Mark Zandi (econ talking head at Moody’s Analytics) called this jobs report a “soft landing”.
But Mark’s predictive powers have never been that sharp. I recall Mark pitching himself for a gig on the Regime’s CEA starting as least as far back as the Hillary Clinton Administration which he claimed that spring was a slam dunk to happen.
Meanwhile, back on Planet Earth in the present, we have the latest jobs report Mark cites as evidence of a “soft landing”.
BLS’s April print has the US adding 175K jobs. That’s down ~50% from the upward revised 315K (was 303K) – lowest print since October 2023.
BLS also revised down Feb jobs by 34K (270K->236K).
March revised up 12K (303K->315K).
All-in, Feb and March are down 22K.
That’s a bunch of misses. What’s what?
Well, in the Biden Regime, government is the engine of growth — until the printing presses stop, that is.
When the Regime slows the hiring of its target voters, we see it in the employment data.
The Regime only added 8K jobs in April – a fraction of last month and the lowest since Dec 2021.
In an election year, no less!
It’s worse than that. 56K of private sector jobs were in health care where ~70% of the cashflow is government spending. That’s 1/3 of the private sector gain. The other components are also government-heavy so the take-away is the private economy is flatlined.
Mark calls this flatline a “soft landing”, as if the “adults in the room” — the Wizards down in the Emerald City — are in control, aimed for this, and have the precise skills sufficient to grease a Piper Cherokee onto any runway they want, even with a 25-knot gusting crosswind.
Are the Wizards that good? Here’s where we run into a lot of “depends”.
Depends on your definition of “in control.” Controlling a macro landing by throttling government hiring isn’t quite like “greasing a landing”. My landings weren’t soft. Most landings aren’t soft.
Should we expect Mark will claim 3% is the new 2.5% — and chalk up his “soft landing” as anything you can walk away from?
Maybe, though moving goal posts brings up other metrics. Like median wages are getting crushed. And capacity utilization running sub-80%.
Which means the only thing driving unemployment and GDP these days is government spending – fueled by debt.
More war. More government jobs. More IOUs.
If that’s Mark’s idea of “control”, how long can that go on before things become uncontrollable? Well, that depends on how high the US public debt can fly?
So is this landing really “soft”, as Mark claims, even if everything else isn’t?
That may also depend on who you are. People like Mark and me have the portfolio, the houses, and the cashflow. Life is good. We’re good.
But, for a lot of people, this economy is NOT good. A lot of people are already getting crushed — and have been for 4-years and more. Real median income is drifting down while the Regime’s core inflation continues to corrode.
When government jobs define your job market, your economy is in trouble and we’re bouncing down the runway.
Ludwig Institute (https://www.lisep.org/tru) reports the functional unemployment rate is more like 24.2% — not Janet’s gaslighting 3.4%.
LISEP’s rates define unemployment as the percentage of the U.S. labor force that (1) does not have a full-time job (35+ hours a week) but wants one, or (2) has no job, or (3) regardless, isn’t running on a living wage, conservatively pegged at $25,000 annually before taxes.
That’s real world.
In contrast, Mark and the other economists in the Biden clown car Mark hopes to join consider people “employed” if they’re driving their clunkers into the ground for Uber dropping Thai food off at the Hamas encampment to feed trust fund babies demanding social justice.
Why is Mark calling the landing soft? Maybe because he keeps demanding a rate cut ahead of the election. Sure, that will juice inflation but mostly after the election is over.
Whether unemployment is 3-something percent counting part-time gigs in sub-poverty, or 20-something percent counting full-time, the fact remains this is NOT a soft landing.
Not even clear what it is with month-over-month negative revisions on negative prints and the spread from Household Survey widening.
How low does this all go?
Who knows?
Is anyone really controlling this? Is this even controllable?
Well, the Regime’s response to any disappointment is always to double-down — more war, more border invasion, more suppression, more indictments, more debt.
Will the Regime spin up hiring after this month’s distraction? Will the Ukraine war bill push up the defense sector enough to goose GDP?
Will that swing the crosswind around to the nose sufficient for anyone to grease the Cherokee onto Republic Runway 32 just as the stall alarm sounds? Did for me at the last moment the last time I greased Republic when I was crabbing and slipping down from a high approach.
At the very least, the Biden Regime has some “splaining” to do about this jobs report.
Lucky for us all, the Regime’s resident talking head is ready to do just that.
She says it’s all due to climate change.
And so does Mark.
Really, Janet and Mark are both all over the Regime script — it’s just too funny.
Well, Mark may have to tell clients he will be on the CEA in the Newsom Administration he expects will seize power in 2028.
Econophysics2020 
