Job Creation Only the Tip of the Iceberg
After digging through the details of the jobs report, it is clear that the message we delivered last time, that the lift-off has finally happened, has been confirmed by this report. The high level of job creation, and upward revisions to past months, are only the tip of the iceberg. Perhaps the most striking thing is that voluntary quits skyrocketed. This means that workers are confident enough in the labor market that they are willing to quit their job. There was also a big rush back into the labor market. Folks are willing to look for a job again, because they now expect to be able to find one.
It is no coincidence that the private sector is taking off while the government stimulus is winding down. This is consistent with the crowding out story I wrote about in last month’s National Review. The biggest risk to the forecast is that an oil shock might launch us into a sudden reversal. It is rather striking that the economy could do this well with gas prices this high, which suggests that the pressure valve has been opened, and the years of pent-up activity that were suppressed by uncertainty over Obama’s policies is finally being released. Thank God for gridlock.