Surveying the weird

It is US employment report Friday. US non-farm payrolls data are derived from a survey. Fewer than 43% of companies answer the survey—normal companies cannot be bothered. Markets are salivating about a survey of the weird. It is also doubtful whether employment data fully reflects the explosion of side hustles and business startups. Nowhere in the employment report does “TikTok content creator” appear as a job. In the US and elsewhere, there are three major labor market trends that matter to markets.

1. Unemployment, and thus fear of unemployment, is generally low. Workers with job security have the confidence to keep on spending on life’s essentials, like holidays and the Eras Tour. There is no need to start “precautionary saving”.
2. Real wage growth has been catastrophically bad. Despite low unemployment, workers have not been able achieve their most basic aim—maintaining living standards. While real wage growth should turn positive as inflation falls, this argues against a structural shift of power from employers to workers.
   
3. Time to get over the mid-life crisis. The pandemic unleashed a surge in job-hopping, with people rapidly changing employers. That now seems to be calming down, and companies (whatever they may claim) are finding it easier to hire people.