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America's booming job market defies economic gravity
While many parts of the economy are experiencing varying levels of distress, the job market continues to show remarkable strength. Tom Vacar reports
OAKLAND, Calif. - There is something very strange in this economy that seems to defy conventional economic thinking.
While many parts of the economy are experiencing varying levels of distress, the job market continues to show remarkable strength.
The federal government says jobs increased by 372,000 with unemployment at a low, low 3.6 percent, lower than what many economists consider as full employment.
"Our private sector has now recovered all of the jobs lost during the pandemic and added jobs on top of that," President Joe Biden said recently.
"The largest gains we've seen in wage growth have been historically lower wage workers," said U.S. Labor Secretary Marty Walsh.
And yet, strangely, there's trouble in the economy.
"We have a dynamic here we really haven't seen here in California over the past 40 years, where you have these other indicators worsening but employment still holding up," said labor lawyer and former EDD Director Michael Bernick.
Those indicators: interest rates are way up, inflation is way up, stocks are down in bear territory.
But, the job market is solid.
"Over 11.3 million job opening still nationwide; at least over a million job openings here in California," Bernick said.
And, get this: the number of workers voluntarily leaving their jobs, often for better ones.
"The numbers remain very high nationwide; over 4.3 million instances of so-called quits. We haven't seen yet, a large number of layoffs," said Bernick.
In many industries, layoffs are taboo.
"The airlines, health services, hospitality and leisure are still desperate for workers; the airlines in particular," said Bernick.
Because of worker shortages, in the last year, wages have gone up 5.1%, but all of that has been eaten up by 8.6% inflation causing some people to look for higher paying jobs.
The job market is staving off the biggest, but still unrealized fear: stagflation.
That's the situation where the economy has high unemployment and high inflation at the same time; something that plagued the Carter and Ford administrations in the mid- and late- 1970s.