The American employment figure is very surprising, almost shocking. The US economy was expected to create over a million jobs in April, but only 226,000 have arrived. The reason? There is a demand for work, but there is a lack of supply. Or, perhaps, the answer is a little more complex. The US world of work is being shattered by this coronavirus pandemic. There is too much volatility on the data and too much displacement on the labor market, on logistics. These are new facts that have never been seen before.
Job supply and demand are no longer stable across the United States. In other words, while first supply and demand intersected in an altogether natural way, now due to the dislocation and that is to say too many movements, the market has become more complex, more difficult to decipher. There has been a reshuffling. With the pandemic, more volatility has been created, because a lot of demand is created where there is not enough supply, or supply is created in sectors where there is no demand. Here is the concept of dislocation.
The American economy, after the pandemic, tends to recover better in the manufacturing sector, that is, in industry, rather than in services. So those who worked in services, that is, in restaurants, in commerce, or the travel sector, have moved to the manufacturing sector, where they hire more and are more protected. And now, that the services are reopening, those who have moved to the factory do not go back, do not resume being a waiter.
The pandemic has created a shattering of the world of work, a radical change, which is difficult to heal, even in working habits. Let’s take the baby boomers, those born in the 1950s and 1960s, who are now around 60, or are over 55. They are people who have worked for 40 or more years and who take the changes introduced by the pandemic to the leap, to leave their jobs, retire, or part-time, or work from home. Find the psychological or contractual excuse of the pandemic to start doing other things.
In short, this shattering of the world of work is deeper than it appears at first sight and even the statistics of the world of work in Washington are beginning to show it. Furthermore, the US employment data for April also demonstrates something else. And that is, the Federal Reserve was right, at least for now. Powell got it right. In the sense that it was right to maintain accommodative policies and that there are no inflation problems because certain price increases are temporary and do not trigger a chain increase in the labor market. There is no pressure on wages. This is demonstrated by the fact that after the US employment figures, the 10-year Treasury fell.