Interesting detail in the job opening data. Job opening in professional services at 1.5M, more than double the drop since Feb 2020. Skew in hiring since 2020 in accountants - not only recouped previous losses but on a skyrocketing trend not seen pre pandemic. This is same time…
https://twitter.com/mylesdanielsen/status/1404540156804218881
College students delayed finishing, dropouts picked up, surge in college apps as prospects for in person class have soared and tests for CPA delayed. Huge distortions in that market in both demand and supply of workers in professional services.
Also notable tech adoption accelerated. Automation in accounting is a very large trend, even in more complex side of equation for major corporations. That suggests some big shifts in productivity growth. Firms that embrace tech tend to have to hire up highly educated workers.
Conversely, leisure and hospitality jobs openings at 1.6M, still almost a million below Feb 2020 peak. Large firms who advertise higher wages getting much more apps - leaves smaller and mid sized business less able to compete. Could accelerate concentration of jobs at large corp
Adoption of existing tech faster at large companies. Those gains offset some of crimp in profit margins due to rising wages and the upward move in wages not likely to be sustained as we move into 2022, given slower recovery in business travel and big conferences.
That bargaining power that workers gained in wake of crisis, step up in pay it is generating could limit worker bargaining power for larger swath of workers again down the road. That is something we have seen, repeatedly.
The key is what happens with productivity, wages and demand & supply as goods demand sours - already is - pent up demand in services, which is different than that for goods, & how supply adjusted once bottlenecks resolved.
These are a lot of moving parts. Economist see prices as the bridge that connects supply to demand. It boosts supply and reduces demand but can become unhinged when our price hikes are expected in perpetuity.
Heat upon reentry has surged. Can heat shields hold until parachutes reopen and we hit cool waters of splashdown in 22 when government stimulus falls off a cliff? Seems likely. Fed can raise rates but risk is that they are forced to do so faster, overshoot & trigger a recession.
The last point is the hardest part. The Fed has decided to hedge bets on side of allowing full recovery in employment as it has more tools to deal with a hot economy than a cool economy. But, that also means we could see next recession sooner.
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