Oh No! We are Running Out of People

Barring a recession, it appears the US is running out of people. We aren't. The chart is misleading.

For every job opening in America, there’s now barely more than one unemployed person available to take it. In mid-2015, there were 2.3 million more unemployed people than open jobs. By January, the gap had narrowed to 372,000.

Pool of Potential Workers

There is a huge pool of workers as shown by the following Advisor Perspectives chart on the Labor Force Participation Rate.

In every age group except 55 and over, fewer people are working on a percentage basis than in 2000.

Many of them are not counted as "unemployed" even though they want a job. Why?

Wanting a job is not enough to be counted. Nor is looking for a job on Monster or other places. Before the BLS counts you as unemployed, you actually have to apply for a job, send out a resume. or have an interview.

Admittedly, many of those who are not working are unskilled. However, fast food places and most retail trade jobs do not require skills other than to show up for work on time and be polite to customers.

Aging Workforce

The biggest differences in that chart are in age groups 55-64 and 35-44.

Age group 35-44 constituted 27% of the labor force in 2000 but only 21% in 2017.

In contrast, age group 55-64 constituted 10% of the workforce in 2000 but 17% in 2007.

People are working longer and longer.

Most have to because they did not save enough for retirement. Also, companies like older workers who are on Medicare or have no dependents.


Thanks to cheap Fed-sponsored financing, companies over-expanded.

Retail companies need employees even though they are getting their clocks cleaned by Amazon.

Such over-expansion accounts for much of the job needs.

Job Gain Recession?

If we have a recession, even a mild one, in which there are not significant job losses, the crush on earnings rates to be massive.

The lead chart suggests a different outcome.

We are nine years into an expansion, with the economy slowing and the Fed intent on getting in three more hikes this year.

Take your pick. Either way, the market is hugely overpriced.

Mike "Mish" Shedlock

Comments (9)
No. 1-9

When a job cannot be filled, ask "At what wage?". If wages are bid up any position can be filled by incentivizing someone doing that job elsewhere to switch.


So true. Many times, in past Fed blown bubbles, because I couldn't find workers, I've had to resort to using other contractors to complete my project in exchange for helping them finish theirs. These boom bust episodes are insane, but it's all the Planners know.


But you didn't include age 35 & under which has a larger percentage working (and in higher paying jobs) than in 2000. If you work in NYC or Boston you will see this is true.


It's a far more dangerous time for the marginally-skilled than they may realize. Virtually every highly repetitive task can now be automated, and many automation projects will be commissioned in the coming inevitable 'kitchen sink' quarter as the Fed begins taking the punch bowl away in earnest.


If we returned to a full time employment model (prerecession 40 hours per week) ,. wouldn't the numbers paint a different picture ? would not the number of job openings decrease ?