Episode summary
He Found 2.5 Million Missing Workers | Eric Pachman on the Labor Crisis Investors Miss
Excess Returns
· · Hosts: Matt Zeigler · Guests: Eric Pachman
Summary
Eric Pachman argues that investors are missing a labor-market slowdown hidden beneath the headline unemployment rate. He says the household survey and establishment survey tell different stories, and that labor force participation — especially among older workers and men — is deteriorating even when unemployment looks stable. He also argues that the BLS and Fed emphasize the wrong metrics, because the real issue is not just how many people are employed, but how many working-age people are actually in the labor force.
On job quality, Pachman says a large share of recent job growth has come from healthcare and especially Medicaid-funded home care, elder care, and social assistance. He warns that Medicaid cuts could hit a major source of employment and consumer spending, while the wages in those jobs are often too low to create meaningful disposable income. His wage tools show that home health and personal care aides are among the largest occupations, yet they earn far less than the high-end jobs that have been disappearing.
He also says inflation risk is understated if investors focus only on the headline CPI or PCE numbers. Shelter dominates CPI, core inflation strips out categories arbitrarily, and energy is still the biggest near-term shock channel. His oil work focuses on crude quality, refinery constraints, crack spreads, and especially falling diesel inventories, which he считает could push costs through transportation, food, and retail. His single-income stress test is meant to show how fragile household finances are even before another inflation shock hits.
Key takeaways
- Eric Pachman says the unemployment rate is masking a bigger labor crisis: falling participation, especially among men and older workers.
- He argues that healthcare and Medicaid-funded home care are doing an outsized share of job growth, making Medicaid cuts a direct employment risk.
- Pachman says home health and personal care aides are among the largest occupations but still pay only about $35,800 a year at the median.
- He says CPI and PCE miss important inflation pressure because shelter dominates the index and core inflation excludes volatile but essential categories like food and energy.
- He warns that diesel inventories are a key inflation tail risk because diesel flows into trucking, food, retail, and most of the real economy.
- His single-income stress test suggests many households have very little breathing room above the poverty line once surprise expenses hit.
Notable quotes
“the major growth driver of our jobs in in our and look, be probably not advised very well”
“home health and personal care aids 4,35,810 making an hourly median of $1721 $35,800 a year”
“if you put $15,000 in there, the whole country turns red”
How the episode opens
You're watching Excess Returns, the channel that makes complex investing ideas simple enough to actually use, where better questions lead to better decisions. I'm Matt Ziggler, and today's guest is the author and data nerd at Data for the People, like it says on his shirt, Eric Pacman. Welcome back to Access Returns.
Thank Thanks for having me. Great to be back.
You came on last call this past month. You did a segment on what the Fed is looking at when they're talking about employment and inflation. I promised we would do this episode to go deeper into each because the stuff you've been writing at Data for the People has been just on fire lately.
So, we're going to do the deep dive today. You said though, right before we recorded, you wanted to say thank you. You got a bunch of traffic, a bunch of people checking out the site.
Yeah, it was almost kind of shocking. I was getting these like anomaly reports from Google and everything that the search traffic like you know we're a sleepy little site um building all organically all word of mouth um you know bare bones to zero funding at this point in time just doing the work because we love it and uh yeah I mean I I was just on the tail end of of your last podcast like your weekly recap type thing and um I all of a sudden it's like you know 60 people signed up for my distribution list and you know distribution list that's a heavy lift right like you have to actually go to the site read the site click a button put your email address in I get it like I that that takes some some commitment and uh and you are
We have a listener base with gumption we've got some gumption out there and I'm telling you — Very grateful — I'm telling you dear listener at home make the man grateful and you want this data because this this is where I'm starting us we talked about the Fed the way the Fed's looking at the numbers.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- labor market data gaps
- labor force participation decline
- medicaid healthcare jobs
- wage quality and job creation
- oil diesel and inflation
Companies and tickers mentioned
- Data 4 The People
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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