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Ask HN: Isn't recession just mass hysteria ? Layoffs leading to more layoffs leading to the entire economy slowing down ?
High inflation → need to reduce demand → slower economy → layoffs.
Anyone that was around for the "Turn of the Century Crash" may find this familiar. With all the massive scaleups, companies were becoming bloated as hell. They also became fairly sloppy with their money. Time to pay the piper. But unlike some bubbles, there's a real industry, here (like in the 'oughts). It's a return to a [still pretty decent] baseline, as opposed to an implosion to nothing. In the early Web days, th…
I was too young then, but did that crash have the same "everyone and their mother sees it coming and have been talking about it months before" feeling? Cause this "crash" is surely like that – it has to be the most "expected and talked about" one in modern times...
Did these companies accelerate planned layoffs because they figure Twitter layoffs on Friday would help take the spotlight off of them?
Earlier quoted context omitted.
Powell has previously said that he wants higher unemployment. He believes this is the only way to decrease demand and bring down prices. > The labor market continues to be out of balance, with demand for workers substantially exceeding the supply of available workers. The labor force participation rate showed a welcome uptick in August but is little changed since the beginning of the year. FOMC participants expect su…
> He's absolutely determined to increase unemployment via rate hikes. either i'm deluded or there has to a better way to run an economy than this...
Something something the measure becomes the means or something.
Anyone that was around for the "Turn of the Century Crash" may find this familiar. With all the massive scaleups, companies were becoming bloated as hell. They also became fairly sloppy with their money. Time to pay the piper. But unlike some bubbles, there's a real industry, here (like in the 'oughts). It's a return to a [still pretty decent] baseline, as opposed to an implosion to nothing. In the early Web days, th…
I was too young then, but did that crash have the same "everyone and their mother sees it coming and have been talking about it months before" feeling? Cause this "crash" is surely like that – it has to be the most "expected and talked about" one in modern times...
Earlier quoted context omitted.
> has previously said that he wants higher unemployment He has not. I am open to being corrected with a credible source. But every time I see this conspiracy theory, it’s based on summaries of Fed statements unsupported by the statements themselves. > is why the market goes down when low unemployment numbers are released Because the market is anticipating rate hikes. When inflation is low strong employment boosts the…
> We’re never going to say that there are too many people working
I’ll admit that was a poorly-worded statement. But it still doesn’t convey the Fed targeting a higher unemployment rate. It isn’t. It’s targeting lower price growth, and keeping an eye on the labor market to avoid overtightening.
Ask HN: Isn't recession just mass hysteria ? Layoffs leading to more layoffs leading to the entire economy slowing down ?
Ask HN: Isn't recession just mass hysteria ? Layoffs leading to more layoffs leading to the entire economy slowing down ?
There is a cascading effect, but it would be a mistake to attribute it all to a big psychological mistake. When demand goes down (in this case due to rising rates) there really is less money flowing into companies.
Earlier quoted context omitted.
What recession? We are not in a recession. Unemployment data and the broader economy are still strong. Saying otherwise is dangerous, to be honest
Agree we're not in a recession, but I'm not sure I'd say we're in a strong place. The impression I've got from the articles I've read is that no one knows what the fuck is going on. Some indicators look great (like unemployment), but others look bad (like inflation).
Every downturn is like all the others and every downturn is a unique snowflake.
Earlier quoted context omitted.
> goal of raising interest rates is to reduce demand for labor. He says that directly None of your quotes say that.
This quote says it: > The labor market continues to be out of balance, with demand for workers substantially exceeding the supply of available workers. The labor force participation rate showed a welcome uptick in August but is little changed since the beginning of the year. FOMC participants expect supply and demand conditions in the labor market to come into better balance over time, easing the upward pressure on w…
> He directly says he's waiting to see softening of the labor market before stopping the rate hikes
Yes, because we don’t want to ruin the labor market. Right now, rates can be raised without spiking unemployment. The Fed is trying to estimate when that stops happening.
A clear signal that the limit has been reached is the labor market actually softening. That doesn’t mean the Fed is trying to raise unemployment. It’s trying to lower inflation, and thinks unemployment may rise as a result of that, though to date it has not.