Joe’s economy still healthy: GDP expands +2.9%

May have been insufficient given the job's report this AM.

 

Haven't seen any evidence of inflation increasing yet. Just lots of people getting jobs. But wages didn't explode nor is there a sign that prices recently have.

 

I’m just not sure the best way to fix a labor shortage problem is try to weaken the economy until there are enough unemployeed people to fill these jobs without wage pressure…

but I’ve pretty consistent in the past that I think workers should get paid more and fast food and Walmart should not rely on the government to supplement their full time employee’s wages to get them above poverty level …

 

I suppose its better than having too much labor (maybe), but if this is our new post-covid reality - that any spike in economic growth / activity leads to historic employment numbers and creates supply and service interuptions - well, that's a pretty significant governor.

 

We clearly need more immigrants. But the anti-immigration folks don't really care about the economic role of immigration, so here we are with them complaining about the border rather than welcoming in immigrants that we need to meet the demands of our labor market.

 

Restaurants can’t find workers because they’ve found better jobs

Nearly three years since the coronavirus pandemic upended the labor market, restaurants, bars, hotels and casinos remain short-staffed, with nearly 2 million unfilled openings. The leisure and hospitality industry, which before the pandemic accounted for much of the country’s job growth, is still short roughly 500,000 employees from 2020 levels, even as many other sectors have recovered.

But these workers didn’t disappear. A lot of them, like McGrath, who were laid off early in the pandemic, moved to behind-the-scenes office work where they are more likely to have increased flexibility, stability and often better pay.

https://www.washingtonpost.com/business/2023/02/03/worker-shortage-restaurants-hotels-economy/

 

It's like they don't really believe in capitalism. Or maybe just that they don't actually understand capitalism.

 

My town is a foodie destination where people would fly in to stay at $500/night hotels for the weekend just to eat and drink. This was 365. Now most every restaurant is closed M/Tu and many are closed Wednesday, as well. It's not to meet demand, it's lack of staffing. I now need reservations months in advance to eat at most places.

I just cook at home.

 

As I’ve said before, restaurants closing will be good for the economy and the country long term.
Pay at those places stinks, spending money there is crazy inefficient relative to other things people could be doing with it, the food they serve is often terrible health wise, the real estate they eat up drives up RE prices, and creates additional traffic concerns.
So for me, if this is the sector that loses and has to face a reckoning this time around, good.

 

Why do you hate food?

 

I think he hates restaurant food. 97% of the time I eat out I can cook what ever meal I’m eating better and not at inexpensive restaurants. Steakhouses really aggravate me I feel like I’m being ripped off every time I go.

 

and yet you go.

 

Sure, I can cook almost every meal I eat at a restaurant. But that's not why I go. I go because:

• I don't have to cook
• I don't have to clean
• I get to leave my house
• Often get to meet friends/family, and I don't have to cook/clean for them, or they for me
• Atmosphere of the restaurant (sports bar for a big game, for example)

And while yes, wages are low at restaurants, it behooves our economy to have as many people who want to work to be working; even low wage jobs. The more money flowing through the economy, the better. And while the front of the house needs English speakers, there are plenty of back-end jobs at a restaurant that can be done by someone who isn't proficient in English. Now, if we only had a willing and able work force that could do these low-wage jobs and be happy about it? Oh yeah, we do. They are just waiting in Mexico because the Judicial Branch of government won't overturn Trump era policies at the border.

 

I can see that point for chain restaurants...but I live in New Orleans. So no way could I do what they do at even hole-in-the-wall places here.

 

Sarcasm aside, it’s the opposite.
I was just downstairs making about 3 pounds of chili. I can make it healthy, tasty the way I prefer, and at a fraction of the cost of going to a restaurant. The whole thing cost me less than 8 dollars (even using 93 percent lean beef), with tax and tip I could barely get a small bowl of that out somewhere. And heaven knows what the sodium, sugar, cholesterol levels are in what they use when you eat out. Not to mention the beef quality.
Between monitoring what I eat and some decent exercise, I’m past 50 now and take zero meds.

That money would still cycle through the economy, just in more efficient ways. Overpaying for a needed daily resource that creates zero long term value is wholly inefficient.
And I’m not saying never to eat out, of course there are special occasions, I might meet some friends out tonight. And yeah there are days where you just don’t have the ability or desire to cook.
But the average family spends 3k a year eating out. That’s over 4 percent of their pretax earnings, let alone post tax, If they could a save half that money by eating in, imagine what the average family could so with eating healthier and saving $1500 a year. And if their property costs went down because they weren’t being driven up by the dozen restaurants nearby taking up land.

 

So you don’t hate food. Very cool.
My family eats out a lot and we try to spend our money in local places.
I always thought we were helping the community by eating out.

 

Interesting...

 

You are basically donating to the local community because you get zero value out of the transaction financially (it’s a net loss comparatively), and there are many ways to spend that extra money that you benefit from dollar wise, but how one spends their money is up to them.

 

You are outside DC, right? I can definitely see that perspective from the DC area. I lived on the Maryland side, but the food is maybe the worst of anyplace I have lived in terms of restaurants. I always have a list of places that I need to go whenever I am back in the other places I have lived (even Gainesville). When I am back up that way? Yeah, not really.

 

There are world class economists that say we are in for a huge reset in the markets... So you just might get to see a missed opportunity in shorting it yourself.

But they have been beating that drum for over a year now. I wish I could time travel.