The stock market has lost trillions in value, the Federal Reserve has raised rates at the fastest pace ever, mortgage rates at approaching 7 percent so there should be massive layoffs by now right?
It seems that labor shortages are going still going strong. The Wall Street Journal had an article entitled, “Why Are Companies Still Hiring With GDP Shrinking?” and the answer is simple: fear. Here is a key quote from the article:
“You can’t lay off what you didn’t hire,” said Ron Hetrick, senior economist at Lightcase, a labor-market analytical firm.
Wall Street Journal
NBC recently had an article that outlined part of the problem with the labor shortage is a drop in net migration into the United States.
In 2015 and 2016, the U.S. had a net international migration gain of more than 1 million people. It dipped to about 930,000 in 2017 and to just over 700,000 in 2018. By 2020, the year the pandemic arrived, it was under 500,000. And last year, the figure dropped to about 247,000.
NBCNews.com
Add a drop in migration and the 10,000 boomers that retire each day and it is fairly easy to see why there is a persistent labor shortage. The United States may be entering a recession and undoubtedly some businesses will go bankrupt but we expect the labor market to remain tight.
We will continue to look for ways to invest and profit from this situation but in the meantime, stay tuned and stay solvent.