[HN Gopher] Number of unemployed persons per job opening
___________________________________________________________________
Number of unemployed persons per job opening
Author : Nicholas_C
Score : 121 points
Date : 2022-11-03 16:50 UTC (6 hours ago)
(HTM) web link (www.bls.gov)
(TXT) w3m dump (www.bls.gov)
| phaedrus wrote:
| I started my career right at the peak of this graph in 2008.
| leet_thow wrote:
| I'm curious how this was measured in 2008 when the go-to places
| for job searching were Monster, Dice and Craigslist.
| CobrastanJorji wrote:
| 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
| cl0ckt0wer wrote:
| Our tax dollars and a lot of phone calls.
| colinmhayes wrote:
| I believe bls data is generally from surveys
| alexb_ wrote:
| 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.
| bryanlarsen wrote:
| 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.
| bcrosby95 wrote:
| Everyone mentions 2007, but 2006 was when lending tightened,
| making the subprime crisis inevitable given all the interest
| only ARM loans.
| bryanlarsen wrote:
| 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.
| chrisco255 wrote:
| 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%."
|
| https://www.financialsamurai.com/adjustable-rate-
| mortgages-a...
|
| 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.
| bcrosby95 wrote:
| 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.
| bjornsing wrote:
| > 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.
| datavirtue wrote:
| 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.
| mythhouse wrote:
| > massive political pressure on the Fed
|
| Whats the proof behind this speculation?
| aschearer wrote:
| >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."
|
| https://apnews.com/article/business-politics-donald-
| trump-vi...
| mythhouse wrote:
| >During the trump years they seemed to buckle under the
| pressure.
|
| So there is no proof that Powell made fed policy based on
| saving his own job?
| MacsHeadroom wrote:
| 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.
| chrisco255 wrote:
| 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.
| whimsicalism wrote:
| What makes an interest rate artificial? If it is different
| from what you think or want it to be?
| datavirtue wrote:
| 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.
| whimsicalism wrote:
| 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.
| bee_rider wrote:
| At some point this becomes "is human society artificial
| or is it, like, the natural product of human nature,"
| right?
| whimsicalism wrote:
| Good point. Maybe the word "artificial" to describe one
| human construct vs. another human construct is not a
| productive conversation.
| bjornsing wrote:
| Good point. "Extremely low" would have been a better way to
| phrase it.
| lkrubner wrote:
| "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.
|
| (Taylor himself later modified the Taylor Rule in response to
| feedback from Republicans, a story you can grasp from this:
| https://delong.typepad.com/sdj/2009/12/on-the-definition-
| of-... )
| mywittyname wrote:
| TIL. Thanks for this.
| bjornsing wrote:
| 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.
| VirusNewbie wrote:
| 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.
| lamontcg wrote:
| 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.
| alexb_ wrote:
| >I think it's unlikely rates will continue to rise for an
| entire year.
|
| Where do you get this idea from? Especially since the Fed has
| said over and over that they are going to do exactly that.
| VirusNewbie wrote:
| I'm fairly confident CPI will be down quite a bit in 9
| months.
| ramesh31 wrote:
| >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.
| alexb_ wrote:
| > corporate world is absolutely loaded with cash right now.
|
| ...Is it? Or is it loaded with debt masquerading as cash?
| whimsicalism wrote:
| Do you know what cash is?
| ramesh31 wrote:
| >...Is it?
|
| It is: https://fred.stlouisfed.org/series/QFRTCASHINFUSNO
|
| It started burning down this year, but corporate cash on
| hand is still the highest it's ever been in history.
| lamontcg wrote:
| It burned through 20% of that cash in one quarter and
| we're not even really in a recession yet...
| whimsicalism wrote:
| 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.
| johnwheeler wrote:
| Exactly. Meta has no debt
| ochoseis wrote:
| 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.
| dilyevsky wrote:
| 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
| mywittyname wrote:
| 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.
| lamontcg wrote:
| > because that's what everyone expects to happen and plans
| for.
|
| generals are always fighting the last war.
| lamontcg wrote:
| > 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.
| boole1854 wrote:
| This is helpful in putting the recent tech layoff announcements
| in perspective.
| sosodev wrote:
| How so?
| baobabKoodaa wrote:
| 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.
| jklinger410 wrote:
| Job openings != actual available jobs.
| pixl97 wrote:
| Hey, I have 10 job openings if you want to work at 1/4th market
| price. Um, good luck affording rent!
| jklinger410 wrote:
| 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!
| logicallee wrote:
| 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.
| pmoriarty wrote:
| 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.
| bigbacaloa wrote:
| The US government. There are others.
| yieldcrv wrote:
| Remember that a company that only hires the best, is only
| hiring people looking right now
| Retric wrote:
| Many companies actively recruit the employed.
|
| 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.
| yieldcrv wrote:
| Yes, but it relies on them being swayed. If they are not
| swayed to be looking, they are not candidates.
| idontpost wrote:
| randomdata wrote:
| 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.
| alistairSH wrote:
| 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).
| randomdata wrote:
| 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.
| paulpauper wrote:
| The US shows it at 7% but in many areas it seem like way a
| higher percentage men of working age are not working . It's
| probably closer to 30%
| rmah wrote:
| 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.
| marcosdumay wrote:
| 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.
| rmah wrote:
| 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).
|
| But maybe that's just me.
| ghaff wrote:
| >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.
| macinjosh wrote:
| 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.
| alistairSH wrote:
| 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.
| macinjosh wrote:
| 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.
| anonporridge wrote:
| Myth is an overly harsh label.
|
| 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.
| TheCoelacanth wrote:
| The different rates are all highly correlated, though, so
| it hardly even makes a difference when you are looking at a
| trend over time.
| mywittyname wrote:
| 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.
| nashashmi wrote:
| 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.
| lotsofpulp wrote:
| The government does count them, in the U-6 statistic.
|
| https://www.bls.gov/lau/stalt.htm
| boole1854 wrote:
| And here is the chart comparing unemployed according to U-6
| to the job openings:
|
| https://fred.stlouisfed.org/graph/?g=Vx5b
| bumby wrote:
| What unemployment metric was used in the linked article? It
| wasn't immediately apparent to me.
| lotsofpulp wrote:
| That is a good question, and it is not apparent to me
| either. The linked article is:
|
| https://www.bls.gov/news.release/jolts.nr0.htm
|
| and the technical note link is:
|
| https://www.bls.gov/news.release/jolts.tn.htm
|
| which says
|
| >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.
| boole1854 wrote:
| If otherwise unspecified, the "unemployment rate" refers to
| U-3, which is also called "the official unemployment rate"
| by the BLS.
|
| https://www.bls.gov/news.release/empsit.t15.htm
| dragontamer wrote:
| 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.
| pessimizer wrote:
| > A good arguer always uses U3.
|
| 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.
|
| Good arguers ignore all three and use prime-age
| employment:
| https://fred.stlouisfed.org/series/LNS12300060
| plantwallshoe wrote:
| Yeah but if that aspect of the data hasn't changed then the
| chart is still useful for seeing trends, and the rate is the
| lowest since at least 2007.
| finneganscat wrote:
| gadders wrote:
| Similar in the UK: https://www.spectator.co.uk/article/how-are-
| five-million-bri...
| bullen wrote:
| How come the UK has had Universal "Income" since 2015 and
| nobody found out?
|
| Aha, it's not Universal "have PS16,000 or less in money,
| savings and investments".
| joe_the_user wrote:
| 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).
| CompleteWalker wrote:
| 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
| matrix_overload wrote:
| 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.
| filesystem wrote:
| > 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.
| miohtama wrote:
| Does the US keeps statistics of full-time employed vs. part-
| timers?
| malfist wrote:
| Yes, the U6 I believe counts "underemployeed".
|
| https://www.macrotrends.net/1377/u6-unemployment-rate
|
| > U6 adds on those workers who are part-time purely for
| economic reasons
| vpfaulkner wrote:
| 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.
|
| https://fred.stlouisfed.org/series/CIVPART
| bryanlarsen wrote:
| The LFPR for people under 50 is significantly higher than it
| was prior to the pandemic.
| cheriot wrote:
| 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
| rmah wrote:
| 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.
| rufus_foreman wrote:
| 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?
| icedchai wrote:
| 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.
| bombcar wrote:
| 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.
| finneganscat wrote:
| ughitsaaron wrote:
| It's wild to me that July 2009 had a higher rate than April 2020.
| jonahhorowitz wrote:
| 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.
|
| [0] - https://www.bls.gov/news.release/jolts.t04.htm
|
| [1] - https://www.statista.com/chart/26186/number-of-people-
| quitti...
| peppertree wrote:
| It looks like fed should have started QT in 2015.
| dragontamer wrote:
| They did.
|
| https://fred.stlouisfed.org/series/FEDFUNDS
|
| QT + higher interest rates clearly started in 2015.
| anonporridge wrote:
| 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.
| dragontamer wrote:
| 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.
| whimsicalism wrote:
| > Every economist will tell you that these Fed-moves take
| over a year (!!!) to kick into effect
|
| That is just not true.
| TinyRick wrote:
| QT is not raising interest rates, it is reducing the balance
| sheet: https://www.investopedia.com/quantitative-
| tightening-6361478
|
| QT quite clearly did not start in any meaningful way in 2015.
|
| https://fred.stlouisfed.org/series/WALCL
| dragontamer wrote:
| 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.
| SantalBlush wrote:
| >zero-interest rate policies extended too long
|
| Not zero-interest rate policies, low-interest rate
| policies. You're intentionally misrepresenting the
| position here.
| grammers wrote:
| So we're all good and recession it not going to hit?
| lysecret wrote:
| 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.
| rufus_foreman wrote:
| Did those incentives plummet during 2008, then slowly increase
| until now, with a brief spike during they pandemic where they
| briefly plummeted again?
|
| Because otherwise, that explains nothing about the chart.
| Joeri wrote:
| Lots of job openings could also mean high turnover, so I don't
| think it is as much of a slam dunk.
| AnimalMuppet wrote:
| 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?)
| zeroonetwothree wrote:
| It could also be that there is a mismatch in skills.
| hdaz wrote:
| Or what the definition of "unemployed" means :) (( too many
| loopholes ))
| okaram wrote:
| How would you define it? What loopholes? Why isn't any of
| the other published measures not enough for your purposes?
| bombcar wrote:
| 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.
| bioemerl wrote:
| Millinnials are growing out of their 20s, basically, and
| gen Z is tiiiiiny
| bioemerl wrote:
| What is going on?
|
| Low unemployment.
|
| High inflation.
|
| High interest rates.
|
| 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.
| lotsofpulp wrote:
| >Individuals will barely scrape by neutral because inflation
| offsets higher pay
|
| Not if they are selling the type of labor that is
| experiencing increase in prices, because:
|
| >Lack of labor and productivity results in supply shortages
| that raise prices, while labor shortages forces salaries to
| match.
| bioemerl wrote:
| 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.
| bushbaba wrote:
| If you break down the latest jobs report by industry. You'll
| see jobs are declining in all sectors but hospitality and
| transportation.
| bioemerl wrote:
| Declining but still overall at all time highs. A recession
| might happen, but we aren't in one right now.
| whimsicalism wrote:
| 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_.
|
| Your entire story is backwards.
| bioemerl wrote:
| Rates can't be set by the Fed arbitrary, the market will
| always bring them back to earth.
| whimsicalism wrote:
| Short-term rates can be effectively by set by the Fed
| arbitrarily. It's only long-term that the _real_ rates
| are independent of the Fed.
| yamtaddle wrote:
| > 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?
| dragontamer wrote:
| 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)
| lesuorac wrote:
| > 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%.
| dragontamer wrote:
| > 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.
| Victerius wrote:
| Give me one logical reason why we should give the NBER the
| authority to declare whether the United States of America is
| in a recession.
|
| First, the NBER is not a government agency. It's a private
| organization.
|
| Second, there is no law that says that the NBER has the legal
| authority to declare recessions.
| sokoloff wrote:
| What's the legal authority I have to state an opinion based
| on the data I see? There is none and none is needed.
|
| If I get known to be trustworthy and reliable on a given
| topic, that's the authority I'd have, a reputation-based
| authority, not a legal authority.
| [deleted]
| lotsofpulp wrote:
| 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).
| dragontamer wrote:
| 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.
| toss1 wrote:
| >>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...
| adam_arthur wrote:
| Employees have pricing power, which is why wage growth is
| running far ahead of what's consistent with 2% inflation.
|
| The labor market tends to be tightest before a recession
| because it forces the Fed to hike until it breaks.
|
| https://www.atlantafed.org/chcs/wage-growth-tracker
| alexb_ wrote:
| 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.
| JumpCrisscross wrote:
| Unemployment is a classic lagging indicator [1].
|
| [1] https://www.investopedia.com/ask/answers/what-are-
| leading-la...
| rossdavidh wrote:
| 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:
|
| https://www.bls.gov/charts/employment-situation/civilian-lab...
|
| 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...
| matrix_overload wrote:
| "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.
| pixl97 wrote:
| 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.
| matrix_overload wrote:
| 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.
| aschearer wrote:
| Pesky lazy kids. Begs the question, though, why did they turn
| out that way? Or was there just something in the water 20
| years ago?
| matrix_overload wrote:
| 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.
| mapmap wrote:
| >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.
| bagacrap wrote:
| 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"
| whimsicalism wrote:
| Some supply recession we've got here
| https://fred.stlouisfed.org/series/DGORDER
|
| It is exceedingly obvious to anyone looking at the trends that
| there is a simultaneous demand and supply shock going on.
| randomdata wrote:
| 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.
| whimsicalism wrote:
| https://fred.stlouisfed.org/series/PCEDG
|
| Happy to keep sending graphs until the point is clear.
| randomdata wrote:
| That measures price. Inflation isn't a big secret... The
| original comment alluded to inflation being caused by
| supply shocks.
|
| Look forward to your next attempt.
| [deleted]
| whimsicalism wrote:
| There has not been a 40% rate of inflation for durable
| goods.
|
| Real PCE https://fred.stlouisfed.org/series/PCEDGC96
| randomdata wrote:
| 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.
|
| It's okay, I'll wait.
| JamesianP wrote:
| 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.
| ramesh31 wrote:
| Also people seem to forget that over 1 million Americans died
| an untimely death over the last two years. That _has_ to be
| factoring into this.
| mjburgess wrote:
| The central banks, harassed by the fed, are however, pouring a
| cold bath.
| mrweasel wrote:
| 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.
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