On the December Jobs Report, and the Triumph of Trickle Down

Donald L. Luskin
Friday, January 10, 2020
A small miss after two big beats. “Fed Listens” has committed the Fed to “hands off” policy.
US Macro
Federal Reserve
With revisions, the December payroll miss is bigger than it seems. After two blockbuster beats, it was inevitable. It is inconsistent with contemporaneous labor market data, and with the “household survey,” both of which showed much greater jobs growth. The “Fed Listens” events have focused on the benefits of persistent low unemployment rates, which have “trickled down” to minorities, the lowest earners, and the least educated. Such communities insist that the Fed not disrupt the present prosperity, and they cannot understand the Fed’s mission to produce higher inflation. This supports Powell’s new “hands off” doctrine on rate hikes.