Today’s labor market report

Unemployment is at 3.9%, and can’t get much better.  In the new report just 199,000 jobs were added.  Job growth is slowing and that is a pre-omicron phenomenon.  Labor force participation has not been so low since 1977.  The great economic myth of the last thirteen or so years is that you can get the labor market to pre-Covid Trump administration levels and keep it there just by having enough “aggregate demand.”  I am all for sufficient aggregate demand, to be clear, but I don’t overrate it either.

People are starting to rethink what is going on.  All coherent stories have to involve…the supply side of the labor market.  Which is precisely what the orthodoxy had been telling you to ignore.  Average is Over.

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