The meat packing job example got me thinking... are we just better off trying to automate that type of work? On top of the safety concerns and working conditions, is that really a job someone wants?
No, we're better off just *not eating meat*. Meat industry jobs are miserable for the workers, horrific for the animals, and harmful to the environment. We should tax meat until people stop buying it.
Good post. I love Furman’s “uncomfortable hot jobs report” … we certainly wouldn’t want millions more Americans to have jobs. That would sacrilegious! Where did those supply chain shortages come from afterall?
Totally agree. This is a supply inflation. The Fed thinks raising interest rates will decrease demand and cause inflation to decrease. It has to a point in reducing gasoline use and increasing mortgage rates. But we still have a shortage of housing. This is not going away. The influx of immigrants coming from our southern border still need to live somewhere which makes the shortage even worse. Eventually they will be allowed to work and will need housing. And it is going to take years to get the number of electric cars to make up for the shortage of refinery output. ( increase in electric output should be the next national goal )
The increase in jobs in in areas where there is a shortage of jobs will actually reduce prices since it will increase supply.
consumer spending (nominal) grew 7.8 percent at an annual rate and inflation adjusted it was 1.0 percent. late in the expansion before Covid, it was not uncommon to see quarters with nominal growth 5 or 6 percent. demand has been growing above trend. the pace needs to slow some AND the point of this post is that supply needs to catch up, in this case of workers.
How incredible that labor shortage driven inflation is still not enough for the country to have a grown up conversation about immigration. Our leadership sucks. Fueling polarization does too.
I agree housing is important in the inflation dynamics and they are connected to the labor market. Housing costs tend to go up when the economy is good (procyclical), that is, when the labor market is good. With more money, people can move out start families or simply get more space, and that puts pressure on rents. The problem is worsened by our long-standing underbuild of housing. Whether it creates a spiral is another question. Workers would need to be able to convince employers to raise their wages to make up for high housing costs. It could happen some now given the labor shortages, but already workers are not getting wage increases on par with inflation.
The meat packing job example got me thinking... are we just better off trying to automate that type of work? On top of the safety concerns and working conditions, is that really a job someone wants?
No, we're better off just *not eating meat*. Meat industry jobs are miserable for the workers, horrific for the animals, and harmful to the environment. We should tax meat until people stop buying it.
Good post. I love Furman’s “uncomfortable hot jobs report” … we certainly wouldn’t want millions more Americans to have jobs. That would sacrilegious! Where did those supply chain shortages come from afterall?
Totally agree. This is a supply inflation. The Fed thinks raising interest rates will decrease demand and cause inflation to decrease. It has to a point in reducing gasoline use and increasing mortgage rates. But we still have a shortage of housing. This is not going away. The influx of immigrants coming from our southern border still need to live somewhere which makes the shortage even worse. Eventually they will be allowed to work and will need housing. And it is going to take years to get the number of electric cars to make up for the shortage of refinery output. ( increase in electric output should be the next national goal )
The increase in jobs in in areas where there is a shortage of jobs will actually reduce prices since it will increase supply.
Claudia - consumer spending is growing at 8% (annualized) rate.
How do you argue that kind of demand growth is not inflationary or sustainable?
I never said it was not.
consumer spending (nominal) grew 7.8 percent at an annual rate and inflation adjusted it was 1.0 percent. late in the expansion before Covid, it was not uncommon to see quarters with nominal growth 5 or 6 percent. demand has been growing above trend. the pace needs to slow some AND the point of this post is that supply needs to catch up, in this case of workers.
How incredible that labor shortage driven inflation is still not enough for the country to have a grown up conversation about immigration. Our leadership sucks. Fueling polarization does too.
I agree housing is important in the inflation dynamics and they are connected to the labor market. Housing costs tend to go up when the economy is good (procyclical), that is, when the labor market is good. With more money, people can move out start families or simply get more space, and that puts pressure on rents. The problem is worsened by our long-standing underbuild of housing. Whether it creates a spiral is another question. Workers would need to be able to convince employers to raise their wages to make up for high housing costs. It could happen some now given the labor shortages, but already workers are not getting wage increases on par with inflation.