Last week’s “Goldilocks” jobs report has landed Janet Yellen in the same bear trap that all Federal Reserve chiefs find themselves in when they haven’t been doing their job properly, says New York Post columnist John Crudele.
The
Labor Department said Friday that nonfarm payrolls increased 223,000 in April while the unemployment rate fell to 5.4 percent from 5.5 percent.
Average hourly earnings rose three cents, the government said in the “Goldilocks” report, as in not too hot and not too cold. The economy isn’t collapsing, but may not be strong enough for a rate hike anytime soon,
Crudele wrote.
“While others were calling a rate hike in June almost inevitable, I was taking a different view, which is now coming true: The economy is too weak for the Fed to take action anytime soon,” he wrote.
“First off, a gain of 223,000 jobs is just OK, not great. And that figure included a guesstimate — before seasonal adjustments — that 213,000 jobs were created by newly formed companies that Labor can’t prove really exist. Without that assumption, which comes from something called the birth/death model, the April jobs report would have been worse than March,” he wrote.
“Do any of those 213,000 phantom jobs really exist? Considering the fact that bankruptcies soared during the first three months of this year and that this trend probably continued into April, you have to wonder if Labor should have been subtracting jobs for the “death” part of the birth/death model, instead of adding them for newborn companies.”
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