Speaker 1: Hey, this is this almost seems like a Saturday Night Live skit. FOX News is now warning
there may be too many jobs, too many people might be working and this could be a warning sign for
the economy. How how is that possible? Well, like with everything with almost everything,
there's sometimes like a kernel or a grain of truth somewhere up the chain in the analysis.
And I'm using the analysis, the term analysis extraordinarily loosely, and we have actually
previously spoken about this, oh, if inflation is up, that's bad. But if inflation is down,
that's also bad because it signals there might be a demand collapse. And either way,
we're heading towards a recession with most economic indicator indicators taken to their
extreme. You can argue that either very high or very low isn't good, but the new one on Fox is
the jobs report might be too good. This could be bad for the economy. After spending a long time
saying where are the jobs, Joe Biden and focusing on the labor participation rate. So let's look at
a couple of screen captures from Fox News. First one, job gains spur concerns of rising inflation.
So let's explore that. How does that work? Well, the more people that are working, the more people
that have money to buy things. If more people want to buy the same limited number of things,
you would expect that prices could go up. It's just there's more demand. So people selling
stuff. If you've got 100 people who want to buy your sneakers, you're going to be able to charge
more than if there's only one person who wants to buy your sneakers. Okay. There's there's a there's
a kernel of that there. But all of a sudden now the problem is the jobs numbers are too good.
That's kind of weird, but it is Fox News. It is Maria BARTIROMO, after all, another headline,
America's Employment Crisis. There are too many job openings. There's too many companies hiring
compared to the number of people looking for jobs. And they put up that this is they call
this a crisis. There is 11 million job openings, but there's only 6 million unemployed people.
That's a crisis all of a sudden. Now, remember, when it's convenient to them, they say, well,
the official number of unemployed workers doesn't reflect the real number because you're only
considered unemployed if you're actively looking for a job. If you are demoralized by not finding a
job, you'd still like one, but you've just sort of given up. You're no longer considered unemployed.
So the right loves to say that the real number of unemployed people is millions and millions higher
than the official number, because you've got all these people working part time who would like to
be working full time, and that's not reflected in the numbers, people who have just given up because
they can't find a job. So now all of a sudden they don't mention that. Now they just say,
Hey, there's 11 million open jobs and 6 million unemployed workers. The other funny thing about
this is they insist that immigrants, legal and illegal, are coming to the United States,
taking all of our jobs and making it harder for the American born worker to find a job. Well,
if your new argument is that there's a shortfall of five and a half million people,
there's five and a half million more jobs than people. Wouldn't you want those immigrants to
come in to work some of these jobs so it's all completely in. Totally incoherent. Now, there's
a real economic conversation to have here, and I'm glad to have it. It's not a partizan conversation,
at least in principle, although the solutions that are often proposed become extraordinarily
partizan. We've talked before, no matter what numbers there are with most indicators. You
can make the case that at one extreme or the other, it could be bad for the economy. Now sky
is falling. Headlines get way more attention. The economists and the financial analysts who
predict crashes get way more clicks than the people who say, Hey, you know what? Things will
probably be more or less okay over the medium term when it comes to the inflation numbers.
We've started to see a turnaround in the messaging from the right. The first messaging was there's so
much inflation. Nobody can afford anything. This is a disaster for the economy because
things are going to get so expensive. Nobody's going to buy stuff that will hurt businesses.
The businesses will have to fire people. It's going to be a recession. As we now have seen,
gas prices decline for nearly a consecutive month. We talked about last week that talked
about that last week as the jobs numbers continue to be really, really good. The new thing is, oh,
if inflation comes down and people all of a sudden now stop demanding stuff and that's
what's causing the inflation to go down, we are going to have potentially a deflationary spiral,
a demand collapse. And that's going to be terrible because people aren't going to be buying stuff and
it will be terrible, terrible for the economy. It's just the other side of the same coin. When
you look at prices and inflation to the extreme, the reality is pretty boring. Okay. The reality is
it's very rare. Not impossible, but it's very rare to have a recession when you have such
you're so close to full employment and we have a steady rate of inflation, which is slowly coming
down. That's an important thing that's often not mentioned. Inflation has been high. And I don't
I'm not pretending that it hasn't been a problem. It's been a problem. Inflation has been high,
but it's now for several months been quite steady. There's no escalating inflation
where it's year over year. Well, look, it looks like it's about 8%. It's about nine. It's ten,
11. It's 12. It's been kind of steady at this high sevens, low rates number. And it's slowly likely
going to start coming down. Recessions are not particularly common in that scenario where the
employment situation looks good and businesses, generally speaking, are looking to hire and
inflation is steady. Is it impossible that we would get a recession? No, it's not impossible,
but it's not particularly likely. And that makes for pretty boring economic analysis. But it is the
reality is the numbers point you so far. So the new one from Fox. The economy might be too good
for its own good. Find me on Twitter at David Pakman. Let me know if this one surprises you.