> The inflation report was part of a deluge of data released this week, with a delay caused by the federal government shutdown. It also showed unemployment rising, to a four-year high of 4.6% in November, and earnings growth slowing.
> Sometimes unemployment rises because a recession is under way. This time, something else is going on. Business leaders I have talked to in recent months are broadly optimistic about growth and pessimistic about hiring, especially their own. As their attitudes percolate down, we could see job security supplant prices in the public’s hierarchy of anxiety.
> […]
> Unemployment’s rise has been gradual and the level is still moderate, yet fragility is amply evident beneath the surface. The number of people working part time who wanted to work more leapt to 5.5 million in November, and is now up 23% from a year earlier. Those unemployed for more than half a year rose to 1.9 million from 1.8 million in September and 1.65 million a year earlier. It may not be a recession, but for anyone trying to find a job, it is starting to feel recession-like.
> Meanwhile, average hourly earnings in November were up just 3.5% from a year earlier, the lowest since 2019 if pandemic-distorted figures are excluded. Other data do show firmer growth. But with employers reluctant to hire and unemployment growing, the pressure on wages is likely downward.
> […]
> One reason for the disconnect between the job market and the broader economy is tariffs. Economists expected them to show up as rising prices for imports. In real life, though, inputs don’t always map neatly to outputs. To cope with higher costs, whether for tariffs, energy, taxes, or health insurance, a business owner looks at all options, which may mean trimming head count instead of raising prices. Maybe it isn’t a coincidence that payroll growth stepped down sharply in the spring, just as Trump’s biggest tariff increases took effect, while the effect on inflation has been muted.
audieleon on
I’d say this is not likely. Jobs very much affect those looking for one, or laid off, and my heart goes out to those people.
Prices affect everyone, all the time. Fuck my grocery bill.
EconomistWithaD on
If there’s anything we should have learned from the minimum wage literature that is broadly applicable to the labor market is that firms have quite a few avenues with which to “absorb” higher input costs. Non wage benefits, wages, employment (hiring and/or hours), training, reduced profits, higher prices, …
The slowdown in hiring is absolutely one that appears to be the choice for business owners.
Captn_Insanso on
It’s by design. If you have a job, just be happy you have a means to make money at all and shut up and pay 2/3 your income for housing. Maybe sell your car and take the bus, or walk to work? Get two more roommates in your two bedroom apartment?
Konukaame on
>But don’t define affordability too narrowly. It means not just the prices we pay, but the means to pay them. We may be focusing too much on the first and not enough on the second.
Who is “we” because that’s been obvious to anyone not invested in pretending that everything is fine.
“X is unaffordable” has ALWAYS had two parts to it.
5 Comments
Gift link. Excerpt:
> The inflation report was part of a deluge of data released this week, with a delay caused by the federal government shutdown. It also showed unemployment rising, to a four-year high of 4.6% in November, and earnings growth slowing.
> Sometimes unemployment rises because a recession is under way. This time, something else is going on. Business leaders I have talked to in recent months are broadly optimistic about growth and pessimistic about hiring, especially their own. As their attitudes percolate down, we could see job security supplant prices in the public’s hierarchy of anxiety.
> […]
> Unemployment’s rise has been gradual and the level is still moderate, yet fragility is amply evident beneath the surface. The number of people working part time who wanted to work more leapt to 5.5 million in November, and is now up 23% from a year earlier. Those unemployed for more than half a year rose to 1.9 million from 1.8 million in September and 1.65 million a year earlier. It may not be a recession, but for anyone trying to find a job, it is starting to feel recession-like.
> Meanwhile, average hourly earnings in November were up just 3.5% from a year earlier, the lowest since 2019 if pandemic-distorted figures are excluded. Other data do show firmer growth. But with employers reluctant to hire and unemployment growing, the pressure on wages is likely downward.
> […]
> One reason for the disconnect between the job market and the broader economy is tariffs. Economists expected them to show up as rising prices for imports. In real life, though, inputs don’t always map neatly to outputs. To cope with higher costs, whether for tariffs, energy, taxes, or health insurance, a business owner looks at all options, which may mean trimming head count instead of raising prices. Maybe it isn’t a coincidence that payroll growth stepped down sharply in the spring, just as Trump’s biggest tariff increases took effect, while the effect on inflation has been muted.
I’d say this is not likely. Jobs very much affect those looking for one, or laid off, and my heart goes out to those people.
Prices affect everyone, all the time. Fuck my grocery bill.
If there’s anything we should have learned from the minimum wage literature that is broadly applicable to the labor market is that firms have quite a few avenues with which to “absorb” higher input costs. Non wage benefits, wages, employment (hiring and/or hours), training, reduced profits, higher prices, …
The slowdown in hiring is absolutely one that appears to be the choice for business owners.
It’s by design. If you have a job, just be happy you have a means to make money at all and shut up and pay 2/3 your income for housing. Maybe sell your car and take the bus, or walk to work? Get two more roommates in your two bedroom apartment?
>But don’t define affordability too narrowly. It means not just the prices we pay, but the means to pay them. We may be focusing too much on the first and not enough on the second.
Who is “we” because that’s been obvious to anyone not invested in pretending that everything is fine.
“X is unaffordable” has ALWAYS had two parts to it.