Unusual trends in job market contribute to inflation
There are some fascinating but scary crosswinds blowing through the labor force; winds that also seem to be fueling inflation.
Even though U.S. employers hired 428,000 new workers last month, the unemployment rate of 3.6 percent did not decrease. That's largely because as people enter the search for jobs, they are also counted into the available workforce,
California still lags the nation.
"We're still down nearly 400,000 workers prior to the pandemic," said former EDD Director Michael Bernick who adds that the number of U.S. jobs openings is at a record high but so are the numbers of workers quitting their jobs.
"We have the highest number of job openings since the bureau began to track this in the 2000s; 11.5 million. Not only the highest number of job openings, but the highest number of quits; people voluntarily leaving jobs: 4.5 million throughout the country that we've ever seen," said Bernick.
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In fact, because of the rise in quitting in April, U.S. manufacturing declined to its lowest level in more than 18 months. With fewer workers on factory floors, that slows output and can fuel inflation. And, last month, U.S. worker productivity fell at the fastest rate in nearly 75 years. If workers can't maintain the needed pace of work, that can also aggravate inflation. Those facts are causing a rise in robotics across the board.
Just last month, Safeway is testing robots that assist workers in fulfilling store pick up or home delivery orders at ten times the speed and volume of workers alone. It's increased production so much, this fulfillment center actually added 65 jobs to mind the robots.
"It's not just in retail but even in fields like agriculture which, for many years, resisted certain types of modernization or automation," said Bernick.
The pandemic knocked the traditional workplace and workforce for a loop, and that's helping to make inflation even more stubborn.