A New York Fed survey shows a huge increase in the percent of job seekers. It’s especially pronounced for those making less than $60,000.
Data is from the New York Fed Survey of Consumer Expectations.
There is not a big difference between men seeking jobs (27.4 percent) and women (29.4 percent) but there is a big age difference.
Percentage of People Seeking a Job by Age
Age and salary are likely related. The younger you are the less skills you have and the lower on the pay scale you are likely to be.
I would have preferred more age classifications then the Fed provided, especially age 35 and under instead of 45 and under.
But the data is very consistent with financial stress.
Credit Card and Auto Loan Delinquencies Surge in the Second Quarter
For discussion, please see Credit Card and Auto Loan Delinquencies Surge in the Second Quarter
Over ten percent of credit card outstanding debt is over 90 days delinquent. Banks will be curtailing credit.
Credit stress is rising just as layoffs are increasing and it’s getting much harder to find a job if you lose one.
That newer issued credit is failing faster again suggests it is renters and generation Z that is most impacted.
But it’s not just Millennials and Zoomers. Delinquencies are rising in all age groups, just more steeply in age groups 39 and younger.
What About Fragmentation?
Fragmentation (asset holders vs non asset holders) has staved off recession until now.
But the kick-the-can dependence on asset holders has run its course.
Fragmentation will no longer save the economy.
Nor will Fed rate cuts.
A recession has started and it will intensify.
August 2: 2024: The McKelvey (Sahm) Unemployment Rate Recession Rule Just Triggered
August 15, 2024: Industrial Production Declines 0.6 Percent on Top of Big Negative Revisions
I have an update on the McKelvey indicator this week. Adding a second indicator to McKelvey yields no false positives and no false negatives dating to 1953.
I suppose it could be different this time, but it won’t be.
I don’t have an optimistic future view for the US. Not as a collective anyhow.
We need another round of Covid Boosters… to kill and disable more working age folks…
Creating more jobs!
More corporate layoffs announced. GM.
So isn’t this when the dominoes began to fall? Job losses > foreclosures > cratering home prices…
Seems like Kamala Harris will reach the finish line in November before the economic collapse.
At least that is what the mainstream media, Hollywood, and the rest of the establishment want.
Job seekers > 60K : demand for highly skilled and semi high skilled workers is high,
way above 10 years ago in 2014, and soon will get even higher.
SPX and NDX [1M] : July close < June high. If Aug fail to close above July high they might flop in Sept/Oct and take us down. DIA and SPY [1M] : July close > June close. There is still hope for the future
Mish, when you state, “the data is very consistent with financial stress,” are you referring to solely the increase in job seekers OR the increase in job seekers PLUS the debt delinquencies? I ask b/c an increase in job seekers isn’t in & of itself a cause for concern: Perhaps some of the 10 million men who dropped out of the workforce are coming back in. However, when paired w/the delinquency data, the rise in job seekers takes on a more portentious tone.
38% of people making under $60k / year is a much much larger population than people who dropped out of workforce, and it’s primarily younger people not old semi-retired guys.
I am referring to delinquencies in isolation.
But they are heavily concentrated in younger age groups (and probably Blacks) and thus those making under $60K
Unsettling uptick, and more evidence of a looming crisis as we move deeper into recession!
Even seniors are looking for work as SocSec isn’t enough to pay the bills. That includes people who own their homes and cars etc. Savings are being depleted by inflation. It’s worse in younger age groups–lots of car-camping.
Doesn’t more people seeking jobs drive up unemployment? These are people who typically haven’t been looking for work for a variety of reasons, so they’ve dropped out of the labor force.
If so, then how much of the, say last 6 months, or rise in unemployment is from actual people losing their jobs vs those who are now seeking employment but might not have done so in the last 12 months?
The OP was less about “unemployed people looking for jobs” more about “employed people trying to find better-paying jobs”. Inflation is destroying living standards and people are looking for better opportunities. Also, at least until last few months, there actually were better opportunities so it made sense to go find better job.
Mish, at what point as you comment that a Fed rate cut would not help the economy? Is that now? And, considering the national debt continues to rise will the market decide what happens to treasury rates, not the Fed. Meaning the market will cause treasury yields to rise due to a lack of trust in the country’s ability to pay the debt service. Your thoughts?
Interesting question and I am not convinced I have a good answer.
I have commented many times the Fed created a dual environment of asset-holders and not-asset-holders.
The nots are screwed.
What happens to housing prices if the Fed cuts rates fast?
And what about inflation?
None of us really know.
All I can say is:
1: The Fed created this impossible mess
2: There should not be a Fed
3: The one thing worse than the Fed would be putting politicians in charge
4: According to a dual mandate the Fed should cut, but that is not necessarily the right thing to do!
5: There should not be a dual mandate because there should not be a Fed
Thanks for the question. It was a very good one.
Add in another 10 million illegals mostly under age 35 and you have a humanitarian disaster. Debt defaults will be YUGE.
Actually, the 10 million illegals are also competing for the low level jobs, which might explain why finding under $60k jobs is hard. Can someone let the NY FED know?
Demand for highly skilled workers is high. Profitable co will raise wages of the low end people as well. A good economy lifts all boats.
Adding a trillion dollars every 100 days… lifts boats…. basically that is all there is left of the economy…. what cannot continue…
https://surplusenergyeconomics.wordpress.com/2024/08/20/287-the-mythology-of-growth/
It’s actually a trillion dollars every 93 days :/
One of the problems with job hunting is that the available jobs to you may be outside of the range you are willing to commute to/from. This is one reason why the WFH movement should have been expanded instead of curtailed. There would be more workers and less job hunting then.
Maybe a lot jobs that need workers can’t be wfh, like you need to run equipment or work with materials at a facility that can’t be in your home. For location, people just need to move where the work is, do rent shares and save up, it’s a lot better than not being productive and asking the govt to take out more debt to pay unemployment.
+ if you own your home… and have a sub 3% mortgage… you do not move
We were in a false bubble with rates and spending being so high from 2021-2023. The Fed should have increased rates sooner and this would have prevented what I now see as an employment bubble which is now popping. We are merely going back to pre-Covid levels of employment/unemployment but there are more people impacted because of new grads since 2020 and older folks who refuse to retire because they are collecting nice paychecks. No one I know who is older and making 6 figures is retiring. There are jobs available but companies are being too picky as usual. It would be cheaper to train a new employee who may have some but not all the skills needed. It makes one wonder if the companies are really just advertising to get resumes but there is no actual opening. This makes more sense.
RRP was up a year before EFFR. The Fed sucked liquidity first, before raising rates. EFFR is 5.33% since Aug last year. The Fed might cut rates. Investors preempted.
Inflation is a nightmare for retirees. I believe many sensible older workers have re-evaluated their savings needs and decided to keep working to reduce the risk of being caught on a limited income with rapidly rising expenses.
Yet the retirees vote hand over fist for the Republican and Democrat debasers. I feel like they have this nostalgia for the prosperous USA of old and think, well the Rs and Ds were in office then, so they must know what they’re doing, in denial that today’s politicians are spending us into an abyss. Not to blame too much though, the older folks I know are the greatest folks. The younger voters can be partly pardoned because it usually takes aging, for me at least, to start paying attention to what’s really going on.
Nightmare for those with no or few assets other than their home, not necessarily retirees who may have bond, treasury, or rent income
Know of someone who lost job in October and hasn’t found anything comparable since. Still looking
Time to enroll and live off student loans that will never be repaid
Jobs shmobs, let the peasants eat cake! Let the elites eat brioche.
You forgot to add, “eat Brioche in Private Jets.” The best part of being ultra-wealthy is flying Private.
My College Roomie made his money 45 years ago, and flies private (he uses his own Gulfstream, an older but sturdy Model). We flew to Madrid two months ago for a week and visited Marbella and Sevilla and the FOOD WAS UNREAL great.
We moved around by private car, but we both RAN AROUND in Cargo Shorts and tee shirts. We ate Jamon, and seafood, and the best sushi that I have ever consumed.
That “elite” lifestyle is unreal great. In Marbella, a widow friend of his let us use her 180-meter Motor Yacht. It had a grand Salon and he invited over local pals with their leggy female friends and it was quite the scene.
I sipped on Contino Gran Reserva, a cheaper vintage and it beat out my favorite Sonoma County Reds. WOW.
and then you woke up……………….