The broader US economy hasn’t had a big pullback in economic activity. But a shrinking workforce and a falling #breakeven #employment growth rate mean the labour market is tighter than what headline numbers suggest. @AdamPosen.bsky.social and Peter Orszag of Lazard have argued this would lead to higher #services #inflation.

For example, the economically viable #breakeven rate for #oil in the #PermianBasin is in the low $40s and trending lower compared to the $50s in #Venezuela, which does not even factor in the immense growth capex required to get production back to the levels we saw in the 2000s.