Why the latest jobs report should calm fears of stagflation

The U.S. Labor Department on Friday released some stellar new jobs numbers, reporting that the U.S. economy added 531,000 gigs in October as unemployment fell to 4.6 percent. Such above-expectations results, argues Neil Irwin for The New York Times, "take the 'stag' out of the stagflation scare."

Despite the country's protracted reopening amid Delta variant-driven chaos, Friday's numbers "present a straightforward, sunny story" — Americans are heading back to work, and fast. Even if its not the "off-the-charts job growth" some would expect, it's certainly not giving way to a period of "stagflation," Irwin argues, or a time when stagnant growth meets higher prices.

"Stagnant economies don't add 531,000 jobs in a month, and they don't exhibit a low and rapidly falling unemployment rate," he writes.

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The pandemic's "hyper-speed recovery" and the resulting numbers show that, "for all the discussion of labor shortages," employers keep managing to find workers. And though businesses are surely paying more for these employees, the findings "undermine any narrative that the pandemic has caused large masses of people to leave the workforce permanently, whether due to government stimulus benefits or personal factors."

There is still an inflation problem causing "real pain, especially for people whose wages have not kept up with rising prices," Irwin writes. But 2020's rebound is not the same as the "glacial recovery" of the 2010s, where workers returned to work far too slowly. Instead, the data highlights what Irwin says is a "one sided economic problem" — "high inflation and its attendant problems" — not a double-sided issue where "high inflation and stagnant growth are both causing people pain."