You realize that their complaint is that labor is too hard to come by due to low unemployment and, as such, is expensive, right?
That is not their complaint. Their complaint is inflation. Might want to try reading that article again. Are labor costs higher as well? Yes, but inflation is the major point as noted. Good effort to deflect. Swing and a miss.
I read the article and the survey. 25% of owners reported that inflation was their biggest issue. Meanwhile, 37% reported that they couldn't hire somebody and 48% reported no or few qualified applicants. Also, inflation is not a distinct issue from labor cost increases.
When unemployment is too low, inflation is the result. Companies have to pay more to get labor to move, and they pass those costs on to the consumer. Inflation.
LOL. Can you show me in the report where 37% reported that they couldn't hire somebody? And for everyone else who actually understand the article, here is the quote showing it is in fact Inflation as the issue. “Inflation has once again been reported as the top business problem on Main Street"
So you agree inflation is the problem. Thanks for agreeing with me. And labor costs alone aren't the only thing driving inflation. Good try though.
I can see how you missed it in the report. It was only the top sentence of the "labor market" section. Here is the quote:
I never disagreed with you on that. Low unemployment leads to inflation. That is why the fed pays so much attention to the unemployment rate and raises interest rates when unemployment is too low. To get to their target of 2% inflation, they want to see 4-4.5% unemployment (that is U3, for U6, it would be more like 8-8.5%). Unemployment is getting closer to the ideal, so hopefully the fed will continue to hold off on any more interest rate hikes. If unemployment drops again, we probably get more interest rate hikes to counter the inflation that comes from too low of an unemployment rate.
No, it wasn't in the article I posted. It was a link in the article and you didn't cite it in your first reply.
Yes low unemployment leads to inflation. Still not close to main driver of inflation. It's like you don't want to admit inflation is a huge issue.
Yeah, you asked where it was in the report, not the article, and I stated that I read the survey. You and I both knew what was discussed. But, now that we both realize that about 50% more business owners have had substantial issues hiring than believe the biggest issue is inflation, do you want to discuss the labor market, on this thread about the labor market, or continue to try to deflect from the strong labor market?
Not true according to this article from the Boston Fed. What Is Driving Inflation—Besides the Usual Culprits? So the issue appears to be inflation occurring in low-wage service sectors has led to a substantial amount of the inflation, much of it driven by wage inflation.
Small business owners are pessimistic. The SINGLE most important problem to business owners was inflation., not labor. Sorry, swing and a MISS, yet again. Twenty-five percent of owners reported that inflation was their single most important problem in operating their business (higher input and labor costs), up two points from February.
So this article states printing money started this inflation issues which THEN led to labor issues. You can keep trying to tie everything back to labor, but it's just you making the narrative fit. Unpacking the Causes of Pandemic-Era Inflation in the US The rise in the inflation rate has been attributed to many factors. The US response to the COVID-19 pandemic included a series of federal initiatives, notably the CARES Act and the American Rescue Plan, which collectively authorized roughly $5 trillion in government spending. These programs contributed to strong consumer and business demand, which tightened labor markets (between mid-2021 and early 2022 the ratio of job vacancies to unemployed workers doubled), putting upward pressure on wages and prices. On the supply side, supply chain disruptions had an important inflationary impact, particularly in 2021 and 2022. The auto industry is a case in point. US auto production dropped from 11.7 million vehicles in July 2020, roughly the pre-pandemic rate, to less than 9 million in the fall of 2021, reflecting shortages of computer chips and other inputs. The combination of strong demand and supply chain bottlenecks led to further pressure on prices, particularly on prices of durable goods. Rising prices of food and energy added importantly to inflation. Notably, the crude oil market was disrupted by the Russian invasion of Ukraine in early 2022. The price of West Texas Intermediate crude oil rose from less than $70 per barrel in the late summer of 2021 to more than $100 per barrel for most of the period between March and July of 2022, pushing up gasoline prices and the costs of many industrial inputs.
And this part of the article I posted shows labor was a small issue at the onset. I have not said the Labor market isn't contributing to inflation now, just saying it wasn't why we had all the inflation the last 4 years "The researchers find that energy prices, food prices, and price spikes due to shortages were the dominant drivers of inflation in its early stages, although the second-round effects of these factors, directly through their effects on other prices or indirectly through higher inflation expectations and wage bargaining, were limited. The contribution of tight labor markets to inflation was initially quite modest. But as product market shocks have faded, the tight labor market and the resulting persistence in nominal wage increases have become the main factors behind wage and price inflation. This source of inflation is unlikely to recede without macroeconomic policy intervention."
Yeah, that is not what the authors of that article claim. They are not claiming that it started with government policy. Here is what they actually said: So their claim is that product shortages happened and now that those product market shocks have faded, the tight labor market and the resulting persistence in nominal wage increases have become "the main factors" behind inflation. So, when you said that "Still not close to main driver of inflation," you provided evidence that your own claim was false, as the paper you linked literally said the opposite.
Here is your quote: Given that we are talking about the current condition of business and that this whole discussion is about the current time, it seems a bit odd to try to claim that your claim about what is happening "Still" is not about the current time period.
