The Sentimentally Great Economy
Conor Sen: A Steady Job Beats a Higher Paycheck
Despite this “hard economic data,” the “soft economic data” — public sentiment — shows that the economy and labor market are perceived to be about as good as they’ve ever been. Gallup has been asking the public every month since 2001 what it considers the nation’s most important problem, and in November only 13 percent responded with an economic problem. The just-completed midterm elections were largely a referendum on health care and President Donald Trump, not on the economy. […]
As a worker, I’d rather be in a labor market with lots of job postings, a low level of jobless claims and a sustainable level of wage growth. It’s certainly preferable to being in one fueled by speculative excess, where I have to constantly worry about when the mania is going to collapse. I’ll take 3 percent wage growth today with good prospects for being employed tomorrow over 4 percent wage growth today and unemployment tomorrow. […]
The good news for workers today, and perhaps why their optimism is higher than some economic data might suggest, is that there’s no reason why this labor market can’t continue for at least several more quarters. The excesses of the past couple years have been in financial markets, not in the real economy. Bubbles in cryptocurrencies, cannabis and private technology companies should not lead to a heavy-handed response from the Fed. Household leverage remains low, and business investment remains modest.
It’s remarkable how much of the employment web site ads I see are aimed at employers rather than people looking for work. That’s a new phenomenon. And like Sen, I don’t think a recession is necessarily right around the corner, as many are predicting. Wishful thinking? Maybe.
On the other hand, there are still some indications that our labor market still has some work to do.
I will believe the labor market is too tight for employers when employers act like the labor market is too tight for employers. https://t.co/2SsOTyF7b4
— Will Truman (@trumwill) October 25, 2018