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...
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...