Quote:
Originally Posted by Drewski Canuck
WHY IS INTEREST RATES GOING UP AND JOBS GROWTH STAYING STRONG said the Economist??
Well Children, it seems that alot of the Job Market was old people who are now retiring, and taking their pension, and the new positions are left vacant as no one wants to do the work.
Drewski
Drewski
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The labour force participation rate still hasn't reached the pre-pandemic level. It is not just the older demographic not returning, the younger crowd isn't as well. That's why we are seeing the large number of vacancies in the lower paid, entry level/service industry type of jobs. How do we get those young workers back into the labour market and out of mom's basement?
From the St. Louis Fed,
"When the pandemic hit, the sharpest decline in the LFPR was for workers between the ages of 20 and 24. Their LFPR decreased from 73% to 64.4% in 4 months before increasing again. However, at the end of 2022, the LFPR for 20- to 24-year-olds still hadn’t fully recovered and remained 1.7 percentage points below its January 2020 value.
This overall pattern is similar but less extreme for the other age groups. Although no age group fully recovered by the end of 2022, the 25-54 group was closest, at 0.7 percentage points below its January 2002 level. There’s been much discussion of older workers retiring early (and permanently) during the pandemic, and the 55+ group remained 1.4 percentage points below its January 2020 level as of December 2022, with no sign of further recovery."
https://research.stlouisfed.org/publ...s-who-are-they
The Phillips curve, the inverse relation between employment and inflation seems to be dead this time around, again. But the Fed appears uncomfortable declaring victory over inflation when employment is still strong by the sound of JP's comments last meeting.
The lag effect of the rate increases is going to show up soon. Was reading an article talking about how long people can hang on with mortgage and loan debt payments taking a huge chunk of their disposable income. Many households will be at the end of their ropes by year end. Right now a large part of their income is going to debt, food and utilities and the savings are being eaten away. The personal savings rate in the States has nosedived as people are using savings to get by.
https://fred.stlouisfed.org/series/PSAVERT