The employment report does not look pretty

Here's how to read it.

On the face of it, parts of August’s U.S. employment report, released on September 6th, don’t look too pretty.

Non-farm payrolls increased by a tad less than expected, (but only missed by a paltry 11,000), and there were revisions down totalling 74,000 to the previous two months’ figures, and at first sight the reasons for the drop in the headline level of employment from 7.4 per cent to 7.3 per cent look disappointing, in that the fall was driven by a drop of 312,000 in the labour force seeking work, whilst the numbers of those in work actually declined by only 115,000, but look closer and you discover that the number of people who aren't working, but would like to be, actually collapsed by 334,000 in August! Think about that. What that is telling us is that work patterns are changing-there are more who want to work only part-time and this fall is also evidence of something much more important to the Fed-a structural change in the U.S. economy that implies it is not going to be able to employ as many people, even when it is growing full tilt-maybe the famous, but enormously difficult to measure, output gap, has shrunk.

The so-called Household Survey of employment, which kicks out the headline unemployment rate, is notoriously volatile, when compared to the Establishment Survey from which non-farm payroll changes are calculated.

The above goes part of the way to explain why I feel these figures weren’t weak enough to stop the Fed tapering down its purchases of US Treasuries, (not Mortgage Bonds), at its 18 Sept. meeting. They may lead to a smaller reduction in purchases, but even that may not be the case. Why?

Well, even parts of the Household Survey were positive-average hourly earnings ticked up from flat in July, (initially reported as -0.1 per cent), to +0.2 per cent, and the average workweek increased from 34.4 hours to 34.5. The broader U6 measure of unemployment fell even further, to 13.7 per cent, from 14.0 per cent. Remember, the Fed told us it wouldn’t just look at the headline figure, but that it would drill down into its composition and look at other labour market indicators.

Just as importantly however, (especially given the volatility and margin for error of the employment survey), we have to remember that recently we have been treated to a veritable slew of positive data surprises, including a drop in the 4-week moving average of those making initial jobless claims to 329,000; a new post-recession low. Other good news has come in the shape of better than expected releases for Existing Home sales, Consumer Confidence, Vehicle Sales and, most encouragingly, as they are forward-looking indicators, the Institute of Supply Managers’ surveys of sentiment in both the manufacturing and services sectors.

None of the above should stand in the way of further advances for developed market equities. Yields are normalising for "good" reasons, and the Fed has done a good job in ensuring they don’t surprise us with their first steps towards tightening-this is not a repeat of 1994’s bond market rout.

Photograph: Getty Images

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An Honours Graduate from Oxford University, Nick Beecroft has over 30 years of international trading experience within the financial industry, including senior Global Markets roles at Standard Chartered Bank, Deutsche Bank and Citibank. Nick was a member of the Bank of England's Foreign Exchange Joint Standing Committee.

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Andy Burnham and Sadiq Khan are both slippery self-mythologisers – so why do we rate one more than the other?

Their obsessions with their childhoods have both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

Andy Burnham is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s widely seen as an unprincipled flip-flopper.

Sadiq Khan is a man whose policies and opinions seem to owe more to political expediency than they do to belief. He bangs on to the point of tedium about his own class, background and interests. As a result he’s the hugely popular mayor of London, the voice of those who’d be proud to think of themselves as the metropolitan liberal elite, and is even talked of as a possible future leader of the Labour party.

Oh, and also they were both born in 1970. So that’s a thing they have in common, too.

Why it is this approach to politics should have worked so much better for the mayor of London than the would-be mayor of Manchester is something I’ve been trying to work out for a while. There are definite parallels between Burnham’s attempts to present himself as a normal northern bloke who likes normal things like football, and Sadiq’s endless reminders that he’s a sarf London geezer whose dad drove a bus. They’ve both become punchlines; but one of these jokes, it feels to me, is told with a lot more affection than the other.

And yes, Burnham apparent tendency to switch sides, on everything from NHS privatisation to the 2015 welfare vote to the leadership of Jeremy Corbyn, has given him a reputation for slipperiness. But Sadiq’s core campaign pledge was to freeze London transport fares; everyone said it was nonsense, and true to form it was, and you’d be hard pressed to find an observer who thought this an atypical lapse on the mayor’s part. (Khan, too, has switched sides on the matter of Jeremy Corbyn.)

 And yet, he seems to get away with this, in a way that Burnham doesn’t. His low-level duplicity is factored in, and it’s hard to judge him for it because, well, it’s just what he’s like, isn’t it? For a long time, the Tory leadership’s line on London’s last mayor was “Boris is Boris”, meaning, look, we don’t trust him either, but what you gonna do? Well: Sadiq is Sadiq.

Even the names we refer to them by suggest that one of these two guys is viewed very differently from the other. I’ve instinctively slipped into referring to the mayor of London by his first name: he’s always Sadiq, not Khan, just as his predecessors were Boris and Ken. But, despite Eoin Clarke’s brief attempt to promote his 2015 leadership campaign with a twitter feed called “Labour Andy”, Burnham is still Burnham: formal, not familiar. 

I’ve a few theories to explain all this, though I’ve no idea which is correct. For a while I’ve assumed it’s about sincerity. When Sadiq Khan mentions his dad’s bus for the 257th time in a day, he does it with a wink to the audience, making a crack about the fact he won’t stop going on about it. That way, the message gets through to the punters at home who are only half listening, but the bored lobby hacks who’ve heard this routine two dozen times before feel they’re in the joke.

Burnham, it seems to me, lacks this lightness of touch: when he won’t stop banging on about the fact he grew up in the north, it feels uncomfortably like he means it. And to take yourself seriously in politics is sometimes to invite others to make jokes at your expense.

Then again, perhaps the problem is that Burnham isn’t quite sincere enough. Sadiq Khan genuinely is the son of a bus-driving immigrant: he may keep going on about it, but it is at least true. Burnham’s “just a northern lad” narrative is true, too, but excludes some crucial facts: that he went to Cambridge, and was working in Parliament aged 24. Perhaps that shouldn’t change how we interpret his story; but I fear, nonetheless, it does.

Maybe that’s not it, though: maybe I’m just another London media snob. Because Burnham did grow up at the disadvantaged end of the country, a region where, for too many people, chasing opportunities means leaving. The idea London is a city where the son of a bus driver can become mayor flatters our metropolitan self-image; the idea that a northerner who wants to build a career in politics has to head south at the earliest opportunity does the opposite. 

So if we roll our eyes when Burnham talks about the north, perhaps that reflects badly on us, not him: the opposite of northern chippiness is southern snobbery.

There’s one last possibility for why we may rate Sadiq Khan more highly than Andy Burnham: Sadiq Khan won. We can titter a little at the jokes and the fibs but he is, nonetheless, mayor of London. Andy Burnham is just the bloke who lost two Labour leadership campaigns.

At least – for now. In six weeks time, he’s highly likely to the first mayor of Greater Manchester. Slipperiness is not the worst quality in a mayor; and so much of the job will be about banging the drum for the city, and the region, that Burnham’s tendency to wear his northernness on his sleeve will be a positive boon.

Sadiq Khan’s stature has grown because the fact he became London’s mayor seems to say something, about the kind of city London is and the kind we want it to be. Perhaps, after May, Andy Burnham can do the same for the north – and the north can do the same for Andy Burnham.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.