The economy is accelerating after a Delta slowdown over the summer. Delta was so powerful it spread and disrupted places that escaped earlier waves, crucial to the supply chains. Those shifts compounded the inflation we are seeing today.
The hope is that we avoid the kind of surges we saw over the summer in the South & West last winter with higher vaccinations & natural immunity. BUT, the estimates are that we could still lose a million souls to COVID still by Spring. That is staggering.
Vaccines for kids are a huge plus but take time. A colleague just had to bring her daughter home due to a positive case in her class and quarantine for 10 days. Her child got the first dose of vaxx last week and is negative BUT if she couldn’t work remote, she would lose earnings
Hard enough having to pivot back to online education and juggle work.

We are grossly underestimating the fatigue & burnout created by the pandemic on multiple levels.

We are losing some of our most critical workers in healthcare, childcare and education to name a few.
I have often said the forecasting during the 2008-09 crisis was like forecasting on a fault line - you could never find your footing.

Forecasting in a pandemic is like standing on quicksand - every time you think you have a tether of a line out, it pulls you back in. Hard.

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More from @DianeSwonk

21 Nov
Will be talking 🔥inflation: global in scope, response to demand surge, supply chain bottlenecks & disruptions in the labor market due to the pandemic. Lots of talk of the move from just-in-time to just-in-case inventories & localizing supply chains.
Problem: Delta wave hit lumber mills in the South - we lost workers to Covid - and exacerbated supply problems for builders. The freeze in TX in Feb 2021 idled two chip plants for auto industry. Lights out overnight but months to reopen. Hard to escape problems.
Just-in-case inventories decisions have implications. Many firms are double ordering to hedge future disruptions. Builders are buying appliances retail while keeping their backlogged wholesale orders in place. All that double ordering means eventual unwanted surge in inventoried
Read 5 tweets
20 Nov
The gap between the supply and the demand for workers is actually quite stunning. Work done by my friends at @indeed show their job postings up more than 50% in first two weeks of Nov from Feb 2020. They estimate that translates to 11.2 million job openings, another record.
The most recent official data on job openings showed a slowdown during Delta wave but still stunning 10.4M end of Sept.

Now, let’s look at labor supply issues.

We had 7.4M workers actively looking for work in Oct, plus 1M (at least on sidelines that would like to work.)
We are uncertain about the shadow supply of workers - those who will return over time as the fear of contagion abates and schools stay open (quarantines upend what little support too many parents have to work). Women r key to participation - have been for decades.
Read 21 tweets
22 Oct
Some thoughts on the labor shortages and some gaps emerging btwn employer & workers.

Research done during the pandemic shows that subsidies & stimulus checks were a modest hurdle to searching for a job. Other factors - illness, care of others, fear were much larger.
But, hard to say this behavior is linear. Over time, loss of supplements & UI much more costly. Long-term unemployed are typically the hardest to reemploy but is encouraging that employment data reveals a drop in the long-term unemployed. We are tapping some of that pool.
Also, notable @aaronsojourner analysis of the household pulse survey, which is shows a major shift between September and peak Delta wave and October. One thing holding workers back in Sept large # of people caring for sick or ill themselves. Dissipated in early Oct.
Read 17 tweets
21 Oct
Initial unemployment claims continued to tick down to 290k in week ending Oct 16, after modest upward revisions to previous week. Strikers are not allowed unemployment insurance but could cause some downstream layoffs that do qualify depending on how long persist.
The data covers the week of the employment survey for October, which is shaping up to look much better than September. Much of loss due to Delta wave fading, including the number of workers who missed work and were not paid due to illness.
Fear of contagion also abating while more reliable hours in school for kids is enabling some to rejoin the labor market. Strikes could temper gains but only those that covered the entire week of the survey week. Anyone working an hour that week on payrolls is counted in Oct #s.
Read 4 tweets
20 Oct
Yep. And @federalreserve poised to taper in November and complete by mid 2022. Markets have been warned. A quick liftoff in rates is not off table in 2022, depending on how much inflation cools - there is a big difference between 2% and 3% inflation within Fed.
Composition also matters. Shelter costs are accelerating as other costs are hitting a plateau or decelerating. Could see somewhat lower but more broad based inflation in 2022. That would test the patience of the Fed on rate hikes. Remember momentum =/= level prices.
Momentum should be helping us to lower overall inflation measures next year but may not get where the Fed wants to be, where inflation is not an issue or not noticeable until 2023. That is a blip in context of history but an eternity for those dealing with it in the moment.
Read 4 tweets
16 Jul
Boom. Consumers stepped it up and out in June with retail sales surprising many on the upside. Sales moved 0.6% higher instead of further in the red, despite shortages of vehicles which pushed vehicle sales down in June. Sales ex vehicles surged 1.3% in June.
Consumers rushed to traditional department stores, clothing retailers, health & beauty stores & restaurants & bars. They bought luggage, clothing, shoes to fill it & makeup to adorn newly unmasked faces. Online spending bounced back as we will search online to find what we want.
Spending at gas stations surged on higher prices at the pump & the return of us all to the roads to commute & go on vacation. Sadly, the surge in gas prices are upping the wages that low wage workers need to keep take home pay steady or rising. Another hurdle for small biz.
Read 6 tweets

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