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Can the West’s perplexing employment miracle continue?

economist.com

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Re: Can the West’s perplexing employment miracle continue?

#71

Post by bluGill »

flkiwi wrote: post #37
bluGill wrote: post #20

Earlier quoted context omitted.

This isn't a high interest rate ecconomy, this is normal interest rates. Rates have been absurdily low for a while so you may not remember it, but history provides a record.

Historians in 500 years will stare in wonder at the stunning evidence we did not, in fact, build ALL the infrastructure, physical and otherwise, during the last ~25 years of absurdly cheap money.

Only those who are not aware of construction costs. Counting those costs rates were more like 700% in their US.

Re: Can the West’s perplexing employment miracle continue?

#72

Post by eek2121 »

mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

Accurate prediction:

Job data trails rate increases by many months. So do recessions.

If the fed levels off interest rates within the next year or so, we have a very good chance of avoiding a recession. I am young/old enough to remember the last time interest rates were this high, and we were BOOMING.

If the fed pushes the gas on interest rates, it will likely push us into a mild recession.

Thanks (covid!) to millions retiring along with remote work, it would take a black swan event to really push things into the red. Note that we have a few possibilities for that setup, but so far, nothing has pushed every button as of yet.

I predict a sideways trend for the near future. A really good event unrelated to employment will pull us up, a really bad event will drag us down.

Re: Can the West’s perplexing employment miracle continue?

#73

Post by ceejayoz »

vuln wrote: post #65
Gibbon1 wrote: post #40

Earlier quoted context omitted.

Also immigration is slowing and we're about to see the decline in births after the 2008 recession show up four years from now.

Immigration is not slowing it could be peaking but we're seeing double even triple the number of monthly encounters at the southern border alone. https://www.cbp.gov/newsroom/stats/southwest-land-border-enc...

Immigration encompasses a lot more activity than just illegal crossings of the southern border.

The Fed uses the term "slowing": https://www.frbsf.org/economic-research/publications/economi...

Re: Can the West’s perplexing employment miracle continue?

#74

Post by nerdponx »

pclmulqdq wrote: post #68
marcosdumay wrote: post #67

Earlier quoted context omitted.

Well, maybe in 500 years people will have an explanation for why people don't create fundamental things in low-interest times. Lasting investment seems to be very strongly and positively correlated with rates.

Here's a theory for you: the increased cost of capital doesn't cause people to stop seeking or loaning out capital, it just directs that capital toward shorter-term projects. A bridge or a skyscraper pays off a lot faster than a startup.

Isn't it more about returns on lending being really low, so investors are forced to put their money elsewhere, like tech stocks and VC funds?

Re: Can the West’s perplexing employment miracle continue?

#75

Post by VLM »

yasp wrote: post #7
jameshart wrote: post #5

Earlier quoted context omitted.

Ask whom? The missing 10m? Might be hard. What with them being ‘missing’.

Ostensibly they are missing from the labor force, not from the planet.

Will HR permit hiring someone who was downsized or it not currently working in that role with that job title? Its all about risk minimization, not workforce maximization.

Re: Can the West’s perplexing employment miracle continue?

#76

Post by chiefalchemist »

ethbr0 wrote: post #16
mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

> to a high interest one We're at 4.50–4.75, no? That's not low, but it's not high either. https://en.m.wikipedia.org/wiki/Federal_funds_rate#Historica...

The better question is: what rate are most ppl paying on their credit card debt.

Re: Can the West’s perplexing employment miracle continue?

#77

Post by pclmulqdq »

nerdponx wrote: post #74
pclmulqdq wrote: post #68

Earlier quoted context omitted.

Here's a theory for you: the increased cost of capital doesn't cause people to stop seeking or loaning out capital, it just directs that capital toward shorter-term projects. A bridge or a skyscraper pays off a lot faster than a startup.

Isn't it more about returns on lending being really low, so investors are forced to put their money elsewhere, like tech stocks and VC funds?

That too, but the same effect applies to equity investors who want to buy equities for diversification.

Re: Can the West’s perplexing employment miracle continue?

#78

Post by zamnos »

ceejayoz wrote: post #69
b33j0r wrote: post #58

Earlier quoted context omitted.

This conversation needs someone fiddling in the background. No one had a normal economic life for several years. It’s a miracle that these levers have been adjusted to the point that everyone is like “well no one going to work for three years had no impact! What over-reactionaries!”

> no one going to work for three years Where did this happen?

I'm not sure about three years, but anywhere the service and entertainment industry was shut down due to Covid. Eg California.

Re: Can the West’s perplexing employment miracle continue?

#79

Post by dd36 »

ceejayoz wrote: post #69
b33j0r wrote: post #58

Earlier quoted context omitted.

This conversation needs someone fiddling in the background. No one had a normal economic life for several years. It’s a miracle that these levers have been adjusted to the point that everyone is like “well no one going to work for three years had no impact! What over-reactionaries!”

> no one going to work for three years Where did this happen?

Yeah, I don’t know a single person that didn’t work.

Re: Can the West’s perplexing employment miracle continue?

#80

Post by ajross »

marcosdumay wrote: post #70
ajross wrote: post #61

Earlier quoted context omitted.

Again, that's wrong. Inflation is by definition the scale-dependent part of price changes. You're right that prices can go up because of a reduction in supply too, but that's measures as part of numbers like GDP; which, importantly, are routinely expressed using inflation-adjusted numbers to avoid precisely the conflation you and the grandparent are making. So, sure, if you want to rephrase and lament that people are…

Well, monetary changes maintain the mean purchase power. But people being able to buy necessities is more about median purchase power, or really the details of its distribution. The mean purchase power has a very small impact on society.

And I say a third time: if you want to have a discussion about unfair distribution of monetary effects on specific populations, you need to have that discussion and not just shout "inflation!". Because while your point is true, it's specious. Changes are always happening (c.f. eggs, mentioned upthread). The question isn't whether things are changing, it's about what is changing and what to do about it.
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