Healthcare makes all the jobs (and signing bonuses)
'The US Gov't increasingly serves as an engine of job creation"
US gov’t as engine of job creation, and other “artificial boosts”
Signing bonuses > wage increases
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Short post today. It’s good. But short.
Healthcare makes all the jobs (and signing bonuses)
There feels like something of a hivemind vibe shift.
Naturally, I’m generalizing a bit, but as someone who consumes a lot of various financial media, one gets a feel for the zeitgeist. And if before, it was “booming on all cylinders,” then now, it’s “ehhh, maybe deficit-driven expansion is a bit near-sighted.”
An “artificial boost”
One recent example comes from an FT piece that has, once again, deigned to notice that Healthcare Makes All the Jobs:
The US government has made above-trend contributions to US job growth for the past couple of years.
Buzz about “American exceptionalism” overlooks the artificial boost the US is getting from state support. Following the pandemic, government spending rose sharply as a share of GDP. More than 20 per cent of new US jobs are now created by government, up from 1 per cent in the 2010s.
Public transfers including Social Security account for more than a quarter of residents’ income in more than 50 per cent of US counties — up from just 10 per cent in 2000
“Artificial boost” indeed.
This is very-well covered ground for Random Walk—and while it’s true that a lot of this was “catch up” growth (even if healthcare job-creation is still above-trend)—it raises some questions as to (a) the sustainability of deficit-funded job growth; and (b) what, if any, more sustainable engines for job growth can we look forward to.1
While the chart doesn’t offer that much new on this particular front (other than to observe that it’s still true), I find it amusing that the last time the FT made this observation, it was to warn the public about the perils of President Trump, who might jeopardize this venerable pillar of the US economy.2
Now that Trump is the president, the pillar is not so much venerable (and neither is the economy), as it is evidence of American-not-so-exceptionalism.
So it goes.
Signing bonus frenzy
Anyways, Random Walk’s amusement aside, the chart is a small segue into the additional tidbit that follows.
While the rest of the labor market has eased into the current No one is firing, no one is hiring, no one is quitting equilibrium—which is a welcome (albeit imperfect) change from the helter-skelter labor shortage days that saw wages (and inflation) blow through the roof—there are still pockets of the labor market with evidence of strong demand.
The good/bad news is that heightened demand isn’t necessarily reflected in pumped up wages. That’s good because scarcity-driven wage pumping is the straw the stirs the service-inflation drink.
It is, however, reflected in big signing bonuses:
While wage growth has moderated, the “signing bonus index” is still relatively high.
And where are these signing bonuses most plentiful?
You guessed it:
Nursing, Physicians, and Medical Technicians (in addition to Vets and Beauticians) are leading the signing bonus party.
They had the highest frequency of listed signing bonuses, and some of the biggest increases in postings, going back to pre-pandemania.
So it appears that yes, Healthcare (and their stylists) Still Makes All the Jobs.
Other links
Boeing plans to spinoff non-core divisions. Sell the space unit. Spinoffs are good.
Synchrony Financial reports of a Selective and Cautious Consumer. Also hmm.
Tech’s $15T rally hinges on earnings stretch. Earnings growth is expected to slow. Today is the big day. Can’t wait.
Previously, on Random Walk
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It’s not that there aren’t any, it’s just that it’s a question that people aren’t really asking enough. If it’s all healthcare, it’s unsustainable. If it’s just healthcare ‘catching up,’ then that means that job growth has, in fact, been pretty anemic.
This chart on trade flows was also fun:
US←→Vietnam is the fastest growing trade corridor.
Other nuggets from the piece are “americans are too fat,” private credit is a ticking time bomb, AI undercuts Big Tech, China is awesome, and other reasons why the economy that was awesome in October is now terrible.