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Comment by D_Alex | Hacker News Reader

This would be the first recession ever featuring near-record-low unemployment.

if anyone has any insights on how we are having an economic contraction AND such low unemployment, I'd love to hear them.

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Although unemployment[0] is back to the pre-pandemic low, the employment-population ratio[1] is still below pre-pandemic levels. People just don't want to work. Probably partially due to the same factors that gave way to /r/antiwork's and /r/workreform's explosions of popularity. I'm sure other factors like people moving in with their parents/friends during the lockdown and the stimulus checks are also contributing.

[0] https://fred.stlouisfed.org/series/UNRATE

[1] https://fred.stlouisfed.org/series/EMRATIO

According to those graphs, the employment to population ratio has been rising strongly for the last two quarters... which makes it even stranger IMO.

BTW that first graph is a lovely illustration of how unemployment went up every time there was a recession - until now.

Is there any evidence that young people are the ones lowering the employment-population ratio?

My understanding is that the pandemic resulted in an increase in retirements which could partially or fully account for the change in ratio.

https://www.pewresearch.org/fact-tank/2021/11/04/amid-the-pa...

From the article:

"Another argument, offered by U.S. Secretary of the Treasury Janet Yellen, is that the strong U.S. labor market precludes the NBER from designating the current downturn as a recession. But while it is true that employment is one of the data series that the NBER consults, there is no reason to think that this variable — even if it remains strong — will single-handedly determine the ultimate call of a recession. Although employment usually falls during a recession, there have been several cases when payroll employment grew or remained roughly stable well after the start of an NBER-designated recession: from December 2007 to March 2008; January to April 1980; November 1973 to October 1974; and December 1969 to April 1970."

Curious, the unemployment charts linked by von_lohengramm in this subthread show unemployment rising for all the periods mentioned above.

Way higher capacity for underemployment with the "gig economy", which was less prevalent in previous recessions.

OK this is a plausible explanation.

Low wages, high inflation, general financialization of everything resulting in more people working or working multiple jobs to keep their heads above water.

Much less expendable income means economic contraction.

>more people working or working multiple jobs

This should cause the opposite of a recession, no? More people working --> more GDP, right?

Just working more to afford necessities isn't the same thing as putting money back into the economy. Less disposable income across society means lower economic activity.

Stagflation?

Stagflation is associated with high unemployment.

Thanks, I commented without thinking.

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