More with less is the only thing that matters (and 9 other labor market charts)

Look, ma! No people; yes healthcare makes all the jobs, even in a slow month; youth unemployment gender splits; gone fishing mystery

Publishing note: Random Walk is going to experiment with a different publishing cadence over the next few weeks (more details forthcoming). I will endeavor to trade some frequency for depth, at least some of the time.

• look ma, no people (bc more with less is the only thing that matters)

• yes, healthcare makes all the jobs, even in a slow month

• tough on new- and re-entrants, still (and it’s not AI)

• gender splits for the youth

• to Florence Nightingale go the spoils

• gone fishing in droves

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More with less is the only thing that matters (and 9 other labor market charts)

The BLS reported payroll growth last week, and it was pretty much exactly as expected.

More with less is the only thing that matters

Job growth is low and job losses are low. Same as it ever was.

It’s, of course, got nothing to do with tariffs or AI, and everything to do with the fact that we’re just not adding that many people to the workforce (and haven’t been, for an awfully long time). The labor market is tight, but not strong. A smart person wrote that once.

That’s a “good” thing insofar as slower job growth isn’t a harbinger of rising unemployment (at least as much as it once was).¹

There is still some concern because unemployment is, in fact, rising (as it has been) for new- and re-entrants. Plus, healthcare, the great job-maker-restorer, while still “great,” is slowing. And an economy propped-up by an acyclical (and unsustainably expensive) healthcare sector, isn’t signaling “strength” to begin with.

But, more broadly, even if we do successfully keep unemployment at-bay (because if you add fewer people, you can safely add fewer jobs), what does growth even look like when it doesn’t involve growing lots of headcount?

Not saying it can’t be done, but if you accept the premise that “this time [slower job growth] is different and not so-bad” because the workforce isn’t growing that much, then you also have to posit that “this time economic growth (such that we get it) will be different” because the workforce isn’t growing that much.

That’s an interesting posit because it really is different—there will be no “throwing bodies at the problem” this time around.² As Random Walk has observed before, slowing immigration is a bigger threat to “growth” than tariffs.³

Rather, success in the new regime is going to be stuff like this:

FT

The big retailers have been growing topline without a hiring binge—in some cases, hiring even contracted.

Some of that has to do with introducing high margin businesses like advertising—because grocery is an advertising business—but a lot of that is stuff like this:

work that once took 12 steps has been condensed to five, helping to cut the cost by an expected 30 per cent at the end of this year. “What was a three-four hour process to fulfil an order now happens in a building like this in less than 30 minutes,” said Kieran Shanahan, chief operating officer at Walmart US.

Among the jobs being automated is building cardboard boxes. A machine uploaded with data on the dimensions of each product wraps it snugly with cardboard for shipment. “In the past, an associate was using some of their judgment for how big a box or small a box,” Shanahan said. “Now the algorithm builds that box specifically for your order.”

Imagine using puny human judgement to build cardboard boxes . . .

Welcome to the future of algorithmic box building (but seriously)!

All of which is to say, doing more with less is the name of the new game. That is the only trade that matters for the foreseeable future.⁴

Anyways, throat-clearing set up aside, on to a few charts ruminating on the themes.

Yes, healthcare still makes all the jobs

Every now and again someone will try to handwave-away the centrality of unsustainable healthcare spending to our “growth” story, and every time they are wrong.

Healthcare makes all the jobs: