10 Oct Defying expectations! (supposedly)
“Why the US job market has defied rising interest rates and expectations of high unemployment”
-published September 25, 2023 | https://apnews.com/article/inflation-jobs-economy-interest-rates-unemployment-recession-7b94da1534f775b08939d184e53ca635
*raises hand slowly* Umm, has it though?
Grim forecasts from economists had predicted that as the Federal Reserve jacked up its benchmark rate ever higher, consumers and businesses would curb spending, companies would slash jobs and unemployment would spike as high as 7% or more — twice its level when the Fed began tightening credit.
Yet so far, to widespread relief, the reality has been anything but: As interest rates have surged, inflation has tumbled from its peak of 9.1% in June 2022 to 3.7%. Yet the unemployment rate, at a still-low 3.8%, has scarcely budged since March 2022, when the Fed began imposing a series of 11 rate hikes at the fastest pace in decades.
-AP News, Ibid.
Wut? Ask any job seeker what it’s like out there and I highly doubt you’ll get a sunshine and roses response. Slower times-to-hire, long interview processes that often go nowhere, 90+ applications and no offers . . . but yet, somehow, you’re expected to think people’r’doin’ great! 😒
If such trends continue, the central bank may achieve a rare and difficult “soft landing” — the taming of inflation without triggering a deep recession. Such an outcome would be far different from the last time inflation spiked, in the 1970s and early 1980s. The Fed chair at the time, Paul Volcker, attacked inflation by escalating the central bank’s key short-term rate above 19%. The result? Unemployment shot to 10.8%, which at the time marked its highest level since World War II.
-AP News, Ibid.
Yeah, OK, sure. I think this time around, the MSM is simply ignoring the cracks in the foundation and trying to paper over them with this narrative of “Nothing to see here, everything is great.” We’ll tell you this is the GOAT of all job markets and that unemployment is still incredibly low, and, well, we’ll expect you to swallow that down hook, line, and sinker. This is why we have people wondering if we’re in a Silent Depression this time around.
Like, I mean, Gordon Gekko tried to tell y’all’s *sses. He did. He tried to tell you back in the 80s, and then he came back and tried to tell you again after the Great Recession. Hello. Back in February of this year, I wrote a blog post called Gordon Gekko Tried to Tell You because he did. Yes, it’s a fictional character from to Hollywood movies, but I think sometimes we can find real world inspiration from those sources. And I mean, it’s right on the nose. It’s sad that this is the reality that young people are being brought into, but it’s true. No wonder there would be a zeitgeist of Silent Depression. And then even though this person is trying to make the argument of “Well, it’s not as bad as the Great Depression, you guys” and sort of be an apologist, in my opinion, look at all the things that he talks about: a trillion dollars in credit card debt, people have had to tap into their 401Ks, they’re unable to purchase a home, they’re stagnating, they’re falling behind, they’re worried. Right, but hey, nothing to see here, people. Move along, move along. And on that note, when we go over to Yahoo News, we find an article titled Posts Claiming US economy in Silent Depression Use Skewed Data. Right, right, right, right, right. Because the Bureau of Labor Statistics and your friendly government, they always use the best possible objective data. What a laugh.
-Are we in a Silent Depression? https://www.buzzsprout.com/1125110/13606864
A year ago, in a high-profile speech, Chair Jerome Powell warned that the Fed was prepared to be similarly aggressive, saying its rate hikes would cause “some pain” in the form of higher unemployment. The Fed, Powell said pointedly, would “keep at it,” a play on the title of Volcker’s autobiography, “Keeping At It.”
Over time, as the job market has displayed surprising resilience, Powell has adopted a more benign tone. At a news conference last week, he suggested that a soft landing remains a “possible,” if not guaranteed, outcome.
“That’s really what we’ve been seeing,” he said. “Progress without higher unemployment, for now.”
-AP News, Ibid.
Ah, yes. One of the MSM’s buzzwords. RESILIENT.
And more job-seekers are still coming off the sidelines. The proportion of adults in their prime working years — ages 25 through 54 — who either have a job or are looking for one has reached its highest point in two decades.
At the same time, businesses appear to need fewer workers. But instead of cutting jobs, they are seeking fewer new employees. The number of open jobs has sunk from more than 12 million last year to 8.8 million in July, though it’s still well above its pre-pandemic level. And fewer people are quitting jobs in search of higher pay elsewhere.
-AP News, Ibid. emphasis mine
I only believe part of that statement, TBH. Are businesses needing fewer people? Yes, I agree with that because it matches what I’m seeing day in and day out in the job market. I warned you about this many times in 2022.
And I’m telling you that the script has flipped and we’re not in 2021 anymore. Going all the way back to January [of 2022], the early part of January of this year, it was like something shifted. Now I don’t know how to sit here and explain it to you logically, chapter and verse. I’m just telling you, it was a shift that was palpable. You could feel it. To use a phrase from the youngsters, the vibes were off. Again, I don’t know exactly how to explain it to you rationally. I could just feel it in my gut instinct and in my spirit, it was like something has changed. So last year , Q4 was crazy. I mean, even during the weeks that are typically dead – Thanksgiving and Christmas – that kind of dead week that typically happens between Christmas and New Year’s – I was busy. I had work to do. We were shakin’ and bakin’ and it was just nuts. January 1st, it was like a door slammed shut. I don’t know how to explain it. I’m just telling you that it happened. Now, of course, you do have decision makers that use up their PTO in January, you have some executives that leave during the month of December and they don’t show back up until the middle part of January or the early part of February, because they’re the power brokers and they get to do that. But it was like, “Okay, I understand that there’s a holiday slowdown, typically, but this feels different.” I don’t know how to explain it. It just felt different. It did not feel like the typical holiday slowdown or the typical January doldrums after people realize, “Dammit, Christmas is over, we’re back in the long haul. There’s not a lot of public holidays.” It just felt different. And so because of the combination of things moving about as slow as molasses, combined with the fact that to me, it felt like the vibes were off and I didn’t really know why, I started to slow things down in both the economy of my business and personal finances because I thought, “Okay, well, this could just be a temporary slowdown, or it could be a bad omen of things yet to come, and I personally want to be prepared either way.”
-Something More Esoteric published July 21, 2022 https://www.buzzsprout.com/1125110/10886920
Where I start to disagree is with the notion that layoffs are over. That things are pretty much stabilized now and companies will hire less people. a) Don’t be so sure about that; and b) That’s still not good news.
Powell noted last week that fewer job openings and more workers mean the labor market has been brought into better balance. This has taken the pressure off companies to raise wages to find and keep workers. Still, with inflation having eased, hourly pay is now growing faster than prices.
-AP News, Ibid.
A couple of things here: yeah, the pressure is off to offer more money. What do you think Corpo America wanted? For The Great Resignation to go on forever unimpeded? Gimme a break!
Does this wage data match with what you see? Is your pay going up faster than prices? ?!?!?!
So this means even in a space like retail, which typically has a higher turnover rate than other industries, Walmart is lookin’ around and saying, “Naw. That’s OK. We’re gonna do a wage trim.” What does that tell you? What it tells me is this: Walmart ain’t out here listening to hot air & hopium from nincompoops on social media. Clearly they must know that the labor market is not churnin’ and burnin’ and doin’ great and even in an industry with high turnover, they aren’t worried about filling jobs. In Walmart’s own Q1 FY24 Earnings statement, we learn: “Total revenue was $152.3 billion, up 7.6%, or 7.7% in constant currency.” (https://corporate.walmart.com/news/2023/05/18/walmart-releases-q1-and-fy24-earnings) So it’s not like the company is hurting for money. Let’s be real.
What seems a more accurate picture to me is something like this:
Cost of living is going up. It’s getting harder to borrow money and/or to use credit cards without getting absolutely gouged. Wages are NOT keeping pace with true inflation. Unemployment is not under 4%. We do not have two legit open jobs for every one unemployed person. Masses of people are not couch surfing and taking drugs and refusing to work. The housing market and the job market are both broken and it’s on purpose. If someone quits, gets fired, or is part of a RIF, they’d better have a good game plan because they will not immediately find another job to replace the one they’ve lost.
Which story sounds more accurate to you? The MSM churnin’ and burning’ BS or my picture?
They want that pain. They want to see you get in line and function as a feudal serf. This is the agenda, folks.
Trapped in a home or an apartment + trapped in a job + trapped by finances / debt = trapped. Full stop.
We need to acknowledge this and stop tiptoeing around the topic.
Putting you in pain and leaving you trapped brings you to heel. It’s not like they don’t know this and they’re simply making it up as they go along. They know. They get it.
Buy in to hot air & hopium at your own risk.