Unemployment

More stories

  • 163 Shares119 Views

    in Economy

    Jobless for a Year? Employment Gaps Might Be Less of a Problem Now.

    by

    People who were out of work for a while have typically found it much harder to get a job. The pandemic may have changed how employers view people who have been unemployed for months or years.Jamie Baxter used to be skeptical of job applicants who had not worked for long stretches of time, assuming that other employers had passed them over.“My mind would jump to the negative stigma of ‘Wow, why could this person not get a job for this long?’” said Mr. Baxter, who is chief executive of Qwick, a temporary staffing company for the hospitality industry.Yet recently, he has hired at least half a dozen people who had been out of work for several months or longer. The pandemic, he said, “made me open my eyes.”Mr. Baxter’s change of heart reflects an apparent willingness among employers in the pandemic era to hire applicants who have been jobless for long periods. That’s a break from the last recession, when long-term unemployment became self-perpetuating for millions of Americans. People who had gone without a job for months or years found it very difficult to find a new one, in part because employers avoided them.The importance of what are often referred to as “résumé gaps” is fading, experts say, because of labor shortages and more bosses seeming to realize that long absences from the job market shouldn’t taint candidates. This is good news for the 2.2 million people who have been out of work for more than six months, and are considered long-term unemployed, according to the Labor Department, double the number before the pandemic.But that change may not last if more people decide to return to the job market or if the economy cools because of another wave of coronavirus cases, experts say.Mr. Baxter, whose company is based in Phoenix, said he has learned from his own experience. Forced to lay off roughly 70 percent of his 54 employees when the pandemic hit, he realized he was responsible for creating the very employment gaps he had once used to screen out job applicants.“I knew I was creating employment gaps,” he said. “Maybe other people would have employment gaps for very justifiable reasons. It doesn’t mean that they are not a good employee.”Even in normal times, the long-term unemployed face steep odds. The longer applicants are out of work, the more they may become discouraged and the less time they may spend searching for jobs. Their skills may deteriorate or their professional networks may erode.Some employers regard applicants with long periods of unemployment unfavorably, research shows — even if many are reluctant to admit it.“Employers don’t often articulate why but the idea, they believe, is that people who are out of work are damaged in some way, which is why they are out of work” said Peter Cappelli, the director of the Center for Human Resources at the Wharton School of the University of Pennsylvania.Some economists believe the pandemic’s unique effects on the economy may have changed things. Notably, the pandemic destroyed millions of jobs seemingly all at once, especially in the travel, leisure and hospitality industries. Many people could not, or chose not to, work because of health concerns or family responsibilities.“For people who were just laid off because of Covid, will there be a stigma? I don’t really think so,” Mr. Cappelli said. Although monthly job-finding rates plummeted for both the short- and long-term unemployed during the early part of the pandemic, the rate for the long-term jobless has since rebounded to roughly the same level as before the pandemic, according to government data. While that does not imply the employment-gap stigma has disappeared, it suggests it is no worse than it has been.That was what Rachel Love, 35, found when she applied for a job at Qwick.After Ms. Love was furloughed, and then laid off from her sales job at a hotel in Dallas last year, she kept hoping that her former company would hire her back. She had been unemployed for about a year when she came to terms with the idea of getting a new job and became aware of a business development position at Qwick.Interviewers did not press her about why she had been out of work for so long. “I hope now, just with everything going on, I think people can look at the résumé and look at the time frame and maybe just infer,” said Ms. Love, who began working remotely for Qwick in June.The tight labor market is almost certainly a factor. In October, there were 11 million job openings for 7.4 million unemployed workers.“The fact of the matter is, there are far more jobs in the U.S. than there are people to fill them right now,” said Jeramy Kaiman, who leads professional recruitment for the western United States at the Adecco Group, a staffing agency, working primarily with accounting, finance and legal businesses. As a result, he added, employers have had to become more willing to consider applicants who had been out of work for a while.Even when the worker shortage eases, labor experts express optimism that employers will care less about employment gaps than before, partly because the pandemic has made hiring managers more sympathetic.Zoë Harte, the chief people officer at Upwork, a company that matches freelancers with jobs, said there had been a “societal shift” in how companies understand employment gaps.“It’s become more and more evident that opportunity isn’t equally distributed, and so it’s important for us as people who are creating jobs and interviewing people to really look at ‘What can this person contribute?’ as opposed to ‘What does this piece of paper say they have done in the past?’” she said.That aligns with Burton Amos’s experience. After he was laid off from his job as a program support specialist with a federal contractor at the start of the pandemic, Mr. Amos, 60, started an online wireless accessories business and began studying for a career in information technology but was unable to land other work.On his résumé and LinkedIn profile, he was open about his lack of full-time employment, an approach that seemed to appeal to interviewers.“Every job did ask about ‘What am I doing right now?’” he said. “They didn’t specifically say anything specific about the pandemic.” He recently received multiple job offers and has accepted a position as a public aid eligibility assistant with the State of Illinois.Many companies have also redoubled their efforts on diversity and are more willing to employ people with a range of backgrounds and experiences, including applicants with long employment gaps.Scott Bonneau, vice president of global talent attraction at the hiring site Indeed, said employment gaps are “not a part of our consideration.” His company instead tries to evaluate a candidate’s skills and capabilities. That practice began before the pandemic, as part of the company’s diversity and inclusion efforts, and it is a shift that he said he expected to see at other businesses.“I think there is the beginnings of a movement to stop focusing on employment gaps entirely at least in certain parts of the employment world,” said Mr. Bonneau, whose responsibilities include hiring people for jobs at Indeed.But other labor experts worry that the employment-gap stigma will return once the economy stabilizes.Employers may not be as forgiving of gaps on résumés that stretch into next year now that jobs, and vaccines, are more available, said Jesse Rothstein, a professor of public policy and economics at the University of California, Berkeley. The stigma may be more evident for lower-wage workers in industries where current job openings are especially high.“I would expect that to whatever extent that it exists, it will come back,” Mr. Rothstein said.History also suggests that the empathy that hiring managers may feel now will not last, said Maria Heidkamp, the director of program development at the Heldrich Center for Workforce Development at Rutgers University.In a study released in 2013 by the Heldrich Center, a quarter of American workers said they were directly affected through a job loss and nearly 80 percent said they knew at least someone who had lost a job in the previous four years. Those levels would seem to make hiring managers more understanding of those who had lost their jobs because the experience was so common, Ms. Heidkamp said. “But that’s not what we saw,” she said.“The equation may play out differently” now, she added. “That said, I’m still worried.”Ben Casselman More

  • 163 Shares169 Views

    in Economy

    Why New York City’s Jobless Rate Is Double the Rest of the Country's

    by

    The city has regained fewer than 6 of every 10 jobs it lost since the pandemic began, while the nation as a whole has regained more than 90 percent of lost jobs.Since the start of the year, nearly six million jobs have been added in the United States. The unemployment rate has plummeted to 4.2 percent, close to where it stood before the pandemic. But in New York City, the economy appears to be in a rut.After gaining 350,000 jobs in the last months of 2020, employment has slowed considerably this year, with just 187,000 jobs added since March. The city’s unemployment rate of 9.4 percent is more than double the national average, and its decline in recent months was largely caused by people dropping out of the labor force.From the start of the pandemic, no other large American city has been hit as hard as New York, or has struggled as much to replenish its labor force. Nearly a million people lost their jobs in the early months of the pandemic, and thousands of businesses closed.As the city plunged into its worst financial crisis since the Great Depression, the unemployment rate skyrocketed, peaking in June 2020 at 20 percent. Nearly every industry — from construction to finance to social services — has fewer people employed now than before the pandemic swept into New York in March 2020.Nearly two years later, New York has added back a little more than half the jobs it lost, according to the state Labor Department, far less than the rest of the country, underscoring how the pandemic ravaged some of the city’s core economic engines like tourism, hospitality and retail.The protracted pandemic has shut out tourists and scared off the crush of suburbanites who filled office towers every weekday — a “double whammy,” said Andrew Rein, president of the Citizens Budget Commission, a nonprofit watchdog group. Just 8 percent of office workers were back at work five days a week in early November, according to a survey by the Partnership for New York City, a business group.Crowds are thinner at Pennsylvania Station in Midtown Manhattan with so many suburban office employees still working remotely.Yuvraj Khanna for The New York Times“Commuters and tourists consume a lot of the same stuff,” Mr. Rein said. “They consume, in a certain sense, the vibrancy of New York City.”Their absence has contributed to the loss of more than 100,000 jobs in the city’s restaurants, bars and hotels, plus nearly 60,000 additional jobs in retailing, performing arts, entertainment and recreation. The reopening of Broadway theaters and the high rate of vaccinations has provided a boost this fall that lowered the city’s official unemployment rate to 9.4 percent in October.But the rise of the Omicron variant could threaten the fledgling recovery just as the next mayor, Eric Adams, takes office in January. Mr. Adams has pledged to use the full resources of city government to reinvigorate the economy, creating a citywide jobs training and placement program.So far, the city has regained fewer than six of every 10 jobs it lost since the pandemic began in early 2020, while the nation as a whole has regained more than nine out of 10 lost jobs, said James Parrott, an economist with the Center for New York City Affairs. “It certainly looks to me like we’re going to have a much slower, much more drawn-out recovery,” Mr. Parrott said.The short but sharp pandemic recession was particularly painful for those in lower-paying service jobs: Positions in retail, restaurants and hotels help underpin the city’s economy and were the first to be cut in spring 2020. The jobs have been slow to reappear while a large share of their customers — office workers — have still not returned to the city’s business districts.The story is far different for one major industry and its employees, finance, which has thrived, with companies like JPMorgan Chase posting record revenues during the pandemic.In the two previous recessions — those that started in 2000 and 2008 — Wall Street shrank and the city lost tens of thousands of high-paying finance jobs. This time, the job losses on Wall Street have been minimal, helping tax collections to hold up as the city has continued to collect income tax from high-paid professionals who are working remotely.“Wall Street is having a banner year, and they did really well last year,” said Ana Champeny, deputy research director at the Citizens Budget Commission. “That has helped prop up the city’s income tax revenues and business tax revenues.”A strong employment rebound has yet to take hold despite an easing of pandemic-related business restrictions over the summer, the ending of expanded unemployment benefits in September and the reopening of international travel last month.An estimated 800,000 New York City residents, about 10 percent of the population, were receiving the benefits when they expired. Republican lawmakers and small business owners had blamed the benefits for discouraging people from working, though recent studies have shown that the extra payments most likely had little effect on labor shortages, which have continued after the payments ended.Before the pandemic, the tourism industry in New York City employed 283,000 people, with the majority of those jobs in Manhattan. By the end of 2020, roughly a third of those positions had been eliminated, according to the New York State comptroller’s office.Roughly a third of New York City’s 283,000 tourism positions had been eliminated by the end of 2020, though visitors have started to return in greater numbers in recent weeks.Gabby Jones for The New York TimesWhen the city locked down early last year, almost all of its tour guides were laid off, and most have not been rehired, said Patrick Casey, a board member of the Guides Association of New York City who is out of work himself.He had worked as a guide for New York Water Taxi, which operated a fleet of sightseeing boats, for more than 10 years before he was furloughed at the start of the pandemic. He had to fend for himself: Federal pandemic benefits have expired, and like many workers, he had exhausted his unemployment insurance.Mr. Casey said he had hoped to be rehired, but he gave up and started collecting Social Security when he turned 65 in early December. “It’s going to take a long time for my industry to come back,” he said.The pandemic has caused many workers to re-evaluate their own priorities, placing a greater importance on work-life balance, spending time with their families and protecting their health. It has led some workers to retire, while others are reluctant to rejoin the work force if it means taking a job that requires face-to-face interaction, economists say.Louisa Tatum, a career coach at the New York Public Library in the Bronx, said that more people with college degrees were seeking advice, and workers were more selective about what jobs they were willing to accept.While some businesses are hiring and some even have major staff shortages, many workers tell her that they are willing to wait to accept a position that pays well, has consistent hours and, in a reflection of how the pandemic has shifted priorities, offers greater flexibility for remote work.“There is a desire to work remotely and for opportunities that don’t put them at risk of anything,” Ms. Tatum said. The biggest barrier, she said, is the lack of desirable openings.For some industries in New York, the pandemic simply accelerated financial pressure that already existed. Retailers were already struggling with the rise of online shopping, and empty storefronts were adding up even on famed corridors like Madison Avenue.The apparel manufacturing business, a bedrock industry in New York a century ago that employed hundreds of thousands of people, shed more than 4,000 jobs during the pandemic, leaving just 6,100 employees in the city as of October.Taylor Grant moved back home to Alabama after being laid off from her clothing designing job and decided to stay after not being able to find a new job in New York.Julie Bennett for The New York TimesTaylor Grant was among those who lost a job in the apparel manufacturing trade. Ms. Grant, 25, accepted a job in early 2019 as a clothing designer at HMS Productions, a designer and manufacturer of women’s clothes sold at shops like TJ Maxx and Marshalls. Her office was in the garment district, the once booming textile neighborhood in Midtown Manhattan.Ms. Grant said she had survived rounds of layoffs in spring 2020 and had worked remotely for a couple of months in Dothan, Ala., her hometown. She lost her job that summer.Ms. Grant said she applied for a handful of jobs in the apparel business in New York through the rest of 2020, hoping to return while she still had an apartment in the city. Not one company responded, so she stopped looking. She now works as a manager at a women’s boutique started by her mother, Frou Frou Frocks in Dothan, and has helped increase its online sales and social media presence.“I definitely thought I would be with my company for at least five years,” Ms. Grant said. “Once I realized there were no job opportunities in New York, I decided to stay in Alabama.”The Hotel and Gaming Trades Council, a union that represents more than 30,000 hotel workers in New York, still has thousands of members who have been out of work for nearly two years. The outlook is so bleak that union officials have been counseling members on how to find work in other fields, even nonunion jobs. But replacing jobs that paid $35 an hour and provided free family health care is a tall order.“We have people waiting in line and anxious to go back to work,” said Rich Maroko, president of the union. “They’re having difficulty finding full-time work.”Kazi M. Hossain, 59, had served drinks at Bar Seine in the Hôtel Plaza Athénée in Manhattan for nearly 35 years when the pandemic forced the hotel to close in March 2020. It has never reopened, leaving Mr. Hossain without a full-time job for the first time since the mid-1970s.He has supported his family in Queens by taking on part-time work and borrowing $100,000 from his retirement savings. “If the hotel opens in the next three months, I could survive,” Mr. Hossain said. More

  • 75 Shares99 Views

    in Economy

    How Inflation Affects Turkey's Struggling Economy

    by

    Even before the pandemic, Turkey was trying to ward off financial meltdown. The crisis has accelerated as President Recep Tayyip Erdogan has doubled down on his unorthodox policies.The signs of Turkey’s disastrous economy are all around. Long lines snake outside discounted bread kiosks. The price of medicine, milk and toilet paper are soaring. Some gas stations have closed after exhausting their stock. Angry outbursts have erupted on the streets.“Unemployment, high living costs, price increases, and bills are breaking our backs,” the Confederation of Progressive Trade Unions said last month.Even before the coronavirus pandemic and supply chain bottlenecks began walloping the world’s economies nearly two years ago, Turkey was trying to ward off a recession as it struggled with mountainous debt, steep losses in the value of the Turkish lira, and rising inflation. But in recent weeks that slow-moving train wreck has sped up with a ferocious intensity. And the foot that’s pushing hardest on the accelerator belongs to the country’s authoritarian president, Recep Tayyip Erdogan.Why is this happening now?Turkey’s economic problems have deep roots but the most recent crisis was caused by Mr. Erdogan’s insistence on lowering interest rates in the face of galloping inflation — precisely the opposite tactic of what economists almost universally prescribe.Mr. Erdogan, who has ruled Turkey for 18 years, has long resisted that particularly painful prescription, but his determination to keep cutting interest rates even as the country’s inflation rate tops a staggering 21 percent appears to be pushing Turkey past a tipping point.Normally, investors and others look to a nation’s central bank to keep inflation in check and set interest rates. But Mr. Erdogan has repeatedly shown that if Turkey’s central bankers and finance ministers won’t do what he wants, he will get rid of them, having already fired three in two years.The value of the lira has nose-dived in recent weeks, and on Monday hit a record low — reaching 14.3 to a dollar, from about 7 to the dollar earlier this year — pushing some businesses and households that have borrowed money from abroad into bankruptcy. The currency’s steep decline means prices for imported goods keep rising. Shortages are common and people are struggling to afford food and fuel. The youth unemployment rate is 25 percent. The president’s popularity is sinking and his opponents have become emboldened.With an election coming up in 18 months, Mr. Erdogan seems convinced that his strategy will enable the Turkish economy to grow out of its problems. Most economists, however, say a crash is more likely.When did Turkey’s economic problems begin?“Interest rates make the rich richer, the poor poorer,” the Turkish President Recep Tayyip Erdogan said in a recent interview.Antonio Masiello/Getty ImagesMr. Erdogan’s aggressive pro-growth strategies have worked for him before. Since he began governing Turkey in 2003, he has undertaken expensive infrastructure projects, courted foreign investors and encouraged businesses and consumers to load up on debt. Growth took off.“Turkey was considered to be an economic miracle” during the first decade of Mr. Erdogan’s rule, said Kadri Tastan, a senior fellow at the German Marshall Fund based in Brussels. Poverty was sliced in half, millions of people swelled the ranks of the middle class, and foreign investors were eager to lend.But Mr. Erdogan’s relentless push to expand became unsustainable. Rather than pull back, however, the giddy borrowing continued.The increasingly unstable economy was caught in a bind. High interest rates attracted foreign investors to accept the risk and keep lending, but they would stunt growth. Mr. Erdogan was unwilling to accept that trade-off, and continued to support cheap borrowing as inflation took off and the currency’s value declined.And he insists that high interest rates cause inflation — even though it is low interest rates that put more money into circulation, encourage people to borrow and spend more, and tend to drive up the prices.“Erdogan has his own economic philosophy,” said Henri Barkey, a fellow at the Council on Foreign Relations.The economy seesawed between these conflicting goals until 2018 when growing political tensions between Turkey and the United States caused the value of the lira to topple.The political standoff eased, but the underlying economic problems remained. Mr. Erdogan kept pushing state banks to offer cheap loans to households and businesses and the borrowing frenzy continued. “Things never really normalized,” said Selva Demiralp, an economist at Koc University in Istanbul.When the chief of the central bank resisted pressure from the president to lower the 24 percent interest rate in 2019, Mr. Erdogan fired him, the beginning of a pattern.To prop up the lira, Turkish banks began selling off their reserves of dollars. Those stocks of dollars are now running low.The global economic slowdown caused by the coronavirus pandemic has added to the strains by limiting the sales of Turkish goods around the world. Tourism, which was one of Turkey’s most dynamic sectors, has also been badly hit.What is President Erdogan’s approach to interest rates and what do economists say?A protest against the economic policies of the government in Istanbul on Sunday.Murad Sezer/ReutersBy keeping interest rates low, Mr. Erdogan argues that consumers will be more eager to keep shopping and businesses will be more inclined to borrow, invest money in the economy and hire workers.And if the lira loses value against the dollar, he says, Turkey’s exports will simply become cheaper and foreign consumers will want to buy even more.That is true to some degree — but it comes at a heavy price. Turkey is quite dependent on imports like automobile parts and medicine, as well as fuel and fertilizer and other raw materials. When the lira depreciates, those products cost more to buy.At the same time, Mr. Erdogan’s disdain for conventional economic theory has scared off some foreign investors, who had been eager to loan Turkish businesses hundreds of millions of dollars but now are losing faith in the currency.And the lower rates go, the faster inflation rises. Over the past year, the lira has lost more than 45 percent of its value, and the official inflation rate has surged past 20 percent, although many analysts believe the rate on the streets is much higher.By comparison, an inflation rate of 6.8 percent so far this year in the United States (the highest in nearly four decades) and a 4.9 percent rate in the eurozone are enough to set off alarms.In Turkey, skyrocketing prices are causing misery among the poor and impoverishing the middle class.“We can’t make a living,” said Mihriban Aslan, as she waited on a long line to buy bread in Istanbul’s Sultangazi district. “My husband is 60 years old, he can’t work much now.” He has a small pension of 1,800 lira — which at the moment is worth about $125. “I sometimes do needle work at home to bring in extra money,” she said.Businesses would rather hoard goods than sell them because they don’t think they will be able to afford to replace them.Ismail Arslanturk, a 22-year-old cashier at a neighborhood grocery shop, complained that the price of green lentils has nearly doubled. “I don’t believe the economy will be fixed after this point,” said Mr. Arslanturk, who added he was forced to leave high school to help support his family. “I am hopeless.’’A currency exchange office in Turkey. Over the past year, the lira has lost more than 45 percent of its value.Emrah Gurel/Associated PressWhat has Erdogan’s response been to the intensifying crisis?The president has doubled down on his approach, asserting he will “never compromise” on his opposition to higher interest rates. “Interest rates make the rich richer, the poor poorer,” he said in an interview on national television last month. “We have prevented our country from being crushed in such a way.”The president has invoked Islamic precepts against usury and referred to interest charges on loans as the “mother and father of all evil,” and blamed foreign interference for rising prices. Analysts like Mr. Barkey of the Council on Foreign Relations said that such comments are primarily aimed at appealing to more conservative religious segments of the country that represent the core of Mr. Erdogan’s support.Turkey’s fundamental problem, Mr. Barkey maintains, is that it has an overly confident ruler who has been in power for a long time. “He believes in his omnipotence and he’s making mistakes,” Mr. Barkey said, “but he’s so surrounded by yes men that nobody can challenge him.” More

  • 100 Shares189 Views

    in Economy

    Biden Touts Low Unemployment Rate Despite Economic Anxiety

    by

    Whether it’s reporting on conflicts abroad and political divisions at home, or covering the latest style trends and scientific developments, Times Video journalists provide a revealing and unforgettable view of the world.Whether it’s reporting on conflicts abroad and political divisions at home, or covering the latest style trends and scientific developments, Times Video journalists provide a revealing and unforgettable view of the world. More

  • 125 Shares129 Views

    in Economy

    Why the November Jobs Report Is Better Than It Looks

    by

    The number of jobs added was below expectations, but otherwise the report shows an economy on the right track.Everything in the November jobs numbers Friday was good except for the number that usually gets the most attention.The 210,000 jobs that U.S. employers added last month was far below analyst expectations. But most of the other evidence in the report points to a job market that is humming. An open question a few months ago — is this a tight labor market or a loose one? — is quickly being settled in favor of “tight.”Most notably, the jobless rate fell to 4.2 percent from 4.6 percent, a remarkable swing in a single month. The speed with which unemployment has gone from a grave crisis to a benign situation is astounding. Unemployment was 6.7 percent last December. In one year, we’ve experienced an improvement that took three and a half years in the last economic cycle (March 2014 to September 2017).Sometimes a falling unemployment rate is driven by a pernicious trend: People drop out of the labor force. The opposite was true in November. The survey of American households on which the data is based showed uniformly positive signs. The number of people working was up by 1.1 million while the number of adults not in the labor force — neither working nor looking for work — fell by 473,000.Among people in their prime working years, those 25 to 54, the share of people employed rose by a whopping half a percentage point. It was 78.8 percent in November, rapidly approaching its pre-Covid level of 80.4 percent. By early in 2022, it’s easy to imagine that people in that age bracket will be employed at prepandemic rates.Even the disappointing number on job creation, derived from a separate survey of employers, has some silver linings. For one, it was accompanied by positive revisions to September and October job growth numbers, amounting to a combined 82,000, which takes some of the sting away. Revisions have been uncommonly large, and mostly in a positive direction, in recent months, reflecting challenges collecting data in a pandemic economy.For another, soft job creation numbers may also be evidence of a tight labor market. Employers may want to add jobs in larger numbers, but are constrained by the number of workers they’re able to find. That story is certainly consistent with many business surveys and anecdotes about labor shortage issues.A tight job market — one in which workers are scarce and employers have to compete to attract workers — is generally the goal of economic policy. Compensation tends to rise, and workers are confident in their ability to find a new job. The new numbers are just the latest evidence that this is the world American workers are living in right now. (Among the other evidence: The rate of people voluntarily quitting their jobs is at record levels.)That’s not to say everything is perfect. The share of adults in the labor force remains significantly below prepandemic levels — 61.8 percent in November, compared with 63.3 percent in February 2020. That reflects in part the decisions of people to retire early. And it remains unclear how many of those people might return to work as the economy and public health conditions improve.But in terms of policy, this increasingly looks like an economy on the right track. The work of macroeconomic stabilization appears to be pretty much complete. At its coming policy meeting, the Federal Reserve will seriously consider winding down its program of bond-buying faster than planned, Chair Jerome Powell said this week.Despite the soft job creation numbers, the overall November employment report appears to support those plans. Fed officials would like to see a stronger rebound in labor force participation, but that measure was at least heading in the right direction in November. And ultimately it isn’t Fed policy that will decide whether, for example, a 62-year-old who left his job during the pandemic decides to start working again.If anything, the new numbers support the idea that the Fed has found itself out of position, with a monetary policy that is looser than it should be at a time when the labor market is quite healthy and with inflation far above its target.Consider this: In the last economic cycle, the Fed began tapering its bond purchases in December 2013, when the unemployment rate was 6.7 percent and inflation was coming in below the Fed’s 2 percent goal. This time, it began when the jobless rate was 4.2 percent and inflation was in the ballpark of 6 percent (November inflation numbers have not yet been released).Even if you believe the Fed was too quick to tighten monetary policy in 2013 — and the sluggish recovery of the 2010s is evidence that it was — the contrast is striking. In that sense, a more aggressive tapering plan from the Fed will be an effort to adjust its policy stance with the facts on the ground without causing too much disruption to markets or the economy.If the Fed succeeds, the economy will keep growing steadily and the labor market will continue its gradual improvement. But it’s worth noting just how rapid the improvement has already been. In February, the Congressional Budget Office was forecasting the unemployment rate would be 5.3 percent in the current quarter. It has ended up a full percentage point below that level.Ultimately, this has been a speedy labor market recovery, and one that appears to have more room to run. Policymakers have every reason to take the win and continue adjusting to that reality. More

  • 138 Shares179 Views

    in Economy

    November 2021 Jobs Report Is Expected to Show Another Healthy Gain

    by

    The trajectory of the economy as the holidays approach and a tumultuous year nears its conclusion will come into focus Friday morning when the government releases data on hiring and unemployment in November.Economists polled by Bloomberg are looking for a gain of 550,000 jobs, a robust number that suggests economic momentum. In October, employers added 531,000 jobs, and initial claims for unemployment benefits recently touched a 52-year low.The unemployment rate is expected to dip one-tenth of a percentage point, to 4.5 percent.Employment has been helped by the easing of the Delta variant of the coronavirus in many places and increased hiring at bars and restaurants as well as stores, offices and factories. The emergence of the Omicron variant threatens some of those gains, but it is too soon to gauge the risk to the economy.“We should continue to see strong jobs growth because demand for labor is red hot, but there is a lid on potential acceleration as the pandemic is still going on,” said Daniel Zhao, senior economist at the career site Glassdoor.He expects the report to show formidable hiring in retailing, transportation and warehousing with companies staffing up in anticipation of holiday demand.Despite the tight labor market and the healthy recent hiring number, the economy remains roughly four million jobs short of prepandemic levels. About one-third of those positions are in the leisure and hospitality sector, which is vulnerable if the Omicron variant turns out to be as much of a threat as the Delta variant, constraining travel and gatherings.“That’s the risk, but it probably won’t show up before Christmas,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “It could be an issue in the new year. We’re still dealing with the Covid pandemic, and the risks are there for the economy and hiring.”The economy’s path has been characterized by clashing signals throughout the fall.The “quits rate” — a measurement of workers leaving jobs as a share of overall employment — has been at or near record highs, evidence of confidence among workers that they can navigate the labor market and find something better. But the University of Michigan’s survey of consumer sentiment dropped to levels not seen since the sluggish recovery from the recession of 2007-9.The report noted “the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation.” Shoppers are facing the steepest inflation in 31 years. In October, prices increased 6.2 percent from a year earlier.Nonetheless, markets have remained relatively calm. The major stock indexes are up by impressive levels this year. And bond yields, which tend to move higher in inflationary environments, remain near record lows, indicating that investors don’t see inflation as a longer-term threat to the economy or financial stability. More

  • 125 Shares139 Views

    in Economy

    Initial unemployment claims last week fell to a half-century low.

    by

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Initial U.S. jobless claims
    Weekly initial unemployment insurance claims, seasonally adjusted. Latest data: week ending Nov. 20.Source: U.S. Employment and Training AdministrationBy The New York TimesInitial unemployment claims tumbled last week to their lowest point since 1969, the Labor Department reported Wednesday.New filings for state benefits totaled 199,000 on a seasonally adjusted basis, a decline of 71,000 from the previous week.The drop marks a milestone in the economy’s recovery from the pandemic. Weekly claims peaked at more than six million in April 2020 as the coronavirus forced businesses and consumers alike to shut down. As recently as early January, amid a winter resurgence of the coronavirus, new state claims exceeded 900,000 in one week.Filing for unemployment benefits has come down sharply since then, but remained well above prepandemic levels until very recently.Unemployment insurance was a key source of relief after the pandemic threw more than 20 million people out of work. To buttress state payments, emergency benefits were funded through federal pandemic relief bills, although those payments ceased in September, cutting off aid to 7.5 million people.Despite a summer lull, the economy has been showing signs of life lately. Employers added 531,000 jobs in October, and most economists expect growth to pick up in the final quarter of the year, boosted by healthy consumer spending.“Today’s data reinforce the historic economic progress we are making and the importance of building on that progress in the weeks ahead,” President Biden said in a statement about the unemployment claims report.As one measure of progress, Mr. Biden pointed to the most recent tally of unemployment benefits of all sorts, from early November, which showed the number of people with continuing claims — those filing for benefits who have already filed an initial claim — at 2.4 million. The figure right before Thanksgiving last year was more than 20 million.The biggest economic worry lately hasn’t been joblessness but inflation, which has been surging amid labor shortages, supply chain disruptions and higher energy prices.In a separate report Wednesday, the Commerce Department said that household spending rose 1.3 percent in October, while personal income jumped 0.5 percent, before adjusting for inflation. It also showed that prices climbed by 5 percent in the 12 months through October.The data for unemployment claims, although certainly welcome news, may not be quite as good as it seems. On an unadjusted basis, state claims rose last week. And employment remains 4.2 million below its level in February 2020, before the pandemic.“While the labor market is recovering, we think the latest drop in claims may be overstated,” said Gregory Daco, chief U.S. economist at Oxford Economics. “We suspect the decline last week may have been exaggerated by quirky seasonal adjustment factors and think we might see a bounce-back in the weeks ahead.” More

  • 113 Shares119 Views

    in Economy

    Record Number of American Workers Quit Jobs in September

    by

    .dw-chart-subhed {
    line-height: 1;
    margin-bottom: 6px;
    font-family: nyt-franklin;
    color: #121212;
    font-size: 15px;
    font-weight: 700;
    }

    Number of People Who Left Their Jobs Voluntarily by Month
    Note: Seasonally adjusted. Voluntary quits exclude retirements.Source: Bureau of Labor StatisticsBy The New York TimesEmployers are still struggling to fill millions of open jobs — and to hold on to the workers they already have.More than 4.4 million workers quit their jobs voluntarily in September, the Labor Department said Friday. That was up from 4.3 million in August and was the most in the two decades the government has been keeping track. Nearly a million quit their jobs in the leisure and hospitality industry alone, reflecting the steep competition for workers there as businesses recover from last year’s pandemic-induced shutdowns.There were 10.4 million job openings in the United States at the end of September. That is down a bit from the record 11.1 million posted in July, before the spread of the Delta variant of the coronavirus led to a slump in sales in some businesses. But demand for labor remains extraordinarily high by historical standards — before the pandemic, the record for job openings in a month was 7.6 million in November 2018. The Labor Department revised its estimate of job openings in August to 10.6 million.There were roughly 75 unemployed workers for every 100 job openings in September, the lowest ratio on record. Separate data released last week by the Labor Department showed that job growth rebounded in October but that the labor force barely grew.“You’re essentially seeing demand continuing to increase without an offsetting increase in talent,” said Ryan Sutton, a district director for Robert Half International, a staffing firm. “Until some new talent comes in, until we get employees who are on the sidelines back into the market, it’s very likely this is going to continue.”A hiring sign at a store in Manhattan. There were 10.4 million job openings in the United States at the end of September.Jeenah Moon for The New York TimesEconomists cite a number of reasons for the slow return. The pandemic is still disrupting child care, making it hard for some parents to work; other workers are worried about contracting the virus or spreading it to high-risk family members. Many Americans have also built up their savings during the pandemic, allowing them to be choosier about jobs..css-1xzcza9{list-style-type:disc;padding-inline-start:1em;}.css-3btd0c{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-3btd0c{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-3btd0c strong{font-weight:600;}.css-3btd0c em{font-style:italic;}.css-1kpebx{margin:0 auto;font-family:nyt-franklin,helvetica,arial,sans-serif;font-weight:700;font-size:1.125rem;line-height:1.3125rem;color:#121212;}#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-family:nyt-cheltenham,georgia,’times new roman’,times,serif;font-weight:700;font-size:1.375rem;line-height:1.625rem;}@media (min-width:740px){#NYT_BELOW_MAIN_CONTENT_REGION .css-1kpebx{font-size:1.6875rem;line-height:1.875rem;}}@media (min-width:740px){.css-1kpebx{font-size:1.25rem;line-height:1.4375rem;}}.css-1gtxqqv{margin-bottom:0;}.css-1g3vlj0{font-family:nyt-franklin,helvetica,arial,sans-serif;font-size:1rem;line-height:1.375rem;color:#333;margin-bottom:0.78125rem;}@media (min-width:740px){.css-1g3vlj0{font-size:1.0625rem;line-height:1.5rem;margin-bottom:0.9375rem;}}.css-1g3vlj0 strong{font-weight:600;}.css-1g3vlj0 em{font-style:italic;}.css-1g3vlj0{margin-bottom:0;margin-top:0.25rem;}.css-19zsuqr{display:block;margin-bottom:0.9375rem;}.css-12vbvwq{background-color:white;border:1px solid #e2e2e2;width:calc(100% – 40px);max-width:600px;margin:1.5rem auto 1.9rem;padding:15px;box-sizing:border-box;}@media (min-width:740px){.css-12vbvwq{padding:20px;width:100%;}}.css-12vbvwq:focus{outline:1px solid #e2e2e2;}#NYT_BELOW_MAIN_CONTENT_REGION .css-12vbvwq{border:none;padding:10px 0 0;border-top:2px solid #121212;}.css-12vbvwq[data-truncated] .css-rdoyk0{-webkit-transform:rotate(0deg);-ms-transform:rotate(0deg);transform:rotate(0deg);}.css-12vbvwq[data-truncated] .css-eb027h{max-height:300px;overflow:hidden;-webkit-transition:none;transition:none;}.css-12vbvwq[data-truncated] .css-5gimkt:after{content:’See more’;}.css-12vbvwq[data-truncated] .css-6mllg9{opacity:1;}.css-qjk116{margin:0 auto;overflow:hidden;}.css-qjk116 strong{font-weight:700;}.css-qjk116 em{font-style:italic;}.css-qjk116 a{color:#326891;-webkit-text-decoration:underline;text-decoration:underline;text-underline-offset:1px;-webkit-text-decoration-thickness:1px;text-decoration-thickness:1px;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:visited{color:#326891;-webkit-text-decoration-color:#326891;text-decoration-color:#326891;}.css-qjk116 a:hover{-webkit-text-decoration:none;text-decoration:none;}Those factors are likely to ease as the pandemic ebbs and savings dwindle. But other shifts could prove more lasting. In a research note published Friday, economists at Goldman Sachs observed that roughly two-thirds of the people who had left the labor force during the pandemic were over 55; many of them have retired and are unlikely to go back to work.The labor crunch is giving workers the upper hand in negotiations. Wages have risen sharply in recent months, particularly in service jobs, although in other industries pay is lagging behind the pace of inflation.The recent rise in the number of workers quitting suggests that many are taking advantage of their leverage to accept better-paying jobs, or to look for them. At the same time, understaffing in many businesses may be putting stress on remaining workers, leading even more people to leave their jobs. Industries that require most employees to work in person, such as manufacturing, retail and health care — as well as leisure and hospitality — report the biggest increases in the rate of workers leaving their jobs.“We are seeing big pickups in quits in the industries that are having the hardest time hiring right now,” said Nick Bunker, director of economic research for the job site Indeed.Kaylie Sweeting worked as a bartender in Millburn, N.J., through most of the pandemic, despite concerns about interacting with unmasked customers and frustration about low wages. But when the restaurant pressured a colleague to come to work sick this summer, Ms. Sweeting quit.“The job was absolutely no longer worth it,” she said. “I was hurt that a company that I gave my time to did not seem to prioritize me or my safety.”So Ms. Sweeting, 23, and her partner, a cook, decided to take the money they had saved to buy a house and open their own vegan restaurant instead. They recently signed a lease and are beginning renovations, with plans to open early next year. They are trying to apply the lessons they have learned as employees, promising good wages, paid time off and other basic benefits that restaurant jobs have often failed to provide.“I genuinely love the industry,” Ms. Sweeting said. “I just don’t love the way it’s managed. I feel like the only way to change it is to implement the change yourself.” More