Resignation

The bottom 25% of earners are gaining wages at the highest rate since 1998. Gains made by first quartile earners are outpacing those of higher quartiles by at least a full percent. 

The current labor market is often described as “tight,” and it may be hard to visualize what that really means. Considering the ratio of unemployed people to job openings gives a clearer picture of exactly how tight or slack the labor market is.

The Federal Reserve has just announced the highest interest rate hike since 1994.

Summer is upon us. School’s out, vacations are beginning, and people are ready to hit their favorite seasonal locales. However, facing a labor shortage, businesses might have a hard time keeping up this summer.

No, not yet. Higher worker pay isn’t the main culprit behind inflation, but some warning signs suggest that could be the case later this year.

The U.S. economy added a solid 390,000 net new jobs in May 2022. The unemployment rate remained unchanged at 3.6%, nearly a 50-year low.

Employers are still desperate for workers. Layoffs are rare, despite anecdotes to the contrary. Quitting remained elevated, but the “Great Resignation” isn’t getting worse (for now).

Determining how the economy is performing is surprisingly difficult. COVID-19 made economists’ jobs even harder, requiring them to develop entirely new methods to measure trends in the labor market.

Demand for workers is about 60% above its pre-COVID level. The paradox is that while the U.K. labour market is extremely ‘tight’ – a good thing for workers – those same workers are suffering from a cost of living crisis.

How does economic growth happen? It’s a hard question to answer but economists have tried for centuries. Perhaps the most famous model came from MIT economist Robert Solow in 1956. The Solow growth model specifies three factors that fuel growth: productivity, capital, and labor.