Layoffs, Quits, Hires, Job Openings: The Phenomenon of Labor Shortages and the Power-Shift from Employers to Workers

Even Powell is now citing this mind-boggling data to justify tightening.

By Wolf Richter for WOLF STREET.

The persistence of the mind-boggling phenomenon of a labor shortage, and the accompanying shift in power from employers to workers was documented today by the JOLTS data from the Bureau of Labor Statistics. Based on a monthly survey of 21,000 nonfarm businesses and government entities, it estimates how many job openings there were at the end of the month, how many people companies hired during the month, how many people quit voluntarily such as for switching jobs, and how many people were laid off or were otherwise involuntarily discharged.

Powell has started to mention these astronomical results of the JOLTS data – specifically the record job openings and the record quits – as aspects of the “very, very, very strong labor market” that is “historically tight,” as said at the FOMC press conference to prepare markets for the tightening that would include “a substantial amount of shrinkage” of the balance sheet. And today’s release was once again a doozie.

The total number of workers who were laid off or discharged involuntarily in December by companies or government entities fell to 1.17 million (seasonally adjusted), a record low in the data going back to the year 2000. In the private sector alone, layoffs and discharges dropped to a record low of 1.1 million, down by 41% from December 2019:

The rate of layoffs and discharges in the private sector – the number of layoffs and discharges as a percent of total private-sector employment – fell to a record low of 0.9%:

The number of workers who voluntarily quit jobs in December, at 4.34 million, remained in the astronomical zone since last June, and was up 24% from December 2019. The private sector accounted for over 95% of total “quits.”

These “quits” are people who decided to quit at their employer to work for another employer with more pay and/or better working conditions, where they became a “hire.” Or they decided to exit the labor force entirely to retire on their stock market laurels. Or they decided to take care of the kids, or to get rich quick with cryptos, or to take the plunge into the unknown and start their own businesses amid an explosion of new business.

These record numbers of quits over the past six months show that workers have discovered their power in the labor market – and they’ve already found, or a confident in finding better opportunities somewhere else.

The high number of quits also shows how aggressively employers are trying to hire people away from other employers, thereby poaching each other’s workers by offering better pay, benefits, and working conditions, and creating massive churn.

It is via this mechanism of churn that pay increases spread around the economy as each employer has to deal with the new reality when a worker leaves and the position needs to be filled, and as employers implement pay raises to retain workers.

When a company hires a worker away from another company, it is reported as a “quit” by the company that lost that worker, and as a “hire” by the company that got the worker. But the job opening itself just got shifted from one employer to another.

The quits rate in the private sector at 3.2%, remained in the record range of the past few months of 3.1% to 3.4%:

The tough job of hiring: 6.26 million people were hired in December, up by 24% from December 2019.

Many of these “hires” filled the jobs that the quits had vacated earlier: 4.34 million people had quit their jobs in December and 4.5 million people had quit in November! A much smaller number of “hires” filled jobs that had been newly created as companies tried to expand to meet demand.

The number of hires was held down by the tightness of the labor market and the difficulties companies face in this labor market trying to hire people, as they often have to entice people who are working somewhere else with better pay and benefits:

Job openings in the astronomical zone. At the end of December, there were 10.9 million job openings (seasonally adjusted), up by 62%, or by 4.2 million openings, from December 2019, at the upper end of the astronomical zone the developed in mid-2021. These job openings are not based on online job postings, but on what companies and government entities said their hiring needs were:

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  198 comments for “Layoffs, Quits, Hires, Job Openings: The Phenomenon of Labor Shortages and the Power-Shift from Employers to Workers

  1. Jake W says:

    he might be talking about tightening, but the market clearly doesn’t believe it. if he does actually raise rates in march, we’re going to see fireworks in the bond and equity markets.

    • Wolf Richter says:

      Jake W,

      “but the market clearly doesn’t believe it.”

      The market believes it just fine. The market has already priced in a 25-basis-point hike in March and sees a 30% change of a 50-basis-point hike in March (so we are not going to get a 50-basis-point hike). The market has priced in 4 hikes totaling 100 basis points in 2022. This is ratcheting up gradually.

      • Jake W says:

        right, on those particular futures, but i find it hard to believe that any investor would buy 10 year paper at 1.8% or “growth” stocks with p/es of 90 if they truly believed rate hikes were coming. who knows though?

        • Augustus Frost says:

          I don’t believe hardly any individuals are buying 10YR maturity debt directly especially with the intent to hold it. I’d say virtually no one is doing it.

          Buying funds or ETF more to speculate on interest rate changes, whether it’s an institution or individual.

          Only “buy and hold” buyer likely to be pension funds and insurance companies hedging offsetting liabilities.

        • Red says:

          Im still long stocks. Yes IF you can get a SFR property, it is 100 percent what you should do. But what to do with trash cash. My guess is FED floor will continue the game for one more year my basic guess is its 50/50 Las Vegas odds. Anyone in cash is smart and also fighting a frigin goverment mountain. So Yeah cash people are stupid till they are the smartest people ever.

      • Kunal says:

        I am 95% sure that Fed is lying.
        They are still buying bonds and talking about QT. What a hypocrisy.

        • MyLadyHumps says:

          You are 100% correct.

          The market had it’s predictable tiny tantrum and the Fed has begun to predictably back track. Powell was lying.

          I don’t see any noticeable reduction in purchases per chart on the FRED site. Powell appears to be pissing in our face and telling us it’s a refreshing rain.

          Trust me, 50% of the time I’m correct every time.

        • Wolf Richter says:

          This is too much BS to bear. See my comment below. Quit spreading BS.

        • gametv says:

          As of Jan 26 data, it looks like the total assets on the balance sheet are still growing at the same rate. Where is the slow-down in the pace of increasing the balance sheet?

          It looks to me that the gov was still buying about 95 billion in bonds per month despite previous promises to cut it.

          So if Powell is lying doesnt that undermine his credibility? I would think that could spell real trouble. They cant keep buying it at this pace much longer without someone noticing that their own statistics dont show a slow-down.

          It seems our government officials all think that there is no such thing as reality. Biden wont even admit that his plunging poll numbers mean anything.

          The collusion of the Democratic party and big media is very dangerous to our nation’s future.

        • Wolf Richter says:

          gametv,

          Nonsense. The Fed is tapering just fine. Look at the numbers again.

          From the Dec 22 balance sheet through the Jan 26 balance sheet, total assets increased by $69.9 billion, compared to $120+ billion as before the taper.

          In addition, the Fed buys MBS in the To-Be-Announced (TBA) market, and these trades in the TBA market take 2-3 months to settle, and the Fed books them only after they’re settled. So most of the MBS purchases that Fed booked in those weeks you mentioned where under the pre-taper regime. We’re now starting to see the lower purchase amounts from the first month of the taper come through as settled trades on the balance sheet.

          You can check the MBS purchase schedule on the NY Fed’s website, and you see how the amounts are coming down. But as I said, it’ll take 2-3 months for these reduced amounts to show up on the balance sheet.

        • Old school says:

          Yardeni just out with big four central bank balance sheet. Bottom line is rate of increase still declining, but gross size still increasing. Google Total central bank balance sheet Yardenni if you want to get visual.

      • qt says:

        I don’t think the worry here is if the markets believe QE will end and the FED will raise interest rate. Powell did this in 2018. The question is how long after they stop QE and raise the interest rate before things start to break? Then after that, will they need to cut interest rate again and re-launch “non-QE” QE as well? People keep forgetting that the FED is trying to jawbone the interest higher without doing so themselves. They are hoping this will slow down inflation so they don’t need to hike interest rate above 6% or 7%. How will the US govt pay their bills if interest eats most of the tax revenues?

        I’m not a betting man but I see with the huge amount of debt that everyone has, it will break by end of the year at 1.00% to 1.5%.

        • Kunal says:

          I think it will never break, not for a few decades. They will just keep printing and inflating everything in the process. Trade deficits will keep growing. Assets will keep growing. Rich will become ever richer and poor gets scr ewed. This will go on as long as USD remains the reserve currency, USA remains the sole superpower and there are no alternatives.

        • Jake W says:

          there are alternatives indeed. not accepting fiat currency. there is no requirement that countries agree to this.

        • Jackson Y says:

          It depends on what you mean by “break.” If it’s based on hard economic data, like a spiking unemployment rate, or 7%+ inflation plummeting to a sub-2% deflation scare, likely not any time soon. There’s a long way to go.

          If “break” means the bond and/or equity markets throwing ugly tantrums & the FOMC insider-trading crooks pivoting to save their personal investment portfolios, that’s a different matter.

        • Nathan Dumbrowski says:

          Mortgage rates are going up up up regardless of the Federal Reserve Interest rate. Over the past 12 months the Fed rate has been flatlined at ~0.08 while 30 year fixed mortgage has shot up from 2.73 to 3.55 per FRED website

          The banks have already begun to take their profits

        • Thomas Roberts says:

          There is no current replacement for the US dollar as the global currency, however, over time, the US dollar could be simply bypassed. Countries simply trading using their local currencies, or some other methods, is the real threat to the US dollars’ status as the global currency.

          Right now, the main reason the US is safe for now, is that all the other major economies are being just as dumb or even dumber (this has been ongoing since before the 2008 recession). The EU, Japan, China, the UK and the rest are all being so dumb, that America is not currently falling behind. If the EU or enough large sized economies like Russia or Brazil get their sh*t in order, than America could be screwed.

          Countries switching away from fiat isn’t a likely option, because, countries no longer have hundreds of years of precident that they will honor the gold/other backing. Should Brazil trust a gold backed UK pound? NO. A gold backed euro? The EU might not even survive. A gold backed Yuan? LOL.

          Which countries would people actually think are trustworthy enough to accept the backing?

          Either way, the asset bubbles popping wouldn’t allow this to continue for decades.

        • Sams says:

          @Thomas Robersts
          The central bank of India is as number two central bank to introduce its own digital currency. China being the first. Depending on the implementation this may change the map of currencies later on.

          China do not have and “independent” central bank, it is more run by the government. If the central bank step into lending money direct and the system are designed for it they can run negative interest rates on loans to deflate the monetary supply. That will hurt or kill the banks, but they compete for power with the government so no big problem. the government then get full control of the monetary supply. That may stabilize prizes on goods and commodities.

          Anyway, if the money transfer system work smooth to everyone trade with China may start to use this system for settling trades. Some countries may also use this Chinese system instead of the SWIFT system for their trade chipping away the US dollar position as the global currency.

          Same with other central bank digital currencies. If they work better for settling trade than US dollars they will be used.

        • Old School says:

          They will have to make tough choice to kill inflation or kill speculative bubble.

        • Tom S. says:

          Guys the Fed can’t relaunch QE with inflation at 5+% and 10+million job openings and a shrinking labor pool. The Fed tried ignoring half of their mandate and are now in the process of failing both mandates through higher inflation and unemployment. The oft touted Philips Curve didn’t hold true with low unemployment, but it is about to rear its head with high inflation bringing on high unemployment.

          We are about to enter a prolonged recession and the only way out is to stabilize interest rates and shrink the balance sheet. The fed knows this and is talking about it. A bunch of geniuses they are, completely throwing free market forces to the wind. They now will bear the blunt of the blame as they try to clean up their mess.

        • Thomas Roberts says:

          Sams,

          It’s important to note that swift is based in Belgium (in the EU) not America. America adds a US dollar exchange component to it. Swift itself has been very hesitant to cut off anyone from it; They are unlikely to cut off Russia or almost anyone new from it. The US politicians are the ones who threaten swift, that the US government will cut off access to the US dollar exchange component to swift, if swift doesn’t cut off certain countries. This tactic (by the US government) is not likely to succeed going forward. The swift system can respond by pushing euros. Realistically, swift will say no to cutting anyone off new and actually save the US dollar in the process.

          As for countries switching to a Chinese yuan/system that is not an option. It’s important to note that the Chinese yuan is the only substantial currency in the world that can’t be freely exchanged back into other currencies. Only for Chinese citizens and only to an ever shrinking amount, can yuan be converted to anything else. Even foreign businesses doing business in China, usually have their profits (if any) trapped inside China for this reason.

          The digital yuan is even worse, once converted to digital yuan, there is no way to turn it back into paper money or any other currency. The digital yuan is a way for the CCP to have absolute control over how Chinese citizens use their money.

        • Thomas Roberts says:

          On the global stage, yuan isn’t significant and is smaller than the Australian and Canadian dollars combined, whose populations combined are only about 50 million. Also, China’s economy is smaller than claimed and already stagnanting.

          Switching to alternative systems is possible, but there is absolutely no reason to switch from a global standard to having the CCP have absolute control over your transactions.

          The real threat to something like swift is if a new open global system was developed, that was implemented on the national level. Basically every country could have their own national server and all internal transactions for that country went through that. If say Brazil was trading with Chile, the Brazilian server would connect to the Chilean server and there would be no intermediate countries involved, if using their local currencies. This would prevent any other countries was interfering forever in this aspect. The main obstacle to this is what currencies are involved and validating the authenticity of the currencies involved when dealing with the currency of third party countries. I.e. if Egypt trades Brazilian “dollars/real” with Germany, how does Germany know the Brazilian money is real and that Egypt didn’t just claim they had way more than they really do? Digital currencies might be able to solve this, but a single integrated system that is already in place is far easier to use. Right now, third parties have to validate certain international exchanges.

          New systems will go through problem stages as well, before becoming true replacements. The servers for digital currencies are going to be a major weakpoint and will be targeted in state backed cyberattacks.

      • Charles Ponzi says:

        January was the result of ratcheting up gradually?

        I really look forward to ratcheting rapidly.

        More power Igor!

      • Pea Sea says:

        Even half the Fed doesn’t seem to believe it.

      • Depth Charge says:

        “The market has priced in 4 hikes totaling 100 basis points in 2022. This is ratcheting up gradually.”

        Hah. What a joke. 1% rates by the end of the year while inflation rages in double digits (by old measures)? This is why nobody is taking the FED seriously at all. “Transitory” and “let it inflation run hot” are alive and well. That’s why the stock market is NOT taking Powell seriously, because Powell is not taking inflation seriously.

        • TimmyOToole says:

          It’s also why folks are interested in the I series bonds.

        • Old school says:

          They are choosing supporting asset prices vs. really fighting inflation. When your stated belief is the wealth affect, what are you going to do?

        • historicus says:

          Talking heads on cable suggesting Fed will wait for more inflation data. I guess 40 yr highs are not clear enough signals…
          who holds the Fed to their duties?
          In a system of checks and balances it is glaringly apparent no one “checks” the Fed.

        • Winston says:

          “1% rates by the end of the year while inflation rages in double digits (by old measures)?”

          Yes, considering what Volker had to do, how long he had to do it, the negative side effects of what he did, how the speculative bubble dependent on cheap debt is worldwide this time, and how China is a huge factor now that wasn’t then, I don’t see how that will work.

          But, of course, “it’s different this time.”

      • Glass Half Empty says:

        The Federal reserve does not lead, it follows the three month treasury bill rate. It was 0.08% Jan. 22nd. It was 0.24% today. The Fed MUST raise to keep up or SHTF.
        The three month rate will predict how much and when the Fed acts.

      • KML says:

        More data that helps destroy the latest delusion from the majority of those who own stocks & bonds, Crypto/NFT Crap, Real Estate, Gold, etc. ….
        “The Fed can’t tighten much” argument is based on a backwards looking view from Q4 2018, when inflation was only at about 2%…and Powell decided to quickly reverse a rise in Fed funds up to 2.4%

        Since Q4 2018, the M2 money supply is UP by $6 TRILLION !!! This epic increase in liquidity does NOT include the massive increase in the value of stocks, real estate, and crypto crap….

        The huge M2 bubble + the huge bubble in asset values + Rapidly rising Wages + rapidly increasing energy costs = The key ingredients for Inflation to stay well above 2% for the next few years.

        Which means that the Fed MUST raise their funds rate well above 3% (the minimum appropriate level for 2% inflation) to stop this wage/price spiral from becoming even more ingrained into the U.S. economy.

        Which means that the Fed MUST raise Fed funds in .5% increments at least 6 times this year.
        and will likely have to continue to hike rates for most of 2023 also.

        = Why most stocks, bonds, real estate, crypto, etc will experience epic declines over the next 2 years or so….

      • sooperedd says:

        I will chew my foot off if they raise rates four times this year.

        While I will save a TON of money on new shoes that I would spend on hiring Bon Jovi for my 60th birthday party, it’s just not going to happen.

      • Dazed And Confused says:

        “a 30% chance of a 50-basis-point hike in March (so we are not going to get a 50-basis-point hike)”

        Things with a 30% chance happen all the time.
        Before the 2016 election, betting markets were predicting <30% chance of a Trump victory.
        Same thing for Brexit vote in UK.

      • Mark says:

        “but the market clearly doesn’t believe it.”

        I don’t think the “market” believes it either. This isn’t even close to a
        waterfall, blow-out decline.

        As long as couterfeiting is legal for the predator class in the USA, there will be no vast decline in the fraudulent asset values of the rich.

      • Jay says:

        We shall see. It’s been very fluid over the last few months. Lots of acceleration & tone changing on the part of the FED.

      • But 100 points will not be anywhere near enough. There is a real danger that inflation and exuberance, combined with the asset-inflationary supply of M2 that is still in the pipeline, will cause the market to ‘melt-up’ in dot-com style, only to meltdown and then stay down. It takes about two years for an increase in the money supply to actually feed into the real economy, so what we are seeing now may just be the beginning of the effects of QE from 2020.

        • Wolf Richter says:

          Yes and yes, except the meltup — much bigger than the dotcom boom — already happened in 2021 and is that’s behind us. It’s unlikely that there will be two meltups in a row.

          What the Fed will do is way too little, way too late to mitigate the effects of something that should have never been started.

    • Jackson Y says:

      The fireworks already happened in January. The S&P 500 had a 12% correction bottoming at 4222 (down from 4818), while the Nasdaq was almost down 20%. The Apples, Googles & Berkshires of the world are holding up the averages. Many fast-growing but unprofitable tech stocks (Fastly, etc.) are down 70%+ from highs.

      It appears the stock market has bottomed out for now, and it did so on its own without a Fraud Reserve policy pivot like in 2018-9. Imagine if Powell and Clarida didn’t panic over their plummeting investment portfolios back then or in Feb-March 2020 – maybe the markets would have recovered on their own, and the Fraud Reserve’s bloated balance sheet would be a few trillion dollars smaller, and inflation wouldn’t be above 7% today.

      • Jake W says:

        uhh, if that was a “correction” it was the shortest one in history. s&p is back to mid 4500s. i’m not seeing what you’re seeing.

      • Depth Charge says:

        How nifty. Guess it’s back off to the races. You’re all in, right?

      • Mike R says:

        No bottom whatsoever. This is only a counter trend rally, in what will be an ugly Feb and March. The next bottom you see will be considerably lower before a very strong summer rally. But then the final top will come in before mid terms, and by year end, every index will be down over 60% from where it began Jan 1.

        Good luck people.

      • Old school says:

        My portfolio was flat in the drawdown, which is better than loosing money. Some value stocks got fairly close to fair value, but I am trying to wait for the panic selling to make some obvious bargains

  2. MiTurn says:

    In the past couple months I’ve received in my mail box mass-mailed multiple job offers. These were generic and not targeting me personally, but sent to everyone in my area. These were glossy appeals and couldn’t have been cheap. I’ve never seen such a thing before and I’m in my 60s.

    • Brent says:

      USPS found a bag of mail missing for 82 years ?

      I’ve got them too:

      1.WE CAN DO IT !
      with Rosie the Riveter

      2.Construction workers…
      Build and fight for Victory
      Join the Seabees !!!

      3.Longing won’t bring him back sooner…
      GET A WAR JOB !
      See your U.S. Employment Service

      Next week I’ll probably get my grandfather’s US Office of Price Administration ration books ☺

      • WES says:

        And Rosie the Riveter probably made a dollar a day too!

        • Brent says:

          During WWII industrial wages were regulated.Rosie (a real person,actually, who recently died) was making $2 per hour.

          After V-J Day (capitulation of Japan) Gov contracts were canceled and wages plummeted from $2 to 50 cents within one week.

        • jm says:

          Back then a dollar bought at least what 10 will buy today

        • NBay says:

          Look at the bright side!….WW2 level TAX SCHEDULES!!!!! About time we at least went back to Eisenhower tax schedules, don’cha think?……he was a conservative, ya know….and this Comprehensive Green New Industry won’t be cheap….but no war for survival ever is.
          The old “death tax” rates might even cause a few heart attacks, making that bit of newspeak quite fitting.

    • Charles Ponzi says:

      Gotta ask where you live if the job offers come addressed to dear occupant via snail mail.

      Also gotta ask what kind of jobs were offered and working for what companies.

      • Wolf Richter says:

        I have received USPS please-come-to-work-for-us post cards, addressed to “resident,” with info about USPS job openings, job fairs, etc.

        • Apple says:

          I received them also!

          On call temp postal workers ( no path to permanent) needed in my city. $19/hr & must provide own vehicle to deliver the mail.

          It’s like they hired some execs from Uber to craft their new business model.

        • Depth Charge says:

          “$19/hr & must provide own vehicle to deliver the mail.”

          Did it also read “maff skills not required?”

        • TimTim says:

          Very good point depth charge!

        • NBay says:

          Yes it did DC, but only in Bible Belt states.

        • Jake W says:

          unless they also get the $.55 or whatever it is per mile reimbursement in addition to the $19/hr.

    • Anthony A. says:

      I’ve even got job offer feelers through my LinkedIn account and I turned 78 a few months ago and have been retired for several years. Whether or not these kinds of activities would actually pan out is anyone’s guess. I guess the headhunters are scraping the bottom of the barrel. LOL!

      • Swamp Creature says:

        Walmart Greeter?

        • Anthony A. says:

          I wish!!

          I don’t even qualify for that anymore. Besides, WM eliminated that job years ago.

        • NBay says:

          No, sometimes they have one, sometimes not. Not sure why….but some old people do spend a lot of restroom time.
          Had a cool boss from Floydada, TX (even went there on one of our trips just to see the place, I liked him so much) He said, “Laugh young man, the day will come when you’ll value a good shit”. But he also said a good lunch was a Moon Pie and an RC Cola.

      • DawnsEarlyLight says:

        You could get a seasonal job at Hamazon, and RV for the rest of the year! Maybe even make a movie about it!

        • COWG says:

          I thought that movie was god-awful…

          Should have named it “ You might be OK, but I’m seriously f#cked up”…

  3. Insta says:

    This is something that the US is going to have to get used to because of demographics. I read this morning that the current birth rate is around 1.7. So if it wasn’t for immigration we would be shrinking right now and will eventually anyways.

    The main reason population is growing is the elderly, retired demographic, not births. This is a long term trend that can’t turn around quickly because all the potential new workers for the next 18 years have already been born and they are less than the number that will retire over the next 18 years. Unless there are enough benefits and raises to entice retiries to stay in awhile longer, the workforce shortage will get more accute and there is nothing the government can do about it.

    • Dan J. says:

      “the workforce shortage will get more accute and there is nothing the government can do about it.”

      It can allow more foreign workers in. Immigration policy and execution is a mess.

      • Wolf Richter says:

        Dan J.,

        Crush American workers’ earnings power and negotiating power by bringing in cheap labor so that uppity Americans cannot ask for a raise?? Good lordy.

        • Depth Charge says:

          That’s what the pigs like, Wolf. And the pigs are running things.

        • DawnsEarlyLight says:

          And where is this ‘not’ happening wolf? What decade was that?

        • Mark says:

          Total agreement

          “The pigs are running things”

          George Carlin wasn’t kidding about “the BigClub”

          What a disaster when the rich steal the entire country.

        • coalman says:

          Wolf, that policy has been working quite well in Oz for the last twenty years, the Corporate Commisars have been laughing all the way to the bank. Ordinary workers cannot afford a home, in their own country. we are governed by psychopaths.

      • Enlightened Libertarian says:

        I would much rather see more automation than bringing more people.
        A lot cheaper in the long run.

    • Augustus Frost says:

      The job market is entirely artificial just like the economy and financial markets. Has nothing to with demographics. People don’t get to retire or stop working just because they reach some arbitrary age, especially since recently this age has been going down even as life expectancy increases.

      There’s an article today on CNBC covering this topic where the author claims about 50% of those retired can’t afford it. I’d consider this a mild understatement, given that he didn’t even mention the asset mania and fake economy.

      It’s not just the result of “free” government money but an asset mania as Wolf’s article stated, including for those who now work for themselves but did not before.

      The US has had a fake economy for about 13 years, back to 2008 when federal deficits exploded and QE induced financial zombification really grew.

      Reduce the fiscal stimulus even back to pre-pandemic levels and the economy is going to be “sucking wind” because it’s fake. You don’t magically create real increased prosperity by closing down the economy and filling the vacuum with more debt.

      Reduce the monetary stimulus and the financial markets will be “sucking wind” too or crater. It’s totally fake too.

      Watch both happen and see what happens to the tight labor market.

      • Sams says:

        The labour market may not be any better or worse without monetary stimulus. Maybe less work openings, but if no living wage is paid there will not be that many takers.

        Starving working is no better than starving unemployed. Stability of society will nevertheless suffer.

      • wadge22 says:

        U.S. life expectancy at birth has not increased since ~2010, and has fallen significantly in the past two years (due to Covid).

        • NBay says:

          With the exception of a drop in infant mortality, life expectancy is mainly a function of water treatment (including sewage) and for all practical purposes unchanged since 1900-1920 or so.

        • goomee says:

          Life expectancy has also been reduced my opioid overdoses.

    • Russell says:

      There is no labor shortage!!!

      People are either not willing to work or relocating to new employers. Look at the numbers. I’m sick of the false narrative. The largest impact to employers due to the rotation is the increased training costs and temporary lack of productivity following new hires. The increase payroll is insignificant.

    • Kurtismayfield says:

      Yep.. zero to do with the economic conditions for people in their prime birthing years. Not at all .

  4. Breezy says:

    Interesting how we have record quits and a housing market with very little supply. Must have something to do with the wide acceptance of full time work from home jobs, but I’m sure there is more to it.

    • georgist says:

      I bet it has a lot to do with “accidental landlords” (oops I decided to exploit working families in my former area!). With housing now seen as a sure fire bet.

  5. Minutes says:

    Take this job and shove it.

    • WES says:

      Yes, there are supposedly millions of jobs available.
      Nobody talks about what kind of jobs these are.
      That they remain unfilled says something about these jobs.
      Maybe people simply can not afford to take these jobs?
      Could it be that the cost of surviving is higher than these jobs pay?
      Something is missing in this big jobs picture.
      My guess is simply “money”, the lack of.

      • Jake W says:

        people work to earn money to buy things. because of massive inflation, money no longer buys the things it used to. so people are giving up.

        • MiTurn says:

          “because of massive inflation, money no longer buys the things it used to.”

          Ergo, shifts in buying patterns, such as essentials over discretionary. At least one would think, but a lot of over-priced new vehicles found new homes recently.

          Anyone out there in Wolfsville quit their old job to get into auto sales? If so, enjoy it while it lasts.

      • Wolf Richter says:

        These unfilled jobs are also in manufacturing, IT and professional services, etc. They’re across the board.

      • Brant Lee says:

        We save to send our kids to college. Maybe it’s better to use the money to provide them with a home, set them up for surviving cheaper in this modern rat race.

        So, a home paid off or a college education supplemented by student loans. Which is the better situation provided by a parent?

        • Cookdoggie says:

          Reminds me of the old saying, give a man a fish or teach him how to fish? There’s my answer.

    • DawnsEarlyLight says:

      Next!

  6. MyLadyHumps says:

    “Powell has started to mention the… ‘very, very, very strong labor market’… to prepare markets for tightening”

    Have you looked at the St Louis FRED balance sheet chart lately. The Fed is not tapering. They should have reduced purchases to 60 billion in January, I see 126 billion. It is a bumpy curve and you might say I’ve cherry picked end points – but that is the month of January out to the 26th.

    I can see you clearly hope the Fed will knock it off. They are not going to knock it off. They will stay loose and markets will continue to melt up.

    I have learned not to listen to the Fed (their preferred tool doesn’t work on me) instead I pay attention to what they are doing. What they are doing is a continuation of ultra loose monetary policy.

    What excuse will they use? That’s easy enough, Powell will simply say that tightening could push us into a recession and a little inflation is a small price to pay to guarantee we have no more recessions.

    Everyone must do their part to keep us out of the recession by paying higher prices. And if it makes wealthy people wealthier, well… that’s a small price to pay in the eyes of the Fed.

    • Jackson Y says:

      They did reduce QE as promised. All of the open market transactions are logged on the New York Federal Reserve website, including exact CUSIPs acquired & sold. QE will continue at a $60 billion per month (TS + MBS) rate through mid-Feb, then $30B/m through mid-March.

      The balance sheet may not line up exactly due to impacts from maturing securities, reinvesting principal, and other operational reasons.

      Not defending the Fraud Reserve (should have ended QE a year ago) but the New York branch is legally required to enact the policy laid out by the FOMC in the implementation note.

      • MyLadyHumps says:

        Dec 29 to Jan 26 – they increased the balance sheet by $103 billion.

        That is quite an overshoot above $60 billion. Not sure where you are looking but you are wrong. Go to the FRED web site and look for yourself.

        Over the six months and the last three months there has been no meaningful reduction in purchases, they are averaging about $110 billion/month. There has been a tiny, but meaningless reduction, just noise.

        The Fed is not now, nor will they ever tighten monetary policy. They will announce a continuation of loose policy with the justification that they must avoid a recession no matter the cost.

        Sorry, but that’s the way it is.

        • I agree that the Fed has been slow to reduce the size of the balance sheet, but they’ve tapered and even done QT before, right? So why would they lie this time? I’m sure they know that the words coming from the Fed are much scarier to investors than the actions. The hard part is done. The Fed has said that QE will end and the markets are under control again. The erratic second-by-second price fluctuations I was seeing in the stock index futures are gone. They’re back to normal. The market is ready now to for a flat balance sheet.

          The real solution here is for people to refuse to go back to work because it’s not worth it when the rich keep getting richer. Once this happens, the Fed will have no choice, but to crash asset prices. The people are actually in control here.

          Reddit’s antiwork discussion group was shut down for a couple of days as a result of an embarrassing Fox interview with one of the Antiwork moderators. But it’s back now. They’ve gone from 276k members in April 13th, 2021 to over 1.7 million members today. They have consistently been among the fastest growing groups over the last months.

          Other than the Antiwork movement, I don’t really see another possible threat to endless asset price inflation. I agree with your view that the Fed will make an excuse and stop tightening soon enough because the inflation is going to come down on its own due to reduced government spending. That will be the time for the Antiworkers to double down and say, “nah, not interested in work when I can retire on my crypto portfolio”.

        • Wolf Richter says:

          Orthodox Investor,

          “I agree that the Fed has been slow to reduce the size of the balance sheet, but they’ve tapered and even done QT before, right?”

          The Fed is tapering alright. Read my comment in reply to MyLadyHumps.

        • When I look at the WSHOSHO data series on the FRED website, it seems to be even worse than you stated. Between Dec 29 and Jan 26, I see a balance sheet size increase of $109 billion.

          When I use the dates that Wolf suggested, I still see $80 billion, more than $60 billion.

        • Jake W says:

          orthodox, i 100% disagree that the market is ready for a flat balance sheet. if it was, stocks would have dropped by 20% or more and stayed there.

    • Wolf Richter says:

      MyLadyHumps,

      “The Fed is not tapering. They should have reduced purchases to 60 billion in January, I see 126 billion.”

      Nonsense. The Fed is tapering just fine. Look at the numbers again.

      From the Dec 22 balance sheet through the Jan 26 balance sheet, total assets increased by $69.9 billion, compared to $120+ billion as before the taper.

      In addition, the Fed buys MBS in the To-Be-Announced (TBA) market, and these trades in the TBA market take 2-3 months to settle, and the Fed books them only after they’re settled. So most of the MBS purchases that Fed booked in those weeks you mentioned where under the pre-taper regime. We’re now starting to see the lower purchase amounts from the first month of the taper come through as settled trades on the balance sheet.

      You can check the MBS purchase schedule on the NY Fed’s website, and you see how the amounts are coming down. But as I said, it’ll take 2-3 months for these reduced amounts to show up on the balance sheet.

      Sorry that’s the way it is.

      • doug says:

        I am amazed at your willingness to go over such worn ground with grace. I appreciate that aspect of this place along with the information. thanks to our host.

      • Old school says:

        Well I think it is because of marketing by Fed which is dishonest. They are decreasing rate of purchases which would be more accurate descriptive language. The Fed hasn’t really made a case why they didn’t just stop the purchases when inflation hit 7%.

        They are intentionally slow walking the tightening because they have the market addicted to gambling and not long term capital investment.

    • Mark says:

      “I have learned not to listen to the Fed” That’s for sure !

      It’s so obvious that when the Fed’s lips are moving , they’re lying.

      I find it insulting to listen to people who’s job is to deceive the populace.

      To protect their loot and their ultra rich buddies.

    • Russell says:

      MyLadyHumps –

      I’m always confused when I see your tag and am finally going to ask.

      Are you bragging about your inflated mammaries or the virility of your wife/girlfriend?

  7. Jackson Y says:

    The entire labor market shows clear signs of being historically tight. Record job openings. High quit rates. High wage growth. 3.9% unemployment rate close to the 3.5% pre-covid bottom.

    Yet for some reason, CNBC, who works for Wall Street, wants readers to think the economy is horrible, as if a widely expected (and mild) growth deceleration coinciding with this winter covid wave is enough to justify delaying interest rate tightening.

  8. Big G says:

    AT&T just said if you dont retire this year you lose your retirement medical benefits and if you stay and work for us you earn 40% less towards retirement. thats not talked about in the news much.

    • Wolf Richter says:

      AT&T is buckling under a huge amount of debt, after mega-acquisitions that backfired. It is now shedding stuff and cut its dividend. That company had the worst megalomaniac decision makers at the top.

      • Depth Charge says:

        How come AT&T is buckling, but Zilldow isn’t?

      • Swamp Creature says:

        AT & T deliberately sends their monthly bills late to their customers, which we are, just to collect late fees. They are another monopoly, criminal corporation which should be broken up. Add in Comcast and Verizon for good measure.

    • Ensign_Nemo says:

      My union ended participation in their pension fund for all new hires starting on December 1, 2021. They also cut all death benefits and all disability benefits. The rate of contribution for those who are still in the pension plan was cut in half, which doubles the number of working years that are needed to get the same monthly amount after retirement as those who have already retired will receive.

      IOW, they are winding down the pension fund. I expect that by the time I actually retire all of the money will be gone and I might get 40% of the promised amount from the Pension Benefit Guaranty Corporation. That assumes that the US government will still be solvent and functional at that point in time, which is a dubious assumption.

      I’m saving most of my income now to try to avoid starvation after I retire but 7%+ inflation is going to whittle that away quite quickly over the span of more than a decade. (0.93)^10 = 0.484, so every $100 I put away now will become $48.40 in purchasing power by 2032 if we have 7% inflation. I think that 7% is a very optimistic projection for the future, as the economy is totally messed up right now. Inflation is more likely to go into a parabola than continue in a straight line if current policies continue.

      We are in a weird world where a huge percentage of corporate profits continue to go into stock buybacks, even though everywhere you look there are supply shortages, labor shortages, raw materials shortages, decaying physical infrastructure, energy shortages, and a whole slew of other problems that are in desperate need of investment in the real world, rather than NFTs and crypto and “Meta”. The disconnect between reality and finance is almost at the point where they will become fully decoupled.

      Perhaps it will take food riots and electrical blackouts that last for days before everybody finally realizes that we think that we are buying a virtual heaven and are really being sold an actual hell.

  9. historicus says:

    The Fed is slow playing this…..
    Three months ago there were record job openings…..and Powell would not address the fact.
    The Fed is enjoying what they have done, IMO.
    Someday, when the QE is finally over…someday……there will be some disastrous auctions…
    Powell disingenuously said “The government doesnt have any trouble borrowing at these low rates.” The obvious response should have been, “Then why are you in there supporting the bill, note and bond markets?”
    Fed hearings have the feel of an orchestrated Biden press conference….screened questioning. They must think us to be stupid. It is time for the Fed to be called out…..the book “Lords of Easy Money” is a start.

    • Depth Charge says:

      Yep. I’ve been saying it all along – the FED is slow-mo-ing their response. It’s akin to something like this:

      “9-1-1, what’s your emergency?”
      “I need an ambulance immediately, my dad is having a heart attack!”
      “OK, we might be able to send one next year.”

  10. JMM says:

    The wage shortage is real.

    • WES says:

      That is why there are so many unfilled jobs available!

      • David Hall says:

        The state employment website job listings for my area has numerous ads requesting RN’s. The local economy is seasonal. They need more RN’s in the winter. There are fewer job openings for CNA’s. Every year they have to hire teachers as Florida is in the bottom decile for teacher’s pay. There has been a shortage of bus drivers and trash truck drivers. The cost of housing is high. A lady did domestic service for me three hours a week. People hired by her agency are out sick with omicron. Her agency was paying her $12/hr. They paid CNA’s $13/hr. She said they all got a dollar an hour raise due to the worker shortage. Many old retired people need service, not enough workers.

  11. georgist says:

    Maybe it’s already in the data above and I’m too daft to see it, but it would be very interesting to know: of the 4.3mm who quit, how many did not quit for a new job.

    Anecdata: in the tech side hiring is very tough, employees have a very strong negotiating position when asking for a raise (if they are a top performer).

    In my opinion this data shows the Fed will hike.

    Everyone and their uncle is busy writing that the Fed only look after the rich. Well yes. And you know what capitalists really don’t like? Labour having power.

    A rate hike will induce a recession. This will increase layoffs, reduce hiring and restore the balance of power back to capitalists.

  12. phleep says:

    The era of WTF is not finished. I expect more weird bouncing stats like these in future articles here! Things may yet go to heck in a VERY non-straight line.

    There is no exact precedent for these factors now. I’m thinking 1970s (demoralized workers, disjointed and inefficient production, possibly more supply shocks — hello Ukraine?), but with a bit of 1987-90 in it (steep graphs, maybe a real estate reversal some time ahead?).

    I’m putting my VIX bets on limit sell orders because a VIX spike could be so fast, blink and you might miss it. Don’t want to be doing some mundane human thing and miss a jackpot.

  13. Nathan Dumbrowski says:

    I am just a statistic. I too have jumped jobs several times in this COVID economy. Waiting on an offer letter for the third job with better opportunity as well as better total compensation. Take the jobs and the pay increase while we are able to

  14. jon says:

    Anecdote: My friend got laid off as a Language Teacher and he is now looking for a job for last 6 months but to no avail. Of course, lots of jobs available in food service filed but he won’t take it yet.

    • MiTurn says:

      This is tough, especially if your friend only holds an endorsement (teaching credential) in one subject. When I taught, I held three endorsements, which made me more valuable (useful?) to my employer, a public school district. When layoffs came due to cut backs, I survived…to teach another day.

  15. Depth Charge says:

    “Even Powell is now citing this mind-boggling data to justify tightening.”

    Powell isn’t doing shit to control inflation, he’s intentionally following it instead of getting ahead of it to promote the coming years – decades – of dollar devaluation and impoverishment of the masses.

    It’s clear that Powell’s got a plan alright – to pretend like he’s doing something while he intentionally destroys everybody but the most wealthy. Their assets will beat inflation, while you lose. Get used to it. He’s got young people in a financial vise, and hes slowly turning the screw on them.

    When inflation is running double digits, and the FED funds rate is double digits behind it, it’s doing nothing to reign it in. And the lamestream media has the audacity to call these guys “hawks” now. They’re all spinning the same narrative and providing cover for the pigmen as they all share the spoils of their economic circle jerk. Having fun, everybody?

    • MyLadyHumps says:

      You speak the truth.

      If Powell wanted to stop screwing the working class he would simply stop screwing them. Instead he announces good intentions but reverses course before even starting. Over and over and over.

      The typical wealthy person is short the dollar and loves inflation. They borrow huge sums of money, to buy assets, and Powell guarantees they can pay back the loans with worthless dollars.

      How many billions can the average worker raise in the bond market at 1.5%. How much debt do Bezos, Musk, and the rest hold? – I’m guessing a lot. they are short the dollar and love the Fed. We are screwed, wage slaves.

      • Wolf Richter says:

        MyLadyHumps,

        “…. but reverses course before even starting.”

        BS.

      • historicus says:

        “screwing the working class”
        Like punishing savings and ramping up housing and rent costs? and food?
        All to keep stocks above the 200 day moving average and fund the “money spilling” federal leviathan ?

    • Depth Charge says:

      Did the Pajama Boy in Chief come out of hiding, or is he still cowering in fear? That little cvck is an embarrassment to the XY gender.

  16. ivanislav says:

    Nasdaq-100 (QQQ) up 7% in 3 days. Wow. The market does NOT believe Powell, and why should it? Fucking clown.

    • Depth Charge says:

      Powell and Co. are giddy with delight. They’ve got a little bit of spring in their step. They’re still buying a sheetload of MBS, too.

    • Swamp Creature says:

      ivanislav

      Right on.

      As I posted several times. The Fed will get cold feet and not increase interest rates in March. Unemployment is surging along with Inflation. Stagflation is with us. They won’t tighten in the face of this except for some cosmetic bull s$it. Larry Lindsey said the same thing. The peons of this country will continue to be pions while the top 1% and 1/10 of 1% will be salivating.

  17. Quitter says:

    I am one of those “voluntary quits” (term of art) who would not receive the jab and so was terminated in Dec 2021. CVS Health WFH for 25 of 27 months I worked there. My group was strained after 1 person was fired 2 left and one moved to another group over those 2 years I was there. Just beginning to integrate tech teams after Aetna merger years ago. Big fan of the patriots in Canada who drive the trucks and those who support them. Not a fan of the corrupt and incompetent PMC.

    • Wolf Richter says:

      Quitter,

      No, you’re not a “voluntary quit.” You said you were “terminated,” so you’re in the category of “Layoffs and Discharges.” This is the category that is now at record LOW.

      • Quitter says:

        I guess the unemployment division sees things differently. They called it “voluntary leaving”. And I quote “…because the conditions or acts were not serious violations of the original hiring agreement or did not create a substantially less favorable work situation, the claimant left work without good cause attributable to the employer” But maybe what one bureaucracy means is not consistent with the next bureaucracy. Sign of the times i guess.

  18. DR DOOM says:

    The Fed is piddling around with inflation fighting. It is hoping it goes away like a headache. If it does not go away like a headache it’s going to go much higher. The impact of slowly rising inflation from 7% to 10% inflation is unknown. The Fed will not keep both assets and the economy at the levels they are at now. This slow rolling disaster has been grinding on the bottom 40% for a lot longer that transitory and is now slowly grinding upward in what is left of the fully employed middle class. Inflation at these levels over a long time will bring down everything.

    • Jake W says:

      well said. they are operating under this delusion that they can knock down inflation and also keep the markets steady. they can’t. there is no secret passage out of this mess that they created.

      • Depth Charge says:

        Powell deserves to spend the rest of his days like Bernie Madoff.

        • Old School says:

          D.M. Booth says there is a big war going on behind the scenes between backers of Powell who is continuation of current system vs backers of Brainard who is a more progressive let the Fed displace commercial banking system person.

          Compromise was to get them both in #1 and #2 positions, but Senate could vote Powell in and not approve Brainard. If there is no vote then Powell keeps serving.

  19. Bobber says:

    I just read an article that KPMG, a large accounting firm in the US, is granting pay adjustments to their entire workforce. These adjustments will range from $3000 to $7000 annually and will be on top of the normal annual pay increases. The accounting industry has a reputation for turnover, and it appears large firms are increasing pay in this environment to maintain adequate staffing. Once one of the big accounting firms does a pay adjustment, the other firms must follow.

  20. michael says:

    The FED has one of two choices of their own making:

    1. Keep pumping the stock market higher, creating an ever rising tsunami of inflation generating the risk of outright riots and societal collapse
    2. Slowly throttle the market down in attempt to prevent a total market melt down.

    Both roads end in the same place. Recession, high employment, stagflation. Its just a matter of how fast we get there.

    • Gomp says:

      Funny. Either choice exacerbates the downward spiral if the other choice.

    • jon says:

      I don’t see this happening: “creating an ever rising tsunami of inflation generating the risk of outright riots and societal collapse” Most people has no clue what’s coming and hitting them and if they see it then they have no idea whom to blame.
      Why do you think politicians keep diving people on the basis other ‘woke’ issues, race etc and keep giving people govt dole.
      They want to make sure people are divided and vote on this line and thus then these politicians and elites can keep getting rich.

      • Depth Charge says:

        “Most people has no clue what’s coming and hitting them and if they see it then they have no idea whom to blame.”

        Too much high-fructose corn syrup, social media, tattoos and vaping to really understand anything else. Walmart nation is scary.

        • COWG says:

          Corresponds with the low birth rate…

          I mean seriously… there is not enough alcohol…

      • Tom S. says:

        It doesn’t matter if people know why, when people are scared and angry they will do terrible things. You put that guy in a trailer/apartment in a position where his day labor job doesn’t feed his kids and you see 1 of 2 outcomes, internalization via drug/alcohol spiral, or externalization ala Jan 6th or looting. The Federal government is basically powerless to do anything other than spend money these days, and spending money irresponsibly has created many of these problems. The Fed needs to fix inflation and fast otherwise people will take to the streets in a way that is permanently damaging to society. Sadly, state and local governments simply do not have the tools to address inflation issues.

        • Jake W says:

          that’s the thing the elites who are looting the country don’t realize. they are not going to come out all smelling like roses if society falls apart.

      • Swamp Creature says:

        You all should read the book “When Money Dies” written by a British author who did some extensive research on the conditions in Germany in 1922/1923. What I’m hearing and seeing now on the ground and being talked about on this post is 100% parallel. The country (Weimer Germany) was then run by leaders who were as loathsome and bankrupt as the ones we have now here in this country and there is no doubt in my mind that we may be headed for a similar fate.

    • jon says:

      if the stock market and housing market goes down by 30-40% i thin it’d be good for the people in general.

      • Depth Charge says:

        Absolutely. If housing crashed 75%, it would be great for the economy. Just think how much money people would have left over to support real businesses. Ratcheting up the price of housing to where it eats up almost 75% of after tax income is one of the dumbest ways you could try to run an economy.

        • drifterprof says:

          I always really hated spending income on rent, and wasn’t settled enough to buy a house. The 75% figure is interesting, and I did some quick checks …

          “Historically, an average house in the U.S. cost around 5 times the yearly household income. During the housing bubble of 2006 the ratio exceeded 7 – in other words, an average single family house in the United States cost more than 7 times the U.S. median annual household income.” (longtermtrends)

          According to that website, the ratio has risen back above what is was at top of the housing bubble. The average home price is now 7.36 times income.

        • drifterprof says:

          According to the most recent BLS statistics, Americans spend an average of $21,409 per household on housing [homes or apartments] per year. This almost doubles the next highest category – transportation.

          Income % gross income
          level spent on house

          Lowest 20% 42.9%
          Next 20% 39.5%
          Next 20% 35.9%
          Next 20% 33.2%
          Highest 20% 31.9%

          I’d be retired in poverty if I hadn’t tolerated cheap housing and minimal cost transportation my whole life.

        • Old school says:

          I am pretty sure neither my maternal or paternal grandfather had a house payment. Built what you could afford with family help. Add on as your family grew. At least part of the time one grandfather worked in the cotton mill for 10 cents per hour. But it was a silver dime back then so a little over $2.00 per hour today.

    • The Real Tony says:

      The first scenario is where everyone ends up poor. The rich will become the new poor under the first scenario.

    • John H. says:

      Michael-

      You’ve summarized the solution set succinctly.

      The 100 year economic stabilization experiment is ending just the way many far-sighted early critics predicted, with the Fed self-painted into a corner.

      Your observation about the unpredictability of timing is apt, too.

      Hopefully the “Recession, high unemployment and stagflation” you predict will be “transitory.”

  21. DawnsEarlyLight says:

    Wolf, looks like you have had a busy day! 😆

    • Wolf Richter says:

      Yes, we got back from skiing Monday night, and so sure enough, chaos awaited me on my first day back ;-]

      • Anthony says:

        Gosh is that global warming snow or the real stuff

        • Wolf Richter says:

          After the record snow in December — 15 feet in Soda Springs — the sun came out, and it gets warm up there, and by the time we got there (end of January), much of the snow was already gone, but there was still adequate snow for skiing. It’s supposed to be sunny for the next 10 days up there, which will likely leave the ski areas without snow. So yes, to answer your question: both.

  22. drifterprof says:

    I’m glad to see this power-shift from employers to workers, and hope it lasts long enough for many working age people to benefit from it.

    My employment history involved a lot of voting with my feet (quitting toxic environments) or voting with my mouth (getting fired telling management what they didn’t want to hear). It seems like now people have more of an opportunity to do that on-the-ground real world type of voting, which can diversify life experience and make one’s life more interesting.

    I have bad-mouthed the seemingly spoiled attitudes many younger people, like my niece who said she was going to demand her employer reduce her work hours so she could work on other things, while retaining the same benefits. But now I’m thinking okay, if she can make it work, it’s not as bad as a strategy of spending your life sucking up to corporate-fascist bosses.

    • The Real Tony says:

      Hyperinflation will put a lot of companies out of business meaning an even tighter workforce. Of course we know all the data coming in before this March and the November midterms will point to the bottom falling out of interest rates but don’t be fooled by all the upcoming lies.

      • historicus says:

        “Hyperinflation will put a lot of companies out of business”

        which just might get the Fed’s attention….for apparently consumer damage doesnt register with the Fed.
        Tighter work force? Fewer businesses will mean fewer jobs, right?
        Fewer businesses also mean fewer services and goods…..inflationary.

        • drifterprof says:

          Unfortunately the losses of hard workers / thrifty savers are merely small collateral damage. The Fed and it’s cartel of banks really mean us no harm. They are even kind enough to pay us lip service.

          It just that their underlying main directive is to enable and safeguard the big supermongus macroeconomic engines of the empire. Without those TBTF engines, the empire would die and all the privileges of our culture would wither on the vine. What would we do? How could we cope then?

        • The Real Tony says:

          Right a tighter workforce but less jobs.

  23. OutWest says:

    Job hopping is the key to success in my experience. Take on a position, master it, and ask your boss’s…always many of them…what comes next.

    When they look at you with a blank stare just say thank you and move on. Glad to see so much opportunity out there these days. In my early days jobs were hard to come by and they didn’t pay squat and there was little opportunity.

    • TimTim says:

      Very smart point. More people should take this approach.

      Getting yourself and others riled up does noone any good.

      Just signals that someone cares more about vanity points.

  24. Anthony says:

    Is that a black swan I see before me?

  25. Seattle Guy says:

    HERE IS THE ANSWER TO OUR TROUBLES….= Erdogan Fires Turkey’s Statistics Chief After Inflation Hits 36% WEDNESDAY, FEB 02, 2022 – 05:45 AM
    Turkish dictator Recep Tayyip Erdogan has sacked the head of the state statistics agency, according to a decree published this weekend, after releasing data showing last year’s inflation rate hit a 19-year high of 36.1%. Sait Erdal Dincer was just the latest in a series of numerous economic dismissals by Erdogan, who has sacked three central bank governors since July 2019, and countless ministers. Erdogan has railed against high-interest rates, which he believes cause inflation, the exact opposite of conventional economic thinking.

    • historicus says:

      Before you know it, the US will take on a new Inflation Metric….

      • Old school says:

        Naomi Prim just out with a new interview on Stansberry. Says Fed only has an emergency plan for crisis without considering how they are going to exit. They are trapped with our future.

        History shows it always gets ugly once the money printing hits the Minsky moment.

  26. Dazed And Confused says:

    So now Eurozone inflation is at a record high of 5.1%.
    And Eurozone unemployment is at a record low of 7%.
    But the ECB still has ZIRP and QE.
    Something’s gotta give ….

    • Old school says:

      Big gold miners netting out 16% plus selling gold that ends up in central bank accounts that don’t want to rely on negative real yield of treasuries. Gold supply increasing about 1.6 – 1.7% per year no matter how big the equipment gets.

  27. Dazed And Confused says:

    It seems that the FOMC did not anticipate that the NAIRU would revert back to 5+% from its previous level below 3.5% just before the pandemic.
    Now that it’s finally dawned on them, they need to play catch up fast.

  28. Dazed And Confused says:

    The longer this tight labor market endures, the more employers will invest in automation to eliminate unfilled roles, offshoring of unfilled full-time remote positions (there’s no labor shortage in India) and lobbying for more immigrant employment visas.

    So demand for labor will drop and supply will increase.

    The cure for high prices is high prices.

  29. Dazed And Confused says:

    Wolf wrote:

    “Or they decided to exit the labor force entirely to retire on their stock market laurels.”

    I don’t really understand this.
    For retirement, the important thing is what returns their portfolio is going to generate over 20-30 years since you need to live off those returns during your retirement.
    Even if the portfolio has doubled in value since March 2020 lows, its projected 20-30 year return won’t have changed much since expected returns are negatively correlated with valuations which are now at extreme nosebleed levels.
    And the risks of large early drawdowns are now much higher than before.

    • drifterprof says:

      “Among all adults, median retirement savings are $65,000, according to the Federal Reserve’s most recent data from 2019. The Fed estimated that by retirement, that number would grow to an average of $255,200.”

      So if someone snags a half million in some crypto Ponzi scheme, they have twice as much as the average person entering retirement.

      Move to some foreign paradise where everything is much cheaper, and you can live a couple decades or so on that.

    • Wolf Richter says:

      Dazed And Confused,

      People understand that you cannot take it with you.

      And people understand that if your portfolio “doubled” in 2 years (to use your metric), it can be less than half in two years as well, and it can still be down 30% in 10 years or 20 years, no problem. There are lots of stock markets around the world with long-term declining values of this type. Japan, China, most stock markets in Europe, etc. are in this category. The US stock market has been the exception, but that might change.

      So if you have enough, you might be able to live off the returns – I mean, what returns with current bond yields and dividend yields? High-flying stocks don’t pay any dividends at all, cryptos don’t either. Investment-grade bonds pay yields that are barely visible. And if you have a rental portfolio that is large enough to live off, you’re not retired, you’re still working.

      So if you want to spend some money in retirement, unless you’re very wealthy, you can borrow against your assets until you die, or you’re going to sell some of your assets to supplement your other forms of income, such as SS.

      If you have a nest egg of $2 million, and get a 2% yield on it, that’s $40,000 a year, which is not a lot for a person that earned enough during a lifetime to put $2 million aside.

      If you leave $2 million nest egg in stocks, you might have $1 million 10 years from now.

      This is the tragedy of people on fixed incomes in a world where central banks have killed yield. If you don’t want to spend your capital, you’re going to be turning over pennies and tightening your belt for the rest of your life. Or you can figure that you live to 110, and start spending your yield and capital at a rate so that it is all gone on your 110th birthday. If you die earlier, which is likely, someone else gets the rest. But at least you could have a little fun during your retirement.

      • Hal says:

        Where can I find the absolute worst sky diving school?

        • NBay says:

          It used to be Casa Grade AZ. It was the self proclaimed “Sport Death” capital of the jumping world…many bounced there….but that was back in the 70’s, it was closed when I went back in 2007.
          You have to actually take off the harness now if you want to go in, at least on a first jump. We had a guy do it at Pope Valley.

      • Sams says:

        Or, do the rational thing. You can take nothing with you, but neither can the creditor get anything from you. Live on the creditors expense. The creditor can cry in the funeral, but that is about what they can do about the money spent. ;)

  30. Cullpax says:

    Companies have referral programs, paying some cash if you bring in hires :) It existed before but it is way more apparent these days

  31. Winston says:

    Corrupt to the very core:

    The Secret Recordings of Carmen Segarra – September 26, 2014

    An unprecedented look inside one of the most powerful, secretive institutions in the country. The NY Federal Reserve is supposed to monitor big banks. But when Carmen Segarra was hired, what she witnessed inside the Fed was so alarming that she got a tiny recorder and started secretly taping.

    Book – Noncompliant: A Lone Whistleblower Exposes the Giants of Wall Street – October 16, 2018

    In 2011, Carmen Segarra took a job as at the Federal Reserve Bank of New York supervising for Goldman Sachs. It was an opportunity, she believed, to monitor the big bank’s behavior in order to avoid another financial crisis.

    Segarra was shocked to discover, however, the full extent of the relationship between Goldman and the Fed. She began making secret recordings that later became the basis of a This American Life episode that exposed the Fed’s ineffectiveness in holding banks accountable.

    As we mark the tenth anniversary of the 2008 financial crisis, Noncompliant shows us how little has changed, and offers an urgent call for real reforms.

  32. Michael Engel says:

    1) Tianjin is 30 miles east of Peking. Tianjin free trade zone is next to Tianjin Port. Covid shut both.
    2) China spring break is Jan 31 and Feb 6.
    3) Covid and tiger claws hit China.
    4) The Winter Olympic Feb 4 – Feb 20.
    5) Long Beach signs of relief when China is resting
    6) When china is back, Shi Shi ping will suck the air of US.
    7) Shaolin Tiger Claws will maul US Labor Force…

  33. Michael Engel says:

    creepto retirement.

  34. Michael Engel says:

    Swimming in the Bay ==> Shaolin defense from SF creeptos.
    SF DA will not protect u.

  35. Ls says:

    The power of employees and regular folk cashing in on the all time high stock market and crypto will not last. We are living in a unicorn fantasy land where regular people are getting raises or cashing in bitcoin and popping down said raises on things they can’t truly afford. Just because you can afford the payment it doesn’t mean you can afford it. Reminds me of 2005, 2006 all over again. Regular people buying 100k boats and brand new vehicles that clock in at their annual salary.

    Some would say take advantage of the higher pay for now but don’t spend it on cars and boats. Save it. As someone else said on here, people holding cash are stupid, until they are not.

    “Thirty years on from its all-time high, the Nikkei Stock Average is still languishing about 40% below the peak of 38,915 scaled on Dec. 29, 1989. The Japanese stock market’s uphill climb to regain lost ground is the longest in the history of any major economy.”

  36. Swamp Creature says:

    Talked to a Real Estate broker who was handling a property that we did the other day. Asked him why he was wasting his time letting us in the property and not one of his agents. He said he fired all of his agents. Reason: they were stupid, lazy, incompetent, and completely useless. They even got him sued. He said he is now a one man shop. Does everything from A to Z. This phenomena may be more widespread than you think.

    • Jake W says:

      stupid, lazy, incompetent and completely useless describes 90% of realtors and most salespeople in general.

  37. eg says:

    Isn’t it a good thing that some power is finally returning to labour almost 50 years after the productivity increases ceased to be reflected in wage increases?

  38. Dazed And Confused says:

    Why has Eurozone and UK employment recovered better than US employment in pandemic aftermath?

    Eurozone now has record low unemployment, below the level it was pre-pandemic.

    In UK, payrolled employees now exceed pre-pandemic levels by 400K+ in a country with just 20% of the US population.

    US unemployment while low is still above pre-pandemic levels and total employed in US still a couple of million below pre-pandemic levels.

  39. DC Warrior says:

    Given this article is about labor supply, and that a large part of the labor shortage is due to retirements and people who have child care issues due to lack of day care, which is itself an issue with labor availability, why are we not talking more about increasing legal immigration? For decades, while the US was decrying illegal immigration, we were still letting people come in and then treating them badly, to boot. And yet there were millions of them in the country, most of them holding down jobs. If we are short of workers, shouldn’t we be letting more legal immigrants in?

    • Wolf Richter says:

      Workers finally have some power and are able to get higher wages, and are able to choose where and under what conditions they want to work, and you want to crush them with cheap labor from other countries? Yes, that is the guiding principle of corporate America: crush the uppity American workers.

      • Mrs Swamp Creature says:

        One thing that is seldom talked about is where people spend their money. If you gave American workers wages that were very generous at least most of the money would be spent in the communities where they live. That helps every business in the area and provides jobs for other workers. Also helps tax revenues. Hiring low wage foreign workers has some undesirable side effects like money transfers out of the country which data has shown to be very substantial. This doesn’t help anyone.

  40. Mike says:

    My friends can’t find any jobs with benefits. Why do you say there are jobs out there? The job postings are fake, designed to trick immigration department “proving” they can’t find good U.S. workers so they get waiver to bring in cheap semi-slave Indian workers. Your input is incorrect (falsified by lobby groups) , therefore, your conclusions are incorrect too. Please write another article about this topic, one that is based on the experience of at least a few hundred of American mothers and fathers who are looking, applied at least 50 times, and they keep failing to get a job. Respectfully.

    • Wolf Richter says:

      READ THE ARTICLE. THIS DATA IS NOT BASED ON JOB POSTINGS.

      Right above the chart with the job openings, it says this:
      “These job openings are not based on online job postings, but on what companies and government entities said their hiring needs were:”

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