Thu. Jan 20th, 2022


This is an audio transcript of the FT News Information Session podcast episode: The pandemic wastes US labor market data

Marc Filippino
Good morning from the Financial Times. Today is Tuesday, January 4th, and this is your FT News Briefing.

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The jury reached a verdict in the Elizabeth Holmes trial. Apple’s market capitalization has reached a new milestone, and Joe Biden is trying to make American meat cheaper. Plus, don’t get too excited about the December work report that will be released on Friday. It can change a lot.

Colby Smith
In a pandemic, it was quite difficult to get a clear reading on the state of the economy and the health of the labor market in particular, just because things are changing so fast.

Marc Filippino
We’ll talk about why the US is struggling to measure job growth. I’m Marc Filippino and here’s the news you need to start your day.

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Jury members found Elizabeth Holmes guilty yesterday of conspiracy to defraud investors. Holmes is the founder and former head of the failed blood test startup Theranos. The company was worth about $ 9 billion at its peak, but it was dissolved in 2018 after facing investigations by regulators. The California jury also found Holmes guilty on three counts of wire fraud and conspiracy to commit wire fraud. They found her not guilty on four other charges. Holmes pleaded not guilty to the charges. Each charge carries up to 20 years in prison. Holmes can appeal against the ruling in the state appellate court.

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Apple became the first company ever to reach a market capitalization of $ 3 billion, making it worth three Teslas, seven Home Depots and 11 Netflixs. But the really shocking thing is the pace of growth. It only took Apple a year and a half to add its most recent trillion. The FT’s Patrick McGee has more on Apple’s hold on consumers.

Patrick McGee
The way I like to think about it is that 1.65 billion people in the world essentially see the internet through the lens of Apple, which means they use the iPhone, the iPad or a Mac of some sort Earth. And that alone is pretty extraordinary. I’ve read a number of different articles and there’s really nobody saying, hey, three billion dollars, we’re in bubble area, right? Like, we’m not in bubble area, right? Like most Apple analysts, it remains positive. And you know, there’s just every reason to think that this company is properly valued in the multi trillions, which is kind of a crazy sentence, just like I say it.

Marc Filippino
Patrick McGee covers Apple for the Financial Times.

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The Biden administration yesterday announced plans to tackle the rising price of meat. Meat, like many goods, has fallen victim to inflation, and the administration hopes that a new series of reforms will reduce costs. But the FT’s Washington bureau chief, James Politi, says there’s another reason why they joined this industry.

James Politi
They have seen high levels of market concentration in the meat industry in which a small group of players kind of dominate the sector. And they hope that by, you know, promoting the production and processing of meat by smaller producers, they might be able to reduce costs.

Marc Filippino
Now, James, the administration is trying to make it easier for smaller producers to compete by giving them grants and making it easier for them to access credit. Does the Biden administration do anything else?

James Politi
So some of the incentives are tightening the rules of origin for meat so that it is not quite as easy for the biggest meat producers to put “Made in America” ​​labels on their meat if they contain products, kind of input products, that contain do not come. from around the world. And they hope that it will also help small and medium-sized meat producers, although some of America’s trading partners will obviously not be happy with that.

Marc Filippino
So is it going to actually move the needle when it comes to high meat prices?

James Politi
Well, I think the price of meat is something that is actually quite politically sensitive. Maybe not as much as gas, but it’s high up there. And interestingly enough, you know, they believe that through executive action they can change the dynamics in certain respects. Interestingly, as far as the meat sector is concerned, they have also launched a new joint initiative between the Department of Justice and the Department of Agriculture to try to police competition law violations more effectively and curb price reductions, something they are trying to do. do it. with Big Oil too. So they kind of apply the same playbook they did with gas on meat.

Marc Filippino
James Politi is the FT’s Washington bureau chief.

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The US released its December work report on Friday, but we may want to take it with a grain of salt. This is because the bureau that publishes those figures struggles to accurately measure job growth. The Bureau of Labor Statistics’s monthly job report is distorted by the pandemic, and it has caused the agency to adjust its initial estimates of salary growth by nearly a million jobs last year. This is the highest adjustment ever. To find out why this is happening, I have the FT’s US economic editor Colby Smith at stake. Hi, Colby.

Colby Smith
Hello, Marc.

Marc Filippino
So Colby, why is the US struggling to measure job growth? Is this just the pandemic?

Colby Smith
Well, there are some factors that are playing out here at the moment. The first has to do with data reporting and some delays in businesses actually responding to the surveys released by the BLS to compile its estimate for job growth. So what happens is that some of the businesses that typically respond to the monthly business survey from which the headline figure is calculated, those businesses do not respond in a timely manner to the survey. This means that the BLS has to fill in more assumptions than it typically does for each subsequent estimate. And so what ultimately happens is that the reviews finally give us a clearer reflection on the actual state of the job data, because as we get the subsequent reviews, we get more data from the different businesses now that they have a little more time to to respond.

Marc Filippino
And Colby, what’s the second reason?

Colby Smith
Second reason has to do with seasonal adjustments. So, the BLS and its economists, they make certain assumptions about various seasonal patterns, whether it be rent related to the holiday season, back to school, changes in unemployment as well. But again, this is all about the fact that the pandemic has really changed the way we act, the way consumers spend money, the way stores operate. So many of the seasonal patterns that the BLS has become quite accustomed to, these have changed quite dramatically, and it has only made it difficult to get the number exactly right with the first time.

Marc Filippino
So if they finally review the data and get it right, why does it matter that they misunderstand it on the first try?

Colby Smith
Well, policymakers pay quite a bit of attention to this data, so you’re right that the reviews ultimately better reflect what the actual job growth is. But I think the story really starts to crystallize when those first estimates do come out. So back in September and October, when job growth was much weaker than expected, many of the questions the Federal Reserve received were what they were going to do if job growth slowed or did not bounce back, let’s say, as fast as many people expect. So I think in many ways, eventually, yes, the numbers sort themselves out. But policymakers are so sensitive to these numbers, it makes it a little harder, let’s say, to, you know, be sure to know that the policy is at its most appropriate institutions.

Marc Filippino
So is there anything the Bureau of Labor Statistics can do to get it right with the first try or are they trying to improve things at all?

Colby Smith
Well, I think a lot of it depends on the trajectory of the pandemic here. Many of the economists we spoke to for the piece mentioned that, you know, as long as we have the virus that drives economic activity, it’s going to be quite difficult for the BLS to properly measure job growth in the first round. If the pandemic continues to limit economic activity, spending holds back people from returning to the workforce, all of this will make it all the more difficult for the BLS to estimate any numbers here. But if we go in the opposite direction and the pandemic disappears from sight, then I think the numbers will start to look a little more in line.

Marc Filippino
Colby Smith is the FT’s American economic editor. Thanks, Colby.

Colby Smith
Thank you.

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Marc Filippino
And before we go, Mercedes has unveiled an electric car that he says can drive a little over 600 miles on a single charge. This is three times higher than the industry average. This is not the first car to reach this milestone. China’s Guangzhou Automobile Group said in November it has a car that can do about the same thing. Now, this bending by Mercedes is based on digital simulations the company has performed, but it hopes to show a roadworthy version of the car this spring.

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You can read more about all these stories at FT.com. This was your daily FT News Briefing. Make sure you check back tomorrow for the latest business news.

This transcript was generated automatically. If there is an error, please send the details for a correction to: tikfout@ft.com. We will do our best to make the amendment as soon as possible.



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