The blowout jobs report is actually three times stronger than it appears
The Fed should not fear the huge increase in demand for labor because it’s alleviating shortages in the sectors where inflation has been hottest.
With the U.S. economy adding 517,000 additional jobs in January (including 443,000 in the private sector), demand for labor was a lot stronger than the 187,000 gain that was expected. But, as incredible as that blowout number is, the actual demand for additional labor was roughly three times stronger than it implies.
How can 443,000 net hires by businesses actually understate the demand for labor? Because businesses have two options if they need more labor: They can hire more workers, or they can work their existing staff harder.
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