They need to reduce interest rates a quarter point 6 months ago. Now they need to reduce it by 1/2 a percent at least.

We are sliding into "recession" territory. Expect more sell off on the markets this week.

The "soft landing" is slipping away.

Not really.

People have been predicting "a recession" for the past 3 years.

Since we have never done this before, this is most likely what a "soft landing" IS.

I.e., the U.S. economy is a huge juggernaut and a pile of different actions have been put in place to calm the waters of the economic lake after the huge bolder that was "the global pandemic" + "the Russian invasion of Ukraine", created a tidal wave of economic and social upheaval.

Remember that there are 3 huge financial job-stimulating funding actions that are now being implemented, including the Bipartisan Infrastructure law, the Inflation Reduction Act, and the CHIPS & Science Act.

Odds are that the "sell off" that we are seeing, are people "re-balancing" their portfolios. Then you will start to see "bargain hunting" (people, and investment funds, will buy a different mix of stocks at "the right price" ), and the markets will go up again. A lot of the sell-offs and buys are automatic/programmed.

What is actually needed is for the Dow to have its 10% correction (I think the S&P already has had one).

at the absolute insistence on doom and gloom for the economy. We are in so many respects doing surprisingly well - and yet seem addicted to built in pessimism ...

There is a collective amnesia about the economic "past", obviously because outside of one's own circumstances at any moment, there is really no need to closely follow it (just those in the business and the "junkies" do so ).

When it comes to the interest rates (fed funds rates), people "forget" -



That long period of "near 0%" was an oddity in a historical sense as it was done to get out of "The Great Recession" that started in 2007/2008 and done again due to the pandemic. But that "near 0%" was never "the norm".

It's fascinating, in a "macro" sense, to see how what has been tried for the first time (a variation and modern equivalent to what FDR attempted, coupled with interest rate controls), is playing out, and what the result has been (or can be).

Unfortunately the big fly in that ointment is the debt, and that needs to be addressed with an increase in revenue (taxes), which should come from those who benefited the most in terms of income but have given the least for that benefit.

ongoing and seeming built in malaise - neatly plays into the hands of .... Guess .. ?

Maybe you are right. But I see patterns from previous bubbles.

I have been side-following these economic things since that "crash of '87" (including reading Ravi Batra's book back then). My mom was a big fan of Louis Rukeyser's PBS shows (including "Wall Street Week" ) and I ended up watching that and just monitoring the whole thing.

I am naturally a risk-averse pessimist, which even gets reflected with my posts on DU. However I also look for "patterns" and there is something very different about what has been done over the past 3 years versus what was done in the past. And part of that is because this situation had a cause that hadn't been seen in over a century (1917 - 1918), where you had a "pandemic" (Spanish Flu back then, COVID now), a war (WWI back then, Russia's invasion of Ukraine), and environmental calamities (massive cold waves that impacted agriculture back then and the extremes of climate change now with floods, wildfires, hurricanes, tornadoes/destructive windstorms, etc).

This current economic environment is not a "bubble", although "bubbles" have formed within it.

It was a "perfect storm" that needed a unique way to handle it, and as I noted in another post, there are things that were done like the passage of 3, job-stimulating funding laws (Bipartisan Infrastructure law, the Inflation Reduction Act, and the CHIPS & Science Act) that are helping to keep a "stimulus" to many parts of the economy, going.

We also have a law (that has been weakened over the years but it still in place) - the 2010 "Dodd–Frank Wall Street Reform and Consumer Protection Act", done to address "The Great Recession" ), that also created an agency - CFPB (Consumer Financial Protection Bureau) - that is still here too.

So there are guardrails and circuit breakers that are in place NOW that didn't exist in the past, including during those times with "bubbles". We watched a mini-meltdown happen with crypto bro Sam Bankman-Fried, that took out a couple regional banks but was halted thanks to some of regs put in place.

It's just like how it was realized during the 1987 crash, that "programmed trading" could kill your market, so things were done to halt trading if the moves were over a certain threshold.

They always go too far too late & pull back too slow too late.

But they'll probably only do 1/4 anyway.

The previous “hot jobs reports” they’re comparing this to have all been revised downwards ENORMOUSLY.

and don't cover all the sectors that the government surveys.

The "downward revisions" that the government has made, still leave the jobs picture in a good place. I.e., it is not "recessionary" nor "overheated", but more "goldilocks" - not too hot and not too cold.

A lot of people, particularly in tech, have been gaslighted pretty viciously about how “great” the labor economy is… and it is not. It’s a bit of a dumpster fire to be honest.

with the race to create/manufacture or buy/deploy "bleeding edge" concepts, and including big dumps of money into doing that (while also buying out smaller companies or start-ups to absorb their knowledge/patents and "clear the field" ). And then if/when it fails, the vulture capitalists start circling, offering to "save the company". They will milk whatever is left and then that is when the big layoffs happen.

And that impacts across the sector to the support personnel of that tech that might be deployed in some non-tech environment.

It's not something that happens to other parts of the economy however.

Tech is the broader economy now, and most of the layoffs had nothing to do with bubbles, but were done by firms that had record profits.

but only contributes about 9% - 11% of the GDP - https://www.statista.com/statistics/1239480/united-states-leading-states-by-tech-contribution-to-gross-product/

The biggest sector, which includes many many "forgotten people", are the "services", covering 70+% of the GDP - https://www.statista.com/topics/7997/service-sector-of-the-us/

This visualizes it -



(from here - https://www.visualcapitalist.com/visualizing-u-s-gdp-by-industry-in-2023/)

If you are ignoring the "AI bubble", then I'm not sure what else to tell you. Even "crypto", that is using massive amounts of "tech" to even exist, is going in and out of "bubbles", and it's only a matter of time.

But again, it is a very narrow segment of the whole economy and certainly the "profit" thing is not unique to "tech" but is a major driver to just about everything in our economy (the healthcare sector "chasing profits" is going through issues now as well).

You’re taking an archaic view of tech as an industry rather than as the capability that powers everything.

Everyone is a tech company now. Walmart, GM, etc. A lot of services are for tech implementation, and so on.

And AI is definitely a bubble but far from bursting. When it does, it will get even worse.

Go on LinkedIn and look at posts by various people about their experience in the labor market. Layoffs are common, it’s taking 6+ months to find jobs that pay 40% less than what folks were making 5 years ago,, and that’s with prices being 50% higher, companies are demanding pointless relocations and “return to office” in astronomically expensive cities like NY and the Bay Area, and so on.

This isn’t something the government has caused. But it’s something the government needs to address.

When it comes to data-driven stats, that assessment is too "subjective" and is nearly unquantifiable, nor trackable in a meaningful way because it is not unlike saying "electricity powers everything" (as a utility).

The Tech Sector has multiple components - "hardware", "software", "support services", and each of these requires specially-trained subject-matter dependent, employees. But because tech is never "static", the types and numbers of employees needed will fluctuate in "waves", and that is obviously an issue. E.g., "Oracle DBAs" used to be "a thing".



There is a difference between "implementation" and "designing, testing, manufacturing (re: hardware), and releasing". The "implementation" part is done by the consumers (whether businesses or individuals) who buy the product or service.



It seems to have "burst" for Meta. Ask Zuckerberg! This whole "AI" thing is like a rebranding of already-existing tech (but obviously updated) like Siri or Alexa or even this guy -



It's almost meaningless hype, which is why it bubbled.



It always HAS been that way in this country - particularly for certain fields. When I came out of college, it was in the Raygun recession - and with a degree in chemistry. Going from pharma company to pharma company (in an area where "big pharma" was king, including GSK, McNeil, Rohm & Haas, Warner-Lambert, etc). I took a job subbing for the Philly school district for almost a year before finally getting a job with the federal government with pay about 20% less than the mean starting salary for a chemist just out of school in the area, but at least it was a job. The next "youngest" person in my lab/office at the time was 15 years older than me.

In general, without more apprenticeships and internships that will lead to an offer, the idiotic process out of college for an applicant, where companies demand "experience" (but where no one can get "experience" unless someone hires them), continues.



Welcome to America. It's not new.

What needs to be done, which is some of what the Biden Administration IS actually doing, is to address that need to supplement academic training with apprenticeships, which can provide much-needed "experience" demanded by employers (below published July 11, 2024) -



As a note, I grew up with "tech" because my dad was a Computer Programmer (COBOL) for the federal government for 20 years before he passed away 50 years ago this year. He had done it since the mid-'50s and would take me and my sisters to his office every once in awhile, where at the time, almost the entire first floor of his building housed a mainframe, in a special air-conditioned room on raised floors, and included mag tape machines, giant punch card readers, and keypunch machines, etc.

Back in the Reagan days, a new car was $3K and a house was $50K. In 2004 a new car was $18K and a house was $150K. In 2024 a new car is around $50K and a house is $500K.

Job tenure and instability are way up; pay has contracted substantially for most white collar jobs while inflation has sent prices to the moon.

The trades are important but most people can’t work physically demanding jobs in their 60s — eg they have a shelf life. Ageism is also rife in white collar work… yet at the same time, companies and policymakers want people to work well into their 70s because of a questionably solvent retirement system.

We can’t go on like this. Something will break.

Regarding employer training, we heard that all before. I’m old enough to remember when companies were complaining about a severe stem shortage just five years ago. Now STEM workers are getting laid off by the truckload and job openings are scarce. The same thing will happen in every other skilled industry.

Finally, it’s inaccurate to say that the job market has always been as moribund as it is today. I’m in my 40s and have worked in numerous industries — it’s harder for skilled workers with tech and STEM backgrounds to find good paying work today than it was during the 2007/2008 Bush recession.

It's not different.



What? Are you kidding?

In 1968, my parents bought their 2nd house here in Philly - a semi-detached (twin, with no garage) for $12K. Some new construction single story (detached) ranchers (which are rare here in the city) about 4 years later, were going for $15K - this was early '70s.

During the '80s, the only houses here near that $50K price were 2-story, 3 bedroom/1 bath row homes with 10-ft fronts that were averaging $39K. Everything else was running in the $125K range.

And I wish a new car was $3k back then. I bought a USED low mileage (had about 9,000 miles on it), 1978 4-cylinder, no air, no power steering car (from a neighbor) in '86 for $1k (as a favor since it was the neighbor's aunt's car that he was trying to get rid of after she passed away). My first "new" car in '88 (an '89 Chevy sedan model) was like $16,000 with 8% interest rates.

In 2005, when I bought my next new car (a compact SUV), the average price of a sedan was a whopping $26,000 (e.g., I remember I saw the small Chevy Malibus going for that price). I was able to get my Ford Escape for about that after I traded in my then-almost 16 year old Chevy sedan, with incentives and whatnot.

The "$150K house" was that same row house here, except once the idiots who were going around "flipping" houses after gutting them, (and gentrifying neighborhoods), put some up for sale. None of these were "single" (detached) homes on a lot. They are 60 houses per block (30 on each side of the street). The "semi-detached" (twin) homes were $250K.

Singles here in the city in the mid-2000s? Starting at $600K. Builders were buying up lots to put up "2-story, 2-bedroom, 1-bath Townhome" (row home) "condos" for $399K.

When I bought by current car (a full SUV) literally 10 years ago, it was $51K.

In other words, it all depends on where you live. I have some former co-workers who moved down to GA in the late 2000s/early 2010s because of the "cheap" housing. Literally $150K for something that would easily cost $300 - $400K here.



Ummm... that's a lot of bunk talk. Thanks to the pandemic, wage growth has amazingly gone up for the first time in decades. What is missing now is getting the federal minimum wage off the current $7.25 that it has been at for the last 17 years because there are still some states, like mine (PA), that have refused to raise for the state itself (we are surrounded by states that have min. wages going from $10.10 - $17.50/hr, where even lowly WV has a higher minimum wage than PA).





We have been "breaking" for years now. Ageism has been going on for decades.



I linked to a federal response to that "training/apprenticeship" need that was just announced in July. If you go to the link, you will see it is across all sectors including IT and even healthcare fields, and there is even a chart of participating institutions.



But it has been. Before you were born and as you were growing up.



Sweetheart, you are young. Most of DU are boomers and GenX (50 yos/60 yos/70 yos), and we have been there, done that, wore the t-shirt, wore that out, wore a new t-shirt, wore that out. Wash. Rinse. Repeat.

I was going to reply, but your patronizing tone at the end was majorly MAGA-style, especially in its assumptions (I’m Gen X myself).

You should probably get out of your cozy coastal bubble and see how the majority of the country lives sometime… we didn’t typically pay BMW 3-series money for a Chevy sedan, for example.

has been done without a single link to any "stats" that you have vehemently proclaimed. I provided links and charts and graphics, not just here, but in other posts under the OP, regarding some past economic data.

You have provide none and continue to persist.

Best be careful with the the threats as your lack of knowledge is showing.

oh well, expect a Fed rate cut this month.

so we shall see tomorrow if that trend holds!

https://www.democraticunderground.com/10143302203

UE ticked down a bit.

Last edited Thu Sep 5, 2024, 03:47 PM - Edit history (1)

The ADP numbers cover only about 20% of the nation's private workforce.
https://www.federalreserve.gov/newsevents/speech/powell20191008a.htm

ETA the ADP National Employment Report and ADP Small Business Report are derived from ADP payroll data representing 460,000 U.S. clients and nearly 26 million workers
https://finance.yahoo.com/news/september-2021-adp-national-employment-121500533.html
/End Edit

(One constantly reads on DU that the ADP is better than the BLS's jobs survey because the ADP uses actual payroll data whereas the BLS's non-farm payroll survey is "just a survey". But ADP does not process all private employment payrolls, just 20%. And then somehow they extrapolate the other 80%. ).

Typically (and this was also true even when Obama was president), in months when the ADP report was significantly worse (i.e. lower job gains or greater job losses) than the BLS numbers, then there are posts about how ADP numbers are more reliable because they are "real payroll data". Whereas when the BLS numbers are worse, it's crickets -- the ADP survey goes unmentioned. And so it goes.

Edited to add Another important difference is that the ADP is private workforce payrolls, while the BLS's headline payroll jobs includes government jobs.

# Nonfarm Payroll Employment (Establishment Survey, https://data.bls.gov/timeseries/CES0000000001
Monthly changes: https://data.bls.gov/timeseries/CES0000000001?output_view=net_1mth

# Nonfarm PRIVATE Payroll Employment (Establishment Survey, https://data.bls.gov/timeseries/CES0500000001
Monthly changes: https://data.bls.gov/timeseries/CES0500000001?output_view=net_1mth
^-Good for comparison to the ADP report that typically comes out a few days earlier

The latest as of this writing (July 2024) is 158,723,000 jobs for the first and 135,384,000 private sector jobs for the second, for a difference of 23,339,000 jobs, or 14.7%. Those are government jobs.


The monthly BLS jobs report comes out tomorrow, Friday.

Things were going so well, the Fed had to make their move to dampen the employment growth.

5.25% is not "ultra high".




(from here - https://www.macrotrends.net/2015/fed-funds-rate-historical-chart)

People got "spoiled" when the fed funds rates were running about 0.25%, translating into about 2.5% - 3% for consumers (with good credit) which was abnormal (and only done under 2 circumstances - "The Great Recession", from 2007 to 2017, when the rates were ticked back up under 45 with at least 7 or 8 hikes and then dropped back down again from 2020 to 2022 when the pandemic hit, after which the rates were taken back up again over about a 16 month period).

The current rates are around what they were under the "booming" Bill Clinton economy in the '90s (in some cases, a wee bit lower).

Dampen the job market, push unemployment up a few ticks, and that would push 'Flation down to 2% territory.

We're there. Cut the friggin' rates already.