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Moneybeat - Job encouragement


WORLD Radio - Moneybeat - Job encouragement

Unemployment drops but more people need to go back to work

A sign for Wall Street hangs in front of the New York Stock Exchange, July 8, 2021. Mark Lennihan/Associated Press Photo

MARY REICHARD, HOST: Next up on The World and Everything in It: the Monday Moneybeat.

NICK EICHER, HOST: Financial analyst and adviser David Bahnsen joins us now for our weekly conversation and commentary on business, markets, and the economy. David, good morning.

DAVID BAHNSEN, GUEST: Well, it's good to be with you, Nick.

EICHER: Well, maybe I should’ve said politics and the economy.

Let me try out a headline for you—see if this fits your assessment of the week: Democrats falter in Virginia, party moderates reassert control in DC, pass bipartisan infrastructure bill.

Is that about it? Does it capture the cause and effect?

BAHNSEN: Yeah, yeah, I think that there is a lot of that that happened. It was, you know, there's nuances and more complexity on both of those stories. But you definitely had a huge story out of Virginia, and you had a huge story out of last Friday night. And both of them do, essentially, have the narrative of what you described that the moderates got what they wanted on Friday night. And obviously, the results, not just to Virginia, but have a multitude of election results around the country, at least provide some sort of prima facie support to the idea that the more progressive wing of the Democratic Party is running on defense right now.

EICHER: Probably not worth going into more political detail, so maybe let’s jump into the infrastructure bill’s passing, without the much-bigger reconciliation tax-and-spend package, which seems really to show the ascendancy of the moderate wing of the Democrats.

BAHNSEN: Well, I think those two things go together. I mean, I think on the political front by now, everyone knows the closeness of the governor race in New Jersey, the result of the Republican Virginia win and the governor's race there, they, you know, look special elections and off election years, they can be indicative, and they have been foreshadowing in the past to certain things, but they're not exclusive. And they don't, you know, guarantee a certain result into the future. But I think that they're incredibly confirming of what has sort of been my anecdotal observation, and I'm sure the anecdotal observation of, of many people listening, which is that there's an overreach right now towards some of the more progressive side. And I think a lot of that is more cultural than even economic. But I think that more importantly, right now is a lot of people are wondering what's happening with this reconciliation bill. And they cannot know. Because what happened with the infrastructure bill did not dictate anything to what the Senate is going to do with the reconciliation bill. Not only did the House not approve a reconciliation bill, even if they had, they would have been doing so knowing that many of the things in there are red lines for some of the Democratic senators. And so until the house does something, and then sends it to the Senate. And then we see what a variety of senators, both the Manchin/Sinema moderate side, and then some of the other more progressives, there are red lines for both sides here. Now, I'm very happy to tell I'm not really happy, but I am in I feel confident sharing with WORLD listeners that I do think a reconciliation bill will end up getting passed, I never really believed that they were going to get one done and not the other, I thought it was both or none. And the fact that they got this infrastructure thing done, probably, let's put it this way, if they had not gotten it done, I think reconciliation was done, over, they're gonna have to walk away with their heads down. And that was almost a completely unacceptable outcome for what the you know, severity of the humiliation would have been to party leaders. At this point, the issue is just really how much they're going to be able to shape the bill, in a more moderate vein versus a more progressive vein. They've already done yeoman's work in reshaping this bill. But are they going to now have the leverage to really get it down to what the kind of Manchin side initially said? That remains to be seen? And I don't think we're going to know for at least a few weeks.

EICHER: All right, 531,000 jobs added in October—that report is in and it’s quite an improvement, more than half a million. Unemployment rate at 4.6%. We’re still four million jobs short, pre-pandemic. But that’s got to be the improvement you’re looking for with that federal incentive not to work fully now out of the way.

BAHNSEN: Yeah, similar to the stuff we talked about last week, the initial jobless claims this week on Thursday, going to another new low. The continuing claims now getting really much closer to pre pandemic levels, and then the confirmation that I expected to see See in the total October number all indicate the same story, which is that the relief from the Federal supplement has worked out according to plan. The bad news remains the same bad news, which is a declining labor participation force. The good news remains the same good news, which is a absolutely astronomical amount of jobs lost during COVID have indeed come back. But we, week by week have had people that have said, okay, the gravy train is over, I enjoyed being out of work. And yeah, the folks going back to work right now people need to go back to work. There are still a concerning amount of people that have just decided they don't want to work again. And that remains in the same demographics we've talked about in past shows. And I don't have anything optimistic to say there. A labor participation force at 61% is way, way, way too low. It was closer to 64% before the COVID moment, and I just think that it's a tragedy to see the amount of people that decided they don't want to be in the workforce again. But I don't think it's necessarily a tragedy because of economic output. I think it's just a tragedy for the cultural ramifications.

EICHER: David Bahnsen, financial analyst and adviser. He writes at Thanks again, David!

BAHNSEN: Well, thank you for having me.

WORLD Radio transcripts are created on a rush deadline. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of WORLD Radio programming is the audio record.


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