There were a large number of economic reports this week, headed by Payrolls, which were released on Friday, at 8:30 a.m. Eastern time:
- Nonfarm Payrolls: headline +261k, expected +200k; new high, positive.
- Personal Income: +0.70% month/month (m/m) (prior +0.40 m/m); new high, positive.
- Auto/Light Truck Sales: +9.17% m/m; positive and recovering from a sharp dip.
- Existing Home Sales: -6.60% m/m, new post-pandemic low. Pop.
- GDP: +1.75% quarter/quarter (q/q), adjusted for inflation (GDPC1): +0.75% q/q. I don’t believe the GDP “inflation” adjustment of 4%. “GDP growth” is all inflation.
More detail about payrolls: average hourly earnings +0.55% m/m, which is a big move higher. Workers are getting raises. Also, “working part time/economic reasons; only part time work available” (FRED: LNS12032196): -6.49% m/m, dropping to a new post-pandemic low. The part time/economic series is one of my labor force “recession indicators.” Right now, it is signaling the exact opposite of recession. It tells us the the economy is either super strong, or the labor force is suffering from a shortage of workers.
Wolf provided a chart which helps show this visually; I’m gonna copy it and insert it here, I liked his chart just that much. It clearly shows a “shortfall” of workers vs the pre-2020 trend: about 3.5 to 4.0 million workers. This shortfall is causing the labor shortage, which explains both “part time work” numbers at 20-year lows, and the average hourly earnings at all time highs. Wolf has a lot more detail in his post here (Source – Wolf Street).
And here is one more labor-market chart, which I contend presents an explanation for half of that workforce shortfall. Fred series: LNU01074597, population 16+ either working, or looking for work, with a disability, jumped almost 2 million since 2021. While it retreated slightly this month, it remains very near the all time high. The change since 2021: +1.95 million people, “with a disability”, in the labor force. That accounts for half of Wolf’s labor shortfall. (FWIW: I suspect Wolf does not agree with me on the particulars of my explanation!) Note that the 2 million new workers “with a disability” are incapable of doing some set of jobs – usually the in-person service jobs.
by barbarah 
