Gad Levanon, Ph.D., The Conference Board’s chief economist for North America, joins DoubleLine’s Jeffrey Sherman and Sam Lau to discuss his work in forecasting the U.S. economy and his new research on labor markets. In 2014, Dr. Levanon issued a report from The Conference Board warning of a looming labor shortage in the U.S. That report, which was met with skepticism in many corners, proved to be prescient with the unemployment rate falling over the subsequent five years to its lowest level in half a century. Among new research initiatives led by Dr. Levanon, The Conference Board has been collecting, classifying and analyzing job-opening ads from every job board in the U.S., creating a real-time data set to spot labor trends. Job openings, which he explains serve as a leading indicator of employment, have been declining for several months. Within the corporate sector, he sees an acceleration in labor costs eroding the bottom line of businesses. So far, these pressures have not resulted in inflation, but an eventual acceleration in inflation remains a possibility. The retirement of baby boomers and weak productivity growth, he notes, have exacerbated the tightness of the labor market. Contrary to fears that technology will replace workers, creating a large unemployed population, Dr. Levanon points out that most of the worker replacement with technology occurred in previous decades. This process, he observes, is continuing but at a much slower place, although some companies are showing signs of refocusing efforts on raising productivity growth through technology. The podcast was recorded August 12, 2019.
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