I know that the numbers look good, but I've started seeing notifications on companies cutting jobs. Specifically some of the electronics retailers. Best buy is supposedly cutting a lot due to "expected slowdown in sales". NFM is supposedly cutting heads as well. A buddy of mine at Toyota has been saying there is a massive layoff coming for them. This just is starting to feel like the beginning of a downturn due to the inflation numbers. Anecdotal I know, but something to keep an eye on for sure.
The great termination (restructuring) is coming. Threats, warnings and layoffs already here in Big Tech. Google execs threaten workers with layoffs: 'There will be blood on the streets' (nypost.com) Google Employees Fear the Worst As the Company Quietly Extends Its Hiring Freeze (businessinsider.com) The 'Great Restructuring' — 5 Signs Layoffs Are Coming (hive.com)
Probably. The economic "recovery" we experienced was just the economy trying to return to normal after being halted by government shutting it down. Now that people have spent all the money the fed printed and gave out, inflation has eaten all the economic gains, and the fed has stopped handing out free money for houses in the form of 2% loans which inflated home prices we'll probably see the effects of government guiding and creating markets rather than our version of capitalism. As with everything else the government does they handled it extremely poorly so it should be interesting. What do I know though, maybe there are no consequences for printing trillions of dollars, shutting down entire state economies and manipulating the housing market. Not complaining too much though, I bought a 4/3 2 story house in a fancy subdivision that's appreciated 50% and my sub 2.75% mortgage is less than the starter home 3/2 I bought in lake city in 2012. Thanks Obama
Well it’s certainly not gonna go any lower. It’s historically low right now. Frankly it would be a sign that the economy is slowing which the fed needs to see before they quit raising interest rates. I think a small increase is probably fine right about now.
I mean… this is what raising interest rates and pumping the brakes on the economy is designed to do to some extent. It isn’t going to flip from an extremely tight labor market to slack overnight though. Perhaps you need to define “jump”. I think the fed probably is ok with slight tick back towards 4%-5% range which is historically good and industry layoffs happen at all times anyway (even in job growth environments).
I don't mean that it's goi g to move into 10-12% range if that's what you're asking. Just that we won't see the 3-4% range we're seeing now. Why? Shouldn't we push for full employment? Serious question since I've heard others say the same as you are and I don't understand it enough. I'd think the lower the better because it would mean less strain on those drawing unemployment.
"The economic "recovery" we experienced was just the economy trying to return to normal after being halted by government shutting it down." My, how soon we forget. The first shutdowns were NOT government mandates. The NBA shut down. Then college sports and universities. Then cruise lines. Restaurants, entertainment venues and retail stores were among the thousands of places to shut their doors to try and slow COVID-19’s spread. The lethal pandemic started the shutdowns. Government then responded.
Define “full employment”. There is always going to be some degree of unemployment even in an extremely healthy labor market. It will never be 0%. So how is that defined exactly? I think anywhere in the 4-5% range is extremely healthy. I’m not sure if there is an “official” measure, but I’d think arguments can be made we are sitting at full employment. Certainly the service sector has had far more jobs than people willing to fill them. Though political hacks try to make hay over any layoff. I think once you get 5,6,7% that is where it gets more problematic (in real world impact terms, rather than political hack terms).
Economists typically define full employment as an UE rate of 4-5%. Full employment - Wikipedia Btw, there are buyers & sellers in this mkt. do you think the store being sold out of beer is good?
I get that... I thought I read once that "full employment" was defined as a u-6 at 5% or lower (I could be misrembering here). For reference, it's currently 7.2% (higher than I assumed). I know that a zero unemployment figure is pretty well impossible given those between jobs and the fluid nature of most companies these days.
IMO, people vastly overweight the sig of a low UE rate on the health of the economy. It can be really costly.
Certainly it’s a risk and it won’t stay at its historical lowest point forever. There is a self fulfilling prophesy going on I bet. My company is tightening the expenses slowing hiring in anticipation of a slowdown even though our business is strong. If everyone is doing that it will cause a slowdown.
We are in a no-man's land right now. It isn't just what was done during the Pandemic, but what was done in the Great Recession. 2 events so close together has never been seen since the Great Depression. We really don't know what will happen because the system has been manipulated by the government since the 1990s. We barely recovered from all of the spending in the Great Recession and then the Pandemic hit. Debt to GDP is at an all-time high and by 2030 may hit 130%. If rates continue to increase, the interest on debt will exceed Medicare and maybe SS and become the largest line item in the budget, surpassing the defense budget by 100%. That's money gone without getting anything in return and it's forever.
Can’t disagree with anything here, but I think the pandemic was far more influential in what is going on right now vs. the Great Recession (even though they are two major calamities within 15 years, which indeed is unprecedented). The Great Recession was sort of self-inflicted domestic problem and mostly concentrated in banking/real estate, the Pandemic was global scale effecting a much broader swath of the economy. Almost all of the current issues are high demand (strong economy) vs. supply chains not yet ready to handle that demand (zero slack to produce more). So economically speaking you have shortages, in the short term that is resolved by shifting prices higher (inflation) or shifting the demand curve lower by tightening monetary policy. Longer term you hope the supply chain sorts itself back out to a more natural equilibrium (this very much differs from sector to sector, depending on which ones have external factors… such as war or actually finite natural resources which can’t be ramped up easily).
