Today’s September Jobs report reminds me of this line from the Teletubbies: “where have the Teletubbies gone?” For every 5 job openings, there are only 4 candidates available. With this serious supply and demand issue where the demand for labor far exceeds the supply, one can feel the pulse for “wage inflation”. I already had the taste of it last month when my handyman asked for $35/hr instead of $25 and my maid coerced me to a 20% raise last week! In both cases I was helpless and I can relate the same to Employers who are going through the same pain. So inflation is here and it is for real and my guess is there is a significant spread between the bid and ask when it comes to wages. Parents who have been working from home, want to continue working from home as the day care prices have sky rocketed. Honestly, the math does not work for many who earn $20/hr and have to spend $15/hr on day care for kids! No doubt Uncle Sam is dispatching advanced child care tax credit but that does not seem to motivate them to go out and work. Especially, Teachers who are kind of nervous to face a bunch of unvaccinated tiny tots at the schools. Even abroad, for example in India, IT workers have started asking for 2x to 3x of their current salary!
Bottomline, just like the “Home Sellers” market when it comes to residential homes, it is a “Job Seekers” market when it comes to jobs. Now Wall Street is wondering if this disappointing job report will taper the tapering efforts of Mr. Powell. He would not move until the job market improves but the inflation dog is not far behind. What a dilemma!
Long story short, Markets will take this bad news as good news and keep rocking while the Employers keep wondering “Where have the Teletubbies gone?”