Labor Problems
Another week, another rock-bottom read on US jobless claims.
If you're looking anxiously for signs that the labor market is cooling, you won't find them in initial claims, which fell again last week to just 183,000.
That was well below consensus and the lowest since April. The four-week moving average sat at just 191,750, the lowest since early May. Continuing claims for the week of January 21 were likewise below estimates.
The numbers underscored what scarcely needed additional emphasis: T
Labor market will be the last market to normalize. There are demographic, health (post covid) and post-Trump immigration frictions at work. That problem has been brewing for awhile, and it will take some time to completely unwind. My own guess is that the US will be forced to allow more legal immigration at some point in the next few years. Until at least then, businesses will try to increase labor productivity, outsource to overseas, and generally substitute capital for labor in any way they can.
There are about 2M wanna-be workers waiting at the Mexican border. Maybe this has something to do with this? No, let’s just keep blaming it on Covid and the lazy Millennials. Duh!