- Driving the news:
- Fed chair Jay Powell yesterday provided some answers, in a speech that garnered bigger headlines for signaling that the pace of interest rate hikes will slow.
- By the numbers:
- Powell says that there are around 3.5 million fewer U.S. workers than forecast.
- He argued that most of that gap, or around 2 million people, was caused by "excess retirements."
- In other words, more people called it quits over the past couple of years than normally would have aged out. Factors for these early enders include health concerns (including increased COVID risks for older workers), costs related to finding jobs and increased financial flexibility due to housing and stock market gains.
- The other major driver, according to Powell, is slower working-age population growth.
- Specifically, a significant decrease in net immigration and a "surge in deaths during the pandemic."
I don't buy the "surge in deaths during the pandemic. There were no "excess deaths" in 2021; and, the Covid-19 deaths were predominantly in the over-80 age group, in other words, those who used to be Walmart greeters, a category of workers long phased out by that retailer.
Two groups he missed:
- the GenZ's still living at home in their parents' basements; and,
- those living in a van down by the river.
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