Five economic trends we’re grateful for

Illustration: Brendan Lynch/Axios

It was a dramatic year for economic news: high inflation, the fastest rate hikes in decades, markets in a swoon and widespread fears of a recession.

Yes but: As we survey the landscape this Thanksgiving, we see a pretty remarkable list of changes for the better. These are the five that stand out as reasons to be thankful even in this time of economic uncertainty.

1) The job market is very hot. There’s no getting around it: by any historical standard, this is an extraordinary time to be a job-seeking American.

  • At 3.7%, the unemployment rate was lower only 8% of all months in data going back to 1948.
  • The number of people filing for new jobless claims has averaged 215,000 so far this year (it rose last week to 240,000). But in the 2010s, that number averaged 369,000.
  • Patches of softness are emerging, and there’s no guarantee conditions will remain robust. But it is difficult to look at the 2022 job market as anything other than a benefit for workers.

2) Supply chains don’t get tangled. An index measuring the health of supply chain conditions, released by the New York Fed, is well below its most recent peak in April, signaling a return to historic norms.

  • The pandemic-era snags at America’s busiest ports – one of the most visible signs of the cargo bottleneck – are over. At the height of January’s chaos, there were a total of 109 ships waiting to land at Long Beach and Los Angeles. As of last week, that number was 5, according to the Southern California Maritime Exchange.
  • Those backups, plus COVID-related factory closures and other supply chain issues, have fueled shortages of all types of goods. This year, retailers have the opposite problem: overstock. This results in more offers for buyers.

3) The war on savers is over. We intend this shot to be somewhat ironic. The same savers who have been “victims” of ultra-low global interest rates have, for the most part, also been beneficiaries of the asset price surge it has fueled.

  • Now, ultra-safe, short-term savings are finally offering decent returns, like the 4.3% 90-day Treasury bills now pay. The downside: Stocks and other riskier investments have plummeted in value.
  • This shift creates winners and losers; prudent savers are better off, while risk-takers are worse off. But there is a more interesting implication: the era of monetary policy constrained by the “zero lower bound” is over, at least for now.
  • Bond markets are pricing in higher rates for many years to come. This implies that in the future the Fed may have more flexibility to steer the economy through rates, without resorting so quickly to unconventional policies such as quantitative easing.

4) Gas prices are falling. When gasoline prices topped $5 a gallon in much of the United States this summer, it hammered household budgets, cut spending everywhere else, and was a political crisis for the Biden administration.

  • Prices moderated to a national average of $3.61 national average, according to AAA, reversing some of those effects.
  • Worth noting: As nominal wages have increased at a steady pace, how much it costs to fill up a car in terms of hours worked has improved even more.
  • At October’s average hourly wage for unsupervised workers, it took 1.96 hours of work to earn enough to fill a 15-gallon gas tank. It took 2.6 hours in June.

5) Tech layoffs can be good for the economy. While our sympathies are with the thousands of jobs lost at tech companies like Meta, Amazon, and (especially) the downsizing of Twitter, there could be a silver lining when those workers find other jobs.

  • There are plenty of reasons to think that over the past decade, big tech companies have essentially hoarded talent, keeping more people on their payrolls than they need to run their businesses.
  • The high pay and lavish benefits of big tech have made it harder for companies in every other industry — health care, retail, energy — to attract the engineering talent they need.
  • If some who lose their jobs can use their skills to make the user experience, say, scheduling a doctor’s appointment as simple as creating a social media account, that would be a win-win for the world.
  • As Bloomberg reported last week, some non-tech companies are already licking their chops at the new supply of top-tier tech talent.

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