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Tag Archives: labor shortage

Turning The LABOR SHORTAGE Up to 11

In Massachusetts, the Federal Reserve’s First District, restaurateurs have struggled mightily to find workers. As part of the central bank’s Beige Book, one contact of the Boston leadership said the industry was “facing the worst labor shortage he has seen in 35 years of experience.” In response to such a major threat, these firms become truly creative to try to entice employee prospects. According to the text of the Fed’s document, it’s not just restaurants, either, as this deficit has...

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An Entirely Too Familiar American (anti)Inflationary Anecdote

One of the more compelling aspects of the last LABOR SHORTAGE!!!!, in an outright contradictory way, was how it was made up of entirely anecdotes. Lacking data, especially wage data, the narrative was instead kept up and alive by the media hyping every small creative innovation companies were using if only to avoid having to actually pay their workers and prospective workers the market-clearing price. The stories have returned in 2021 already granted a similar seriousness if for those same...

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Inflation/Rate Hike Probabilities Were Never High To Begin With, And Now, Despite CPI & Labor Shortage, They Are Even Less

It wasn’t all that long ago when the media began to fill itself up with one story after another about how huge looming inflationary pressures were causing the entire “market” to rethink its lengthy and determined anti-reflationary stance. Back in March, for instance, S&P had joined this chorus by zeroing in on eurodollar futures, of all instruments, and coming back with premature rate hikes out of them. Recent trading in the Eurodollar and Fed Funds futures markets, which both track...

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April’s Payroll Jolt, Because Unprecedented Number of Workers Just Quit?

April 2021’s payroll estimate (CES) was the “bad” one; at a revised +278,000 it was “supposed” to have been significantly better than the “good” one for March (+785,000, revised). Near three hundred thousand in any month before 2020 would’ve been celebrated as a near miracle (that’s just how bad the labor market has been for a long time). What made it so worrisome, then, was that already in a deep hole we just can’t afford to take several more years at such a reduced rebound to get out of...

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UST Yields, Reverse Repo, and…Payrolls

February’s cold winter blast throughout the Southern United States was supposed to have been the extent of the weakness. The unusual and unusually severe freeze caused a great deal of havoc, making its way very quickly into economic data. The recovery was said to have been on a winning streak (vaccines, gov’t payments, etc.) so it seemed the easiest correlation more likely the explanation.In terms of the Establishment Survey, or payroll report, this didn’t really happen. The low-point...

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Labor Shortage Under #1 Becomes Labor Bottleneck Under #2

It doesn’t quite rise to the level of the LABOR SHORTAGE!!!! fiasco, not yet, but it’s moving up toward that territory. This, of course, had been during Inflation Hysteria #1 when at its absolute peak the unemployment rate was being used to justify expectations for not just a little more in consumer prices but a lot more. In 2018, in particular, there were widespread anecdotes, hardly a day would pass without some mainstream media story about how companies were struggling to cope finding...

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Inflation Hysteria #2 (Slack-edotes)

Macroeconomic slack is such an easy, intuitive concept that only Economists and central bankers (same thing) could possibly mess it up. But mess it up they have. Spending years talking about a labor shortage, and getting the financial media to report this as fact, those at the Federal Reserve, in particular, pointed to this as proof QE and ZIRP had fulfilled the monetary policy mandates – both of them.A labor shortage would’ve meant full or maximum employment, the absolute best any economy...

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Exposed Inflation Bubble

Wait, wait, wait. Hold up. The Federal Reserve just concluded its near two-year long Grand Strategy Review. The purpose, in its most basic component, was to figure out why inflation hadn’t shown up in the manner everyone at the Federal Reserve spent years promising even though the unemployment tumbled to 50-year lows. The labor market was so tight, inflation was guaranteed. Then it didn’t happen.Behind the resulting monetary policy change (spoiler: not a change) to an average inflation...

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Like Repo, The Labor Lie

The Federal Reserve has been trying to propagate two big lies about the economy. Actually, it’s three but the third is really a combination of the first two. To start with, monetary authorities have been claiming that growing liquidity problems were the result of either “too many” Treasuries (haven’t heard that one in a while) or the combination of otherwise benign technical factors. The other one has been about this epically tight labor market, which, Jay Powell points out, should keep the...

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Weakening Labor Market Now In All The Data

The JOLTS series had always been a seemingly superfluous set of labor numbers for the Bureau of Labor Statistics (BLS). The agency wanted to go deeper into employment when it originally presented these other series in 2002. The unemployment rate seemed accurate enough, but it came at the labor market solely from the view of labor supply. As the BLS said of its new set of figures in their initial publication: The number of unfilled jobs—used to calculate the job openings rate—is an important...

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