxiety disorder and/or depressive disorder (41% of adults in January 2021). The CDC also reported a record number of drug overdose deaths last year, due in part to the lockdowns and other government-imposed disruptions.
Cuomo boasted that the Covid-19 responses “were probably the most consequential decisions that governors had made in generations. They were literally about life and death. You make the wrong decision, people could die.” Thousands of New Yorkers died because of Cuomo’s mistakes and cover-ups. New York state initially reported barely half of the total of more than 12,000 New York nursing home patients who died of Covid – one out of eight nursing home residents in the state that occurred after Cuomo ordered nursing homes to admit Covid patients. Early in the pandemic, Cuomo pushed to include a legislative provision written by the Greater New York Hospital Association to give a waiver of liability to nursing homes and hospitals whose patients died of Covid. A report earlier this year by the New York Attorney General warned, “The immunity laws could be wrongly used to protect any individual or entity from liability, even if those decisions were not made in good faith or motivated by financial incentives.” As the Guardian noted, “Cuomo’s political machine received more than $2 million from the Greater New York Hospital Association, its executives and its lobbying firms.”

15/09/2021

Alie can get around the world faster than truth can get its pants on, according to the adage apocryphally connected to Mark Twain or Winston Churchill (or Jonathan Swift).
One such kind of lie, or at least obfuscation, is what I call “progressive pop news” – pieces of news, usually quasi-academic studies or gripping anecdotal evidence, that pertain to confirm the long-held biases of progressives. They often have to do with environmental news (think the Arctic, or melting glaciers), but can be anything from the wonders of racial equities or gender-diverse corporate boards to the success of minimum wage laws. In the case of last week, our beloved progressives found issues with the nature of work itself – and the evil corporations that have us work too much, for too little pay.
We should therefore work less, for the same pay (also known as a raise).
Two trials of shortened work weeks in Iceland between 2015 and 2019 came to a stunningly positive result, suggested the British NGO and an Icelandic partisan one who authored the report. (Not wanting to participate in this PR campaign of theirs, I refrain from stating their names or linking to their websites. Interested readers are presumed competent in the art of googling.)
Following “longstanding calls from grassroots organisations and unions,” activists convinced the City of Reykjavík to begin trials with 66 people in select offices, measuring performance against a control. The work week was to be reduced by 1, 2, or 3 hours per week, with maintained pay. After some politicking and “initial success,” the trial exploded to 2,500 employees across all levels of the Icelandic state, with interested departments and offices self-selecting to take part. Any notion of controls disappeared. All employees involved were government officials, ranging from critically important services like the City Library and City Museum, to parking services and curators of the botanical garden (yes, really). Among those with the greatest reduction in work, 4 hours per week, we find the police department in Westfjord (which recently made headlines for chasing rumors of a stray polar bear) – a remote mountainous area of 7,000 inhabitants and a grand total of 22 officers.
The results were apparently astounding, with lots of positive comments by participants and no noticeable decline in any services. BBC reported that the “Four-day week” was an “overwhelming success,” with HuffPo and CNBC echoing the same sentiments. Covering 1% of Iceland’s workforce, the grandiose scheme had now been extended to possibly cover 86% of employees, we were led to believe. (Under the not-so-careful hands of Business Insider’s Chris Weller, it became 86% “now making moves for reduced hours”). Bloomberg reported it; the Independent ran hopeful political quotes by one of the think tank’s “director of research;” and fellow Nordic news and radio broadcasts were full of it.
And yes, by “it” I also mean bull. As with all progressive pop news, claims are very fishy and journalistic scrutiny is suddenly nowhere to be found.
Let’s begin with the organizations I won’t name: the British one openly describes itself as focusing “on the future of work and economic planning,” as if trying to plan the economy was a great feat to brag about. Their Icelandic counterpart is a typical small-scale, run-of-the-mill, politics-is-corrupt initiative, calling for extreme democracy over the economy, corporations run by employees, and power returned to the people from the “small and powerful groups” that now allegedly control everything.
Great. This is the progressive version of letting Westboro Baptist Church give testimony on the mental health issues in the LGBT community, or have a spokesperson for ISIS craft U.S. foreign policy.
Next, some of the outrageous claims. The trial included no 4-day work week, and whether it was a great success I’ll leave the reader to decide. Depending on the exact offices involved, some gave extra time flexibility, others running overlapping short vs. long weeks (with alternating shorter hours and Friday afternoons off). Most offices reduced working weeks by a paltry 1 or 2 hours, and through the activist keyboard warriors at BBC or HuffPo, this became a “four-day workweek” – presumably because the organizations behind the study explicitly considered that a policy goal. Other wacky commentary included Yahoo Finance, according to which workers apparently had three extra days off each week.
For the initial trial of 66 people, there were apparently some control groups involved. Then the initial “success” warranted a much larger pool, reaching the sensational “1.3% of the workforce” figure that international news outlets jumped on. Somewhere between the pompous description and the “analysis,” the control groups disappeared, probably joining the overall rent-seeking glory. The superficial metrics used for each office to measure their performance during the trials were vague enough to include the entire department’s activities (permits issued, traffic violations written, immigration cases closed, and average waiting times) and be impacted by variance much larger than what a few hours’ work would warrant. Relegated to the end of the report, the quantitative comparisons juxtaposed performance before the trial with that after, repeatedly indicating that no negative effects could be discerned. (What, one wonders, were the point of control groups if you only meant to do an observational study anyway?).
Thankfully, it seemed that the Westfjord police officers could write as many speeding tickets as they had before the trial and even close more cases the year after the trial began than they had in the two years before. Hurray.
Most news releases, perhaps in their eagerness to spread progressive gospel, played fast and loose with numbers. Some focused on the 1% of the labor force which, while approximately true, is highly misleading for a country whose population is just shy of 370,000. Others suspiciously aggregated all who had moved to shorter workweeks with all who “have gained the right to trim their working hours,” and those who “soon might gain that right” via ongoing union negotiations. Stunningly, such inclusive arithmetic yielded 86% of the workforce. In the wholly incompetent journalistic hands of Annie Nova at CNBC, this arithmetic magic became a certainty: she quotes Jack Kellam, researcher at the British NGO, saying: “Nevertheless, even though Iceland is a comparatively small national economy, 86% of the population has made the shift.”
To recap the ludicrous trajectory in the world’s progressive news media over the last few days, we went from 1% of labor force in trial for shorter working hours, to 86% of labor force potentially covered by union agreements that may soon, possibly, potentially work shorter hours, to 86% of the population having already made the shift to a 4-day work week. Blimey, how quickly the lies can grow, multiply, and expand across the world.
One private sector company, not part of the trial, was bullied by its union in 2020 to shorten work weeks by a full 35 minutes. Explosive stuff, I know (The report doesn’t reveal any further results from that employer).
And for the greatest cluster-f— of all: these are all government employees. Public officials. Civil servants. The kind that push paper for a living, when not dead set on annoying the rest of us with bureaucratic nothingness. The report stated that
“To be able to work less while providing the same level of service, changes in the organisation of work therefore had to be implemented. Most commonly, this was done by rethinking how tasks were completed: shortening meetings, cutting out unnecessary tasks, and shifts arrangements.”
If anything, the story suggests that government employees working less does not cause any identifiable harm to society.
Knock me down with a feather: You mean to say that government employees, the masters of needless paper pushing, in wholly inessential government services, could work less and nothing seems to have happened to their already questionably-measured “output?”
The interviews with selected employees were altogether positive – surprise, surprise – with lots of juicy quotes about more time for family and mental well-being. Well, why wouldn’t you, if you needed to attend your leisurely unproductive government job for a few hours less each week, with no cut to your income?
Snark aside, I don’t think anybody objects to removing “unnecessary tasks” or “shortening meetings” – inside or outside of government. The relevant question is, of course, how much that has anything to do with the length of the work week rather than the nature of government work.
May I be so bold and suggest an extension to this hyped-up trial?
Let’s go big, and do a 50% reduction in the length of the work week; then we can gradually move towards zero hours worked. At first, I’d be happy to maintain these officials on full pay, just to get them out of their offices, before we’d phase out their pay too. Yes, let’s altogether relieve them of their counterproductive working duties. Chances are we’ll find a lot more tasks that were “unnecessary,” a lot more “services” not doing anything but annoying the public, and a lot of public officials creating work for themselves rather than value for their citizenry.
In a terrible “study,” Iceland showed that we can reduce the hours worked by public officials without any meaningful negative outcome to society. Shocking, I know.

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