More jobs than expected and a rising unemployment rate, according to Lukkezen there is only one possible conclusion: more people have entered the job market. “Some of them have found work, others have not and then are unemployed”.
Remarkable
Lukkezen defines the remarkable tendency. Unemployment has not increased in the past 14 months, but more jobs have been created. And this in a situation of rising inflation, tighter monetary policy and rising interest rates which should cause the economy to cool down. Geopolitical tensions have also increased, which in turn has put pressure on exports. But the American job market continues to rumble, Lukkezen says. “And that has more to do with the job market itself than anything else.”
The corona crisis plays a role in the phenomenon, the terms ‘silent dismissal’ AND ‘quiet resignation’ they are important here. Many people have simply stopped working during the corona crisis. According to Lukkezen, there was a spike in layoffs in March 2020, but many people left voluntarily. «In Europe we go on strike, in America we simply go out and come back at another time, when wages are a little higher. And you see it now.’ Lukkezen will follow for the care, education and service sectors broadly.
‘US job market continues to rumble’
Growth of self-employment
According to Lukkezen, the fact that the job projections are so out of step with reality is due to the fact that the estimates are based on economic fundamentals such as expected economic growth and planned investment. “It’s the job market itself that’s doing much better than one would expect based on the rest of the economy.”
powered
But, says Lukkezen, now that unemployment also appears to be approaching its peak, this will affect future interest rate decisions by the US central bank, the Fed. It will be a tricky time for them to watch. It looks like the Fed hawks will be calling for firmer rate hikes and the pigeons will lose out.
According to Lukkezen, what economists are doing is happening in the United States ‘unexpected compression’ call. This means that wages at the bottom of the labor market will rise relatively more than incomes at the top of the labor market. ‘This is simply the labor market shortage that underlies all of this. There are simply fewer people doing relatively low quality work, so they can just set higher standards.’ And in the United States, as in the Netherlands, this goes against a trend of years in which income and wage inequality has widened further.