Summary of today's FOMC meeting: The labor market remains too strong

[woodlandsro]

@bluegrassfan Why do they focus so much on the labor market? It's not the working class that's driving inflation right now. Real estate investors are doing quite a bit of that.

 

[psalm92]

@woodlandsro There is a shortage of workers. This was going to happen with or without Covid. Legal immigration is kept under 500k, and fertility rates are below replenishment. Considering a 2-way matching function it takes employers longer to find workers. The Beveridge Curve may have shifted under current conditions. In order to compete and reduce time to fill a position offered compensation must increase.

Even with labor law changes to extend who is eligible to work the labor shortage will continue to be a factor in inflation. The Fed has its tools and Congress has theirs.

A permanent tax increase, a stop to deficit spending, a change of spending type, immigration reform could all have impact on inflationary pressures.

Mr Kennedy in the last two congressional hearings of J. Powell pushes this point. I will have to rewatch the hearings again but I recommend listening to Mr. Warner, Mr. Tillman, and Mr. Brown (need to double check this one) along with Mr. Kennedy.

 

[musili]

@psalm92 There is no such thing as a worker shortage.

 

[bhibatsu]

@musili There can be, but usually it's just businesses complaining that they need to pay more to get people through the door.

 

[hazarmaveth]

@musili This line is so silly. What, because employers just need to pay more, right?

What do you think happens during a food shortage? You can still get the food, it’s just going to cost more.

 

[agenonlin3]

@hazarmaveth you think a labour shortage is the same as a food shortage? these are totally different things. people are not objects for consumption

 

[hazarmaveth]

@agenonlin3 I don’t think people are objects for consumption, but capitalism does. The labor market, insofar as it is a market, behaves similarly to markets of other goods.

But if you can explain a way that the labor market is different than other markets such that the term “shortage” would not apply, please do.

 

[musili]

@hazarmaveth you just spelled it out yourself LOL

 

[musili]

@hazarmaveth Yep, it's that simple. Employers should pay more, not complicated.

 

[nagy88]

@psalm92 Let more people in

 

[palemoon]

@nagy88 Lol you really want to be like Canada? 1.8 million dollar homes and 55k salaries.

 

[nagy88]

@palemoon ?

 

[palemoon]

@nagy88 Canada immigration rate is around a million people a year all in.

This rate with no real preparation has caused massive issues.

 

[nagy88]

@palemoon How many is US

 

[kennethjoshua]

@woodlandsro They hate us. Greenspan gloated about it too. They need us uncertain about our long term employment.

 

[daniel8daniel]

@kennethjoshua I think that's it - all of a sudden we had power and that's not good for the wealthy, because that power was being used to force reform, like work from home, which messed up their commercial real estate investments.

 

[ilovejesus33]

@daniel8daniel Underrated Comment!

 

[reshma]

@ilovejesus33 You’re right but this isn’t Instagram sir

 

[ilovejesus33]

@reshma Hmm, I'm not familiar with Instagram.

 

[shadowkat]

@bluegrassfan The fact that their stated goal is to make people lose their jobs in hindsight is going to look like the economics equivalent of bloodletting to cure disease.

Yeah let’s just ignore the fact that we’re pouring liquidity into the market every time we have an excuse. Couldn’t be that, it’s definitely those pesky workers. /s