AGI – “The American employment figure is very surprising, almost shocking. The US economy was expected to create over a million jobs in April, but they have arrived just 226 thousand. The reason? There is a demand for work, but apparently there is no supply. Or, perhaps, the answer is a little more complex. The US world of work is being shattered by this pandemic. There is too much volatility on the data and too much displacement on the labor market, on logistics. These are new facts that have never been seen before. “
So, hot, Professor Fabrizio Pagani, macroeconomics expert, head of the technical secretariat of the former Italian Minister of Economy and Finance, Pier Carlo Padoan, economic advisor to former Prime Minister Enrico Letta and former G20 sherpa, try to explain to AGI the disappointing data of the US labor market.
“Let’s put it this way: demand and supply of labor are no longer stable. In other words, while before supply and demand intersected in a natural way, now due to the dislocation and that is to say too many movements the market has become more complex, harder to decipher. There has been a reshuffling. With the pandemic it was created more volatility, because a lot of demand is created where there is not enough supply, or supply is created in sectors where there is no demand. Here this is the concept of dislocation“, says Pagani.
To explain the concept even better, Pagani tries to give some examples. “The economy, after the pandemic, tends to recover better in the manufacturing sector, that is, in industry, rather than in services. So those who worked in services, that is, in restaurants, in commerce, or in the travel sector have moved to the sector manufacturing, where you hire more and are more protected. And now, that the services are reopening, those who have moved to the factory don’t go back, they don’t go back to being a waiter “.
“The pandemic – he continues – creates a shattering of the world of work, a radical change, which is difficult to heal, even in working habits. Let’s take the baby boomers, those born in the fifties and sixties, who are now around 60 years old, or over 55. They are people who have worked for 40 or more years and who take the changes introduced by the pandemic to the leap, to leave the work, retire, or part time, or work from home. Find the psychological or contractual excuse of the pandemic to start doing other things. “
“In short, – he continues – this shattering of the world of work is deeper than it appears at first sight and even the statistics of the world of work are beginning to show it”. “And then the US occupation data in April it also proves another thing. And that is that he was right there Federal Reserve, at least for now. Powell got it right. In the sense that it was right to keep the policies accommodating and that there are no inflation problems, because certain price increases are temporary and do not trigger a chain of increases in the labor market. There is no pressure on wages. This is demonstrated by the fact that after the US data on US employment, the 10-year Treasury fell “.
.