Beware of Tomorrow’s US Jobs Report

us jobs report may 2021

Are you ready to get up on Friday and read the U.S. Labor Department’s report on employment? That… red-hot report. You know, the one printed on dot paper. It’s precisely what you want to read to start your day if you’re trying to go back to sleep. If Ambien stops working for you, I highly recommend government reports.

They’re intentionally boring. The quicker you stop reading, the faster you stop asking the government questions about its role in the economy. That said, we’re back to people claiming that this is “THE MOST IMPORTANT JOBS REPORT” ever, just like every election that we ever confront.

May 2021 US Jobs Report

Tomorrow is important. But don’t overreact if there’s a big surprise. I’m not exactly sure what to expect out of tomorrow’s jobs report. But I’m certainly guarded. Although the private jobs report was positive on Wednesday, I question if this report will be the roses and sunshine that we’ve been promised. A lot will hinge on tomorrow’s official report from the Department of Labor.

However, I’m already seeing people moving the goalposts. And, what’s worse, I’m also seeing members of the Federal Reserve start to raise red flags. For example, this week, Dallas Fed President Robert Kaplan warned that various factors could produce an “unusual” jobs report for May of 2021. He also used the word “odd” to describe it.

These aren’t usually the terms that economists use. But when you’re trying to communicate with retail investors at a time that markets are frothy, it’s best to sometimes use simple terms.

Now Hiring: Skilled Laborers

The major problems that I’ve warned about for the better part of three months center around the worker shortage in the United States. We have more than eight million job openings in America and not enough willing people to fill them. Moreover, many of those jobs are in manufacturing, where blue-collar jobs continue to face massive shortages.

I don’t know what it is about these jobs, but many people don’t want to do them. Truck drivers, welders, and people who know how to use their hands can easily make more than six figures across the country. But we can’t get people to take the jobs. Some people blame childcare costs. Others are blaming fear of the virus.

That has a deflationary impact on the economy. Republicans will say that extremely generous federal unemployment benefits are driving the challenges to fill jobs. But it’s certainly more than this. For truck drivers, as an example, the cost of insurance has ballooned. Commercial truckers are also facing increasing pressures for delivery times and additional regulations making the job harder to achieve.

The Result of an “Unusual” US Jobs Report

Investors should consider whether a bad or “odd” report will impact the ongoing battle for an infrastructure bill here in the United States. These projects are – by definition – supposed to create new demand for workers. That “result” is a debate for another time.

Tomorrow’s report matters because it will shape the debate about Washington’s role in spending money on infrastructure, family programs, and other stimulus efforts. I’d love to say that there’s compromise on the horizon, but I know better.

I’ll talk more about this report tomorrow because it will set up all of next week. We could see more money flow into alternative assets – or we might see unbridled optimism. I just don’t know what to expect right now. But I do know that once the picture is clear, it will set the tone for the next 90 days of trading and the best way to position ourselves for success.

Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.
Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.

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