Posting this as its own top level comment for better visibility:
Look at how (relatively) low it was in September 2007. One can assume in February it was even lower - and February is when Greenspan said a recession was obviously coming. The subprime mortgage crisis started in April 2007. But the job market didn't really get fucked until 2008. There's a delay with these types of things - I personally predict that a year from now, a lot of companies (especially ones in the tech sector fueled by immense amounts of cheap debt and the assumption ad revenue always goes up) will collapse. That's when you see the spike in unemployment, not now.
Because the ad-fueled tech sector companies are driving employment? And which of these companies are fueled by immense amounts of debt (traditionally a mainstay of capital intensive industries, which tech is not).
I don't know, your comment makes little sense to me. I encourage others to read what Greenspan actually said if they are under the impression that he predicted the 2008 recession.
Asset prices are inversely correlated to interest rates, so companies can raise more capital by selling shares when rates are low than when they’re high.
People may read causality into your comment that you didn't imply. That the number of unemployed persons per job opening is so low is a very strong "boom" signal. Busts inevitably follow booms, but booms don't cause busts. Something else is the trigger. Subprime mortgage crisis in 2007, the rate tightening caused by inflation in 2022, etc.
I argue that the US fed rate is going to have to get a lot higher than 4% to cause this boom to bust in the US. That's an exercise in fed tea leaf reading. The last fed guidance was a lot more ambiguous than previous tightenings this year.
And now is when we find out who didn't learn from the subprime lesson. The UK had the gilt crash, but so far no cascade crisis has appeared with the tightening interest rates in the US. Given that the rates today are about the same as what they were in 2019, I don't expect any cascade crisis unless rates rise significantly higher.
Even then, in the U.S. less than 5% of mortgages are variable rate loans:
"The percentage of adjustable-rate mortgages to total loans shrank from a high of roughly 34% in 2005 to a low of under 5% in 2022. The decline began when the housing market peaked around 2006 and bottomed in 2009 at around 2.5%."
Everyone is always fighting the last war. The real estate market may slow down here, maybe even prices decline in either real or nominal terms, but I don't think real estate is where the biggest risks lay, at least in the domestic US real estate market (can't say anything for China or AUS or other markets that seem primed for a dramatic bust).
I'm far more concerned about sovereign debt levels, which have absolutely ballooned over the past decade, and are even accelerating in growth in many cases.
Real estate is, unironically different this time. A key component in this run up vs the last is, last time rents did not increase nearly as much as home prices. In 2005-2006 I was paying $2200/mo to rent a house worth $1 million. And no, it wasn't rent controlled.
That rent prices haven't massively dislocated from housing prices makes me think it's not the same situation.
> I personally predict that a year from now, a lot of companies (especially ones in the tech sector fueled by immense amounts of cheap debt and the assumption ad revenue always goes up) will collapse.
I think this will unfold quicker than that. We’ve had artificially low interest rates (+ QE) for over a decade now. There’s lots and lots of economic activity that will not be profitable when rates go up. If we’ll have ~5% rates in February (as Powell indicates) then I think we’ll see massive deterioration in the labor market before summer.
"We’ve had artificially low interest rates (+ QE) for over a decade now."
No, you misunderstand the situation. We had artificially high interest rates for at least the period from late 2008 to about 2014 -- if we assume the Taylor Rule is "the natural rate", as Taylor originally defined it in 1993, as the rate that allows the maximum possible employment balanced with just 2% inflation. For most of the period 2008-2014, that would have implied a rate of negative 5% interest, but banks cannot go much below 0%, so they were up against the zero lower bound, and so the rate was artificially high -- it was stuck at 0% when the economy needed it to fall to negative 5%, so as the restore what maximum employment could be achieved against the limit of 2% inflation.
My wording was unfortunate. “Extremely low interest rates” would have been better.
But all this is a bit beside the point as I see it. If you run the economy on negative real interest rates for an extended period of time you will see seemingly profitable economic activity that in fact destroys economic value (but does so slower than the negative real interest rate). When rates go up such activities will reveal themselves as unprofitable.
Is the market setting the rates when the Fed has them bottomed out? Kind of hard to tell when the banks are essentially able to create free money at the discount window. I imagine interest rates would be much, much higher than we are used to if they relied on raw savings. Things would be very different for sure, and we most likely would not be able to maintain enough growth to match population growth. That would mean widescale creeping poverty. Maybe not, seems like all we know is a strong dollar cheap fiat orgy, and it has been quite nice.
Given that these are both human constructs, I don't know what makes one more artificial than the other.
Given that one would likely lead to awful financial contractions and instability... and the other doesn't, seems like there is a preferred option - artificiality aside.
And massive political pressure on the Fed, again. During the trump years they seemed to buckle under the pressure. With social media and our current political atmosphere I don't see this continuing if people start feeling the pain through job losses. I certainly won't stand for it.
Frankly, I'm tired of the interest rate hammer falling on workers. I find it especially unacceptable when the Fed is jacking rates to reign in wild corporate spending and investor speculation.
Again, everyone has been begging congress for better tools but they choose inaction until the Fed is forced to use the one tool they have.
I see this round as the Fed quickly trying to get things under control when they have safe harbor with Biden. Given a Trump/Republican administration again I expect the gloves to come off when they demand cheap debt for the investor class under the guise of helping workers. Magically, the Republicans know how to fix the economy (until it explodes and it's Binden's fault), or so goes the trope.
>President Donald Trump said Saturday he had the power to fire or demote Federal Reserve Chairman Jerome Powell, adding new fuel to his long-running animus toward the central bank’s leader at a moment when the economy was at risk of edging into recession.
>“I have the right to do that or the right to remove him as chairman,” Trump said Saturday at a news conference called to provide an update on the administration’s response to the coronavirus outbreak. “He has, so far, made a lot of bad decisions, in my opinion.”
Powell should make fed policy based on not losing his job. That is how jobs work.
I'm not commenting on president Trump's comments or Powell's response to them. Just pointing out that we should expect Powell to align with the executive and that doing so is not "political pressure," it's just normal.
To some extent, yes. We do have the Senate confirm Fed chairs, and their terms are 5 years, which overlaps into the next administration. Biden and the Democrat Senate refused to confirm Powell for his second term for over a year. It wasn't really until after he was confirmed for his second term that the Fed turned hawkish. Could be coincidental. Still, let's not pretend that the Fed is free of political influence and pressure from all sides.
> I personally predict that a year from now, a lot of companies (especially ones in the tech sector fueled by immense amounts of cheap debt and the assumption ad revenue always goes up) will collapse.
That is likely the wrong prediction.
The thing to be worried about is stuff like commercial real estate and all the vacancies in places like downtown SF and Portland (plus Mall vacancies and everything else--other than self-storage of course).
Those vacancies are currently being floated on cheap debt and rolling that over is going to get much more expensive. But it takes time to push a business into insolvency, so the delay you cite is certainly real.
That can rollover into a financial crisis via CMBS.
I doubt that this recession will be primarily about tech, although it might hit tech harder than 2008 did. I doubt it changes anything fundamentally about the tech sector though other than clearing out some unsustainable companies with high debt-to-equity ratios.
I disagree. There is a ton of VC dry powder right now. Many are waiting for 'the bottom' to happen before pulling the trigger on more investments and big rounds. As soon as things level out, you'll see a flood of money in. I think it's unlikely rates will continue to rise for an entire year.
Rates don't have to rise any more to cause a recession. Holding rates at this level should be more than enough. And Powell has indicates that they're going to go higher than expected and likely hold it there longer than the street expects.
You should really listen to him rather than your own ideas about what the CPI is going to do.
>The subprime mortgage crisis started in April 2007. But the job market didn't really get fucked until 2008.
The job market didn't just magically "get fucked". Companies found themselves with little cash and no access to credit. We had the biggest credit freeze since the Great Depression. The Fed is not making that mistake again, and the corporate world is absolutely loaded with cash right now.
So my understanding of GFC is 2008 unemployment situation was caused by collapse of corporate debt (due to banks being caught in subprime loan crisis with their pants down) which in turn fed further banking collapse so we had a negative feedback loop. I don’t see a cycle like that today
Recessions never look like the one before it, because that's what everyone expects to happen and plans for.
This one is already quite odd in a number of ways (i.e., low unemployment), so there's good reason to expect several other aspects of it to not follow conventional wisdom.
My personal opinion is that this will be seen as an indefinite recession, in that we will look back and see that it was comprised of the cause and effect of many smaller "recessionary events" rather than one defining event.
Normally, the stock market is a leading indicator. It is down 20% bit from all time highs but still has a bit to go even to get down to where we were pre-pandemic.
Also, since the recession is being created by rate hikes, there will be plenty of room to cut rates in a recession/deflationary environment. It seems that there could be a natural feedback loop to this.
Remember that the government doesn't count people who are not looking for work (perhaps because they've given up hope of ever finding a job, for example) as "unemployed".
So the actual number of people who are not working is certainly higher.
This is a myth. The government publishes multiple unemployment rates (https://www.bls.gov/news.release/empsit.t15.htm) along with the "official" headline rate. You probably want the U-4 or U-5 rate. In reality, all of the rates are highly correlated and what's important is the rate relative to historical norms.
When the headline unemployment rate is the only thing the vast majority of people hear about and what politicians boast about, it's entirely reasonable to remind people that it's common to misunderstand what "unemployment rate" actually means.
Most people do think it's something closer in relation to labor participation rate.
Right, most of it is just report the U-3 rate because we've always reported the U-3 rate. You can infer the U-x rate by multiplying the U-3 by some fixed scaling factor (i.e., x1.9 for U-6).
I feel like people love to call the the U-6 the "real" unemployment rate because it looks far worse than it actually is. But, in reality it doesn't matter if your preffered figure feel from 10% to 6% or from 17% to 10% over a time period.
Yes, you can discover the more useful number of how many people in working condition do not have a job. It's not hidden or anything. But that number is not the unemployment rate.
That means the graph on the article uses the less useful number. And the GP's notice is relevant.
I don't know, it seems to me the ratio of "jobs available" vs "people looking for a job" is more useful and meaningful than "jobs available" vs (people looking for a job + people disgusted with working so not looking).
That's pretty absolute. There are plenty of people above a certain age who depending on skills, preferences, and savings are in some gray area between working, zero interest in working for pay at all (whether "disgusted" by work or just ready to move on), and will do a little work on the side for the money/human contact/intellectual stimulation etc.
Sure. But the press will report the absolute numbers when and in whatever way it benefits each publication's political wing. This is done under terms like "unemployment rate" which every reasonable person takes to mean that it includes _all_ unemployed people. So sure, the government bureaucracy is correctly doing its bureaucratic job but politicians, press, and pundits abuse the complicated data by presenting it in deceptively vague terms.
The press almost always uses U-3, which is the government's official unemployment rate. There's nothing vague about it. BLS is clear about what each category includes. The only confusion is caused by a certain subpopulation who likes to toss out U-6 as some sort of "gotcha!" whenever unemployment makes the news.
Next time you are on the street ask some random passersby what the difference between the U-3 unemployment rate and the U-6 unemployment rate. You're gonna get a bunch of blank stares unless you are on the campus of an economics college.
Random passersby is a really low bar. Many won't be able to place nations on a map or name the Speaker of the House either. Which is why throwing out U-6 as a "gotcha!" is so dangerous - somebody who doesn't know better might believe the government is trying to hide something.
Always assume U-3 if otherwise not reported. U5 and U6 exist if you really need it. But historically speaking, everyone always has used U3 as the base discussion point.
We all know U3 has its flaws, but I've never really found a situation where U5 or U6 would make a sizable difference in an argument.
The only people who seem to play U3 vs U5 vs U6 games are those who are jumping statistics between arguments, to mislead and misdirect. IMO anyway. A good arguer always uses U3. When someone else runs out of things to say, they start criticizing U3 itself (ignoring the easily accessible U5 or U6 statistics). So its a good indicator for when a discussion has run its course.
No, a good arguer ignores U3. It's a favored statistic by administrations because it's designed to improve even if circumstances haven't changed. People challenging administrations prefer U5 or U6 because they don't improve even when circumstances haven't changed.
>Employment estimates are benchmarked, or ratio adjusted, monthly to the strike-adjusted employment estimates
of the Current Employment Statistics (CES) survey. A ratio of CES to JOLTS employment is used to adjust the
levels for all other JOLTS data elements.
Oppositely, I suspect they do count fake (or unfillable) job openings that employers post for a variety of reasons (needed formally for internal promotions to the need to say you're hiring in order to say you're growing to bureaucracies confused about they're aims etc).
They have been saying that for like 20 years just to make some politician look bad.
Reality is that after two years no one can really get back in the same job without some sort of bridge trainings for any job. So yes they are still looking. Just not necessarily the same type of job.
As an extreme, the pipeline of Hollywood movie production is an interesting model for working with “the best” people. Most positions aren’t that exclusive, but finding the right people is actually a major concern.
The media doesn't normally latch on to metrics that include people not looking for work as they look for the cheap and easy soundbites, but the government counts them. There are many measures of unemployment to account for all the different ways you might want to look at things. Why wouldn't they maintain multiple measures of unemployment? It is obviously something that cannot be summed up in a single figure.
The media (almost) always uses U-3. It's the agreed upon value. The others exist and get updated at the same time, but for most purposes U-3 is good enough. The other values generally track along with U-3, they really only matter when that correlation breaks (ie, it's good to check them, but you only mention them when there's something interesting with them specifically).
Yes, that's what I said, making it ridiculous to claim that the government doesn't count them. Why wouldn't they count them? It doesn't require all that much additional effort.
The far better number to look at is the "Quit Rate"[0][1] - the number of people leaving their jobs for other jobs. It's more reflective of what's actually happening because job openings is often an inflated number that doesn't reflect the number of jobs actually available.
I think, with the rise of the gig economy, the number of unemployed persons is not a very good metric anymore, because it doesn't make a distinction between a full-time employee, a shift worker getting 20 hours per week, and an Uber driver working at a loss, if you count the car depreciation.
A better metric could be the number of billable work hours within the last month, or the payroll distribution curve. The latter can be easily computed from the monthly payroll taxes and should show if people are being massively shifted to part-time or laid off and not immediately finding another job.
> an Uber driver working at a loss, if you count the car depreciation
I hate to nitpick but I see this sentiment word-for-word on HN way too much. Uber drivers don't actually operate at a loss unless they only Uber for a short amount of time and they total their car during that stint. They just tend to earn less profit (often way less) than they think they are earning due to the car depreciation and other factors. But a working class person cannot afford to operate "at a loss" without noticing immediately, and a $25,000 car cannot depreciate infinitely.
Interesting. I must say, that doesn't look like we're currently in a recession.
On the other hand, if the job market is actually that tight, you'd expect employees to have pricing power. (Maybe they do, and it's just taking both workers and management a while to get used to that idea?)
The reason why there's a debate is that by some measures, we're in a recession, but by other measures, we're not. Jobs is extremely strong. From a jobs perspective, we are not in a recession.
And so cues the debate. Which measures _should_ we focus on? Etc. etc.
The only thing with any certainty, is that I know we'll be retroactively be declared to have been in a recession for months. The NBER is 100% trusted on calling the recession, but they're also always late to the party by several months.
NBER always calls the recession accurately, because they backdate their calls. Ex: in 2008, NBER declared that we've been a recession since 2007.
--------
Because of this effect, everyone wants to be "correct faster than NBER", so you see a whole lot of talking-heads talking about recession way too early (ie: before all the economic indicators prove we're in a recession). Everyone wants to predict the future after all, so that they can feel smarter about the whole situation.
EDIT: It should be noted that in the real world, it takes weeks, maybe months, to collect and process the statistics. That is to say, we won't know how good our economy in October 2022 is, until maybe January of 2023. That's why NBER is late, they need the time to collect statistics and analyze them. But its also why everyone who is trying to call the Recession "as it happens" (IE: call a January Recession in January) is inevitably going to be wrong, because they're baseless and without any actual data backing that sentiment.
Data and statistics take time. Many months. Just sit tight and wait. Have patience. There's no real benefit (or downside) to being "early" or "late" to calling the recession. Getting the call correct is important. It takes many months to spin up employees and/or fire them anyway (good severance pay is multi-month affair after all)
> There's no real benefit (or downside) to being "early" or "late" to calling the recession.
Isn't there a large financial benfit?
Like if you could predict any up/down turns you know when to start buying/shorting stocks. Or even if you're a bank maybe don't lend out a ton of money at say 2% when next month you can lend at 5%.
> Like if you could predict any up/down turns you know when to start buying/shorting stocks
But the stock market doesn't always go down in a recession. And vice versa, a recession may happen, but the stock market may be fine. Ex: the recession of 1990 barely budged the stock market. While the Stock Market Crash of 1962 had nothing to do with the economy.
> Or even if you're a bank maybe don't lend out a ton of money at say 2% when next month you can lend at 5%.
But that's speculation upon the Fed Rate, which isn't about recessions at all. For example, the Fed Rate increased in from 0% in 2015 to 2% in 2019. Or from 1% in 2004 through 5% in 2006.
>>There's no real benefit (or downside) to being "early" or "late" to calling the recession.
For people interested in understanding exactly what the economy does in detail, of course it is more important to get it right than getting it early.
However, for some sets of short-medium-term investors, there could be a very real benefit to calling the trend correctly and early.
I'm quite convinced that what is happening here is what happens to every complex system after a large uncontrolled disturbance - all the subsystems oscillate wildly and often not with the same leading/following indicators. This is just that happening until it gets damped.
I see a key real-time recession indicator as just the level of traffic in the area (I'm north of Boston). Obviously not hard numbers, but quiet vs dense & fast traffic seems to indicate better whether we're going into recession or not. The traffic has only increased since the beginning of the year, and indeed, the last quarter came out as 2%+ growth...
You've got it backwards. As a society, we've already given NBER the authority to declare recessions. They are the official recession caller of the country.
Its you who has to argue why NBER's methodology is wrong.
The NBER has no authority. They are simply stating their opinion. Perhaps some people use NBER's opinion to influence their decisions, but you, or any court, is not under the obligation to use their opinion (unless specified in a contract).
These are the hallmarks of an industrialization. Labor is needed to be more productive. Business wants capital to do it. Lack of labor and productivity results in supply shortages that raise prices, while labor shortages forces salaries to match.
Stocks, looking for dividends, will do poorly because of high pay, labor costs will eat profits and eaten profits will kill stock values, leaving to the appearance of recession.
Individuals will barely scrape by neutral because inflation offsets higher pay
But a good investment that raises productivity will pay very very handsomely in the future.
And those that don't? Will be inflated away to nothing.
Order is being restored to the post 2008 insanity. Many tech companies won't survive the jump.
The only way for labor to come out on top is if productivity increases.
With war, population shrinking, disruption around the world, I expect productivity (in total) to be somewhat stagnant.
Which means the top dogs will be forced to make less while they figure out how to fix things through productivity going up once the disruptions are over.
But also that the average Joe will get a larger slice of a smaller pie.
Assuming I'm right. Who knows what will actually happen.
The high rates are not being driven by firms competing for capital, they are being driven by the Fed reducing the money supply and associated expectations of money supply reduction because of high inflation.
I am fairly confident that the rate increases we've seen over the last couple of months are going to be permanent, and we're going to keep seeing inflation for quite a long time.
Now I can't prove this for sure, we will see if I'm wrong or not, but I think this is definitely capital shortage territory, not fed screwing with the rate territory.
> On the other hand, if the job market is actually that tight, you'd expect employees to have pricing power. (Maybe they do, and it's just taking both workers and management a while to get used to that idea?)
Is it not the case in your area that every fast food joint and small business has a "hiring" sign up with a starting wage listed that a lot higher than it was ~3 years ago?
Look at how (relatively) low it was in September 2007. One can assume in February it was even lower - and February is when Greenspan said a recession was obviously coming. The subprime mortgage crisis started in April 2007. But the job market didn't really get fucked until 2008. There's a delay with these types of things - I personally predict that a year from now, a lot of companies (especially ones in the tech sector fueled by immense amounts of cheap debt and the assumption ad revenue always goes up) will collapse. That's when you see the spike in unemployment, not now.
Yeah, you have to account for that. Everywhere there's a huge shortage of jobs paying at or below $20/hr. Likely caused by most of those people moving up to jobs in the 25-30/hr range.
That's not what people "mean" or "care about". The inflation doomers want to pretend that zero-interest rate policies extended too long in the 2010s decade.
After the 3rd round of QE in 2014, the Fed began to undo that policy by raising interest rates above 0% in the 2015 to 2016 timeframe. They also were unwinding their balance sheet into 2019, before COVID19 interrupted plans.
And then they reversed in 2019 when the stock market started slowing down and Trump freaked out and pressured them to keep the unsustainable growth going, leaving us collectively in a weaker position to respond to the covid crisis.
The tax cuts that cost us $1 Trillion/year is the bigger issue at that timeframe.
The 2019 reversal was... well timed for the wrong reasons. Every economist will tell you that these Fed-moves take over a year (!!!) to kick into effect. Since COVID19 occurred in Nov 2019 into March 2020, the 2019 reversal was actually perfectly timed.
For all the wrong reasons mind you, but... we kinda got lucky there.
Because, we have a supply recession, not a demand recession. We haven't had one in living memory (except, kind of, the oil supply shocks in the 70's), so we don't seem to recognize it. Some people think it obviously feels like a recession is happening, but others point to things like this graph to say that it sure doesn't look like it.
But that's because this measures demand for labor, not supply. We are seeing a broad-based depression of economic activity, caused by supply problems, and the supply of labor is one of those problems. We've aged, a lot of boomers retired a bit early at the onset of the pandemic, and there are a lot more people on disability than we once had. The labor force participation rate has never returned to pre-pandemic levels, and even that was low by 21st century standards:
Ominously, most of what world governments have been doing to try to help the economy, has been about goosing demand. In a supply recession, that's like giving an electric blanket and a hot drink to somebody with a dangerously high fever...
The analysis I've seen always has supply crashing (lock-downs, which are over) then recovering and in the case of manufacturing, being higher than even before the pandemic. Inflation should have mostly stopped if that was all there was to it (or never happened because demand would go down too when people can't get paid). However demand crashed less, recovered more, and has kept right on going up way above per-pandemic levels and faster than the increasing supply.
Manufacturing moving "back home" is how we are attempting to deal with the supply shocks, so it is true that domestic demand is increasing but I expect the parent considered that as part of the supply shock. This doesn't necessarily suggest a demand shock on the global scale. Places like China are seeing decline in exports.
That's the same chart, except in real dollars. It still only provides price. Price does not tell us anything about the supply and demand components individually. Price is the product of supply and demand put together.
Stimulus packages may have goosed demand but low interest rates should in theory* increase supply, since capital must be applied to useful purposes rather than sitting in a bank collecting interest.
*unfortunately, subsidizing ride shares is probably not a "useful purpose"
"Supply recession" is a shortage of people willing to produce meaningful stuff for the going price. Majority of Gen Z wanting to become CEOs, youtubers and luxury bloggers is very indicative of that. We kinda plugged the hole by letting China produce cheap trinkets, Saudis pump cheap oil and Russia get cheap gas, but it only kept working as long as that money came back to the West through various laundering schemes.
Except now that Russia and China are showing military ambition, this arrangement is done with, so we truly need more domestic supply. Except now it's a cultural problem: if you give 10 youtubers and 1 baker one extra dollar, the price of bread will go up, but it won't convince a single youtuber to go stand in front of a hot oven all day. We won't fix it by printing more money. We could fix it by destroying easier ways to make money, but it will be painful and will take time.
Automation fixes the oven problem, and we've been doing it in the US for a long time in applications where low cost of energy in the US allowed.
But thinking we're going to bring lots of jobs for $5 an hour so they can try to afford $3000 of rent per month is just going to get cities burned down in mass.
Automation creates a much bigger problem. If you had 10 independent bakers, the price of bread would be limited from both sides:
* The bakers would rather quit than keep earning less that what easier jobs pay, pushing the prices up.
* If the price went too high, someone would setup another bakery to get a market share, pushing the prices down.
With automation and consolidation we have 1 corporation owning 1 automatic bakeries and 10 completely disposable bureaucrats on near-minimum wage. If the demand goes up, jacking up the prices is easier than setting up the 11th bakery (what if the demand goes down later? too risky!). If a new player enters the market, they will just sell the bread in that neighborhood at a loss until the competitor is out, then get the prices back.
Rinse and repeat for a decade and here you go: assets prices are through the roof, salaries are stuck, there is a shortage of everything, prices are going up, competence is lost art, nobody knows what to do.
Artificially created jobs won't pay for a decent house because they don't come with a bargaining power. We could print money and turn $5/hr vs. $3K rent into $50/hr vs. $30K rent, but it won't change the balance of power. If you want to change it, we need to crack down on centralization and make small businesses competitive again.
Incentives. For the past couple of decades the deal has been "mom and pop have it all figured out, so get out of the way and we'll buy you off with some cheap toys". So yeah, we have a generation that knows how to throw a perfect tantrum to get their next Lego set and expects the store to somehow never run out of them.
>We've aged, a lot of boomers retired a bit early at the onset of the pandemic, and there are a lot more people on disability than we once had. The labor force participation rate has never returned to pre-pandemic levels
And more than a million Americans have died from Covid.
One thing to always remember is that companies (especially startups) have strong incentives to always have a lot of job openings on their websites. Because it looks like the company is doing great. Also, there is no legal obligation to actually hire someone. So it is almost a zero risk move.
I think the reciprocal is more meaningful: number of job openings per person, employed or unemployed.
A healthy number is between a hundred and a thousand, the number of jobs someone can potentially do (lots of opportunities).
Likewise, at a 10-person company there should be hundreds of jobs that person number 11 could end up doing, corresponding to hundreds of job openings. Anything less than a hundred job openings per person means employers aren't hiring enough.
Imagine meal choices per person: if there are only 2 then it is famine, a hundred to a thousand is healthy. "There are two meal choices per person" is not a bustling metropolis full of restaurants and grocery stores. It sounds more like a food desert.
There are two job openings per person is similar: in a healthy bustling evonomy it should be a hundred.
By illustrating that the market is not saturated with unemployed people desperately competing for scarce jobs - not currently in absolute terms, and not when compared to historical perspective in relative terms.
The labor force participation rate ("percentage of the population that is either working or actively looking for work") has been declining for 20 years and had a big drop at the beginning of the pandemic. Consequently, part of the low unemployment trend has been driven by people dropping out of the workforce/not looking for a job.
Many people think of the labor participation rate is just the % of working among the adults working age population who could be employed if good jobs were available to them.
In reality, the divisor includes college students, the highly disabled, happy housewives/househusbands, trust fund brats and, most importantly, the elderly/retired. Essentially everyone age 16 and over. Not 19, not 21, 16. I.e. it includes juniors and seniors in HS and college students.
The demographic shifts in the US means the labor force participation rate will, by necessity, decline.
And some states allow kids to start working as young as 14, so you can have part time jobs that just entirely disappear if the kid gets laid off / fired / quits, because they don't appear in the employable column.
Are there any statistics on how many people actually are the beneficiaries of a trust fund of any sizable amount, and what percentage of those people are actually legitimate brats?
I have relatives that haven't worked in years. They don't have a trust fund. Instead, they get put on the payroll of a highly profitable family business with a "fake" (but well paying) job. I doubt you will find anyone who will admit to these arrangements openly.
That measure will reflect changing demographics and, specific to our current circumstances, an increase in retirements during covid. Prime age participation is more useful for projecting forward https://fred.stlouisfed.org/series/LNS11300060
I found a state unemployment map: https://www.bls.gov/charts/state-employment-and-unemployment...
But, would love to see the equivalent of this chart broken down by state and job sector. I've noticed an uptick in holiday seasonal jobs in my area... wonder how this affects the data
As it happens, the Bureau of Labor Statistics does an exceedingly thorough job of documenting how it generates its numbers. It has a bunch of explanations on its website. A good starting point might be the general overview of their job openings survey: https://www.bls.gov/opub/hom/jlt/data.htm
Hey Government, we did interview 100 people for our 20 job listings, but we didn't like any of them. The listings are still open though. Jobs numbers are still strong! Teehee!
Graphs like this is pretty much useless. Governments around the world, not just the US, will use numbers like this to "prove" that there's plenty of work. It just don't work like that. What good is it that there a two jobs out there, just for you, except one is as an engineer and one is as a neuro surgeon and so far you only ever worked at a sandwich shop.
The majority of unemployed people are nowhere near qualified, or even able to hold the jobs that are available. Some simply don't have the IQ for it, some have mental issues or other health problems, unable to afford to relocate and some simply aren't cut out for the job market. I have an acquaintance who is basically dependent on unemployment being 0%. He's a nice, interesting and somewhat smart guy, but he don't understand jobs and is unable to hold a job for more than a few months.
It doesn't matter if there are plenty of work, because the pool of people able to fill those positions are way more limited than governments and companies are willing to admit.
Look at how (relatively) low it was in September 2007. One can assume in February it was even lower - and February is when Greenspan said a recession was obviously coming. The subprime mortgage crisis started in April 2007. But the job market didn't really get fucked until 2008. There's a delay with these types of things - I personally predict that a year from now, a lot of companies (especially ones in the tech sector fueled by immense amounts of cheap debt and the assumption ad revenue always goes up) will collapse. That's when you see the spike in unemployment, not now.