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This would be the first recession ever featuring near-record-low unemployment. if anyone has any insights on how we are having an economic contraction AND such

by D_Alex 4y ago

This would be the first recession ever featuring near-record-low unemployment. if anyone has any insights on how we are having an economic contraction AND such low unemployment, I'd love to hear them.

Fauntleroy 4y ago
Way higher capacity for underemployment with the "gig economy", which was less prevalent in previous recessions.
- D_Alex 4y ago
  OK this is a plausible explanation.
markburns 4y ago
Low wages, high inflation, general financialization of everything resulting in more people working or working multiple jobs to keep their heads above water. Much less expendable income means economic contraction.
- D_Alex 4y ago
  >more people working or working multiple jobs This should cause the opposite of a recession, no? More people working --> more GDP, right?
  - markburns 4y ago
    Just working more to afford necessities isn't the same thing as putting money back into the economy. Less disposable income across society means lower economic activity.
kk6mrp 4y ago
Stagflation?
- D_Alex 4y ago
  Stagflation is associated with high unemployment.
  - kk6mrp 4y ago
    Thanks, I commented without thinking.
rufus_foreman 4y ago
From the article: "Another argument, offered by U.S. Secretary of the Treasury Janet Yellen, is that the strong U.S. labor market precludes the NBER from designating the current downturn as a recession. But while it is true that employment is one of the data series that the NBER consults, there is no reason to think that this variable — even if it remains strong — will single-handedly determine the ultimate call of a recession. Although employment usually falls during a recession, there have been several cases when payroll employment grew or remained roughly stable well after the start of an NBER-designated recession: from December 2007 to March 2008; January to April 1980; November 1973 to October 1974; and December 1969 to April 1970."
- D_Alex 4y ago
  Curious, the unemployment charts linked by von_lohengramm in this subthread show unemployment rising for all the periods mentioned above.
von_lohengramm 4y ago
Although unemployment[0] is back to the pre-pandemic low, the employment-population ratio[1] is still below pre-pandemic levels. People just don't want to work. Probably partially due to the same factors that gave way to /r/antiwork's and /r/workreform's explosions of popularity. I'm sure other factors like people moving in with their parents/friends during the lockdown and the stimulus checks are also contributing. [0] https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UNRATE [1] https://fred.stlouisfed.org/series/EMRATIO https://fred.stlouisfed.org/series/EMRATIO
- D_Alex 4y ago
  According to those graphs, the employment to population ratio has been rising strongly for the last two quarters... which makes it even stranger IMO. BTW that first graph is a lovely illustration of how unemployment went up every time there was a recession - until now.
- enragedcacti 4y ago
  Is there any evidence that young people are the ones lowering the employment-population ratio? My understanding is that the pandemic resulted in an increase in retirements which could partially or fully account for the change in ratio. https://www.pewresearch.org/fact-tank/2021/11/04/amid-the-pandemic-a-rising-share-of-older-u-s-adults-are-now-retired/ https://www.pewresearch.org/fact-tank/2021/11/04/amid-the-pa...

by D_Alex 4y ago

Fauntleroy 4y ago

Way higher capacity for underemployment with the "gig economy", which was less prevalent in previous recessions.

D_Alex 4y ago
OK this is a plausible explanation.

markburns 4y ago

Low wages, high inflation, general financialization of everything resulting in more people working or working multiple jobs to keep their heads above water. Much less expendable income means economic contraction.

D_Alex 4y ago
>more people working or working multiple jobs This should cause the opposite of a recession, no? More people working --> more GDP, right?
- markburns 4y ago
  Just working more to afford necessities isn't the same thing as putting money back into the economy. Less disposable income across society means lower economic activity.

kk6mrp 4y ago

Stagflation?

D_Alex 4y ago
Stagflation is associated with high unemployment.
- kk6mrp 4y ago
  Thanks, I commented without thinking.

rufus_foreman 4y ago

From the article: "Another argument, offered by U.S. Secretary of the Treasury Janet Yellen, is that the strong U.S. labor market precludes the NBER from designating the current downturn as a recession. But while it is true that employment is one of the data series that the NBER consults, there is no reason to think that this variable — even if it remains strong — will single-handedly determine the ultimate call of a recession. Although employment usually falls during a recession, there have been several cases when payroll employment grew or remained roughly stable well after the start of an NBER-designated recession: from December 2007 to March 2008; January to April 1980; November 1973 to October 1974; and December 1969 to April 1970."

D_Alex 4y ago
Curious, the unemployment charts linked by von_lohengramm in this subthread show unemployment rising for all the periods mentioned above.

von_lohengramm 4y ago

Although unemployment[0] is back to the pre-pandemic low, the employment-population ratio[1] is still below pre-pandemic levels. People just don't want to work. Probably partially due to the same factors that gave way to /r/antiwork's and /r/workreform's explosions of popularity. I'm sure other factors like people moving in with their parents/friends during the lockdown and the stimulus checks are also contributing. [0] https://fred.stlouisfed.org/series/UNRATE https://fred.stlouisfed.org/series/UNRATE [1] https://fred.stlouisfed.org/series/EMRATIO https://fred.stlouisfed.org/series/EMRATIO

D_Alex 4y ago
According to those graphs, the employment to population ratio has been rising strongly for the last two quarters... which makes it even stranger IMO. BTW that first graph is a lovely illustration of how unemployment went up every time there was a recession - until now.
enragedcacti 4y ago
Is there any evidence that young people are the ones lowering the employment-population ratio? My understanding is that the pandemic resulted in an increase in retirements which could partially or fully account for the change in ratio. https://www.pewresearch.org/fact-tank/2021/11/04/amid-the-pandemic-a-rising-share-of-older-u-s-adults-are-now-retired/ https://www.pewresearch.org/fact-tank/2021/11/04/amid-the-pa...