From 2023 Into 2024: Nine Areas of Jobs and the Economy

How did this year turn out with economic and employment Issues?  What is likely in the next?

I can only go so far with the latter, as a lot can happen, especially in a year with an unusually critical presidential election.  But we are now heading in some direction with each of these nine areas, and so can say something.  I also feel confident about making annual predictions, as I was in a small minority of economists expecting no 2023 recession.  Will I do as well in 2024?

The first area is employment statistics and the American Job Shortage Number, or AJSN.  From November 2022’s Bureau of Labor Statistics Employment Situation Summary data to a year later, we added 2.79 million net new nonfarm payroll positions.  Since our population, including children and those not wanting to work, rose by 2.43 million, that’s tremendous.  Seasonally adjusted and unadjusted official joblessness went from 3.7% and 3.4% to 3.7% and 3.5%.  The adjusted total number of unemployed increased from 6.0 million to 6.3 million, with the count of long-term jobless, or those out for 27 weeks or longer, holding at 1.2 million.  Those working part-time for economic reasons, or keeping less-hours positions while thus far unsuccessfully seeking full-time ones, gained 300,000 to 4.0 million.  The labor force participation rate jumped 0.7% to 62.8%, and the employment-population ratio grew 0.9% to reach 60.8%.  Average hourly private nonfarm payroll earnings grew $1.28 or 4.2%, more than inflation, to $34.10.  The AJSN showed that latent demand for work fell 155,000 to get to 15.646 million.  Overall, though there were some unfavorable gains, these numbers remain strong.  Expect more of same next year, with continued unemployment below 4% but fewer new jobs.  That would again be excellent – and still recession-free.

Second, we have four-day workweeks.  Per my December 1^st post, I see no progress on pertinent questions that must be answered, such as salary amount change, idle time during workdays, no Friday equivalent, and, most importantly, what a switch to 32 nominally scheduled hours would mean for workers now putting in way over 40.  I see interest fading in this option in 2024, with other alternatives, such as flexible hours and hybrid work, to get its adherents.

Third is autonomous vehicles.  This has been a terrible year for them, with gains approximately offset by San Francisco rollbacks caused by traffic and emergency interference.  It has seemed clear since at least 2021 that there will be no imminent large-scale move to them, but even slow growth was lacking in 2023.  The next will be a critical year for the technology – look for some retrenching and some new locations and applications, but strictly incremental progress.  How 2024 turns out will define where fully driverless cars, buses and trucks will go, which could be back to widespread hopes, steady and slow proliferation, or near-extinction.

The fourth area is electric vehicles.  Strangely, 2023 was both very good and very bad for them.  It was a success since one million were sold in the United States alone, and they made up 7.5% of November-to-November sales, a massive increase.  The bad news is in the title of the source article for these facts, “The electric vehicle math isn’t adding up, with average transaction price around $50,000 and gas price nationwide falling to $3 a gallon” (Alexa St. John et al., Fortune, December 7^th).  With charging stations becoming available in almost all areas with high demand, a high share of those who wanted them have accepted their shortcomings and bought, whereas those less interested are, if anything, becoming even more unlikely to buy.  Being forced to cheer for higher oil prices is a hard position to maintain, and fundamental sale price drops may require more to be sold than the market can support.  I predict that by November 2024 the share of electrics as American vehicles will be higher than it is now, but only about 10%, with a growing consensus that under current conditions they will not be completely or even largely taking over.

Fifth, I give you artificial intelligence.  In February, I wrote that “we’ve been sort of stunned by ChatGPT’s recent exploits, which not only suddenly forced people to adjust their methods but solidly moved AI from the future to the present.”  To what extent has this continued?  AI was in use well before then, and there have been some currently running achievements and improvements, particularly in the automotive field, but for various reasons over these past ten months we have seen only small, incremental effects on most American’s lives.  When I posted a promotional message about my latest AI post, “Artificial Intelligence is an Awfully Wobbly Juggernaut,” documenting lack of broad-based progress, a former Silicon Valley worker sent me 18 points to be intended to be to the contrary.  I counted only four actual applications new since February, along with three already in place before then, eight on business deals and technical achievements focusing on the future, and three claiming general large-organization use.  While it is beneficial for those developing technology to focus on the future, it is necessary also to see what has actually been completed and how it measures up to projections.  The problems I named in the August 25^th post as causing AI to be “boxed in” – dishonest employee use distorting results, feeding on its own errors by reading in AI-generated erroneous information, the looming new-data shortage, copyright violations awaiting legal judgments, chip shortages, the uncertainty of coming regulation, and the gigantic cost of future releases, along with reasonable and unreasonable fears about it and a consistent lack of will in enduring temporary problems to implement major technical and logistical improvements – are all still valid, and will probably truncate AI’s effects.  I expect that while in 2024 there will be many more AI-enhanced niches, its overall effect will be more modest than that of mobile phones, with the world-conquering fears and sweeping expectations becoming far rarer.

Sixth is remote work.  This year it met with great resistance, as the pendulum on which its enthusiasm has swung for 30 years moved away from it.  As I have written, businesses often learn little from experiences, and when they again discover the advantages of either working from home or working from the office, they do not remember what went wrong or right before.  There are two sides to the issue, meaning that putting in time remotely is not a panacea, and will not take over.  I project non-office workdays to slightly decrease in 2024, with de facto industry standards calling for few employees in most fields to be granted more than one per week.

Seventh I move to interest rates.  It was an event when on Wednesday the Federal Reserve not only held them the same as expected but announced that they projected cutting interest rates three times next year, and the Dow Jones Industrial Average jumped over 500 points and hit an all-time high.  But how can they attach any conviction to that?  Did they anticipate in December 2021 that a year later the federal funds rate would be almost 5% higher?  They carefully consider recent inputs, weigh a range of factors, and only then decide – and we should all be glad that their 2022 choices turned out that way.  Whether they reduce rates three times, eight times, or not at all in 2024 will depend on data we don’t yet have and can’t really estimate.  I predict that we will indeed pay less for money in a year, but only about 1% or 1.5%, and I certainly am not confident enough about it to even pencil that in.

Eighth, how about investments?  I don’t have much to say here.  Predicting a massively profitable 2024 is unjustified.  There are a lot of problems in the world, and we may add one of our own in November.  A historically justified 5% gain in general seems as good a projection as any.

Last, public beliefs on the economy.  There has been a string of articles discussing that as if it were a problem of its own, and to some extent it is.  Many people are less happy about our economic times, most of whom are influenced by not knowing firsthand what a real recession is like or following the stated views, designed to affect voting, of their political party.  It is easy to take bad individual experiences, such as being fired or not hired, as reflecting everyone’s condition.  I predict that, by year’s end, people’s opinions will be more in line with reality.  That’s optimistic, but irrationality often corrects itself.

For more information on these areas, see other posts in this blog.  With that, here’s to a prosperous 2024, especially for you and your family.