Reading over this with a bit more time to digest the numbers, my understanding is that this initial take may have been a bit of a miss. The job market absolutely did care about COVID, January job numbers were hit pretty hard by Omicron, it's just that other corrections hid that fact.



I'm not sure what the correct take is of course. Omicron appears to be passing fast enough that the impact will soon pass, so it seems likely that there's still even more room for improvement in jobs. But I think it is clear that if our vaccines were more effective vs Omicron, the January numbers would have been even better which directly contradicts the headline.

Expand full comment

I understand from Kevin Drum (https://jabberwocking.com/we-are-pretty-close-to-full-employment/) that we're pretty much back on the trend line for labor force participation. That is, it has been trending down for years and the current numbers are simply reflecting that trend. There's not so much reason to expect that the *current* numbers should reflect, or match, those of two or more years ago.

Expand full comment

It's kinda weird to me just how endogenous "wanting a job" is. Like, plotting the unemployment rate against the LFPR gives you basically a straight line (hence this unambiguously great jobs report that included an increase in the unemployment rate)

Expand full comment