The Real Scoop On and Around the Economy – Good and Bad

As a nation, how are we doing with jobs and money?  What I would call objective results say they are going well, but is there more than that?

Starting with “This Economy Has Bigger Problems Than ‘Bad Vibes” (Tressie McMillan Cottom, The New York Times, December 11^th), there are doubts out there.  “The economy is growing.  Wages are up.  Unemployment is low.  Income inequality is narrowing.  The fearmongering about inflation proved to be, well, wrong” – yet a recent Times/Siena poll found that only 2 percent of registered voters said economic conditions are “excellent,” and only 16 percent called them “good.”  Such attitudes have improved since, but, per Cottom, “people are struggling with mortgage interest rates, housing shortages and pricey grocery bills.  They’re also consuming to make their lives work:  on expensive, hard-to-manage child care, health care and convenience spending – things like restaurants, travel, delivery services and on-demand help – which are necessary for balancing work and life demands.  Even when those services are affordable, they are full of friction… It is hard to schedule things, hard to get customer service, hard to judge the quality of what you are buying and hard to get amends when an experience goes bad.”  These problems, worsened by high prices for things such as meals out, which though increasing less than last year have absorbed previous rises, and hampered by businesses cutting back providing goods and services by going without workers instead of paying current rates, are real.  Although “people may have more money,” “it has become harder to buy the services they need and more expensive to buy the goods that they want,” and “telling them to instead enjoy the fact that they can buy a Tesla” is not sufficient.

So, with that, it might be more understandable that the “Majority of Americans feel US economy is in recession: survey” (Breck Dumas, Fox Business, December 12^th), even though it is not.  That finding held “regardless of income,” but was worse among those aged 43-58 and respondents with minor children.  Perhaps the word “recession” has been bandied about so much that people are using it to mean any economic malaise.

Have U.S. residents’ feelings improved in the two-plus months since?  Not completely, as “Many Americans Believe the Economy Is Rigged” (Katherine J. Cramer and Jonathan D. Cohen, The New York Times, February 21^st).  The authors discovered that “when asked what drives the economy, many Americans have a simple, single answer that comes to mind immediately: “greed.”  Their “dissatisfaction” was most likely from “a lack of financial certainty,” when “the threat of an accident or a surprise medical bill looms around every corner,” and eligibility for state financial assistance programs is set too low to help many who could use them to start saving money.

Paul Krugman described one related problem in “Watch What People Do, Not What They Say About the Economy” (The New York Times, December 11^th).  Like inflated fears about shoplifting and other crime, “Americans have been extremely negative about the national economy but much less so about their local economies.”  Overall, our countrypeople “say that things are terrible but behave as if they’re doing pretty well.”

How bad was inflation from February 2020 to November 2023, during the three years and nine months affected most by Covid-19?  Per a detailed listing presented by Peter Coy, also in the Times on December 27^th, the overall rate was 18.8%, with the highest gains heaviest in automobile-related goods and services, followed by meat and dairy items.  Clothing, travel-related services, fruits and vegetables, and medical-related products generally decreased or rose less than average.  Fuel oil went up the most, 54.8%, and televisions fell the greatest, 21.5%.  Some of these are consistent with the areas mentioned in the first article, but some are not, and others are not listed.

Two pieces took the positive view, one well defended by overall statistics.  Paul Krugman’s “Our Economy Isn’t ‘Goldilocks.’  It’s Better,” from February 1^st in the New York Times, called it “both piping hot (in terms of growth and job creation) and refreshingly cool (in terms of inflation),” with wage gains supported by recently rising productivity, and a fourth-quarter 3.3% GDP gain far from recession territory.  Our “one-time burst of inflation” proved shorter-lasting than in similar countries, leaving us with “arguably the best economy we’ve had since the late 1990s.”

The second was “After 3 years of pain, America has finally achieved economic nirvana” (Neil Dutta, Business Insider, December 3^rd).  The author mentioned that while we don’t know about decreases, it is hard to imagine interest rates going higher soon.  As well, we have become so accustomed to the number of net new nonfarm payroll positions far exceeding our population growth that most considered a month with 150,000 more “disappointing,” and unemployment, under 4% at article time, has stayed there.  Contrary to those constantly predicting an imminent recession, “the chances of a placid 2024 are becoming more real with every data release,” backed up by the two Employment Situation Summary emissions since, and “if 2023 was about the hard work of stabilizing the economy, then 2024 is about enjoying the fruits of that labor.” 

So where are we?  I can’t buy that the economy is bad, weak, or even indifferent – it’s booming.  Yet the Cottom piece points out too many related issues.  Now that we know that we’re not going back to 2010, 2020, or even 2022, we need to repair them.  That is up to more than our president – it can be accomplished by businesses, Congress, state legislatures, and even individual workers and families.  Let’s see what we can do.

Seven Takes on Remote vs. Office Work, and Where the Pendulum Is Now

In the past two-plus months, what’s been happening with observations on this shifting if not really evolving issue?

In Business Insider on December 9^th, Diamond Naga Stu and Tim Paradis told us that “Making your job suck less means upending the workplace as we know it.”  They called “the four-day workweek” “the latest buzzy example of how some employers hope to combat worker burnout,” and that “other methods include pretty offices, paid sabbaticals, and” of course “remote work.”  Yet they claimed that “what’s needed most… is greater flexibility – and a more thoughtful definition of what that means for each company and industry.”  The possibilities they came up with were “letting workers pick their schedules,” “helping managers “unstick” how work gets done” or change that, and “radical flexibility” by offering more unusual time obligations. 

The same publication offered “Remote work stifles innovation” (Aki Ito, December 19^th), which held that while that did not generally hurt productivity, “a massive new study published in the journal Nature,” assessing “24 million scientific papers and patents” (how did they do that?), found that “apparently, having better, more collaborative interactions… everybody gathered around the water cooler, as it were, actually does lead teams to pursue more novel ideas.”  I trust they sorted out the correlation-causation issues properly, but I rarely have confidence in that.

On a growing concern with working from home, Jacob Zinkula, also in Business Insider, let us tune in as “3 people who’ve secretly worked multiple remote jobs explain the top things to look for in overemployment roles.”  The three key factors their responders indicated were to “find a global company that’s accommodating of flexible schedules,” especially those which “provide flexible working arrangements for parents” exploitable by conjuring up children, “find a job you’re great at so you can make a good first impression” thereby minimizing training and avoiding “any kind of ramp-up period,” and “work in the IT field and try to work with your friends” with the latter providing “someone on the inside to understand there might be a meeting I miss here or there.”

A surprising assertion to be made in an article was that “The hybrid work experiment is failing everyone” (Alyssa Place, Benefit News, January 8^th).  While “74% of employers have implemented a hybrid work schedule, where some of most of their workers clock into the office a few times a week,” “a third of remote workers have reported feeling lonely and isolated from colleagues,” despite hybrid arrangements and remote-work technology.  For example, on combination conference-room dial-in meetings, “best practice has always been to bring those voices from furthest away into the room first… but oftentimes, when the bulk of the team is in person, we forget that there are other people who are outside.”  This piece does not fully justify its title, but still conveys an impression of real weakness with workers physically elsewhere.

On January 12^th, Goldman Sachs published an attempt to understand “How the shift toward remote work has changed consumption.”  It claimed that “remote work appears likely to be the most persistent economic legacy of the pandemic,” as a chart of the “share of US workers working from home at least part of the week” against the 3½ years of time starting July 2020 showed a drop from almost 50% to 27% about February 2021 and fluctuation wafting down to about 23% late last year.  That looked like a decrease, except for the note saying that the “pre-pandemic average” was 2.6%.  With services consumption lagging well behind goods consumption since 2020, another graph is consistent with “metro-level credit card data” showing “that remote workers spend less on office-adjacent services (such as transportation) and more on home office and recreation goods.”  The latter impeaches the view that away-from-office workers are using their freed-up commuting time to work more.

As if to concede that remote labor is not indefinitely sufficient, Stephanie Schomer’s January 11^th Benefit News “7 things employees hate about the office – and how to fix them” offered solutions.  For “punching the clock,” she recommended “flexible arrival and departure times.”  For “a lack of connection,” it’s “in-person gatherings – for all employees” (italics hers).  To combat “inaccessible leadership,” it’s “more facetime with the C-suite.”  To deal with “top-down decisions,” try “granting department heads decision-making power.”  To neutralize “a casual approach to COVID,” employers can practice “embracing remote work as a safety measure.”  To handle “skills gaps for young talent,” they can “nurture young employees with face-to-face time.”  And as workers hate “no chance to give feedback,” well, “gather feedback – anonymously.”  While addressing only some issues people have with showing up in person, most are to the point.

Can the title of Kelli Marie Korducki’s February 5^th Business Insider piece, “Bring back cublcles!,” be called a cry from the heart?  The author documented how cubicles became more and more common in the 1980s and 1990s, at times of “sweeping company mergers, acquisitions, and downsizing that rewarded space-efficient office layouts that were easy to reconfigure,” and became “symbol(s) of daily drudgery.”  Yet “open office plans,” which followed, proved “a mixed bag” at best, and employees found themselves increasingly relieved to be moving back to privacy-allowing cubicles.

How about the pendulum, which has gone back and forth between remote and in-office work since the first George Bush’s presidency?  It is halfway between the midpoint and the most extreme pro-office view possible, still moving toward reporting in person.  While, per the Goldman Sachs study, staying at home may remain more common, there is little current effort by companies to get people to do that, and plenty to get them to appear in person.  The pendulum’s speed may be slowing, but it’s still moving in that direction.  Tune in around 2029 to see it reverse.

Electric Vehicle Questions, and Three Other Possibilities

The past few months have been shaky for electric cars, not so much because they aren’t selling – they are, much more than a couple of years ago – but because things keep appearing that make it seem unlikely they will become the norm. 

What will be the result if “The electric vehicle math isn’t adding up, with average transaction price around $50,000 and gas price nationwide falling to $3 a gallon” (Elesa St. John, Tom Krisher and the Associated Press, Fortune, December 7)?  Sales in 2023 of the things, per Motorintelligence.com, through November were over one million and 7.5% of all vehicles, something which “experts say… must rise swiftly to address climate change.”  But between lower oil prices, themselves partially a result of fewer new cars using petroleum, and sales prices stubbornly high, along with reduced government subsidies, it is a bad time for that.  Other named reasons stopping buyers included range concerns and the “location, cost and convenience of charging these cars.”

Will that last concern remain problematic, as “Slow Rollout of National Charging System Could Hinder E.V. Adoption” (Madeleine Ngo, The New York Times, December 23^rd)?  Although the Biden administration wants “a robust federal charging network” to be implemented, the only stations put into service have been in New York and Ohio, making the federal goal of 500,000 “public chargers,” which may need to be one million, by 2030 seem unlikely, meaning that private companies, who may or may not want to, would need to fill the gap.

In Business Insider on January 3^rd, Paris Marx asked “What happened to EVs?”  Although “electric vehicles were supposed to be inevitable,” “the pace of adoption has markedly slowed,” as “EVs accumulated at dealerships this fall, even as automakers cut prices,” and, as a result, Ford, General Motors, and Tesla all delayed significant manufacturing plans.  In addition to the problems above, Marx cited less consumer spending power from inflation, heavier battery-laden vehicles requiring “producers to beef up their environmentally destructive mining operations,” such being “harder on roads,” and them causing “a greater safety risk for pedestrians” and even making “more air pollution.”

What alternatives are there?  In The Atlantic, Patrick George assessed one that in previous years appeared to many to be the best overall solution, but has been out of conversations lately, in “The Hybrid-Car Dilemma” (December).  Although hybrids often get over 60 miles per gallon, don’t have most issues mentioned here, and might be exemplified by “the latest Toyota Sienna minivan” which “has nearly half the CO2 emissions of its non-hybrid predecessor,” they have been held back.  Reasons for that include that “the auto industry can’t decide whether hybrids are a bridge to an all-electric future or a dead end,” and the vehicles “involve all the complexities of internal combustion and battery power put together.”  Car companies do not always make what is most popular, and the situation with hybrids may be another example of that.

Five years ago, we were supposed to be humming toward a driverless car future.  Since then, the industry has entered a winter of small action and few implementations.  However, “Apple Ramped Up Autonomous Vehicle Testing Last Year, Filings Show” (Aarian Marshall, Wired.com, February 2^nd).  Although “Apple’s secretive vehicle project doesn’t have much to show for its six years of work, at least publicly,” it “went on an autonomous testing jag last year, almost quadrupling the number of miles it tested on public roads compared to 2022 and jumping 2021’s total by a factor of more than 30.”  Waymo and Alphabet have been testing several times as much, with and without passengers and safety operators.  Will we see more self-driving results?  I hope so.

What other prospect is out there?  As of over two years ago, “You can now buy a flying car for $92,000” (Kristin Houser, freethink.com, October 28, 2021).  The operator doesn’t need a pilot’s license – if they build the craft and are willing to take liability for crashes.  Since the item here, the Jetson One, “can’t be flown at night, over city traffic, or in restricted air space… right now it’s more like a really expensive, really cool toy than an alternate transportation option,” but that could change.  This one is electric, and doesn’t have much of a range, but who knows?  If electric cars end up in a niche, would we want to see this ancient idea revived?  Questions, questions.

This Morning’s Report: Another Big Jobs Gain, But Other Results Aren’t Following, and Latent Demand Grew 1.2 Million to 17,152,000 Per the AJSN

Some will say today’s Bureau of Labor Statistics Employment Situation Summary was first-class, and according to the most publicized number, total net nonfarm payroll employment jumped 353,000, almost matching both published estimates I saw combined, it was.  But how about the rest?

Seasonally adjusted unemployment held at 3.7%, with the unadjusted variety, reflecting how many people work in December but not in January, up from 3.5% to 4.1%.  The adjusted count of unemployed was off 200,000 to 6.1 million, again consistent with the unadjusted gain of just under 900,000 to 6,778,000.  The number claiming no interest in working dropped 716,000, losing most of December’s gain, to 95.149 million.  Unadjusted employment fell a seasonal 1.1 million.  The count of long-term joblessness, people out of work for 12 months or longer, fell 100,000 to 1.1 million, and the tally of people working part-time for economic reasons, or keeping part-time positions while so far not finding full-time ones they want, matched last month’s change with a 200,000 gain, and is now at a dispiriting 4.4 million.  The two measures of how common it is for Americans to be working or nearly so, the labor force participation rate and the employment-population ratio, stayed the same and gained 0.1% respectively to reach 62.5% and 60.2%. 

The American Job Shortage Number or AJSN, the metric showing how many additional positions could be quickly filled if everyone knew they could be obtained easily and routinely, increased almost 1.2 million to the following:

Almost 800,000 of the change was from higher unemployment, with nearly all the remainder from those not looking for a year or more and those discouraged.  The share of the AJSN from the officially jobless rose 2.3% to 35.6%.  As the AJSN is not seasonally adjusted, this result is not particularly discouraging, however, when compared with the measure a year before it has gained over 400,000, mostly from higher unemployment.

How should we assess this data?  It is generally good, but what is noteworthy to me is how much the number of people with positions increases month after month, but the unemployment rates and the measures of partial attachment above don’t improve.  Since for the past year or two we have known about “overemployment,” or people secretly having more than one full-time job, is it possible that many of these 353,000 additional people working were doing that already?  Those taking on extra jobs may be no more honest with pollsters than they are with employers.  It would not be a shock to discover that the 159-plus million people reported as working are really something like 155 million, with over 4,000,000 undiscovered multi-job workers.  I don’t know if that is technically possible, but if it is, it is worthy of investigation.  In the meantime, the turtle took another small step – but no more than that – forward.