Wednesday Musings

Wednesday Musings

“The will to succeed is important, but what's more important is the will to prepare.”

– Bobby Knight

This past week Markets (S&P500) down just under 1%, but are still up close to 20% for the year. All three major indices are still near all time highs.

The non-farm payroll report was released on Friday and was a massive disappointment versus expectations. Today the Job Opening and Labor Turnover Survey was announced and the number another all time high - 10.9mm jobs available. As a point of reference there are 5.5 Million fewer workers working than pre-pandemic. When you take into account population and work force growth, the US needs to add over 6mm jobs to be in a similar labor scenario as pre-covid.

Part of the COVID economic relief package was additional or enhanced unemployment compensation from the Federal Government. For many who lost work during the pandemic they received this enhanced Federal Unemployment, and in many cases, they also received state unemployment benefits. The combination of these two benefits resulted in vast numbers of workers making more money to not work, than return to the work force.

Many economists and pundits believe this is the root of the problem. I think many of these job openings will be filled over the next few months as the enhanced unemployed expires this week. There are also some other complications to this predicament that I outline in the video below. Hopefully this is resolved sooner rather than later.