Despite the so-called “Bipartisan Infrastructure Framework” deal, it is clear extensive and consequential tax changes are in the works that will affect not only corporate/business rates but also the amount individuals will be paying if passed (including changes to the “death tax”). The “S-Corp” organization, which CIRT has worked in coalition with over the years, has developed an informative detailed description of the various aspects or proposals that are being considered by the President and his Democrat allies in Congress. For example, the paper has a table showing what a pared-down, $1.5 trillion package might look like.

[For details see, S-Corp Washington Wire]

Jobs expansion picked-up in May to 559,000 new jobs according the latest Labor Department figures (comfortably above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics).  Non-seasonally adjusted construction unemployment improved to 6.7 percent in May reflecting the expanding reach of the spring work season across the lower 48 states. [The percentage was down 1.0% from April ‘21, while also dropping-off 6.0 points from the pandemic/shutdown induced 12.7% figure last May 2020].  However in total numbers, construction employment edged down in May (-20,000), reflecting a job loss in nonresidential specialty trade contractors (-17,000). Employment in construction is still 225,000 lower than its February 2020 level.

The overall unemployment figure slide to 5.8 percent i.e., 0.3 percent lower.  (“Unemployed persons” also dipped to 9.3 million per the government count). The “labor force participation” deteriorated a tick to 61.6 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL). The “employment to population ratio” however improved slightly to 58.0 percent.  Average hourly earnings for employees moved-up slightly again to $25.60, signaling a possible trend to a higher norm in the post pandemic era, potentially due to a shortage of willing workers at this time. 

Workforce Statistics Chart

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8 percent in April ‘21 on a seasonally adjusted basis after rising 0.6 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 4.2 percent before seasonal adjustment. This is the largest 12-month increase since a 4.9-percent increase for the period ending September 2008 (nearly 13-years ago).  Both an earlier AGC and CIRT’s own Sentiment Index reports show “inputs” (materials and labor) also seeing a rapid rise beginning in this year, with a yearly projection from these number to be in the 12 plus percent range for 2021, if the pace keeps up.

The inflationary increases in the index were led by used cars and trucks, which rose 10.0 percent in April. This was the largest 1-month increase since the series began in 1953, and it accounted for over a third of the seasonally adjusted all items increase. The food index increased in April, rising 0.4 percent as the indexes for food at home and food away from home both increased. The energy index decreased slightly, as a decline in the index for gasoline in April more than offset increases in the indexes for electricity and natural gas. The index for all items less food and energy rose 0.9 percent in April, its largest monthly increase since April 1982.

Nearly all major component indexes increased in April. Along with the index for used cars and trucks, the indexes for shelter, airline fares, recreation, motor vehicle insurance, and household furnishings and operations were among the indexes with a large impact on the overall increase. The all items index rose 4.2 percent for the 12 months ending April, a larger increase than the 2.6- percent increase for the period ending March. Similarly, the index for all items less food and energy rose 3.0 percent over the last 12 months, a larger increase than the 1.6-percent rise over the 12 month period ending in March. The energy index rose 25.1 percent over the last 12-months, and the food index increased 2.4 percent.

Jobs expansion slowed in April to 266,000 (after March’s numbers were also revised downward by 146,000) according the latest Labor Department figures (still above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics).  Non-seasonally adjusted construction unemployment slide to 7.7 percent in April reflecting the spring work season was beginning to expand. [The percentage was 0.9% down from March ‘21, while also seeing a huge drop-off from the pandemic/shutdown induced 16.6% figure last March 2020].  Employment in construction was unchanged over the month, up by 917,000 over the year, but still 196,000 below its February 2020 level.

The overall unemployment figure ticked-up to 6.1 percent i.e., 0.1 percent higher – the first monthly increase since the pandemic hit last year.  (“Unemployed persons” was up a bit to 9.8 million per the government count). The “labor force participation” improved to 61.7 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL). The “employment to population ratio” improved slightly to 57.9 percent.  Average hourly earnings for employees moved up slightly to $25.45, fairly high due to the fact lower wage earners are being disproportionally impacted by slow process of fully opening the economy up across the country. 

SEE Workforce Statistics Table

The U.S. Bureau of Economic Analysis (BEA) reported today that real Gross Domestic Product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021, reflecting the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic. In the first quarter, government assistance payments, such as direct economic impact payments, expanded unemployment benefits, and Paycheck Protection Program loans, were distributed to households and businesses through the Coronavirus Response and Relief Supplemental Appropriations Act and the American Rescue Plan Act. In the fourth quarter of 2020, real GDP increased 4.3 percent.

March saw a substantial jobs increase registering a large 916,000 jump according the Labor Department figures (well above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics). Construction’s non-seasonally adjusted unemployment figures were mixed: with a decrease in unemployment to 8.6 percent in March [down 1.0 percentage point vs. February ‘21, but at the same time 1.7 percentage points above a year ago in March 2020 when it stood at 6.9%]. Construction added 110,000 jobs in March, following job losses in the previous month (-56,000) that were likely weather-related.  

The overall unemployment figure slide to 6.0 percent i.e., down 0.2 percentage points.  (“Unemployed persons” also dropped to 9.7 million per the government count, down 100K). The “labor force participation” slightly improved to 61.5 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL). The “employment to population ratio” also improved slightly to 57.8 percent.  Average hourly earnings for employees remained essentially unchanged at $25.21, still fairly high due to the fact lower wage earners are being disproportionally impacted by the continuing partial government mandated shutdowns in some states and large cities.  

SEE Workforce Statistics Table

Jobs expanded at a healthy clip in February by 379,000 according the latest Labor Department figures (well above the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics). However, non-seasonally adjusted construction unemployment moved in the opposite direction increasing to 9.6 percent in February [up 0.2 percentage points vs. January ‘21, while remaining a sizeable 4.1 percentage points above a year ago in February 2020 when it stood at 5.5%].  Employment in construction fell by 61,000 jobs in February, largely reflecting declines in nonresidential specialty trade contractors (-37,000) and heavy and civil engineering construction (-21,000). Severe winter weather across much of the country may have held down employment in construction. Notwithstanding, employment in the industry is 308,000 below its level a year earlier.

The overall unemployment figure slide to 6.2 percent i.e., down 0.1 percentage point.  (“Unemployed persons” also dropped to 10.0 million per the government count, down 100K). The “labor force participation” stayed constant at 61.4 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL). The “employment to population ratio” improved slightly to 57.6 percent.  Average hourly earnings for employees remained essentially unchanged at $25.19, still fairly high due to the fact lower wage earners are being disproportionally impacted by the continuing partial government mandated shutdowns in some states and large cities.  

SEE Workforce Statistics Chart

Reversing the downturn seen at the end of 2020, jobs expanded in January by 49,000 according the latest Labor Department figures (however, well below the 130-150,000 estimated increase needed on a monthly basis to stay-up with growing demographics). Non-seasonally adjusted construction unemployment decreased to 9.4 percent in January [down 0.2 percentage points vs. December ‘20, while remaining 4.0 percentage points above a year ago in January 2020 when it stood at 5.4%].  Construction employment on the whole changed little over the month (-3,000), after increasing for 8 consecutive months.

The overall unemployment figure slide to 6.3 percent i.e., down 0.4 percentage points.  (“Unemployed persons” also dropped to 10.1 million per the government count, down 600K). The “labor force participation” got slightly worse down to 61.4 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL). Conversely, the “employment to population ratio” improved slightly to 57.5 percent.  Average hourly earnings for employees increased slightly to $25.18, fairly high due to the fact lower wage earners are being disproportionally impacted by the renewed partial government mandated shutdowns.  

The seeming anomaly in the numbers (newly hired vs. number counted as unemployed persons = unemployment percentages) appears to suggests a large number of Americans have simply “given up looking for work” at this time, which means they don’t count as unemployed persons under the governments tracking; thereby reducing the overall unemployment percentage even though the actually number of new jobs (49K) is fairly modest.  

Workforce Statistics Chart

The U.S. Bureau of Economic Analysis (BEA) announced that its “advanced estimate” forReal Gross Domestic Product (GDP) increased at an annual rate of only 4.0 percent in the fourth quarter of 2020, reflecting both the continued economic recovery from the sharp declines earlier in the year and the ongoing impact of the COVID-19 pandemic, including new restrictions and closures that took effect in some areas of the United States. In the third quarter, real GDP increased 33.4 percent (on an annualized basis). Maybe just a coincidence, but the abrupt about-face on the “V” shape recovery coincides with the complete takeover of all policy elements of the federal government by the party that has argued for sustained or renewed shutdowns. Although growth continued in the fourth quarter, the pace wasn’t strong enough to complete a recovery “on the whole” for the year, leaving the GDP in negative territory at minus 3.5 percent for 2020.

Elections have consequences, and it appears the results of November 3^rd have already impacted markets, especially with the number of states returning to aggressive shutdowns. Job hiring collapsed in December declining 140,000 jobs according the latest Labor Department figures. Non-seasonally adjusted construction unemployment jumped to 9.6 percent [up 2.3 percentage points over November, while being nearly twice or up 4.6 percentage points from a year ago in December 2019 when it stood at 5.0%].  Notwithstanding, construction added 51,000 jobs in December, but employment in the industry is still 226,000 below its February peak level.  Specifically, employment rose in residential specialty trade contractors (+14,000) and residential building (+9,000), two industry segments that have gained back the jobs lost in March and April. In December, construction employment also increased in nonresidential specialty trade contractors (+18,000) and in heavy and civil engineering construction (+15,000).

The overall unemployment figure stayed at 6.7 percent.  (“Unemployed persons” also remained at 10.7 million per the government count). The “labor force participation” was flat at 61.5 percent. [NOTE: The “labor force participation” rate “typically” works inversely to the overall unemployment figures. Meaning: as it deteriorates/gets worse or smaller, it actually is counted as improving unemployment (i.e., people leaving the workforce are no longer viewed/counted as unemployed by the DOL)].  The “employment to population ratio” was also constant at 57.3 percent.  Average hourly earnings for employees increased slightly to $25.09, fairly high due to the fact lower wage earners are being disproportionally impacted by the renewed partial government mandated shutdowns. 

SEE Workforce Statistics Chart here.