What's sector growth without job growth?
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What does the latest PMI report reveal about manufacturing growth?
All right, give me a four-letter word for this economy, would you? Here's mine. J-O-B-S. From American Public Media, this is Marketplace.
In Los Angeles, I'm Kyle Risdell. It is Monday today. Somehow it is the first of June. Good as always to have you along, everybody. We are going to learn over the next, what, one, two, three, four days in this economy, a whole lot about the state of the American labor market. The April jolts will be upon us tomorrow. That's the Job Openings and Labor Turnover Survey from the Bureau of Labor Statistics. We'll get first-time claims for unemployment benefits on Thursday. That is not an A-list indicator, but it can give us some good context. And then Friday, the biggie non-farm payrolls is what the BLS calls it. The jobs report is what the rest of us say. And it will include, among a whole lot of interesting data, how much people are getting paid.
That's all the more relevant now, because back in April, inflation outpaced wage growth for the first time in three years. Daniel Ackerman gets us going with what's what with worker wages.
Of course, everyone wants their pay to keep up with inflation. But Lujaina Abdelwahed, head of economic research at Revelio Labs, says there's a tough reality in the labor market right now.
Workers aren't in a very good negotiating position.
She says there just aren't a ton of job openings.
for like two years consistently, the hiring and separation rates are going down and down. So if there aren't that many opportunities for workers, then it's going to be really hard for them to try to negotiate a pay increase.
That's a very different situation from the inflation spike of 2021 and 22, says Betsy Stevenson, a labor economist at the University of Michigan. Back then, workers could pretty much demand whatever pay they wanted to deal with rising prices.
The number of job openings swamped the number of people looking to change jobs. Basically, anybody who wanted to change jobs could. And it was really one of the most dynamic periods I've ever seen in the U.S. labor market.
And all that job switching meant workers came out ahead.
They saw huge wage gains from those job changes that they made.
But rapid wage growth was one factor that helped push inflation even higher. And since then, says Ron Hetrick, principal economist at Lightcast. We have thrown water on this economy to try to cool it down. Most critically, the Fed raised interest rates. Higher tariffs have also just increased economic uncertainty, says Hetrick.
That has made the desire to hire much lower than it would have been in 21 and 22.
Still, the unemployment rate is at a relatively healthy 4.3%, says Michelle Meyer, chief economist at the MasterCard Economics Institute.
The problem is... You're not seeing as much churn in the workforce.
And less movement means fewer opportunities for pay bumps. Meyer says how much that matters will depend on how long the current inflation spike lasts. I'm Daniel Ackerman for Marketplace.
Wall Street, to start the week, tell me there's a disconnect between the markets and the news. Without telling me there's a disconnect between the markets and the news, I'll go first. Equities today, that's stocks, record highs. Oil up 4.5% to 5.5%, depending on which benchmark you like. Think about it. We'll have the details when we do the numbers.
Jobs and job data, as it happens, come in all varieties. And we're going to look at manufacturing right now. Manufacturing, which was in a slump last year, due in part to the president's on-again, off-again tariffs, is growing pretty nicely right now, thank you very much. Factory production, new orders, imports and exports, all of them up. Manufacturing jobs, though... Not so much. Factory payrolls are still contracting. It is 32 months in a row now that that's been happening. What gives you ask? Here's Marketplace's Mitchell Hartman.
The data from the Institute for Supply Management is clear. The manufacturing sector has been expanding now for the past five months and May was stronger than April.
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Chapters
4 chapters
1
What does the latest PMI report reveal about manufacturing growth?
0:02–6:18
2
Why has the labor force in manufacturing contracted for 32 months?
6:18–12:04
3
How is inflation affecting wage growth in the current economy?
12:04–13:07
4
What challenges do workers face in negotiating pay increases?
13:07–26:22