I read an interesting discussion of the jobs numbers from 2023 recently, the conclusion of which was basically that most of the jobs "created" last year were in healthcare and government and that in general all other sectors held steady or contracted. The piece went on to note that these are considered counter-cyclical industries and that that does not bode well for the labor market this year [0].
Further, I've been reading a lot of commentary saying that most of the posted job openings are fake (which I also experience anecdotally as true) since these jobs are posted to make it seem like companies aren't in the process of cutting costs and attempting to weather bad economic winds without any intention of hiring anyone into the listed roles. Similarly, I've seen my current employer list a lot of positions despite a lot of internal talk about hiring freezes. Worse than that, despite the hiring freezes, there are a tiny fraction of the open positions that get special dispensation to hire, so you can't just write off a whole giant company on rumors of hiring freezes, even if you have strong confidence in the rumor mill. All of this tends to indicate that hiring is down and will continue to be down through most of if not all of 2024.
Charitably, you could interpret the article title as "true" in that most companies in the US do little hiring in late December and a lot in early January to avoid starting new employees when everyone with any seniority is out of office on vacation for at least the last week of December and often much longer, even at companies without an official Christmas to New Year's break.
The improvement is pretty broad-based: aside from healthcare and government (which actually increased below-trend), there were decent-sized increases in construction trades, retail, professional services, manufacturing, and education. Even the tech industry posted an increase, though not a particularly large one.
Interestingly, the large increase in travel & hospitality that I'd heard about last year seems to have petered out, and that sector is roughly normal. These are also employment numbers, not job openings, and so they reflect actual hires rather than advertised positions.
You're correct that the pattern of industries does seem indicative of a potential recession brewing: capital-intensive industries like mining equipment, civil engineering, and credit intermediation all posted decreases, and these are often leading indicators for a potential recession. But the recession may be farther off than many people currently suspect.
> Interestingly, the large increase in travel & hospitality that I'd heard about last year seems to have petered out, and that sector is roughly normal.
That makes sense, I think; last year it would have been busy recovering from covid (it was _very_ hard-hit), but there's only so much covid recovery you can do.
> All of this tends to indicate that hiring is down and will continue to be down
I'm not sure why, but it seems half the posts in this discussion seem to be working very hard to twist things around to dispute the actual numbers by the Fed, without just explicitly saying the numbers are wrong.
Is hiring down? No. Apparently not. Yet, people seem to keep arguing that they are down.
I’m in the Bay Area right now, and it’s wild to hear the bubble it’s created for itself. In New York and Austin and West Wyoming, finding people is hard. It’s patently obvious the economy is hot because nobody can hire the people they need. Tech, on the other hand, is facing a combination of headwinds. Yet instead of recognising those we have conspiracy theories about election-year propaganda.
> you could interpret the article title as "true" in that most companies in the US do little hiring in late December and a lot in early January
December numbers are up, too. You’re citing the prevailing wisdom from just before these numbers.
It reminds me tremendously of exactly one year ago, when the prevailing wisdom among the Bay Area elite was that the Fed was constrained in being unable to sustain high interest rates. The reasons given were always bunk, e.g. Congress can’t afford the interest, but clearly not debatable.
With the benefit of hindsight, it makes sense why regional bank management steeped in this culture would get caught sideways by resiliently-high rates. (I’m not seeing the predictable effect of the current misassessment. Maybe good angel opportunities outside the valley.)
They aren't wrong, just early. The reasons still hold - if you increase interest rates by 5x while holding the amount of debt constant, debt service costs are going to increase 5x. The U.S. currently spends about 13% ($659B, more than Medicaid) of its budget on interest costs; it's roughly double the $345B spent in 2020 (largely because of the higher rates). Go up to the full amount implied by rates and you're spending about $1.6T on interest, more than any other category and about 40% of total tax revenue.
It's a similar picture for corporate debt, which is continuing to hit record levels.
The missing part of the puzzle is maturity. Most corporations took advantage of the low 2021-2022 rates to roll over their debt into low-interest bonds that mature between 2025-2027. Similarly, the bulk of U.S. government securities have maturities between 2-7 years. So they're insulated from higher interest rates for at least 2 years, and can keep going business-as-usual until then (at which point, they will probably just go bankrupt). If the Fed drops rates before then, they never feel the impact. Of course, the Fed has no incentive to drop rates before then if the economy keeps on humming well and we don't see workers reallocated from zombie companies to sectors that need them, making this a game of chicken between the Fed and corporate debt.
It wouldn't surprise me if much of the market predictions for 7 rate cuts this year (while the Fed is insisting on no more than 3) is traders assuming that if they don't start cutting in earnest before the end of this year, lots of companies will go bankrupt next year, and the Fed won't let that happen, so therefore the Fed will cut. Which is logical for traders accustomed to the "Fed put", but I think the days of the Fed encouraging moral hazard might be over.
So if you guys had actually clicked on my link, you'd see that much of the highlighted issue was that 1) all of the months before the December yearly adjustment were down, so we adjusted down, then at the end of the year we adjusted the whole shebang back up. 2) The negative data was actually mostly tied to the household survey for unemployment and general financial health. Overall, we're seeing people complain that life is hard to afford and there's a general upward trend of low-wage positions (low wages are getting less low over time, more than higher wages are). This backed up my current employer, one of the Big 3 automakers having just massively increased the line worker salary in the UAW negotiation (to something like 2.5x what a Tesla assembly worker makes) while having suppressed promotions and wage increases in white collar areas. The government and health care sectors are up but counter cyclical. Similarly, construction is up in places like Michigan not because people are building more (just check the construction surveys for that one) but because the state finally saved some money for fixing the damn roads, then got a windfall of COVID assistance that had to be spent, not saved, and had to be used quickly, so they turned fixing 2 freeways into fixing 5 freeways simultaneously, which requires a lot of additional road construction workers. As another commenter further down pointed out, those jobs are not sticking around past 2026, when most of that work is scheduled to end. Meanwhile, the announcements of layoffs in anything that makes over $80k/yr is increasing...
The current US Government has a massive program that is creating a bubble in construction (Build Back Better), this generates a lot of jobs, but despite the program lasting a long period, those jobs don't stay and aren't jobs created entirely by free market and the private sector.
Those jobs will go away, won't last and will likely have a reverse impact once we're at the other side of the construction cycle.
Government-led hiring changes from government to government, it generates bad bubbles and is bad. If you look at the data above, you'll see that we're actually doing pretty badly, if it wasn't for the increased demand by that package.
Not to mention that those government packages are fueled by DEBT. The US is running a big deficit and this will "fake unemployment" will be paid by your kids.
I meant for the other sectors. You've picked one that didn't fit what I said to "prove" I am wrong.
About wages being higher: are you taking inflation into account? Where are those figures?
Even if you took inflation into account, the US is so big and inequality is so huge there that inflation country numb reis completely uneven and pointless.
> meant for the other sectors. You've picked one that didn't fit what I said to "prove" I am wrong
I picked the second-largest hiring category since the largest one, private education and healthcare, is less generous to your argument: it’s filled with high-paying, rewarding jobs.
> About wages being higher: are you taking inflation into account?
Yes [1].
> the US is so big and inequality is so huge there that inflation country numb reis completely uneven and pointless
Varied, yes. Even given the variance, it’s difficult to find large cohorts who don’t have a higher real wage today than any time other than Q4 2019 to Q4 2021 (stimulus). That doesn’t mean life doesn’t suck for a lot of people, just that it’s better for most and far better for many.
>Those jobs will go away, won't last and will likely have a reverse impact once we're at the other side of the construction cycle.
All construction is cyclical. There's no such thing as a "permanent" construction job. Meanwhile, those workers will have jobs, health insurance, drive the economy, buy homes, and build wealth.
Some will, others will become alcoholics, or already were and will no longer seek employment.
Not to mention most construction people ideally don't stay in construction.
It's really hard and sorta inhumane to do this when you are 50+ with problems all over your body. For many, unemployment and alcohol abuse looks like a better alternative.
America doesn't want to talk or hear about this, as everybody want to buy their beautiful huge homes on a suburb, no matter how this is costly in the health and life of others
> hard and sorta inhumane to do this when you are 50+
My painter in West Wyoming is in this age bracket. He is currently on a ski trip in Hokkaido. He makes good money and is in great health, certainly compared to most office workers I know.
This is literally true for any 50+ in construction. My point is someone with that seniority can pick their jobs, pick their clients and not necessarily be doing the back-breaking work.
My cousin's baby-daddy was a painter, but he couldn't make enough money to pay child support doing that so he does some sort of overhead-door service thing now. He was pretty thrilled to get health insurance as well since he'd never had a job that provided that before.
What data do you have that shows that painters are currently highly paid? It's entry-level construction work; AKA a shit job (maybe just a bit better than roofing), so I'm skeptical.
> It's entry-level construction work; AKA a shit job
This was historically true for construction [1]. Yet their wages are on a smooth curve upwards [2]. The entire cohort of construction workers is currently seeing high real wages, and their data almost completely hide Covid.
I’d also argue that commodity and skilled painting are different. The 50-year old commodity painter who honed his craft can charge a premium because he can smooth my drywall and put on a finish someone with zero training cannot.
That paper that you're citing is from 2022; hardly what I'd call historic. And is 2 in real dollars? Because it doesn't look like it and I wonder if it would be just a flat line if it was.
I'll say that I've worked along side my cousin's baby-daddy (I think in future I'll just call him "T" as that's less unwieldy), and he's a fine painter, but ultimately there just isn't that much to the job. I remember the first time I used a paint sprayer on a new construction job myself; basically you just need to learn where the trigger is and in a minute you can paint a wall that would take an hour with a roller.
I'll just say that my on-the-ground experience (limited such as it is to the markets/trades that my friends and family work in) doesn't express that construction is all of a sudden a good job. I could perhaps be convinced that it has upgraded from a shit job to merely a crap one, perhaps because so many people have escaped it that they have to at least pay slightly better these days. If I had any kids, I'd still be inclined give them the same advice that my blue-collar parents gave me - go to school to do just about anything else.
If we're talking qualitatively about bubbles, I'll take government-led building programs that help lower real estate prices and help build trades over hilarious tech bubbles that all rely on the same memes (Quantum! AI! Selling user data!) and then burst, leaving a bunch of people with super mad Monday.com skillz out of work.
I recommend people go and check the 12 month data in the link for themselves (the chart lets you click into categories and drill down into subcategories) and see if this narrative that good-looking job numbers are caused by a "bubble in construction created by the federal government" makes any sense.
For one thing, I'd be interested to know how this artificial construction bubble causes local governments and state governments to coordinate so well with the federal government in hiring so much in education.
For another thing, I'm wondering where construction "should" be absent this bubble and how it squares with what we already know about the demand for housing and electricity.
Finally, take a look at all the non-government, non-construction activity and tell me where the bubble is.
You're being fooled by the top-level chart showing you absolute nubmers. It's just showing you which sectors are biggest, not which is growing the fastest. Click the "show table" to get relative values, which don't paint the same picture.
In fact government and healthcare grew above median, but not abnormally so. And at the same rate as other sectors like construction which don't really support the same kind of inferrence.
They weren't too far off. On a 12 month basis, Private Education and Healthcare Services, Leisure and Hospitality,Utilities, Construction, and Government sectors are the only five sectors of fourteen that are up over 1.5%, the only two white collar sectors of those being Private education/healthcare and government. Every other sector is below 1.6% growth. The Information sector is down 1.1 percent, professional and business services is essentially flat at a 0.9% increase, and financial services had only a 1.1% increase. Private education and healthcare grew at 4.2% over the last year, which is 323% of the median of 12 month sector growth of 1.3%. Government at 2.7% is 207% of the median.
Right, but if "2x median" reflects a range between 1.0 and 3.0% growth, is it really that insightful to call out specific sectors? There are always (mild) winners and losers in every distribution.
Note also that population growth in the US is something like 0.3% for the past few years, so calling 0.9% jobs growth "flat" seems a bit spun?
I mean, we both know what's going on here: there's a desire on the part of multiple posters to try to deny these numbers are good numbers, probably for political reasons. And I guess fingering "government" and "doctors" seems like an easy way to win that argument (i.e. "real people's jobs actually bad"). But that's just incorrect per the numbers. "Real people" are doing well too.
The big question for us to be able to figure anything out based on this: what did that chart look like in other years?
Healthcare and government are enormous slices of the economy. I'd expect them to be at or near the top of hiring much of the time. IDK about hospitality.
I was able to change careers because I have a security clearance and security certifications. Get certifications, preferably management certs, and pimp out your resume with the added credentials.
Software developers spent the last 15 years finding easy employment with inflated wages all of which resulted in a lot of unearned entitlement. The gravy train is over. Now you have to actually compete for employment, but I promise its there. Bear these to heart:
* Easy to hire means easy to fire.
* Always prefer that which has a higher barrier of entry
Seems like sectors that were hit hard during COVID are recovering, while sectors that boomed during COVID (tech, remote-able work) are reverting to the mean.
If that's what's happening it seems pretty predictable.
Tech (at least with current VC-led business models) runs on low interest rates too, so the rate increases have hit tech growth pretty hard.
My wife, a licensed teacher in our state, was switching jobs from one school district to another, and watching her go through that process was interesting...
The interview process for any kind of school administrative position consisted of multiple rounds of interviews.
The interview process for a teaching position consisted of them confirming that my wife had a pulse.
That article says that "after today’s revisions, employers added more than 3 million jobs in 2023. That makes it the best year for job growth since 1999."
In what world was 2023 the best year for job growth?
It's important to remember we're at the start of an election cycle. Every time there's a Democratic president, the Repulicans start the drum beat of "the economy is ailing" and they ramp it up as the next election comes close. Americans have trusted Republicans more on the economy since Reagan took over from Carter. It's their main PR plan, tell Americans the economy is is going to die if they pull the wrong lever. Dems have similar PR bullshit, just on different topics.
So the answer to your question: in this world. Job growth in absolute numbers has been strong now for over a decade (2020 being an abberation of course) and remains so. These are numbers collected by bi-partisan and non-partisan organizations, and they're fairly consistent in their methods. Economists don't believe who is in the White House has much to do with it almost all of the time, but most people do and it feeds their anxiety.
It is a rough time in the tech industry, and the first in many decades, so I'd not be surprised if many people here share your view, but for the economy as a whole, it's still tough out there to hire. A lot more people work in restaurants and factories than tech, and ask anyone in those industries how it's going.
What makes you think it wasn't? Again, tech is not the whole world. I mean, 2023 was essentially late covid recovery; you'd _expect_ it to be _pretty_ good.
I know almost no one that is doing good and enjoying the economic situation right now, but somehow the numbers are better on each report. Election year for sure.
A few highlights from the report itself (to clarify from spin):
+353,000 in January, similar to revised December gain of 333,000.
January monthly figures:
Professional and business services: +74,000 jobs
Healthcare: +70,000
Retail trade: +45,000
Social assistance: +30,000
Manufacturing: +23,000
Government employment: +36,000
Information: +15,000 But huh? How could that be? From the report:
"In January, employment in information continued its upward trend (+15,000).
Employment in motion picture and sound recording industries increased by 12,000, while employment in telecommunications decreased by 3,000. Overall, employment in the information industry is down by 76,000 since a recent peak
in November 2022."
Continuing...
Mining, quarrying, and oil and gas: -5,000
Construction, wholesale trade, transportation and warehousing, financial activities, leisure and hospitality, and other services: "little change"
Overall, average hourly earnings are up "19 cents, or 0.6 percent, to $34.55" -- I wonder what the mean is.
What's more, employment "for December was revised up by
117,000, from +216,000 to +333,000".
So these are super-strong numbers, and not "just government" though yes largely services (ex programmers).
Remember that interest rates are currently restrictive and that money supply (M2) while having ticked up a bit lately, has fallen significantly for the last two years.
According to real M2 we've basically absorbed the Covid helicopter cash drops?
As for programming jobs, that's likely, don't you think, an interest rate story, since startups and early stage ventures are highly interest rate-sensitive? But... it might be that LLMs actually... increase programmer hiring, as more projects become financially viable, if LLMs increase developer productivity? I hope so. What do you think?
> this trend of "announce big numbers, get headlines, then walk them back quietly in the coming months" rather alarming
Then you’ve just started following jobs numbers. They’re incredibly volatile when first released because of the way they’re collected. When the economy is moving, they have a decided bias. That said, this report revised up November and December’s numbers. That suggests we’re undercounting again.
Literally none of the aspects of your statement are accurate. This report revised all the recent reports upwards. Pay is growing faster than inflation. Participation increases almost monotonically since the onset of the pandemic and for some demographic groups stands at record highs.
Total labor participation rate is purely driven by generational demographics. Boomers have largely passed out of their working years, but they forgot to die, so total labor force participation falls.
Prime age participation is as high as it's ever been.
Well here's sources that show that two points are not inaccurate at all, and one is hard to support depending on the stat you choose. And the stat you chose did barely increase. (IMO 0.5% in 1 year is suspect in my mind when you include my personal bias that inflation is under reported).
Jobs numbers in Oct, Nov, Dec all revised down. [1], [2]
Labor participation rate, peaked ~67% in 2000s, down to 61% a year after the pandemic. [3]
Looks like you're right that median household income has had real gains "a 0.5-percent increase in real average weekly earnings over this
period." [5]
Even more stark when you filter by Men - peaked at 86% in the 50's and has been consistently declining for 70 years to 68%. [4]
“It appeared that there had even been demonstrations to thank Big Brother for raising the chocolate ration to twenty grams a week. And only yesterday […] it had been announced that the ration was to be reduced to twenty grams a week. Was it possible that they could swallow that, after only twenty-four hours? Yes, they swallowed it.“
It’s a quote from the book “1984”. Where a dystopian government routinely makes up fake numbers and even changes the numbers daily. The OP is either indicating that they don’t trust the government’s employment statistics, or the OP is indicating something along the lines of “yesterday we laid off 1000 workers, today we hired 500 workers” where the headline is +500 instead of -500.
Thanks. Yes, I am aware of the origin and its implications, but was hoping the OP had more to it. I agree that it feels a bit manipulative, this "god number from the heavens".
> wages going up 4.5% after three years of inflation averaging above 4.5% is not an improvement
Real wages. Real wages are up [1].
We’re not up to the sugar high of the pandemic’s stimulus era, which is what people in tech are feeling. But we’re making more than since any time before Q4 2019 and any time since Q4 2021.
> My lived experience tells me that's just not true
Yes, in a country of 330 million, the individual qualitative will vary from the quantitative central tendency. This is practically guaranteed by statistics. (As is the impossibility of compiling “lived experiences” into a meaningful national consensus.)
I know multiple people laid off, all in tech, mostly in California. That doesn’t change that it’s virtually impossible for me to find someone to build a deck in Wyoming, nor the trouble my friends hiring in New York, Austin and Miami are having.
I definitely agree with you and understand that. It just seems like everyone around me in my life is struggling more than they were four years ago, and are scared of being laid off whether they're in tech or not.
I work remote in tech and live in a rather economically depressed and forgotten area of the country.
Given your background in finance, I am genuinely interested in your take on this region and how we could improve it.
The area is the Southern Tier of the state of New York. Specifically, Elmira NY, born and raised, but moved to NYC for several years for work and back. The Elmira/Corning area had a booming industrial economy before the effects of neoliberalism and offshoring.
Very few people in tech, but there are a handful remote workers in the area like myself. Typically, the area is more of a service and industrial economy with a small amount of tourism from the nearby Finger Lakes region. Nearby Corning Inc. is laying off thousands and talking about moving their headquarters down to NC, which would decimate the area even further.
There is talk about NYS and Chuck Schumer wanting to inject millions to make this area a lithium ion and fab production hub, but many locals are skeptical that will materialize. While near-shoring and re-shoring trends sound promising, many feel as if this area does not have the same geographical advantage it had during the gilded age and into the early-mid 20th century.
It seems your unemployment rate is low [1]. But people are dying [2] and incomes and GDP/capita stalling [3][3a] while home prices soar [4] despite a falling population [5].
So the quantitative supports your qualitative: something is misfiring. Your crime rate is down, so that wouldn’t seem the problem [6]. And the population doesn’t appear to be borrowing itself into ruin [7].
Is there a drug or industrial pollution problem? Are folks from the city buying up your housing stock?
> many feel as if this area does not have the same geographical advantage it had during the gilded age and into the early-mid 20th century
The Cheming River is a navigable waterway, correct? I wonder if your community is another victim of the Jones Act [8].
Thank you very much for those data. It does line up with my experience.
> Is there a drug or industrial pollution problem? Are folks from the city buying up your housing stock?
Yes, there are major substance abuse and lead contamination issues in our area. In fact, my mother works for the city administering a federal HUD lead abatement grant. There are many local and outside investors who buy up housing stock with the intent to rent it, so that could partially explain the rising prices despite the lowering population.
[8], yes, although there was a major flood in 1972 resulting in much of the downtown being destroyed along with damming by the US army corps of engineers upstream, which lowered the river depth, so it's not quite navigable by a supertanker. Although, we are well connected to the Norfolk Southern rail line.
But what do we do? Getting into the information service economy seemed to be the answer for some time, but given our current trend of mass tech contraction that's starting to seem doubtful now.
I know exactly what you mean, and I know plenty of people from my hometown who've made the same choice. I completely empathize with your choice. And I ask: aren't people leaving further exacerbating this issue?
My family has been here for over 150 years, and I feel like I have an intergenerational responsibility to be a small part of helping my home through this tough time. There's got to be something the rust belt can do to pull itself through its issues.
Further, I've been reading a lot of commentary saying that most of the posted job openings are fake (which I also experience anecdotally as true) since these jobs are posted to make it seem like companies aren't in the process of cutting costs and attempting to weather bad economic winds without any intention of hiring anyone into the listed roles. Similarly, I've seen my current employer list a lot of positions despite a lot of internal talk about hiring freezes. Worse than that, despite the hiring freezes, there are a tiny fraction of the open positions that get special dispensation to hire, so you can't just write off a whole giant company on rumors of hiring freezes, even if you have strong confidence in the rumor mill. All of this tends to indicate that hiring is down and will continue to be down through most of if not all of 2024.
Charitably, you could interpret the article title as "true" in that most companies in the US do little hiring in late December and a lot in early January to avoid starting new employees when everyone with any seniority is out of office on vacation for at least the last week of December and often much longer, even at companies without an official Christmas to New Year's break.
[0] https://thedispatch.com/newsletter/capitolism/some-of-my-big...