Today is GDP day, but I'm a little late with it. However, I have a good excuse! More on that later. For now, let's get to it:
Overall, this is a pretty good report. It was driven mostly by final sales to consumers and improved trade, not by things like inventories and IP valuations. Sales of goods were down while sales of services were up. And the overall GDP number was decent even though residential construction was down a whopping 26%. (Commercial construction was down 15%.)
The bad news, needless to day, is that Jerome Powell will undoubtedly see nice growth as an excuse to raise interest rates even more. But we'll see. Tomorrow is PCE inflation day, which should have an impact on whatever the Fed decides to do next month.
> Tomorrow is PCE inflation day
Does anyone really think there's any question about what happens? There's still a risk of Democrats retaining congress.
One of the FED governors (I believe) said that it's looking more probable that the economy will soft land. Inflation is already coming down and the labor market remains way too tight
Some posters here have alluded to immigration reform as being "the answer" to the tight labor market. It is for low skilled jobs but for other jobs? Not so much. I think what we are going to see is that labor shortages don't play as large a part in inflation as we once thought.................
There are many, many, many highly skilled people in the world who would jump at the opportunity to work in America.
It would be pretty easy to fill a ton of high skill jobs.
Real income for the bottom 97% or so of households peaked in the mid 1970s. At that time the bottom 90% of households received about 63% of personal income. This had been the case since the early 1940s and, while it fluctuated a bit with the economy, anyone drawing a graph in 1970 would have been sure the average would be 65% long before now. Instead the last figure I saw was that the bottom 90% of households only have a 49% share now. That's a swing of about $22,000/household, say about $2.2T. And the folks in the 91 to 95% brackets are down as well.
All this is to support the statement that in my lifetime there has never been a shortage of labor. One of two things must be true: 1. A shortage of labor will cause wages to go up. Or 2. The "law of supply and demand" is a crock, and therefore all of Economics is a crock. So, let's fire all the economists.
Finally, if you still believe there is a shortage of labor, you should be an enthusiastic supporter of single payer national health insurance. We have 3.5 million people working for the health insurance industry and hundreds of thousands filing claims for providers. Certainly more than 3 million of these people would be put out of work by single payer. There's nothing bad to say about these workers, but the work they do now is as useful as having people dig holes then fill them in. Even worse as the rest of us have to fight with them all. This is the biggest reason why the cost to the government of adopting single payer is probably slightly less than nothing.
SC
"All this is to support the statement that in my lifetime there has never been a shortage of labor."
THAT'S the problem. I'm a boomer. During my lifetime there has never been a labor shortage because job creation could not keep up with the sheer numbers of people entering the work force. When did all this happen? Starting in the 70s the boomers were entering the workforce. NOW, 50 years later they are exiting the workforce and at the same time the birth rate has declined to almost nothing. We are losing more people than we are having babies. We need "ONLY" 90K new jobs per month to keep up with the numbers of those people entering the work force.
We are not alone in this regard either. China is facing serious population issues. as is MOST of the world. We have more people wanting goods and services than we have who can provide those very same goods and services and after 50 years or so of work many of these folks feel as though they are "entitled" to these goods and services.
And you are correct about single payer health care. I am all for it! We can start with the current Medicare recipients and give them dental, vision, standard health care (along with psychological services then expand it out to younger and younger groups.
If you tell an employer he no longer has to provide health care coverage for employees they will rejoice. Conversely you tell a 50+ year old he or she no longer has to worry about any health care issues and they will rejoice as well.
But there are indeed, labor shortages and I think we are at a point where it's stifling growth.