May 3, 2017

ESPN SportsCenter 6 Co-Host Michael Smith: Every City in America Is Racist

ESPN’s determination to dig its own grave continues to move at high speed. On Tuesday, SportsCenter 6 co-host Michael Smith intensely overreacted to the racist actions of at most a tiny contingent fans at a Major League Baseball game at Boston’s Fenway Park, using what they did to tag every city in America as “racist.”

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April ADP Employment Report: 177,000 Private-Sector Jobs Added (and Conference Call Notes)

Filed under: Economy — Tom @ 7:25 am

Predictions, per Yahoo’s Economic Calendar … well, there isn’t one because it says there are no “economic events” today.

Though I didn’t get the usual heads-up email, the report will be here at 8:15.

HERE IT IS:

ADP National Employment Report: Private Sector Employment Increased by 177,000 Jobs in April.

From the Press Release:

“In April we saw a moderate slowdown from the strong pace of hiring in the first quarter,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “Despite a dip in job creation, the growth is more than strong enough to accommodate the growing population as the labor market nears full employment. Looking across company sizes, midsized businesses showed persistent growth for the past six months.”

Mark Zandi, chief economist of Moody’s Analytics said, “Job growth slowed in April due to a pullback in construction and retail jobs. The softness in construction is continued payback from outsized growth during the mild winter. Brick-and-mortar retailers cut jobs in response to withering competition from online merchants.”

Prior months:

  • March — 255K jobs added, slightly down from original 263K.
  • February — 249K, originally 298K at first release.
  • January — 268K, originally 246K at first release.

Manufacturing added 11,000 jobs, continuing an uptick in that sector.

CONFERENCE CALL NOTES:

Mark Zandi, Moody’s/ADP Director: Pretty solid ADP number. In his view that’s very consistent with the underlying rate of job growth. Underlying growth is between 150K-200K, with 80K-90K growth per month, so labor market which is tight will get tighter.

Implications: Wage growth is picking up. Employment Cost Index last week from BLS showed a definitive wage growth pickup. Will push consumer spending and the economy.

Expansion is near 8th birthday, making its second-longest ever.

Job growth will slow, as businesses will find it increasingly difficult to fill open job positions (per JOLTS report). Open jobs are at record/near-record levels. Businesses already having difficulty filling jobs. He thinks we’ll get close to a 4 percent unemployment rate 12-18 months from now.

Expects productivity growth to pick up. Has been 0-1 percent per annum for quite a while vs. long-term trend of 2 percent.

Businesses will be forced to invest in items to leverage the employees they have, increasing output per employed person.

Disruptive technologies are affecting some sectors. Online retailers are at critical mass and taking a larger share of the retail pie and hurting brick and mortar retailers.

Retail employment has been flat for almost a year, offset by improving job creation in const-mfg-energy.

With fewer jobs added because of broader forces, annual employment gains won’t be as great, maybe 1.5 mil jobs/year (125K/month).

Lack of labor is going to be a very tough issue for the next decade or so. Boomers will be a very tough hole to fill.

Assuming immigration remains unchanged (1 mil legal and illegal combined), labor force growth will slow to more like 20K to 30K per month. If we get less immigration, labor force tightening will become more pronounced. 4-6 years from now, labor force may contract, at which point businesses will have a tough time getting people.

More pressure on Fed to normalize rates.

Really hammering on the upcoming worker shortage.

QUESTIONS:

ME (BLS and early 2Q estimates) — expects 185K-ish on Friday from BLS.

GDP 2nd quarter will benefit from residual seasonality in Q1 GDP carrying over into positive 2Q and maybe Q3 to make up for Q1 (smh).

Richard Neal from Reuters (hiring with smaller firms slowing down?) — may be that smallest companies are having a tougher time hanging on to people because of tight labor market. Bigger companies do better in a tight labor market (several hundred and up). Stronger HR functions are a built-in advantage.

Neal (Follow-up Q on Wages): Wage growth will accelerate. Lag between tightness and wage growth has been longer than expected, but it’s almost here if not here. Inflation will also accelerate.

Wednesday Off-Topic (Moderated) Open Thread (050317)

Filed under: Lucid Links — Tom @ 6:00 am

This open thread is meant for commenters to post on items either briefly noted below (if any) or otherwise not covered at this blog. Rules are here.

Positivity: White House advisor reiterates Trump’s commitment to religious freedom

Filed under: Life-Based News,Positivity,Taxes & Government — Tom @ 5:55 am

From Washington:

Apr 28, 2017 / 12:10 pm

A White House advisor rejected recent concerns that the Trump administration supports the controversial HHS mandate, saying it is simply a matter of timing in finding a “litigation-proof” alternative.

“The administration is not stepping back. It’s doing precisely what it should be doing here… because of the way people are attacking Trump executive orders, it’s very important that this thing gets done right and be as litigation-proof as possible, knowing full well they’re going to get sued anyway,” said White House advisor Leonard Leo, according to Axios.

His comments came amid concerns by religious groups after the Washington Post on Tuesday reported that the Justice Department had asked a federal appeals court for 60 extra days to negotiate an agreement with East Texas Baptist University and several other plaintiffs challenging the controversial HHS mandate. The Supreme Court last year had instructed the Obama administration to negotiate with the plaintiffs as the next step in the litigation process.

During his presidential campaign, Trump had promised Catholics relief from the HHS mandate, which requires employers to offer health insurance plans covering contraception, sterilization and some early abortion drugs. In a letter to the Catholic Leadership Conference last October, he pointed to his opponent Hillary Clinton’s support for the mandate, and said “that is a hostility to religious liberty you will never see in a Trump Administration.”

After Trump’s election, the plaintiffs challenging the mandate widely expected that the new administration would drop the government’s appeal of the lawsuits, which federal circuit courts may re-examine in the coming months.

Instead of dropping the cases, however, the administration had indicated earlier this week that it intends to take the next step in the litigation process.

According to Axios, “The Trump administration is considering a range of options, from providing blanket exemptions to allowing schemes that would let insurance companies deal directly with employees.”

The HHS mandate was formed under the Affordable Care Act, which required preventive coverage in employer health plans. Obama’s Department of Health and Human Services interpreted this to include coverage for contraceptives, sterilizations, and drugs that can cause abortions. …

Go here for the rest of the story.