Tuesday, January 27, 2026

Edward Quince's Wisdom Bites: Stay

 

In January 2025, jobless claims hit 11-month lows. The takeaway making the rounds was familiar and comforting: the labor market is strong.

But that conclusion may be missing the point.

Welcome to what might be better described as The Great Stay.

Stability Isn’t the Same as Strength

Unlike the “Great Resignation,” today’s labor market is defined by inertia. Workers aren’t quitting. Employers aren’t firing. Hiring is cautious. Mobility is low.

Everyone is staying put.

At first glance, this looks healthy. Low layoffs usually mean confidence. But under the surface, it may signal something else entirely: risk aversion.

Workers are afraid to move because opportunities feel scarce. Employers hoard labor because they fear they won’t be able to rehire later. The result is a labor market that appears tight but behaves brittle.

Why Churn Matters

Healthy labor markets require friction. Movement allows:

  • Skills to reallocate

  • Wages to adjust

  • Productivity to improve

  • Capital to flow where it’s most efficient

A labor market where no one moves is not dynamic — it’s defensive.

This has implications for inflation. When companies cling to workers, wages become sticky. Costs don’t fall easily. And inflation pressures persist even as growth slows.

Investment Implications

For investors, “The Great Stay” complicates the macro narrative:

  • Low layoffs don’t guarantee strong growth

  • Wage inflation may remain elevated

  • Productivity gains may disappoint

  • Corporate margins face quiet pressure

This is not a boom. It’s a holding pattern.

The Financial Takeaway

Do not confuse stability with vitality. A labor market frozen in place may be masking fear rather than confidence.

For portfolios, this argues for realism: slower growth, sticky costs, and a premium on businesses that can thrive without relying on abundant labor churn.

XTOD:
 "Jobless claims at 11-month lows show you still can’t get fired... The term I find most endearing to the current job market is one I heard called ‘the great stay’."
at

No comments:

Post a Comment