This is about as close as the permabullish Goldman will get to acknowledging reality:
A Narrow Path to a Soft Landing
On the surface, standard measures of US labor market utilization still look a touch looser than just before the pandemic, even after Friday’s strong jobs report. The unemployment rate stands at 3.6% vs. 3.5% in February 2020, while the employment/population ratio for 25-54 year olds is 80.0% vs. 80.5% in February 2020. But these standard measures seriously understate the tightness because they don’t include open positions, which are just as important as employed workers (in fact, arguably more important, because firms try to fill job openings by offering bigger wage increases for job switchers than for job stayers). This is why we recently introduced the “jobs-workers gap”—employment plus job openings minus the labor force—as a more comprehensive utilization measure. It now stands at +5.3 million, the most overheated level of the postwar period both in absolute terms and relative to the population.
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David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
