Payrolls and Patience
from Mind the Macro Hosted by Michael Roberts and Jeff Baldwin
This week, we discuss the Employment Report, the Job Openings and Labor Turnover Survey, and the Berkshire Hathaway Annual Meeting. Although the headline employment figures appeared strong, the underlying composition was less reassuring. Nearly all of the payroll growth came from lower wage sectors and industries where workers are more likely to hold multiple jobs. In that sense, the rise in payrolls may be less a sign of strength than of strain, as more consumers take on additional work to make ends meet. That interpretation was reinforced by a 449,000 increase in the number of people working part time for economic reasons. The JOLTS survey told a similarly subdued story, with low quits suggesting continued uncertainty and caution among workers. Finally, Greg Abel’s message from the Berkshire Hathaway meeting echoed our own: be patient. Warren Buffett noted that there had been only five truly “juicy” periods in his career. Until such opportunities return, Berkshire will continue selling equities and holding cash in Treasuries. Without those rare windows, Buffett’s extraordinary record of outperforming the market by roughly two times over six decades would likely not have been possible.
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