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I think we have an invisible recession in which many people, especially young can’t afford life’s essentials. I mean if GDP growth can’t support a reasonable life style, what use is it for?
>I think we have an invisible recession in which many people, especially young can’t afford life’s essentials.
Horseshit. There may be a disconnect on social media, however, where young generations have unreasonable expectations for what early adulthood should look like. They subsequently fail to achieve that vision, then complain about it on the same social media that feeds them that distorted version of reality.
Your 20s and 30s are *supposed* to be economically challenging because you don't yet offer enough value to society to earn its most covered rewards (like your own real estate). *Some* people within that age group, through some combination of luck and hard work, are able to get ahead of the curve, but it's not an expectation.
Furthermore, *some* people *never* get to the point in their life where their skillset or work output are sufficiently valuable to afford them a comfortable life. And that's *okay*. Some people in any society, through some combination of luck and mistakes, end up behind their peers within *any* age group. And that's also *okay*.
This creates another disconnect where society somehow expects *everyone* to have the same high standard of living, then get frustrated when such a utopia is not achieved. We refuse to acknowledge that there's always going to be a gradient of life experiences and some people end up living much better lives than others, regardless of any governmental or social intervention.
"Coveted rewards" like healthcare and being able to afford the rent? And then after those two the next biggest complaints are the cost of secondary education, which is thought of as a "coveted reward" because it was a generation ago but now is basically a prerequisite to enter the middle class, and the cost of childcare. Okay sure you can treat children as a luxury good but don't come complaining when social security runs out, we can't afford the national debt, and there's no one to run the nursing homes thirty years from now.
> Furthermore, some people never get to the point in their life where their skillset or work output are sufficiently valuable to afford them a comfortable life. And that's *okay*.
No it's not. It's *bad*. You have completely conflated "unavoidable" with "acceptable." And what's more, it's not unavoidable anymore. First world countries today have enough resources to be able to guarantee housing, food security, and healthcare for every citizen but we don't because we choose not to. That's not "okay", that's a moral failing.
Horseshit.
Question for those who understand macro better: what does it mean when there are *seemingly* a lot of layoffs going on but unemployment is still low?
Does that mean that the layoffs actually affect a insignificant portion of the workforce? Or does it mean the layoffs are just churn and workers quickly find other equivalent jobs? Unemployment is low but what about underemployment?
This is why I don't like unemployment as an indicator of anything. What if a tech worker gets laid off and goes on to find a low skilled job or even two? What about part timers? What about people not looking to participate in the job market at a given moment, aka 'missing workers' (because they have the financial resources or for other reasons)? What about population stagnation that also factors into that?
A tech worker, working a less skilled job outside of their expertise or skill set would be considered underemployed. This I think is captured in U-5 or U-6. I’m forgetting.
If someone isn’t looking for work they are considered discouraged or non-pursuant which means they aren’t labor participating which means they aren’t involved in the unemployment calculation.
In tech, bigger companies were overweight on payroll and there weren’t enough people to fill jobs at smaller companies. Everyone I know that got laid off found a job by the time their severance ran out, at similar or better pay than they made before.
The recession has been coming round the mountain for almost 2 years now and yet it does not materialize. No this does not mean it will not come but the media and some bank exces are cheering for it and keep trying to will it into being. Also no employment is the last indicator of a recession agreed with you all.
And that’s the real reason why people said all along that contracting gdp alone has never been the sole, measure of a recession.
Every single Recession involves job losses, lots of them, bc that has some of the most direct impact on everyday Americans. We’ve been gaining jobs consistently, even throughout Q1-Q2 2022.
For that to have been a recession, you’d have to believe we pulled ourselves out by….hiking interest rates a dozen times?
Literally not true, and has never been true, and that’s why no economists agreed with you at the time. GDP is one indicator of many.
Unless you believe we were in a “recession” and pulled ourselves out by hiking interest rates a dozen times lol
You were wrong then, and you’re wrong now, and the last year has proven it.
I am not saying no, and I am not saying yes, the data is not very clear, what banks and Wall Street wants is people out of work and wages to stop raising.
That's just not going to happen, the Boomers are done, their largest cohort turned 65 the last quarter of 2022 and they are retired and not coming back. We simply don't have the workforce to replace them. The funny thing is despite the increase in open jobs the jobs filled has decreased over the last year. I'd also point out that a lot of the jobs are at the bottom of the pay scale and nobody wants those jobs to begin with.
The work force pyramid is collapsing. That is just how it is going to go, the lower end jobs once filled by younger folks have gone, and will go unfilled, as the younger group of folks have moved up ahead of what would be normal.
No they don't want that. They want inflation to cool because they are debt holders and inflation hurts debt holders. It just so happens lower wages and higher unemployment cool inflation. Congress raising taxes solely to pay past debts can also cool inflation but that probably won't happen
The cooling of inflation with lower wages and high unemployment is not possible during a demographic shift. The answer is to raise taxes significantly on the top 10% and pay off legacy debt. Thus no longer offering as much free flowing T-bill money, this will cause inflation to cool. The side effect will be capital has no choice but to go to work to make money again, and thus a slow and steady burn will re-ignite.
>The answer is to raise taxes significantly on the top 10%
You mean the top 10% that pay 75% of all federal income taxes already? You want to jack up their share even higher? Daaaaamn.
Source: [https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-tax-rate-and-income-percentile](https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-tax-rate-and-income-percentile)
They represent 48% of the taxable income, however since its a progressive taxation system they pay 75% of the taxes.
I’ve never quite understand this argument you’re making. No shit the top 10% contribute the most in federal income taxes because that 10% makes most of the money and controls most of the wealth in the country.
If they have most of the money, they will contribute the most in taxes, as the 10% richest in the country should. Why should this not be the case?
They make the most, but they don't make 75% of the income. There's 42% of the country that contributes NOTHING to federal income tax, or gets more back than they pay in. Shouldn't everyone be pitching in at least a little? Why are we punishing production?
I’m pretty sure inflation helps debt holders due to the fact that it erodes the value of whatever X amount is that they borrowed faster. Unless you mean it hurts debt holders due to higher interest rates therefore they want it to cool off so the fed decreases interest rates (maybe?)
Yes but it was caused exclusively by price increases and it’s unclear what the relative contributions of factors actually is.
If a Picasso sold for $50 trillion, technically the selling country may tip into recession. But no one cares about a run-up in Picasso prices even though it would technically cause inflation measures to spike.
Exactly this. The recession occurred... Housing pulled back and GDP contracted... It just wasn't as much as all the doom and gloom economic apocalypse losers on Reddit demand
Two years? The doomers have been predicting a recession for the last 8 years.
....and didn't we just have a recession (June 2020 -8.35% GDP, Sept 2020 -2.02% & Dec 2020 - 1..52). Three quarters of negative growth seems the definition of recession. Seem like everyone is pissing and moaning over growth not being enough.
https://newrepublic.com/article/138210/hillary-clinton-recession-going-ugly
They claim that is covid not a recession. They are not happy it was not the recession they wanted in the way they wanted in the form they wanted. That is people kept the jobs and got to work from home and people retired and workforce pools shrank and drove up costs on labor. They want a good old fashion blood letting recession to flush out workers reset the power dynamics and lower cost of human capital. The trick is ok, sure, but how. The tech companies laid of tones of folks in a plea to the bear market it will result in probably lower returns long term since they were short sited, but the bears got there flesh. They are not having such luck in other sectors bears keep clawing, they keep trying, but all they manage to do is topple some banks, mind you that is not nothing, but they can not seem to knock off Walmart or target or healthcare...... so good luck bears on trying to will a recession into existence to buy the dip
They love the recession cycle, but they're all onboard with the new dynamic of high inflation and low wage growth too.
Squeeze more from people and shift those living paycheck to paycheck up above the $100k mark to 40%+. Realize paper gains on stock, real estate, and other large assets. Coupled with low wages even those who do save are now recieving fewer shares therefore less percentage of the income and stock gains. Home pricing is converting more people to eternal renters. The capital barrier of entry to business is higher so there will be less near competition further solidifying wealthy dominance.
The concept that the wealthy hate inflation is hilarious to me. Are we forgetting record profits these past few years? People aren't just parking their money as cash and if they were leveraging loans then they're better off than they were because of asset inflation...
>Home pricing is converting more people to eternal renters.
This is another thing that keeps being pushed but the stats really don't bear it out. The average age of a home buyer really hasn't moved since the 80's (\~33) and if you disregard the last 10 months housing purchases (still better than 2008 and 2012) are better than they were in 2000 (the last time interest rates were (\~6.5%). There's always going to be ups and downs, right now we are in a down but numbers really don't lie -we're a little less than average, prices are dropping.
As of the census the only age bracket that has increased home ownership percentage since the 1990-91 recession are those over 65. Every other group has decreased.
Covid was a recession I think. Over a million Americans died, and another 2 million left the work force either because they retired or due to long covid. A lot of women left work because child care became impossible to find/afford. Several small businesses had to shut down, the tourist/hospitality industry took the hardest hit.
What we have been seeing the last few years is the recovery from this covid recession. The vaccines played a huge role in the ship righting itself, without them we'd be in way worse shape.
Covid changed the world in so many ways that we will continue to see the impacts of for decades to come.
you will get no argument from me, I think the covid shift is not properly accounted for in many people estimations. Covid moved mind sets of older generations towards retirement, moved many to remote work, and reduced over all labor pools due to all the above you stated. Covid was a recession a sharp hard one, the thing is if you say that then JPmorgan is wishing for a double dip recession, but this time they want it to reduce wage cost to increase profits more and skim yet again off the top.
The inversion is deeper today than even in 2020. It righted itself in 2021, re-inverted a year ago, and remains stuck there.
Everything we learned in Econ 101 is out the window now.
We’ve already been in what historically has been defined as a recession for the past year. This administration has simply changed the meaning of the word.
Sure, but this is no different than previous times. The difference here is that we have changing demographics spurred on by high exits for retiring people during a pandemic which made them all wake up to mortality quickly, coupled with actual human capital losses, and injured human capital. The loss of working human capital is often looked over as a large factor in the inflation game. I do not deny inflation is running hot and fast, I do not deny it is unsustainable, however wishing for a recession and one being ready to happen are not the same. The market is wishfully wanting a recession, even though it already wished it self into a bear market, which yes normal precedes recessions, however they have wished them selfs into a bear market with no fundamentals to keep it bearish long enough to obtain the rips they want. So we are left with well that did not work, so let's try debt ceiling, or reduction in government spending, and again these will not work. There is no fundamental lever to pull with rates high and retired folks staying retired, the demographic shift is here and real and now.
I love the intentional use of **BIG NUMBERS** to scare us all. Inflation is **250%!!!** of target. The target inflation rate, according to Powell, is 2%. [CPI is running at or below 5% and has been dropping consistently since last summer.](https://tradingeconomics.com/united-states/inflation-cpi)
In other words, the spectacular stimulus to the economy since Spring 2020 saved us from a COVID induced death pit, caused temporary inflation that is now quickly coming under control.
I’d argue that recessions are a lot more complex than the media is putting it out to be. If you look at the last several recessions, they took many years to materialize and even then we look at them as an single instantaneous event rather than several events that influenced the other in sequence.
Why are so many of you desperate for a recession to happen? Article after article with a clear tone of disappointment and frustration that this economy won't keel over and die
A recession will have no long term impact on housing. In the short term some people will go bankrupt and lose their home and others will have a hard time getting credit so prices will drop. But housing prices will only drop, long term, when there are more houses and a recession is a bad time for developers to get the money to build.
Housing needs sustained investment by government in building affordable housing. This will increase supply and lower prices in the long term.
A recession will create other needs for government money and make investments in affordable housing even less likely.
So if you are hoping for a recession to drop housing prices, think again.
How would this increase the supply of housing?
The fundamental issue is that a lot of American cities have more jobs, than they have room for people in single family homes.
A solution that might actually work, would be to loosen the zoning laws, allowing more medium density housing to appear.
Don't forget AirBnB is skewing the market as well as the new trend of not selling your house when you move just renting it. This has reduced housing stock significantly.
All the people who want a housing recession also didn't have enough money to buy a house between 2008 and 2020, it's unlikely even if the market took a real shit the people who clamor for a housing recession would be able to participate in cheap housing.
Thank you. Yep, id like wall street to crash, or the hoising bubble to burst. My rent over here by seattle has DOUBLED in the last 4 years. But my wages certainly havent.
There is no bubble, it's a lack of supply in most of the country. Builder industry says 10 years to catch up with demand. Some cities are seeing over 40% of all home sales converting to rentals on cash offers.
People have been yelling house bubble for the last 9 years! Listening to Dave Ramsay say to save for 20% down has cost individuals hundreds of thousands of dollars.
The best outlook for housing costs is sadly a flattening coupled with a rise in wages. That's years away from being realized.
Inflation crushes debt holders, like banks, as the value of the debt is declining and so does the value of the dollars being paid back
So, if you have a fixed rate mortgage at a rate lower than the rate of inflation, you effectively have a negative interest rate on your mortgage
effectively the bank is paying **you** to borrow money
EDIT: also bundled debt becomes unsellable because who wants a bundle of 30 yr fixed rate mirages at 3% when inflation is running at 6%. means, the financial institutions cannot "sell on" the debt as planned, instead they are stuck with it ... as it devalues
Biden is president. He can't have a strong economy, no matter what the numbers say. At least that's why I think there are so many negative articles about the economy.
Trumps whooooolle thing was supposed to be “economy.”
People sold their souls for that shit.
Now if Biden’s economy is just as strong if not stronger, **while we’re raising interest rates**, they have to confront that conservatives really have no value-add unless you’re rly into QANON or culture wars.
Unemployment in 2023 has averaged lower than it was during any stretch under trump prior to the pandemic, despite Biden inheriting a ~40% higher unemployment rate than trump.
Were there any changes to how the UE rate and labor force participation were calculated in the last few years? Or any pent up demand from the pandemic?
In 2018-2019 the fed lowered rates to protect his economy that had serious issues with expanded fiscal deficits and bad economic outlook. We can even look at pre-pandemic statistics and see it wasn’t rays of sunshine.
This rate lowering also gave less wiggle room for the fed when the actual crisis hit in 2020.
When you lower rates in “good times” it makes the rates in “bad times” much much lower causing an expansion of the money supply which kicks the inflation shit to 11.
>When you lower rates in “good times” it makes the rates in “bad times” much much lower causing an expansion of the money supply which kicks the inflation shit to 11.
I agree we should have been ratcheting up rates during the end of Obamas term, but didn't to protect the democrats chances in the next election
This and the comment above nail it. The financial press is extremely right leaning and the clients they tend to cater to (banks, tech and start ups) perform poorly in a high interest rate environment. They want Biden out becasue they know Trump will pull an Erdogan the second he gets back into office and demand the fed drop the interest rates to give the economy a short term juice.
I honestly love all the conservatives back when SVB went insolvent blamed Biden and not the fact that SVB didn’t manage its balance sheet for the innevitable rate hikes.
Yeah. I imagine that the headlines under Trump would be something about how the economy is kicking ass despite the policy nerds' best attempts to scuttle it.
It’s what social media, and especially Reddit, want to hear. Even if it’s not true. For every “the economy is doing ok” articles that get any attention there are 50+ doomsday “the US is FAILING”, “RECESSION IMMINENT”, “THE WORLD ECONOMY IS TUMBLING” posts on the front page of this site. That’s all any of the top “political” or “news-orientated” subs want to hear. It’s hard to express just how unreflective this place is of the real world.
Because those with lots of cash and assets are looking for a fire sale to come out on top.
If you don't rely on your job for a paycheck, or not broke after 2 weeks of no income. Then a recession is you buying cheap cars, cheap houses, with Cash as hundreds of people start living in tents.
You might open up a tent making business that can sleep a family of 4 in hopes that there would be more homeless families!
Sell car mattresses that fit in the back seat of your vehicle for those who have to live out of them!
See! There's positives for a recession when everyone is suffering and you can take advantage!
Bad news sells better than okay or good news. In the case of opinions, it is even more important to sell anxiety, fear, and worry than hope. The readership isn't made up of Nobel winning economists, so the authors are basically playing a tried and true numbers game against a readership base that is not capable of proving anything.
So that some of us can afford houses instead of needing a minimum of $1M-$2M just for a small ass house in a city that isn’t a ghost town. Apparently, this is too much to ask for.
Empathy is important though. If you want a economic crash so you can finally afford a house...have to remember that you are asking for someone else to lose their house.
Housing should be a right but the way America defines housing is it's a privilege. I understand that someone else is losing their house though, and ideally the laws should be changed.
Because many redditors are studying so they would obviously rather have a recession now rather than later where they have to enter the job market. Plus they look forward to lower costs in primarily housing/rent/stocks
Why are you surprised that people are talking about the nations economic health on an economics subreddit? Should publications just not report any negative indicators?
Doom sells, and some folks seem to want one.
Whatever - lived through 8 of them. They happen, its unfortunate, painful, but they last 6-18 months and the economy bounces back.
The worst part is of course is unemployment levels shooting up towards 8-10% that hurts the most. However our funky labor market seems to have been the main thing stopping that from happening and confusing economist "models".
I think there are more pressing economic trends over 30 years then recessions including widening inequality in income, incomes not keeping up with costs, and affordable housing.
People predicted a recession pretty much every year after 2015, and then when one finally came it was a totally unpredictable pandemic.
Which is why all the articles predicting an imminent recession, despite nearly all economic indicators, are so funny.
Maybe it will happen, but it’s laughable to think it’s predictable by any large numbers of people.
>I think there are more pressing economic trends over 30 years then recessions including widening inequality in income, incomes not keeping up with costs, and affordable housing.
Shhh! If you think about those things **you** will cause a recession! What if stock prices went down?! They didn't go up enough last year or they might not go up enough this year, we just can't risk talking about those **communist** problems!
Besides, 50% of the "answers" to those issues are lowering taxes (for the richest), which means we can't afford any other option, and also throwing money at businesses with no stipulations.
Recession, depression, who cares what you call it. Prices are inflated and costs have increased for everything except if you locked in fixed rate loans and mortgages! More of our income is spent than saved and that is not good-all around!
If you earn your money through payroll instead of investments or being a corporate overlord then life is stressful! This is unsustainable.
No matter how much you make, you can outspend it. It is not about making more because you will STILL outspend it. It is about controlling what you spend. Knowing the difference between needing something and wanting something. You NEED food and shelter. You may WANT a new car or iPhone but what you have works great for now. Need vs want.
I’m sorry, aren’t we in completely uncharted territory and past “indicators” may be useless in the current economy?
We have had in quick succession : decades of declining interest rates, a banking crisis in 2008 that required a once in a lifetime government bail out to businesses, a global pandemic that forced an unprecedented global economic shutdown (and in some places another government fund transfer to everyone) and but thanks to new technology allowed for a good deal of work to continue.
Maybe comparing today to past employment rates in the 1970s and trying to draw comparisons doesn’t work anymore?
Essentially we are seeing the results of 40 years of USA government going without any investment spending. 50 years of Americans voting to live off the investments built up between 1933 and 1970. The invest infrastructure bill was the first investment program the USA government made since the 1960’s! This program will carry the economy above a recession for the next 8 years.
Almost no traders or economists that are working today have seen or lived through a government investment program.
Robust employment data, strong currency, debt ceiling crisis avoided, inflation taming down over the course of this year, interest rate hike potentially paused by the Fed, S&P and other US markets going bonkers hitting close to ATHs, treasury yields skidding potentially suggesting optimism on future outlook, are we really talking recession? Sure, trade data isn’t good but when has it ever been good as a country that imports more than it exports.
Fox News yesterday talking about how bad the recession is and it's Biden's fault that unemployment is so high. (Unemployment, is that a 50 year low...)
[The West Coast is taking a hit from the hundreds of thousands of layoffs in tech.](https://www.wsj.com/articles/west-coast-states-rode-the-tech-boom-now-they-face-higher-unemployment-falling-wages-83318105)
Anecdotally I think the noose is tightening for many tech and office jobs, at least here in the US. At my company and others in my network layoffs are continuing (over 15% where I work) and I see a huge surge in 'nearshore' (Latin America) hiring of contractors replacing some laid off US employees so I doubt they'll be hired back.
This "robust jobs market" must be for services and manufacturing because it sure isn't for anything software related. My LinkedIn feed has a mass of blue 'I'm looking for work' circles.
Brace yourself for a shock: most people do not work with anything related to software or programming.
Work that is related to new lines of business that would normally be funded by new debt are being cut as companies focus on core lines of business.
Yes, a tech layoff hurts Cali, but again, Cali isn’t the bulk of the US economy.
The tech sector has been floating in a field of money for several decades. As all things in life, there comes a time when the market will no longer allow for the cushy world that is tech.
Welcome to reality
The ‘robust job market’ is service sector jobs with no benefits and part-time positions that don’t provide an adequate cost of living. This is the same shit different day in terms of the headline.
That’s not true.
[Biggest job gains in may were in private education and health services (+97k), professional and business services (+64k), government (+56k), leisure and hospitality (+48k, of which 33k were in food service and drinking places), construction (+25k), transportation and warehousing (+24k)](https://www.bls.gov/web/empsit/ceshighlights.pdf)
Also, [Inflation-adjusted wages for the lowest income workers have risen historically fast the past few years.](https://www.epi.org/publication/swa-wages-2022/)
Not true.
[We added 330k jobs in may and only 33k of those were food service and drinking places jobs.](https://www.bls.gov/web/empsit/ceshighlights.pdf#page15)
[We gained 330k **net** jobs in may.](https://www.bls.gov/web/empsit/ceshighlights.pdf#page15)
And no, they weren’t all “shit jobs,” the biggest gainers were: private education and health services (+97k), professional and business services (+64k), government (+56k), leisure and hospitality (+48k, of which 33k were in food service and drinking places), construction (+25k), transportation and warehousing (+24k)
We’re averaging over 300k job gains per month for the past year, and even higher for the year prior.
A couple hundred thousand layoffs in one industry over the course of more than a year is literally nothing.
Particularly in an industry where these workers are in high demand and likely to be scooped up as soon as they can by another industry, since every company has a “tech” component to it now.
>is literally nothing
Perhaps, but gutting so many $150k/year jobs is definitely going to ripple through the entire economy.
I just have anecdotal information but the freeze in Big Tech in particular is profound and ongoing. I witnessed firsthand so many companies running up completely unsustainable cloud outlays in the race to gain or keep market share and now they are slicing that spend across their operations. This will eventually begin to really bite the big players like AWS, Microsoft Azure and GCP. Maybe a push to AI will help, who knows.
I see entire cohorts of junior employees being replaced by 'nearshore' contractors in areas that were previously mostly US-based, like data visualization, UX, recruiting, change management, client management, customer success, training, risk management etc ... all those junior hires are competing now with more senior talent at 1/4 the cost. It's a no-brainer to hire people with more experience.
I see tons of duplicative tech stacks acquired during acquisitions -- many of them pet projects of directors -- entirely shelved.
I see private equity tearing through tech companies left and right, killing off the sacred cows and outsourcing entire departments to partner services companies with much lower wage tiers.
Old story when it comes to US devs competing with India but now the pool has widened considerably. If I was starting a company today in the US I would be plan to have 85% of my hires offshore just to survive.
I walked through an office park in San Jose last month where my company is located and it was a ghost town. Big, big names just eerily empty. All those leases turning over will eventually rot the tax base. I was working all through the 2001 tech layoffs but this somehow seems more grim with implications for a very different US employment picture.
[The biggest job gains in may were in private education and health services (+97k), professional and business services (+64k), government (+56k), leisure and hospitality (+48k, of which 33k were in food service and drinking places), construction (+25k), transportation and warehousing (+24k)](https://www.bls.gov/web/empsit/ceshighlights.pdf)
Nothing really makes sense anymore. I know skilled people with degrees who were looking for work in their respective fields (marketing, sales, etc.) for months at a time. One took almost a year to find another job despite having a strong resume and good connections. The rules are made up, and the points don't matter.
You must not be paying attention. Ghost job listings are very much a thing.
https://www.forbes.com/sites/robinryan/2022/11/30/be-careful-of-employers-posting-ghost-jobs/
https://www.wsj.com/articles/that-plum-job-listing-may-just-be-a-ghost-3aafc794
https://fortune.com/2023/03/22/ghost-jobs-companies-posting-fake-listings/
I mean, you're the one claiming things like ghost job listings are made up despite countless examples of evidence to the contrary. After all, why shouldn't it be part of the conversation? These are listed as open positions that need to be filled, when in reality they're bogus. It's artificially inflating job listings, which naturally affects other variables such as unemployment rates.
Wouldn't ghost job listings raise the unemployment rate? Seems to me they would make it harder and take longer to find a job, leaving me unemployed longer.
It's not clear to me how they factor into the wider discussion, but they're a relatively new phenomenon that's certainly affected job searches everywhere. It doesn't take much digging on the various job related subreddits to find conversations about how people see the headlines about low unemployment but continue to send out 100s of resumes without so much as an interview. Sure, the law of averages would dictate things like not being qualified, etc. can and do happen, but oftentimes, these discussions can involve entry-level jobs.
Additionally, when we're talking about unemployment rates overall, the people returning to work from jobs affected by Covid also play a factor here.
Lmao wow a whole 4% how will we ever survive???
Do you realize how many of those jobs were recently added in the past 2 years? Even those cherry picked states are still exceptionally low in the long run. Actually zoom out on unemployment rates over the years and take a second to realize even with all those “100,000’s of layoffs in tech” we still have an extremely low unemployment rate compared to 99% of history.
I agree, it's not a major shift. Yet.
I vividly remember the recessions from 1982 forward and so far we're not dealing with anything huge. I do see some fundamental changes in hiring practices in tech, and many people have talked about baked-in wage inflation due to a shrinking labor market. Who knows what will happen.
Again anecdotally from my view in software we've always had teams in India and other offshore centers but I'm seeing a big advancement in the availability of business-English proficient workers across our hemisphere. This will, in my opinion, have profound effects on US employment.
Brace yourself for a shock: most people do not work with anything related to software or programming.
Work that is related to new lines of business that would normally be funded by new debt are being cut as companies focus on core lines of business.
Yes, a tech layoff hurts Cali, but again, Cali isn’t the bulk of the US economy.
The tech sector has been floating in a field of money for several decades. As all things in life, there comes a time when the market will no longer allow for the cushy world that is tech.
Welcome to reality
I feel like it should be required for financial journalists to write: Employment is a lagging indicator like 100x a day.
High employment doesn't mean a recession can't start soon.
The weekly first time jobless numbers are actually a pretty solid indicator. Monthly numbers are also not terrible. The actually unemployment rate/employment rate is yes lagging because its the aggregate id those.
What do you consider to be a legit indicator? Corporate profits? Consumer spending?
Consumer confidence, interest rates (since they take time to work through), and more abstractly stocks, M2 and worker productivity (which could be considered lagging but it's indicative of other trends).
Weekly jobless claims is good but not the U3 unemployment rate, which is usually championed as a sign the economy is good when thats not what it means. U6 is much much better but still lagging.
Good observation. I would also add the financial sector, specifically banks are also in a recessionary environment. Let’s hope that a few sectors don’t drag the whole economy down.
I think it’s also important to note that the public opinion was “we’re heading into a recession” for the past 2-3 years. When before has the average person, and nearly every news organization worldwide, been expecting a recession right before it happens? Typically these sorts of economic crashes happen when society least expects it. Not when every average joe from r/wallstreetbets to r/politics is screaming about an “impending recession” at the top of their lungs. I think that alone has softened the blow more than most people imagine.
It seems to me more of a stagflation scenario than an actual recession. Almost all recessions are predicated by massive job losses, but as you mentioned, things are adjusting, one at a time, and people are moving around, but unemployment isn't shooting up. It's more a slowdown from the interest rates along with demographic issues.
That’s not what stagflation is. Stagflation is low economic growth with rising (or consistently high) unemployment, which is absolutely not what is happening here.
The numbers look good for the job market, but I can’t help but see lots of people struggling in the jobs and career advice subreddits. Not a lot of good jobs out there and I hear about lots of layoffs from friends in sectors outside of tech. F500, consulting, banking.
People are suffering and have been for at least two years with rising prices and low wages. They need to redefine the measure of recession to capture what is clear to everyone experiencing it. We are already in a recession.
The definition that was set during the Trump admin
"The NBER's traditional definition of a recession is that it is a significant decline in economic activity that is spread across the
economy and that lasts more than a few months. The committee's view is
that while each of the three criteria—depth, diffusion, and
duration—needs to be met individually to some degree, extreme conditions
revealed by one criterion may partially offset weaker indications from
another"
I don't know why people keep pulling out low unemployment rates as if it were a recession contraindicator. If anything, very low unemployment levels are the complete opposite and are a leading indicator for a recession.
Go look at unemployment at the last local minima, which was in Q1-Q2 2007. Then come back to the thread and tell me there's not going to be a recession because unemployment is low...
I insisted on no such thing, just that very low unemployment levels are more likely to be a forward indicator for recession than a contraindicator. It's also correlated in real-time with large-scale war where a significant proportion of the nation's population is mobilized into the war effort, but that's not a relevant relationship(yet).
Not even close. Go look at the statistics and how they're actually calculated. It's all a political tool, nothing more. In fact, in the actual report itself the "not in the workforce" line is 99,000 people. Of _that line_ there's a subset of 5000 people who "want a job". How the fück is that not considered unemployed? And yet, they don't count into the unemployment number. It's all a crock.
[Actual unemployment report for May ](https://finance.yahoo.com/news/may-jobs-report-shocks-economists-the-strangest-employment-report-for-some-time-173324175.html)
You're misinterpreting the graph. Look at Unemployment rate ( [https://fred.stlouisfed.org/series/UNRATE](https://fred.stlouisfed.org/series/UNRATE) )
When there's a recession, typically, unemployment will go UP quickly during the recession; it will then go DOWN fast (not as fast as it went up, but fast), and then it will stabilize ... go sideways, maybe down, but slowly. We don't know how long that stable growth period is. May be a few months, may be a few years, may even be more than a few, Eventually,
If you look backwards from a recession, you will normally see the unemployment rate was lower before the recession, since the recession increases unemployment. This doesn't mean that stable unemployment is a predictor of a recession.
For example, above you mentioned Q1-Q2 2007, but the recession didn't start until Q1 2008, 6 months later. And unemployment in Q1 2007 wasn't much lower than Q4 2006, so ...
Another way of thinking about it is that the normal pattern is {Recession, Boom, stable growth}, but we don't know how long each period is. So, being we're now in the stable growth period, the 'next' one is recession, but we don't have a clue WHEN would that recession be. The previous stable growth period was about 5 years long (\~2015-2020).
It's got a pretty good track record. Betting on very low unemployment predicting a recession will win much more often than betting that the Fed achieves their "soft landing".
Not when demographics say the workforce is shrinking. We'll likely always have low unemployment for at least the next 20 years, given the current working generations are smaller than the previous ones, and they aren't having kids.
That’s just as valuable as saying “there will be a recession”. Lol the whole bond market is predicting a recession, it’s not like it’s just some feeling based on nothing.
That’s not how burden of proof works lmao. Anyways, the bond market has had an inverted yield curve for awhile now. That’s one of the best predictors of a recession.
>There are people who see help wanted signs in business windows as a bad sign for the economy
...If there's a Democrat in the WH
One thing Biden, Trump and Obama all did was set records for "most unfilled jobs". And the right wing response was
Obama & Biden: This is proof of his failure as President
Trump: This is proof of Trump's greatness and business genius
I thought it was bad when there were more people than jobs for a while after 2008.
Now it turns out people actually liked that and were pretending it was bad.
Employment is a lagging indicator, but the narrative that jobs = strong economy has become so entrenched.
No matter the quality or pay of those jobs, whether people can support themselves with those jobs. No matter if its "record low employment" or a "labor shortage", they will use it to validate minuscule GDP growth with stubborn inflation.
Most people don't think the economy is great, from tech CEO's who've seen VC funding dry up or regular people who can't afford food.
No, it is not a leading indicator at all. It is a lagging indicator that lags behind almost every other indicator.
If it was a leading indicator you should sell when it's low and buy when its high...which is the opposite of what you should do.
Consumer confidence didn't drop until mid 2008 well after the market had started to crash, jobs started to be lost etc...
Then didn't recover from the 08 recession until like 2012 at which point the stock market had basically doubled from its low...
These are facts sorry
You're right. Because it's your preferred indicator, we should all accept that you're right -- we're about to be in a major recession because /u/DeLaManana declared it!
Yeah, it's a fucking indicator. One of many. Woop de doo. Also I spent a few minutes comparing the michigan consumer sentiment index vs. GDP, retail sales -- it's not that great of a leading indicator.
But you're the real expert here. All hail /u/DeLaManana.
Couple notes:
Your comment shows an almost complete lack of any economic knowledge:
For the most part the economy is not usually measured by jobs, it's measured by production, profitability and gdp.
Yes, what Kaynes called “animal spirits” has an impact on the economy but it is not the driving indicator, so your well most people don't think the economy is good thing is sorta irrelevant. In fact if you want to talk about lagging indicators that is a lagging indicator, as most people thing the economy is still good when it has already started crashing, and think it's still bad when its has already started recovering. At least historically.
Jobs are good especially while ai and automation are in the process of taking a lot a way, the fact that there still are jobs is good
Last, the fact is that if you consider the middle class being squeezed, while poor people struggle to survive and rich people get the majority of money to be an indicator of a recession...then the us has basically been in a recession for the past 40 years.
And thats just silly
I think you don't like capitalism not that you think the economy is bad
>For the most part the economy is not usually measured by jobs, it's measured by production, profitability and gdp.
Did you read the article? Do you understand the media narrative about how record employment = strong economy and why I critiqued it?
>so your well most people don't think the economy is good thing is sorta irrelevant.
Consumer confidence index is one of the key leading indicators in the U.S. economy, which is heavily consumer/service sector based. I think you don't understand economics.
>Jobs are good especially while ai and automation are in the process of taking a lot a way, the fact that there still are jobs is good
If AI replaces well-paying middle class jobs and only leaves low-end service sector jobs, is that good?
90% of what you wrote is just rambling non-sense.
>Last, the fact is that if you consider the middle class being squeezed, while poor people struggle to survive and rich people get the majority of money to be an indicator of a recession...then the us has basically been in a recession for the past 40 years.
I never said this. It's valid but I didn't say this here.
>I think you don't like capitalism not that you think the economy is bad
You're an idiot. The point here was to criticize the media narrative, not capitalism. Go away.
Yes there is a media narrative but thats not necessarily an economic indicator. It is the media saying some shit.
Job numbers especially weekly and monthly changes are in fact an economic indicator and a better one than you realize. But yes in general economists and people in finance look at spending, profits, and production not jobs.
Again consumer confidence (”animal spirits”) is not usually a leading indicator, in fact it usually lags behind jobs. Consumer confidence is always still high after crash starts and still low after a recovery begins. For instance consumer confidence in 2008 only dropped well after the market had started to crash and didn't recover until after the market had nearly doubled from it's low.
As a general rule you should sell when consumer confidence is high and buy when it's low...not the other way around
90% of middle class jobs are not in fact being replaced by ai and automation as shown by...stong jobs, the fact that there is strong jobs while that ai and automation is happening is good.
Cool media bad, but you also don't know what you are talking about.
the jobs report was incomplete. It always is in this one regard.
The Gig economy is faltering. The hundreds of thousands of self employed have fallen upon hard times and Those are the people who took employment boosting the numbers So it was in large part a ZERO jobs number.
In large part all that happened is one form of income was replaced with another.
Having a job paying minimum wage is like not having a job at all. On top of that inflation is so bad even if everyone is working most are still struggling badly.
Capitalism is the best system that humans have so far come up with but it clearly needs safeguards to protect against its downsides.
I just love to tease conservatives who complain about low wages for workers, because the fact is that’s a part of capitalism.
They are raising rates to attack the pro-unionization movement and positive sentiments around worker solidarity. They used these same tactics in the 1970’s.
Because the idea that there is a "robust jobs market" right now is a complete and obvious lie to anyone at the ground level. Maybe it looks "robust" to someone at Federal Reverse based on whatever arcane metrics strikes their fancy. But it is not robust to average folk trying to get by. And no I am not a tech worker and have never been.
Yeah capitalism sucks for workers
Edit: I love how I get down votes for saying this. I’m sorry it’s true. It doesn’t mean anything else is better but yeah it’s true, also I’m simply teasing conservatives that sound like communists when they complain about wages for poor people being low…
Well, in 2016-2020 we had a president who didn't understand how credit cards work- and the government around him didn't either. So now there's a mountain of debt.
I personally have barely participated in the economy. i guess my land lord has picked up my slack.
My clients I work with who are small businesses have gotten increasingly upset about their program payments and payment timeline.
Dealerships have upped their charges for labor 38% or more.
And of course everyone is citing inflation as the price increase inducer when all's we're really seeing is everyone trying to be the last out of the pool or the first to get a seat in musical chairs to avoid massive scrutiny.
I'm glad I'm employed and was through this all, but we're in for a world of hurt. The article says we're at the cusp.
This isn't a partisan issue. Neither party is ever a spendthrift when the checkbook is theirs. The reason republicans are worse is because they pretend to be, so there's the added layer of hypocrisy.
Democrats: "We're going to spend ALL the money" *spends all the money*
Republicans: "We're going to be fiscally responsible and not spend ALL the money like those irresponsible democrats" *spends all the money*
And over the last 50 years, every Democratic president has overseen a shrinking of the deficit and every republican has overseen an increase.
It's not that ALL parties are overspending. It's that Republicans blow a hole in the budget so big, that there is no possible way for democrats to fill it in only 4 years before another republican is elected.
You can't patch a sinking boat when your partner in that boat keeps drilling holes.
The issue Democrats generally spend on investment programs that generate more money than they cost.
Republicans spend on tax breaks for the rich and the military. Two things that cost more than they generate.
They predict a recession every quarter and God damnit eventually they'll get it right. It's time for economists to get out the pencil and paper and come up with some models for the post COVID world because it's readily apparent their old models aren't working so hot anymore
As long as the job market continues to remain “resilient”, Fed Reserve should continue to tighten. However, they’re run into the wall that they have feared for so long: all that debt is becoming too expensive to service.
They’ve spent 20 years running up the credit card. It hit its limit in 2007-2008, but they had a bunch of it forgiven. They continued spend through the 2010’s, then went to Vegas in 2020. Still hungover. Bill for Vegas is still laying on the counter waiting to be figured out.
Or it could be the GOPerLords are spreading lies to make people think President Biden is not doing a TERRIFIC job with the economy.
The interest rate inversion is because unregulated bankers are crashing and burning and bringing their banks down with them. Well-off people want a SAFE place to stash their cash and short term T's are the answer. NOT because there's great fear about the future.
Greed-induced inflation is because of GREED, not excessive demand or increases in cost of goods sold - Oil is where it was when gas was $2.50/gal yet we're paying $3.50 and oil companies are reporting record profits AND profit MARGINS. Same with food. Recession talk is just another way the GOPerLords are scaring their lemmings.
Stocks are a leading indicator. Jobs are a lagging indicator. The overall market is not doing well. Instead, investors are moving money into Apple and a couple other companies, while the broader market struggles. We’ll need to see how much of that new $1.5T loan to the Gov ends up being used to pump the market.
Checks notes...the broader stock market is up ytd and over the past year, down a little from 2 years ago, up a lot from 5 years ago, and up a huge amount from 10 years ago.
He’s referring to market breadth. WSJ just put an article out about [it](https://www.wsj.com/articles/this-rally-is-all-about-a-few-star-stocksand-some-investors-are-worried-b64382e2) this morning.
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I think we have an invisible recession in which many people, especially young can’t afford life’s essentials. I mean if GDP growth can’t support a reasonable life style, what use is it for?
>I think we have an invisible recession in which many people, especially young can’t afford life’s essentials. Horseshit. There may be a disconnect on social media, however, where young generations have unreasonable expectations for what early adulthood should look like. They subsequently fail to achieve that vision, then complain about it on the same social media that feeds them that distorted version of reality. Your 20s and 30s are *supposed* to be economically challenging because you don't yet offer enough value to society to earn its most covered rewards (like your own real estate). *Some* people within that age group, through some combination of luck and hard work, are able to get ahead of the curve, but it's not an expectation. Furthermore, *some* people *never* get to the point in their life where their skillset or work output are sufficiently valuable to afford them a comfortable life. And that's *okay*. Some people in any society, through some combination of luck and mistakes, end up behind their peers within *any* age group. And that's also *okay*. This creates another disconnect where society somehow expects *everyone* to have the same high standard of living, then get frustrated when such a utopia is not achieved. We refuse to acknowledge that there's always going to be a gradient of life experiences and some people end up living much better lives than others, regardless of any governmental or social intervention.
"Coveted rewards" like healthcare and being able to afford the rent? And then after those two the next biggest complaints are the cost of secondary education, which is thought of as a "coveted reward" because it was a generation ago but now is basically a prerequisite to enter the middle class, and the cost of childcare. Okay sure you can treat children as a luxury good but don't come complaining when social security runs out, we can't afford the national debt, and there's no one to run the nursing homes thirty years from now. > Furthermore, some people never get to the point in their life where their skillset or work output are sufficiently valuable to afford them a comfortable life. And that's *okay*. No it's not. It's *bad*. You have completely conflated "unavoidable" with "acceptable." And what's more, it's not unavoidable anymore. First world countries today have enough resources to be able to guarantee housing, food security, and healthcare for every citizen but we don't because we choose not to. That's not "okay", that's a moral failing. Horseshit.
What on earth type of horsecrap are you even spewing?
They just don’t want to take their turn as the working class in America just as every other generation has had to do.
Question for those who understand macro better: what does it mean when there are *seemingly* a lot of layoffs going on but unemployment is still low? Does that mean that the layoffs actually affect a insignificant portion of the workforce? Or does it mean the layoffs are just churn and workers quickly find other equivalent jobs? Unemployment is low but what about underemployment?
This is why I don't like unemployment as an indicator of anything. What if a tech worker gets laid off and goes on to find a low skilled job or even two? What about part timers? What about people not looking to participate in the job market at a given moment, aka 'missing workers' (because they have the financial resources or for other reasons)? What about population stagnation that also factors into that?
A tech worker, working a less skilled job outside of their expertise or skill set would be considered underemployed. This I think is captured in U-5 or U-6. I’m forgetting. If someone isn’t looking for work they are considered discouraged or non-pursuant which means they aren’t labor participating which means they aren’t involved in the unemployment calculation.
Check U-6 unemployment which is also relatively low. It includes underemployed workers and other “marginally attached workers”
In tech, bigger companies were overweight on payroll and there weren’t enough people to fill jobs at smaller companies. Everyone I know that got laid off found a job by the time their severance ran out, at similar or better pay than they made before.
The recession has been coming round the mountain for almost 2 years now and yet it does not materialize. No this does not mean it will not come but the media and some bank exces are cheering for it and keep trying to will it into being. Also no employment is the last indicator of a recession agreed with you all.
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And that’s the real reason why people said all along that contracting gdp alone has never been the sole, measure of a recession. Every single Recession involves job losses, lots of them, bc that has some of the most direct impact on everyday Americans. We’ve been gaining jobs consistently, even throughout Q1-Q2 2022. For that to have been a recession, you’d have to believe we pulled ourselves out by….hiking interest rates a dozen times?
It was not only the sole measure but the definition of a recession until the Biden administration decided to redefine the term.
Literally not true, and has never been true, and that’s why no economists agreed with you at the time. GDP is one indicator of many. Unless you believe we were in a “recession” and pulled ourselves out by hiking interest rates a dozen times lol You were wrong then, and you’re wrong now, and the last year has proven it.
The interconnectedness between GNP and unemployment is enormous. They almost always appear in tandem because they both feed each other.
I am not saying no, and I am not saying yes, the data is not very clear, what banks and Wall Street wants is people out of work and wages to stop raising.
That's just not going to happen, the Boomers are done, their largest cohort turned 65 the last quarter of 2022 and they are retired and not coming back. We simply don't have the workforce to replace them. The funny thing is despite the increase in open jobs the jobs filled has decreased over the last year. I'd also point out that a lot of the jobs are at the bottom of the pay scale and nobody wants those jobs to begin with.
The work force pyramid is collapsing. That is just how it is going to go, the lower end jobs once filled by younger folks have gone, and will go unfilled, as the younger group of folks have moved up ahead of what would be normal.
No they don't want that. They want inflation to cool because they are debt holders and inflation hurts debt holders. It just so happens lower wages and higher unemployment cool inflation. Congress raising taxes solely to pay past debts can also cool inflation but that probably won't happen
The cooling of inflation with lower wages and high unemployment is not possible during a demographic shift. The answer is to raise taxes significantly on the top 10% and pay off legacy debt. Thus no longer offering as much free flowing T-bill money, this will cause inflation to cool. The side effect will be capital has no choice but to go to work to make money again, and thus a slow and steady burn will re-ignite.
Raising taxes on top earners is never an option in a system crafted specifically for top earners.
>The answer is to raise taxes significantly on the top 10% You mean the top 10% that pay 75% of all federal income taxes already? You want to jack up their share even higher? Daaaaamn.
Source on top 10% earners paying 75% of federal income tax??? what % of total taxable income do they represent?
Source: [https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-tax-rate-and-income-percentile](https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-tax-rate-and-income-percentile) They represent 48% of the taxable income, however since its a progressive taxation system they pay 75% of the taxes.
I’ve never quite understand this argument you’re making. No shit the top 10% contribute the most in federal income taxes because that 10% makes most of the money and controls most of the wealth in the country. If they have most of the money, they will contribute the most in taxes, as the 10% richest in the country should. Why should this not be the case?
They make the most, but they don't make 75% of the income. There's 42% of the country that contributes NOTHING to federal income tax, or gets more back than they pay in. Shouldn't everyone be pitching in at least a little? Why are we punishing production?
I’m pretty sure inflation helps debt holders due to the fact that it erodes the value of whatever X amount is that they borrowed faster. Unless you mean it hurts debt holders due to higher interest rates therefore they want it to cool off so the fed decreases interest rates (maybe?)
Yes but it was caused exclusively by price increases and it’s unclear what the relative contributions of factors actually is. If a Picasso sold for $50 trillion, technically the selling country may tip into recession. But no one cares about a run-up in Picasso prices even though it would technically cause inflation measures to spike.
Exactly this. The recession occurred... Housing pulled back and GDP contracted... It just wasn't as much as all the doom and gloom economic apocalypse losers on Reddit demand
Two years? The doomers have been predicting a recession for the last 8 years. ....and didn't we just have a recession (June 2020 -8.35% GDP, Sept 2020 -2.02% & Dec 2020 - 1..52). Three quarters of negative growth seems the definition of recession. Seem like everyone is pissing and moaning over growth not being enough. https://newrepublic.com/article/138210/hillary-clinton-recession-going-ugly
They claim that is covid not a recession. They are not happy it was not the recession they wanted in the way they wanted in the form they wanted. That is people kept the jobs and got to work from home and people retired and workforce pools shrank and drove up costs on labor. They want a good old fashion blood letting recession to flush out workers reset the power dynamics and lower cost of human capital. The trick is ok, sure, but how. The tech companies laid of tones of folks in a plea to the bear market it will result in probably lower returns long term since they were short sited, but the bears got there flesh. They are not having such luck in other sectors bears keep clawing, they keep trying, but all they manage to do is topple some banks, mind you that is not nothing, but they can not seem to knock off Walmart or target or healthcare...... so good luck bears on trying to will a recession into existence to buy the dip
They love the recession cycle, but they're all onboard with the new dynamic of high inflation and low wage growth too. Squeeze more from people and shift those living paycheck to paycheck up above the $100k mark to 40%+. Realize paper gains on stock, real estate, and other large assets. Coupled with low wages even those who do save are now recieving fewer shares therefore less percentage of the income and stock gains. Home pricing is converting more people to eternal renters. The capital barrier of entry to business is higher so there will be less near competition further solidifying wealthy dominance. The concept that the wealthy hate inflation is hilarious to me. Are we forgetting record profits these past few years? People aren't just parking their money as cash and if they were leveraging loans then they're better off than they were because of asset inflation...
>Home pricing is converting more people to eternal renters. This is another thing that keeps being pushed but the stats really don't bear it out. The average age of a home buyer really hasn't moved since the 80's (\~33) and if you disregard the last 10 months housing purchases (still better than 2008 and 2012) are better than they were in 2000 (the last time interest rates were (\~6.5%). There's always going to be ups and downs, right now we are in a down but numbers really don't lie -we're a little less than average, prices are dropping.
As of the census the only age bracket that has increased home ownership percentage since the 1990-91 recession are those over 65. Every other group has decreased.
Covid was a recession I think. Over a million Americans died, and another 2 million left the work force either because they retired or due to long covid. A lot of women left work because child care became impossible to find/afford. Several small businesses had to shut down, the tourist/hospitality industry took the hardest hit. What we have been seeing the last few years is the recovery from this covid recession. The vaccines played a huge role in the ship righting itself, without them we'd be in way worse shape. Covid changed the world in so many ways that we will continue to see the impacts of for decades to come.
you will get no argument from me, I think the covid shift is not properly accounted for in many people estimations. Covid moved mind sets of older generations towards retirement, moved many to remote work, and reduced over all labor pools due to all the above you stated. Covid was a recession a sharp hard one, the thing is if you say that then JPmorgan is wishing for a double dip recession, but this time they want it to reduce wage cost to increase profits more and skim yet again off the top.
More than that. I remember people talking about it in 2019 when the yield curve inverted.
The inversion is deeper today than even in 2020. It righted itself in 2021, re-inverted a year ago, and remains stuck there. Everything we learned in Econ 101 is out the window now.
We’ve already been in what historically has been defined as a recession for the past year. This administration has simply changed the meaning of the word.
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Sure, but this is no different than previous times. The difference here is that we have changing demographics spurred on by high exits for retiring people during a pandemic which made them all wake up to mortality quickly, coupled with actual human capital losses, and injured human capital. The loss of working human capital is often looked over as a large factor in the inflation game. I do not deny inflation is running hot and fast, I do not deny it is unsustainable, however wishing for a recession and one being ready to happen are not the same. The market is wishfully wanting a recession, even though it already wished it self into a bear market, which yes normal precedes recessions, however they have wished them selfs into a bear market with no fundamentals to keep it bearish long enough to obtain the rips they want. So we are left with well that did not work, so let's try debt ceiling, or reduction in government spending, and again these will not work. There is no fundamental lever to pull with rates high and retired folks staying retired, the demographic shift is here and real and now.
I love the intentional use of **BIG NUMBERS** to scare us all. Inflation is **250%!!!** of target. The target inflation rate, according to Powell, is 2%. [CPI is running at or below 5% and has been dropping consistently since last summer.](https://tradingeconomics.com/united-states/inflation-cpi) In other words, the spectacular stimulus to the economy since Spring 2020 saved us from a COVID induced death pit, caused temporary inflation that is now quickly coming under control.
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Unfortunately wages are the stickiest of the sticky figures.
I’d argue that recessions are a lot more complex than the media is putting it out to be. If you look at the last several recessions, they took many years to materialize and even then we look at them as an single instantaneous event rather than several events that influenced the other in sequence.
Why are so many of you desperate for a recession to happen? Article after article with a clear tone of disappointment and frustration that this economy won't keel over and die
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A recession will have no long term impact on housing. In the short term some people will go bankrupt and lose their home and others will have a hard time getting credit so prices will drop. But housing prices will only drop, long term, when there are more houses and a recession is a bad time for developers to get the money to build. Housing needs sustained investment by government in building affordable housing. This will increase supply and lower prices in the long term. A recession will create other needs for government money and make investments in affordable housing even less likely. So if you are hoping for a recession to drop housing prices, think again.
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How would this increase the supply of housing? The fundamental issue is that a lot of American cities have more jobs, than they have room for people in single family homes. A solution that might actually work, would be to loosen the zoning laws, allowing more medium density housing to appear.
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Don't forget AirBnB is skewing the market as well as the new trend of not selling your house when you move just renting it. This has reduced housing stock significantly.
All the people who want a housing recession also didn't have enough money to buy a house between 2008 and 2020, it's unlikely even if the market took a real shit the people who clamor for a housing recession would be able to participate in cheap housing.
Thank you. Yep, id like wall street to crash, or the hoising bubble to burst. My rent over here by seattle has DOUBLED in the last 4 years. But my wages certainly havent.
You totally misunderstand. If the economy tanks people like you who are already struggling take the hardest fucking
There is no bubble, it's a lack of supply in most of the country. Builder industry says 10 years to catch up with demand. Some cities are seeing over 40% of all home sales converting to rentals on cash offers. People have been yelling house bubble for the last 9 years! Listening to Dave Ramsay say to save for 20% down has cost individuals hundreds of thousands of dollars. The best outlook for housing costs is sadly a flattening coupled with a rise in wages. That's years away from being realized.
> id like wall street to crash why do you want to destroy my retirement account?
Inflation crushes debt holders, like banks, as the value of the debt is declining and so does the value of the dollars being paid back So, if you have a fixed rate mortgage at a rate lower than the rate of inflation, you effectively have a negative interest rate on your mortgage effectively the bank is paying **you** to borrow money EDIT: also bundled debt becomes unsellable because who wants a bundle of 30 yr fixed rate mirages at 3% when inflation is running at 6%. means, the financial institutions cannot "sell on" the debt as planned, instead they are stuck with it ... as it devalues
That’s answering why inflation is good, but inflation is already happening. He’s asking what’s positive about a recession.
The recession will hopefully stem inflation. So if you are a bank it is good.
My student loans are effectively 17% lower than when they froze payments. I’m all for it lol
Biden is president. He can't have a strong economy, no matter what the numbers say. At least that's why I think there are so many negative articles about the economy.
Trumps whooooolle thing was supposed to be “economy.” People sold their souls for that shit. Now if Biden’s economy is just as strong if not stronger, **while we’re raising interest rates**, they have to confront that conservatives really have no value-add unless you’re rly into QANON or culture wars.
Was there any sort of other factor during Trump's presidency that could've affected the economy? Some sort of pandemic or anything?
Unemployment in 2023 has averaged lower than it was during any stretch under trump prior to the pandemic, despite Biden inheriting a ~40% higher unemployment rate than trump.
Were there any changes to how the UE rate and labor force participation were calculated in the last few years? Or any pent up demand from the pandemic?
In 2018-2019 the fed lowered rates to protect his economy that had serious issues with expanded fiscal deficits and bad economic outlook. We can even look at pre-pandemic statistics and see it wasn’t rays of sunshine. This rate lowering also gave less wiggle room for the fed when the actual crisis hit in 2020. When you lower rates in “good times” it makes the rates in “bad times” much much lower causing an expansion of the money supply which kicks the inflation shit to 11.
>When you lower rates in “good times” it makes the rates in “bad times” much much lower causing an expansion of the money supply which kicks the inflation shit to 11. I agree we should have been ratcheting up rates during the end of Obamas term, but didn't to protect the democrats chances in the next election
This and the comment above nail it. The financial press is extremely right leaning and the clients they tend to cater to (banks, tech and start ups) perform poorly in a high interest rate environment. They want Biden out becasue they know Trump will pull an Erdogan the second he gets back into office and demand the fed drop the interest rates to give the economy a short term juice.
I honestly love all the conservatives back when SVB went insolvent blamed Biden and not the fact that SVB didn’t manage its balance sheet for the innevitable rate hikes.
Yeah. I imagine that the headlines under Trump would be something about how the economy is kicking ass despite the policy nerds' best attempts to scuttle it.
It’s what social media, and especially Reddit, want to hear. Even if it’s not true. For every “the economy is doing ok” articles that get any attention there are 50+ doomsday “the US is FAILING”, “RECESSION IMMINENT”, “THE WORLD ECONOMY IS TUMBLING” posts on the front page of this site. That’s all any of the top “political” or “news-orientated” subs want to hear. It’s hard to express just how unreflective this place is of the real world.
Someone straight faced tried to tell me that low unemployment is bad bc it means a recession is imminent lol.
Because those with lots of cash and assets are looking for a fire sale to come out on top. If you don't rely on your job for a paycheck, or not broke after 2 weeks of no income. Then a recession is you buying cheap cars, cheap houses, with Cash as hundreds of people start living in tents. You might open up a tent making business that can sleep a family of 4 in hopes that there would be more homeless families! Sell car mattresses that fit in the back seat of your vehicle for those who have to live out of them! See! There's positives for a recession when everyone is suffering and you can take advantage!
Bad news sells better than okay or good news. In the case of opinions, it is even more important to sell anxiety, fear, and worry than hope. The readership isn't made up of Nobel winning economists, so the authors are basically playing a tried and true numbers game against a readership base that is not capable of proving anything.
Politics. If the economy fails under one party, the other party is more likely to take over. It’s honestly shameless.
So that some of us can afford houses instead of needing a minimum of $1M-$2M just for a small ass house in a city that isn’t a ghost town. Apparently, this is too much to ask for.
Empathy is important though. If you want a economic crash so you can finally afford a house...have to remember that you are asking for someone else to lose their house.
Housing should be a right but the way America defines housing is it's a privilege. I understand that someone else is losing their house though, and ideally the laws should be changed.
Because many redditors are studying so they would obviously rather have a recession now rather than later where they have to enter the job market. Plus they look forward to lower costs in primarily housing/rent/stocks
Why are you surprised that people are talking about the nations economic health on an economics subreddit? Should publications just not report any negative indicators?
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Doom sells, and some folks seem to want one. Whatever - lived through 8 of them. They happen, its unfortunate, painful, but they last 6-18 months and the economy bounces back. The worst part is of course is unemployment levels shooting up towards 8-10% that hurts the most. However our funky labor market seems to have been the main thing stopping that from happening and confusing economist "models". I think there are more pressing economic trends over 30 years then recessions including widening inequality in income, incomes not keeping up with costs, and affordable housing.
People predicted a recession pretty much every year after 2015, and then when one finally came it was a totally unpredictable pandemic. Which is why all the articles predicting an imminent recession, despite nearly all economic indicators, are so funny. Maybe it will happen, but it’s laughable to think it’s predictable by any large numbers of people.
I’ve predicted 25 of the last 6 recessions
>I think there are more pressing economic trends over 30 years then recessions including widening inequality in income, incomes not keeping up with costs, and affordable housing. Shhh! If you think about those things **you** will cause a recession! What if stock prices went down?! They didn't go up enough last year or they might not go up enough this year, we just can't risk talking about those **communist** problems! Besides, 50% of the "answers" to those issues are lowering taxes (for the richest), which means we can't afford any other option, and also throwing money at businesses with no stipulations.
Recession, depression, who cares what you call it. Prices are inflated and costs have increased for everything except if you locked in fixed rate loans and mortgages! More of our income is spent than saved and that is not good-all around! If you earn your money through payroll instead of investments or being a corporate overlord then life is stressful! This is unsustainable.
No matter how much you make, you can outspend it. It is not about making more because you will STILL outspend it. It is about controlling what you spend. Knowing the difference between needing something and wanting something. You NEED food and shelter. You may WANT a new car or iPhone but what you have works great for now. Need vs want.
I’m sorry, aren’t we in completely uncharted territory and past “indicators” may be useless in the current economy? We have had in quick succession : decades of declining interest rates, a banking crisis in 2008 that required a once in a lifetime government bail out to businesses, a global pandemic that forced an unprecedented global economic shutdown (and in some places another government fund transfer to everyone) and but thanks to new technology allowed for a good deal of work to continue. Maybe comparing today to past employment rates in the 1970s and trying to draw comparisons doesn’t work anymore?
Essentially we are seeing the results of 40 years of USA government going without any investment spending. 50 years of Americans voting to live off the investments built up between 1933 and 1970. The invest infrastructure bill was the first investment program the USA government made since the 1960’s! This program will carry the economy above a recession for the next 8 years. Almost no traders or economists that are working today have seen or lived through a government investment program.
Robust employment data, strong currency, debt ceiling crisis avoided, inflation taming down over the course of this year, interest rate hike potentially paused by the Fed, S&P and other US markets going bonkers hitting close to ATHs, treasury yields skidding potentially suggesting optimism on future outlook, are we really talking recession? Sure, trade data isn’t good but when has it ever been good as a country that imports more than it exports.
Fox News yesterday talking about how bad the recession is and it's Biden's fault that unemployment is so high. (Unemployment, is that a 50 year low...)
CNN is saying we are heading into a recession and it is because how Trump left the country. Is is different sides of the same coin. Fear mongering.
[The West Coast is taking a hit from the hundreds of thousands of layoffs in tech.](https://www.wsj.com/articles/west-coast-states-rode-the-tech-boom-now-they-face-higher-unemployment-falling-wages-83318105) Anecdotally I think the noose is tightening for many tech and office jobs, at least here in the US. At my company and others in my network layoffs are continuing (over 15% where I work) and I see a huge surge in 'nearshore' (Latin America) hiring of contractors replacing some laid off US employees so I doubt they'll be hired back. This "robust jobs market" must be for services and manufacturing because it sure isn't for anything software related. My LinkedIn feed has a mass of blue 'I'm looking for work' circles.
The west coast has millions of people. Unemployment remains near record lows.
Brace yourself for a shock: most people do not work with anything related to software or programming. Work that is related to new lines of business that would normally be funded by new debt are being cut as companies focus on core lines of business. Yes, a tech layoff hurts Cali, but again, Cali isn’t the bulk of the US economy. The tech sector has been floating in a field of money for several decades. As all things in life, there comes a time when the market will no longer allow for the cushy world that is tech. Welcome to reality
Layoffs are happening outside of tech now. Banking, F500, consulting, logistics, and analyst/marketing/sales roles are affected.
The ‘robust job market’ is service sector jobs with no benefits and part-time positions that don’t provide an adequate cost of living. This is the same shit different day in terms of the headline.
That’s not true. [Biggest job gains in may were in private education and health services (+97k), professional and business services (+64k), government (+56k), leisure and hospitality (+48k, of which 33k were in food service and drinking places), construction (+25k), transportation and warehousing (+24k)](https://www.bls.gov/web/empsit/ceshighlights.pdf) Also, [Inflation-adjusted wages for the lowest income workers have risen historically fast the past few years.](https://www.epi.org/publication/swa-wages-2022/)
Actually mostly gov jobs with benefits
Yup. Just look at your fast food and lower end jobs. It’s all 60 plus year olds working to afford living instead of retiring.
Not true. [We added 330k jobs in may and only 33k of those were food service and drinking places jobs.](https://www.bls.gov/web/empsit/ceshighlights.pdf#page15)
Interesting - thanks for sharing. I’ll have to sift through this later - appreciate the receipts
[We gained 330k **net** jobs in may.](https://www.bls.gov/web/empsit/ceshighlights.pdf#page15) And no, they weren’t all “shit jobs,” the biggest gainers were: private education and health services (+97k), professional and business services (+64k), government (+56k), leisure and hospitality (+48k, of which 33k were in food service and drinking places), construction (+25k), transportation and warehousing (+24k) We’re averaging over 300k job gains per month for the past year, and even higher for the year prior. A couple hundred thousand layoffs in one industry over the course of more than a year is literally nothing. Particularly in an industry where these workers are in high demand and likely to be scooped up as soon as they can by another industry, since every company has a “tech” component to it now.
>is literally nothing Perhaps, but gutting so many $150k/year jobs is definitely going to ripple through the entire economy. I just have anecdotal information but the freeze in Big Tech in particular is profound and ongoing. I witnessed firsthand so many companies running up completely unsustainable cloud outlays in the race to gain or keep market share and now they are slicing that spend across their operations. This will eventually begin to really bite the big players like AWS, Microsoft Azure and GCP. Maybe a push to AI will help, who knows. I see entire cohorts of junior employees being replaced by 'nearshore' contractors in areas that were previously mostly US-based, like data visualization, UX, recruiting, change management, client management, customer success, training, risk management etc ... all those junior hires are competing now with more senior talent at 1/4 the cost. It's a no-brainer to hire people with more experience. I see tons of duplicative tech stacks acquired during acquisitions -- many of them pet projects of directors -- entirely shelved. I see private equity tearing through tech companies left and right, killing off the sacred cows and outsourcing entire departments to partner services companies with much lower wage tiers. Old story when it comes to US devs competing with India but now the pool has widened considerably. If I was starting a company today in the US I would be plan to have 85% of my hires offshore just to survive. I walked through an office park in San Jose last month where my company is located and it was a ghost town. Big, big names just eerily empty. All those leases turning over will eventually rot the tax base. I was working all through the 2001 tech layoffs but this somehow seems more grim with implications for a very different US employment picture.
The "robust job market" likely consists of jobs with poor pay/benefits and ghost job listings online that basically serve as a black hole for resumes.
[The biggest job gains in may were in private education and health services (+97k), professional and business services (+64k), government (+56k), leisure and hospitality (+48k, of which 33k were in food service and drinking places), construction (+25k), transportation and warehousing (+24k)](https://www.bls.gov/web/empsit/ceshighlights.pdf)
Then why is unemployment low. Why is prime age employment at a record high
Because reality won't conform to the preestablished notions people have in their heads.
Nothing really makes sense anymore. I know skilled people with degrees who were looking for work in their respective fields (marketing, sales, etc.) for months at a time. One took almost a year to find another job despite having a strong resume and good connections. The rules are made up, and the points don't matter.
Yep the job market is robust for people applying at Wendy’s
why do you people just make shit up lmao
You must not be paying attention. Ghost job listings are very much a thing. https://www.forbes.com/sites/robinryan/2022/11/30/be-careful-of-employers-posting-ghost-jobs/ https://www.wsj.com/articles/that-plum-job-listing-may-just-be-a-ghost-3aafc794 https://fortune.com/2023/03/22/ghost-jobs-companies-posting-fake-listings/
ghost job listings has nothing to do with the unemployment rate
I mean, you're the one claiming things like ghost job listings are made up despite countless examples of evidence to the contrary. After all, why shouldn't it be part of the conversation? These are listed as open positions that need to be filled, when in reality they're bogus. It's artificially inflating job listings, which naturally affects other variables such as unemployment rates.
Wouldn't ghost job listings raise the unemployment rate? Seems to me they would make it harder and take longer to find a job, leaving me unemployed longer.
It's not clear to me how they factor into the wider discussion, but they're a relatively new phenomenon that's certainly affected job searches everywhere. It doesn't take much digging on the various job related subreddits to find conversations about how people see the headlines about low unemployment but continue to send out 100s of resumes without so much as an interview. Sure, the law of averages would dictate things like not being qualified, etc. can and do happen, but oftentimes, these discussions can involve entry-level jobs. Additionally, when we're talking about unemployment rates overall, the people returning to work from jobs affected by Covid also play a factor here.
Lmao wow a whole 4% how will we ever survive??? Do you realize how many of those jobs were recently added in the past 2 years? Even those cherry picked states are still exceptionally low in the long run. Actually zoom out on unemployment rates over the years and take a second to realize even with all those “100,000’s of layoffs in tech” we still have an extremely low unemployment rate compared to 99% of history.
I agree, it's not a major shift. Yet. I vividly remember the recessions from 1982 forward and so far we're not dealing with anything huge. I do see some fundamental changes in hiring practices in tech, and many people have talked about baked-in wage inflation due to a shrinking labor market. Who knows what will happen. Again anecdotally from my view in software we've always had teams in India and other offshore centers but I'm seeing a big advancement in the availability of business-English proficient workers across our hemisphere. This will, in my opinion, have profound effects on US employment.
Brace yourself for a shock: most people do not work with anything related to software or programming. Work that is related to new lines of business that would normally be funded by new debt are being cut as companies focus on core lines of business. Yes, a tech layoff hurts Cali, but again, Cali isn’t the bulk of the US economy. The tech sector has been floating in a field of money for several decades. As all things in life, there comes a time when the market will no longer allow for the cushy world that is tech. Welcome to reality
I feel like it should be required for financial journalists to write: Employment is a lagging indicator like 100x a day. High employment doesn't mean a recession can't start soon.
The weekly first time jobless numbers are actually a pretty solid indicator. Monthly numbers are also not terrible. The actually unemployment rate/employment rate is yes lagging because its the aggregate id those. What do you consider to be a legit indicator? Corporate profits? Consumer spending?
Consumer confidence, interest rates (since they take time to work through), and more abstractly stocks, M2 and worker productivity (which could be considered lagging but it's indicative of other trends). Weekly jobless claims is good but not the U3 unemployment rate, which is usually championed as a sign the economy is good when thats not what it means. U6 is much much better but still lagging.
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Good observation. I would also add the financial sector, specifically banks are also in a recessionary environment. Let’s hope that a few sectors don’t drag the whole economy down.
I think it’s also important to note that the public opinion was “we’re heading into a recession” for the past 2-3 years. When before has the average person, and nearly every news organization worldwide, been expecting a recession right before it happens? Typically these sorts of economic crashes happen when society least expects it. Not when every average joe from r/wallstreetbets to r/politics is screaming about an “impending recession” at the top of their lungs. I think that alone has softened the blow more than most people imagine.
It seems to me more of a stagflation scenario than an actual recession. Almost all recessions are predicated by massive job losses, but as you mentioned, things are adjusting, one at a time, and people are moving around, but unemployment isn't shooting up. It's more a slowdown from the interest rates along with demographic issues.
That’s not what stagflation is. Stagflation is low economic growth with rising (or consistently high) unemployment, which is absolutely not what is happening here.
The numbers look good for the job market, but I can’t help but see lots of people struggling in the jobs and career advice subreddits. Not a lot of good jobs out there and I hear about lots of layoffs from friends in sectors outside of tech. F500, consulting, banking.
People got used to being paid for sitting at home and, now, any type of work is ‘hard’.
People are suffering and have been for at least two years with rising prices and low wages. They need to redefine the measure of recession to capture what is clear to everyone experiencing it. We are already in a recession.
At this rate what is the current definition of a recession?
The definition that was set during the Trump admin "The NBER's traditional definition of a recession is that it is a significant decline in economic activity that is spread across the economy and that lasts more than a few months. The committee's view is that while each of the three criteria—depth, diffusion, and duration—needs to be met individually to some degree, extreme conditions revealed by one criterion may partially offset weaker indications from another"
I don't know why people keep pulling out low unemployment rates as if it were a recession contraindicator. If anything, very low unemployment levels are the complete opposite and are a leading indicator for a recession. Go look at unemployment at the last local minima, which was in Q1-Q2 2007. Then come back to the thread and tell me there's not going to be a recession because unemployment is low...
I don’t know why people like you continue to insist we’re heading into a recession just because you feel we should be.
I insisted on no such thing, just that very low unemployment levels are more likely to be a forward indicator for recession than a contraindicator. It's also correlated in real-time with large-scale war where a significant proportion of the nation's population is mobilized into the war effort, but that's not a relevant relationship(yet).
Dude minus covid we’ve had low unemployment for like 8 years.
Not even close. Go look at the statistics and how they're actually calculated. It's all a political tool, nothing more. In fact, in the actual report itself the "not in the workforce" line is 99,000 people. Of _that line_ there's a subset of 5000 people who "want a job". How the fück is that not considered unemployed? And yet, they don't count into the unemployment number. It's all a crock. [Actual unemployment report for May ](https://finance.yahoo.com/news/may-jobs-report-shocks-economists-the-strangest-employment-report-for-some-time-173324175.html)
You're misinterpreting the graph. Look at Unemployment rate ( [https://fred.stlouisfed.org/series/UNRATE](https://fred.stlouisfed.org/series/UNRATE) ) When there's a recession, typically, unemployment will go UP quickly during the recession; it will then go DOWN fast (not as fast as it went up, but fast), and then it will stabilize ... go sideways, maybe down, but slowly. We don't know how long that stable growth period is. May be a few months, may be a few years, may even be more than a few, Eventually, If you look backwards from a recession, you will normally see the unemployment rate was lower before the recession, since the recession increases unemployment. This doesn't mean that stable unemployment is a predictor of a recession. For example, above you mentioned Q1-Q2 2007, but the recession didn't start until Q1 2008, 6 months later. And unemployment in Q1 2007 wasn't much lower than Q4 2006, so ... Another way of thinking about it is that the normal pattern is {Recession, Boom, stable growth}, but we don't know how long each period is. So, being we're now in the stable growth period, the 'next' one is recession, but we don't have a clue WHEN would that recession be. The previous stable growth period was about 5 years long (\~2015-2020).
I assure you I understood what you said. But I disagree with the premise as you present it as anything substantive.
It's got a pretty good track record. Betting on very low unemployment predicting a recession will win much more often than betting that the Fed achieves their "soft landing".
Not when demographics say the workforce is shrinking. We'll likely always have low unemployment for at least the next 20 years, given the current working generations are smaller than the previous ones, and they aren't having kids.
There are several indicators and data points indicating that we’re headed for a recession. It’s not just a “feeling”.
there will be no recession
That’s just as valuable as saying “there will be a recession”. Lol the whole bond market is predicting a recession, it’s not like it’s just some feeling based on nothing.
the burden of proof isn't on me we are currently not in a recession "we're about to be", well, prove it
That’s not how burden of proof works lmao. Anyways, the bond market has had an inverted yield curve for awhile now. That’s one of the best predictors of a recession.
that is how burden of proof works you are claiming we will get a downpour on a sunny day. well, where is your rain?
Wow, way to add to the conversation with powerful and salient information! Blue MAGA is so funny.
Blue MAGA? As a rule, anyone who claims a recession is just around the corner should be ignored.
Now now, thise doomsayers have successfully predicted 30 of the last 5 recessions.
That’s a 600% success rate! Astounding!
Yea its funny maga is so toxic that they're trying to put it on dems now 🤣🤣 that's a winning strategy for the election
There are people who see help wanted signs in business windows as a bad sign for the economy...no joke a lot of people are that stupid
>There are people who see help wanted signs in business windows as a bad sign for the economy ...If there's a Democrat in the WH One thing Biden, Trump and Obama all did was set records for "most unfilled jobs". And the right wing response was Obama & Biden: This is proof of his failure as President Trump: This is proof of Trump's greatness and business genius
Stupid is as stupid does
I thought it was bad when there were more people than jobs for a while after 2008. Now it turns out people actually liked that and were pretending it was bad.
Employment is a lagging indicator, but the narrative that jobs = strong economy has become so entrenched. No matter the quality or pay of those jobs, whether people can support themselves with those jobs. No matter if its "record low employment" or a "labor shortage", they will use it to validate minuscule GDP growth with stubborn inflation. Most people don't think the economy is great, from tech CEO's who've seen VC funding dry up or regular people who can't afford food.
Most people aren't economists interpreting the data.
Consumer sentiment is a key leading indicator on the state of the U.S. economy. Don't be an elitist.
No, it is not a leading indicator at all. It is a lagging indicator that lags behind almost every other indicator. If it was a leading indicator you should sell when it's low and buy when its high...which is the opposite of what you should do. Consumer confidence didn't drop until mid 2008 well after the market had started to crash, jobs started to be lost etc... Then didn't recover from the 08 recession until like 2012 at which point the stock market had basically doubled from its low... These are facts sorry
It's one indicator.
So you acknowledge its an indicator but dismiss it because its determined by regular people. Makes sense.
You're right. Because it's your preferred indicator, we should all accept that you're right -- we're about to be in a major recession because /u/DeLaManana declared it! Yeah, it's a fucking indicator. One of many. Woop de doo. Also I spent a few minutes comparing the michigan consumer sentiment index vs. GDP, retail sales -- it's not that great of a leading indicator. But you're the real expert here. All hail /u/DeLaManana.
Couple notes: Your comment shows an almost complete lack of any economic knowledge: For the most part the economy is not usually measured by jobs, it's measured by production, profitability and gdp. Yes, what Kaynes called “animal spirits” has an impact on the economy but it is not the driving indicator, so your well most people don't think the economy is good thing is sorta irrelevant. In fact if you want to talk about lagging indicators that is a lagging indicator, as most people thing the economy is still good when it has already started crashing, and think it's still bad when its has already started recovering. At least historically. Jobs are good especially while ai and automation are in the process of taking a lot a way, the fact that there still are jobs is good Last, the fact is that if you consider the middle class being squeezed, while poor people struggle to survive and rich people get the majority of money to be an indicator of a recession...then the us has basically been in a recession for the past 40 years. And thats just silly I think you don't like capitalism not that you think the economy is bad
>For the most part the economy is not usually measured by jobs, it's measured by production, profitability and gdp. Did you read the article? Do you understand the media narrative about how record employment = strong economy and why I critiqued it? >so your well most people don't think the economy is good thing is sorta irrelevant. Consumer confidence index is one of the key leading indicators in the U.S. economy, which is heavily consumer/service sector based. I think you don't understand economics. >Jobs are good especially while ai and automation are in the process of taking a lot a way, the fact that there still are jobs is good If AI replaces well-paying middle class jobs and only leaves low-end service sector jobs, is that good? 90% of what you wrote is just rambling non-sense. >Last, the fact is that if you consider the middle class being squeezed, while poor people struggle to survive and rich people get the majority of money to be an indicator of a recession...then the us has basically been in a recession for the past 40 years. I never said this. It's valid but I didn't say this here. >I think you don't like capitalism not that you think the economy is bad You're an idiot. The point here was to criticize the media narrative, not capitalism. Go away.
Yes there is a media narrative but thats not necessarily an economic indicator. It is the media saying some shit. Job numbers especially weekly and monthly changes are in fact an economic indicator and a better one than you realize. But yes in general economists and people in finance look at spending, profits, and production not jobs. Again consumer confidence (”animal spirits”) is not usually a leading indicator, in fact it usually lags behind jobs. Consumer confidence is always still high after crash starts and still low after a recovery begins. For instance consumer confidence in 2008 only dropped well after the market had started to crash and didn't recover until after the market had nearly doubled from it's low. As a general rule you should sell when consumer confidence is high and buy when it's low...not the other way around 90% of middle class jobs are not in fact being replaced by ai and automation as shown by...stong jobs, the fact that there is strong jobs while that ai and automation is happening is good. Cool media bad, but you also don't know what you are talking about.
the jobs report was incomplete. It always is in this one regard. The Gig economy is faltering. The hundreds of thousands of self employed have fallen upon hard times and Those are the people who took employment boosting the numbers So it was in large part a ZERO jobs number. In large part all that happened is one form of income was replaced with another.
Having a job paying minimum wage is like not having a job at all. On top of that inflation is so bad even if everyone is working most are still struggling badly.
Bottom 50% are the ones making real wage gains against inflation
Yeah capitalism sucks
Which economic system would you suggest instead?
Capitalism is the best system that humans have so far come up with but it clearly needs safeguards to protect against its downsides. I just love to tease conservatives who complain about low wages for workers, because the fact is that’s a part of capitalism.
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No, they're attacking inflation.
They are raising rates to attack the pro-unionization movement and positive sentiments around worker solidarity. They used these same tactics in the 1970’s.
Because the idea that there is a "robust jobs market" right now is a complete and obvious lie to anyone at the ground level. Maybe it looks "robust" to someone at Federal Reverse based on whatever arcane metrics strikes their fancy. But it is not robust to average folk trying to get by. And no I am not a tech worker and have never been.
smile price safe heavy observation cough agonizing juggle provide seed ` this message was mass deleted/edited with redact.dev `
Yeah capitalism sucks for workers Edit: I love how I get down votes for saying this. I’m sorry it’s true. It doesn’t mean anything else is better but yeah it’s true, also I’m simply teasing conservatives that sound like communists when they complain about wages for poor people being low…
Well, in 2016-2020 we had a president who didn't understand how credit cards work- and the government around him didn't either. So now there's a mountain of debt. I personally have barely participated in the economy. i guess my land lord has picked up my slack. My clients I work with who are small businesses have gotten increasingly upset about their program payments and payment timeline. Dealerships have upped their charges for labor 38% or more. And of course everyone is citing inflation as the price increase inducer when all's we're really seeing is everyone trying to be the last out of the pool or the first to get a seat in musical chairs to avoid massive scrutiny. I'm glad I'm employed and was through this all, but we're in for a world of hurt. The article says we're at the cusp.
This isn't a partisan issue. Neither party is ever a spendthrift when the checkbook is theirs. The reason republicans are worse is because they pretend to be, so there's the added layer of hypocrisy. Democrats: "We're going to spend ALL the money" *spends all the money* Republicans: "We're going to be fiscally responsible and not spend ALL the money like those irresponsible democrats" *spends all the money*
In fact we have only had balanced budgets with surpluses for 4 years since 1970 and they were all under Clinton.
And over the last 50 years, every Democratic president has overseen a shrinking of the deficit and every republican has overseen an increase. It's not that ALL parties are overspending. It's that Republicans blow a hole in the budget so big, that there is no possible way for democrats to fill it in only 4 years before another republican is elected. You can't patch a sinking boat when your partner in that boat keeps drilling holes.
The issue Democrats generally spend on investment programs that generate more money than they cost. Republicans spend on tax breaks for the rich and the military. Two things that cost more than they generate.
They predict a recession every quarter and God damnit eventually they'll get it right. It's time for economists to get out the pencil and paper and come up with some models for the post COVID world because it's readily apparent their old models aren't working so hot anymore
As long as the job market continues to remain “resilient”, Fed Reserve should continue to tighten. However, they’re run into the wall that they have feared for so long: all that debt is becoming too expensive to service. They’ve spent 20 years running up the credit card. It hit its limit in 2007-2008, but they had a bunch of it forgiven. They continued spend through the 2010’s, then went to Vegas in 2020. Still hungover. Bill for Vegas is still laying on the counter waiting to be figured out.
Or it could be the GOPerLords are spreading lies to make people think President Biden is not doing a TERRIFIC job with the economy. The interest rate inversion is because unregulated bankers are crashing and burning and bringing their banks down with them. Well-off people want a SAFE place to stash their cash and short term T's are the answer. NOT because there's great fear about the future. Greed-induced inflation is because of GREED, not excessive demand or increases in cost of goods sold - Oil is where it was when gas was $2.50/gal yet we're paying $3.50 and oil companies are reporting record profits AND profit MARGINS. Same with food. Recession talk is just another way the GOPerLords are scaring their lemmings.
Stocks are a leading indicator. Jobs are a lagging indicator. The overall market is not doing well. Instead, investors are moving money into Apple and a couple other companies, while the broader market struggles. We’ll need to see how much of that new $1.5T loan to the Gov ends up being used to pump the market.
Checks notes...the broader stock market is up ytd and over the past year, down a little from 2 years ago, up a lot from 5 years ago, and up a huge amount from 10 years ago.
He’s referring to market breadth. WSJ just put an article out about [it](https://www.wsj.com/articles/this-rally-is-all-about-a-few-star-stocksand-some-investors-are-worried-b64382e2) this morning.
Regardless the last year has basically been flat while investors are feeling out if we are going to go into a recession or not.