Investing.com – The United States faces a shortage of workers alongside strong demand fueled by easy money, raising the risk of stagflation for the economy, the founder of FedEx (NYSE:) warned. Fred Smith.
He said low labor force participation means the United States will not have enough workers to meet demand, which he says is skyrocketing due to government support for the economy. .
“You just don’t have enough workers to meet the demand that has been spurred by the printing of money. It’s like sitting in your car and putting your foot on the gas and the brake at the same time”.
The combination of “enormous” demand and a shortage of labor means the United States is in a period of sorts of stagflation, he argued, after two straight quarters of economic growth. negative.
Mr Smith worries that the student loan forgiveness program, along with other recent measures that inject money into the economy, could push consumer demand even higher.
“In the last 15 or 16 months, there have been five separate occasions – since the American Recovery Act in March – where you’ve had money injected into the economy. We’re the only ones in the world that can do it. We are the reserve currency – if we want to buy something we just print the money The problem is when that comes up against the lack of manpower we have in the US to meet the demand “.
According to Mr Smith, it was the labor shortage, rather than the coronavirus pandemic, that fueled the supply chain crisis last year. Delivery issues have led to record shortages of everyday products, which has helped to drive up prices and inflation.
“People mistakenly thought it was some kind of shipping issue after the pandemic was fixed. There was not enough manpower to unload the containers and distribute the items. in execution centers.”