Tom Barkin

And that's because productivity has allowed people to absorb these hits without having to affect margins and having to pass it on fully in prices.

And when you start seeing good productivity numbers over and over and over again, that gives you some hope that can continue.

Yeah, I have to say the businesses I talk to when they describe the labor market, they describe it as pretty open, maybe even loose.

Availability is high.

Turnover is low.

I was with a bunch of poultry processors on the eastern shore who told me that even after losing workers to temporary protected status, they've been able to replace them relatively easily.

relatively easily.

And if you can replace poultry workers, I think you've got a reasonably open job market.

And of course, going back to the fall, that's what we saw as unemployment was ticking up.

I will say the last couple months of employment data has been reassuring.

As you've seen, the unemployment rate came down.

Jobless claims have stayed low.

And so you still hear a relatively loose labor market.

You still hear people not hiring but not firing.

But the numbers are even better than I think what you hear.

Yeah, if you go back to the fall, I think a lot was behind our moves was the sense that the risks to the labor market were up while the risks to inflation were down.

The data that's come in over the last couple of months would, I think, suggest it's moved in the other direction.

Well, I expect we're still modestly restrictive, and that should help as we try to grind out the last mile here.

But again, we'll have to see.

I definitely take note of the continued strength in demand.