Labor Shortage: More Proof of a Brewing Crisis

I’m nine days away from returning home from my wife and daughter’s quarantine. And I’m talking to them from 50 feet away. My daughter is getting better. But it’s a surreal experience and a reminder that this pandemic isn’t over. So, I’ve got a lot of free time. More than I need to be honest. Each day, I read about 200 articles on trends. One that caught my attention centered on the U.S. labor shortage. And wow… could this get ugly.

Man and the Machines

The U.S. economy is heating up. Manufacturing activity surged to a 37-year high in March. Everyone has discretionary income, it seems. And demand continues to surge for anything and everything produced in U.S. manufacturing.

Now, you’ve likely heard that commodity prices are rising. You’ve likely heard that inputs into various products (corn is in EVERYTHING) jumped. That’s not the problem.

The problem is that our manufacturing sector has more than 500,000 job openings. Firms can’t find welders, machinists, and other Blue Collar gigs. Here’s the thing.

These jobs can pay more than six figures. And even the most basic jobs – which just require following directions – pays well above minimum wage.

The Skilled Labor Shortage is Incredible

And it’s going to get MUCH worse. A report by Deloitte and The Manufacturing Institute says that we’re going to have a huge gap in talent.

The report states that we’ll have 2.1 million unfilled job openings through 2030.

I want to stress this trend because it won’t go away. I’ll be talking about this a lot more in the future because of its importance. The companies that win the talent war will be the companies.

Right now, the big tech firms like Amazon and their logistics competitors are winning. They continue to attract talent away from manufacturers.

While this is now popping up in conversations across Washington, I’m not sure that public policy will solve this.

Companies will need to move where the workers are… and not the other way around. This will create unique opportunities, particularly in the industrial real estate space. Manufacturers can and will move to robust hubs where talent lives.

I’ll talk more about what regions of the U.S. we should target and where the money is flowing. This could be a White-Hot trend, and I want you to stay in front of it.

Market Conditions with Dr. Bauer

Right now, the market is moving higher despite yesterday’s selloff.

I like to pay attention to the 5-13 EMA. Right now, it is positive, indicating that more institutional money is pouring into Mega cap stocks.

Blue Collar EMA

We are paying close attention to statements from Federal Reserve Janet Yellen. Yesterday, the Treasury Secretary suggested that the U.S. central bank might need to raise interest rates to curb inflation and stop the economy from overheating. We’ll continue to watch this as a rate hike would spook the markets.

Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.
Garrett Baldwin
Garrett Baldwin
Garrett Baldwin joined Godesburg Financial Publishing as Chief U.S. Markets Analyst in early 2021. A Johns Hopkins-trained Economist, he’s worked with hedge funds, venture capital firms, angel investors, and economic advisors to the U.S. government. Baldwin specializes in market anomalies and alternative investments. He’s written extensively on momentum, value, insider buying, and other unique strategies that provide investors that elusive edge.

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