Labor pains
We live in a Braxton Hicks economy where all contractions are fake news
Sometimes the most telling information escapes our notice.
Our culture wants headlines and trusts experts to tell us what’s going on.
Last week, we got the latest U.S. data on the employment situation and labor markets. The takeaway? The U.S. economy remains resilient with unemployment falling and jobs being added, albeit at a slower rate.
I don’t see it like that.
Let’s start at the ‘big picture’ level:
In early 2022, major developed nation economies began raising interest rates rapidly to curb inflation (they all did the same thing at the same time, pretty much). As a result, the unemployment rate in most nations began rising quite noticeably and many have experienced recession. But the U.S. is going through its “exceptionalism” phase and seems to be shrugging it all off, or so the experts tell us.
I say that the U.S. economy is also suffering, but a massive surge in the working age population has meant cash is flowing from new entrants, just enough to offset the rate hike-driven downturn. But the surge in the working age population had its taps turned off a year ago and is no longer providing the support it once did.
Can we see underlying weakness in labor market data?
