Episode summary
Jobs Look Strong. Workers Are Disappearing | Why Eric Pachman is Watching Diesel Prices
Excess Returns
· · 1 hr 14 min · Hosts: Matt Zeigler · Guests: Eric Pachman
Summary
Eric Pachman argues that the headline jobs report is a noisy snapshot, not a clean measure of labor-market strength. He says the CES payroll survey has a declining response rate, a wide confidence interval, and month-over-month changes that can swing sharply on revisions, so investors should focus on unusual industry-level moves and longer-term trends instead of the monthly headline.
He then uses new data tools to show what he thinks is happening underneath the surface: population aging, rural labor-force decline, and a sharp drop in foreign-born men in the labor force since March 2025. In his view, those shifts matter more than the unemployment rate because cities, tax bases, and employers depend on labor-force supply, not just the unemployment figure.
Pachman also ties diesel prices to inflation through freight surcharges, retailer margins, and consumer goods costs. He argues that diesel-driven cost pressure could show up in retailer earnings calls in October and create upward pressure on prices that monetary policy cannot easily offset. He closes with a grocery-price study comparing CPI-based food costs with Kroger prices, saying store brands were cheaper and that CPI can miss how different households actually experience inflation.
Key takeaways
- Pachman says the CES payroll survey is precise for employment levels but much noisier for month-to-month job changes.
- He flags unusual payroll prints in local government education and computing infrastructure as signs investors should not over-trust the headline number.
- He argues the labor-force story is driven more by aging, rural decline, and immigration shifts than by the unemployment rate.
- Pachman says diesel prices can flow through freight, retailer margins, and consumer goods prices, creating inflation pressure the Fed cannot fully control.
- His Kroger study found a CPI-based thrifty basket at $152.71 versus $140.17 using real store prices, suggesting CPI can overstate some grocery costs.
Notable quotes
“if everybody agrees that it's right or it's meaningful, I guess it's meaningful”
“All these jobs are not equal, right? If we hired 60,000 people in food services, drinking places, is that a strong job market”
“diesel percolates through 44.4% of all of the CPI items basically casting this big shadow over CPI right now”
“this is a short-term problem right we I it's it's a political hot potato”
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. He's back on Excess Returns data for the people's zone. Eric Pacman, how we doing, Eric? — I'm great, Matt. Thank you for having me back.
I I'm insisting on this. If you're watching, if you're checking out data uh Eric's work at data for the people, data with the number four, exciting development from last time. Uh, you were talking about 501c3 conversion. You're now an officially sponsored 501c3 sponsored entity. Something like that. Did I say the words right?
Not exactly, but but but close enough. — Thanks. Compliance. — We are — Matt gets in trouble. Episode 2000. Go ahead. Say what it really is.
No. So, I I went through the entire process. You know, that's what you have to fill out what's called a form 1023.
And so I was doing that and it's funny because I I sent it to the lawyers and I used AI to do it right. I mean I wrote a you know a lot of it at least the narrative but you know Claude put it together and so I sent um everything to the lawyers and she was like in 30 years of doing this job I have never seen a more comprehensive and detailed you know form 1023 submission especially not before I did it. And I was like, "Oo, the legal profession,
But I'm coming for them." — When you're getting when you're getting the compliments. — Well, but but what this means is, and why I wanted to flag it at the top, you can now make so if you are going to his site, which we're going to walk through a bunch of the really cool tools, if you believe in journalism, and if you're looking for a charitable contribution to make, you can now support Data for the People in a charitable manner.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- jobs report context
- labor force aging
- diesel price pass-through
- cpi vs grocery prices
- ai data journalism
Companies and tickers mentioned
- KR
- Kroger
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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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