Ask HN: What Recession? | Hacker News Reader

Ask HN: What Recession?

121 pointsdanwee212 comments

So, I'm reading a lot these days about lay-offs in tech companies and how many HN users (mainly from US?) are having a hard time finding top-level paying jobs.

I work on Western Europe, and in theory we should be more screwed up than other Western countries... but:

- Just landed (3 months ago) on a job that pays me 20% more than the previous one. I could have switched jobs years before, but I just got the courage to do it now

- Keep seeing the same amount of job offers on Linkedin. Now, I have the tendency to keep a list of companies that hire on an Excel file, so I can come back to it later and compare past and current situations of such companies. I have over 200 companies that operate in Western Europe (but not exclusively) that I consider "top-level" (at least from my point of view). The effect of the recession? Well, it has had one, but somehow very poor: many companies went from having around 1000 job offers open in linkedin on a weekly basis to having now around a third of that. Sure, they are not hiring like crazy anymore, but they are still hiring!

- A company that announced a 14% lay-off back in May, is now hiring again (the same pattern as before: when they were offering thousands of jobs before, now they are offering a few hundred)

Now, I have no idea how FAANG is doing in Western Europe (I never cared to track them) because I have no plans to work for them. But all the other non-FAANG companies over here are hiring. So, I don't feel the recession (yet). Touching wood.

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"It isn't affecting me so it doesn't exist" is a fairly elementary mistake, yeah?

“A recession is when you hear about your neighbor losing their job, a depression is when you lose your job.”

And anxiety in between

You cut it before the punchline: "...and a recovery is when Jimmy Carter loses his job".

Well, technically, it's only a recession if it comes from the Rècession region of France.

What OP is referring to is called bubbly fiscal agony.

This make me spit all my coffee.

I would buy you another cup of coffee to replace it, but money is a little tight these days...

Have my humble upvote good sir or madam. A good day to you!

Times are getting so tough that people are stealing jokes [0].

[0] https://news.ycombinator.com/item?id=33283106

Relax buddy, it's a meme [0].

[0] https://en.wikipedia.org/wiki/Meme

Oh it's definitely a meme. My reply is also a meme. We're just having fun.

Some would say a well-documented and evidence-supported meme is no meme at all.

Some would say 1 + 1 = 3.

Oh damn, that was good. The actual citation is what threw me, well done.

I ain't your buddy, friend.

This joke is widely adapted and reused, though. You could basically call it a meme format at this point.

I understand the joke, but I wonder... what's the instance that made it popular?

Good jokes should be repeated

Yeah this was fantastic. Let them have cake!

I wish HN had awards like Reddit, I would spend coin on this comment. I got a much-needed proper belly laugh from it. :)

I think the implied question was "It isn't affecting me, here is the data I see around myself. That data is incongruent with the headlines, can you offer an explanation and show me what I am missing?"

And the answer is if someone surveys the inside of an office, they'll report very high employment rates.

The world is large and diverse. To understand it, one has to look at statistics. Looking at people runs in to hard limits very quickly, because it is only possible to see people who are in the same place as the viewer.

That's a generous interpretation. I think someone capable of negotiating themselves a new tech job at higher pay could only be asking this question rhetorically and not because they are incapable of answering it themselves.

The internet commenter's fallacy: I can only interpret things that happen to other people through things that have happened to me.

To some degree, this is just the human condition, but it is especially common (and annoying) in internet comments.

I think something about not being face to face makes people prone to think of your fellow commenters as an abstraction, and to interpret the ways their experiences differ as from yours as their misunderstanding rather than your not having that set of experiences. I'm aware of this, and am often able to catch myself and reflect further before hitting send, but will still observe this if I look over my past comments.

We aren’t in a recession yet.

Companies are starting to see the slowdown, so they are taking preemptive action so as earnings contract, P/Es will hold up better.

The politically minded readers of Hacker News refused to listen to those who said 2 quarters of negative GDP doesn’t necessarily mean a recession.

It would be really nice if we could take a deeper dive into economics, markets, etc and all learn but …

Has there ever been a recession so widely accepted and talked about before it kicked in?

I mean that honestly; I know there's a downturn and it'll probably continue, but my instinct is that something so widely talked about and accepted will probably not be as bad as it seems. Again I have no proof and maybe my instincts are totally wrong, but that's the feeling

It's very common for recessions to be widely talked about before they happen. I first heard talk about the upcoming housing bubble burst in 2003, five years before the bubble actually burst.

"Economists have predicted 9 of the last 5 recessions" - Paul Samuelson

> I first heard talk about the upcoming housing bubble burst in 2003, five years before the bubble actually burst.

2006 is when the housing bubble was pierced. It took another couple of years to fully deflate, so bursting isn't likely the best depiction of the event, but typically when we talk about bubbles bursting we refer to the first moment of weakness, not the tail end.

It was the securities market that crashed fast and hard five years later. The housing market crash played a role in that happening, I'm sure, but isn't housing itself.

I first learned what 'no doc' loans where in 2004. I worked inside a mortgage company for a while, and was a bit shocked by some of the numbers I saw. BUT... I don't think a housing bubble/crash was a foregone conclusion in 2003/2004, but warning signs were there and got louder over time.

The housing bubble occupied the front cover of the economist several times in 2004.

> I mean that honestly; I know there's a downturn and it'll probably continue, but my instinct is that something so widely talked about and accepted will probably not be as bad as it seems. Again I have no proof and maybe my instincts are totally wrong, but that's the feeling

Pretty much the center of opinion in mid-2006 was that the housing market was in a "slowdown" but that any recession would be brief, talk of "soft landings" and everything else. Everyone could see that it was rolling over, but there was a lot of optimistic talk about it.

Your opinion here is almost exactly the opinion seen 6-12 months before a strong recession.

There was some discussion of a contraction/recession due to the spike in commodities around 2014 by economists, but that never quite developed into a broad common opinion that a recession was due. And there was no Fed rate hike cycle starting then (since the Fed knew that inflation that was confined to commodities would be its own tax and brake on the economy, in the absence of other measures of inflation taking off).

Will we be in a recession on November 9th?

According to the general definition of a recession - two consecutive quarters of negative gross domestic product - the U.S. entered a recession in the summer of 2022.

And we left the recession in Q3?

https://www.bea.gov/data/gdp/gross-domestic-product

Probably depends on whether it stays up or not. See here: https://fred.stlouisfed.org/series/A191RL1Q225SBEA

7 of the 12 recessions marked on the graph temporarily jumped up then dropped back down during the recession.

A note though that the "2 quarters negative real GDP growth" has only ever been a rule of thumb that tends to fit (on that graph above, the dips below 0 outside of recessions only ever lasted one quarter). The official determination has always been made by NBER ( https://www.nber.org/ ), and how they determine it is more complicated (though AFAIK the details aren't public). I think it's too soon for them to make a determination on this one though, they make it while looking backwards, so these two quarters may yet become official which would maintain the pattern.

Perhaps, though this more of a response to "We aren’t in a recession yet" as this is an odd thing to say being just 1 quarter out.

Here's some actual data on hiring rate from LinkedIn:

https://economicgraph.linkedin.com/en-us/resources/linkedin-...

Looks like the hiring rate is down some since May but still quite positive. It's always been above 1% for the last two years, and reached a max of about 1.35% in June of last year. It is down 10.6% this October, compared to October of last year, but the actual variation in hiring rate is not huge. They break it down by industry, some industries have increased hiring, some have decreased it.

The "works on my machine" for the economic world.

So obviously what we need is docker for the economy

Which might look like Matrix downloads?

And any non random sample of a much larger population is almost certainly biased.

Same can be said in the reverse: "It is affecting me, so it does exist". Bias on both ends, qualitative data is often not reliable.

Last election: "If my social circle thinks we are going to win, then it is a given". Both share a pattern: a tech bubble (pun intended)

Some data (need more) https://news.ycombinator.com/item?id=33453819

You are indeed correct. Much of the "data" I've seen here in support of the recession argument revolve around tech layoffs (and, of course, inflation), and when someone points out that real GDP grew and the unemployment rate is low, someone will respond by telling you how bad their neighbor in some tech city has it right now.

You didn't notice the use of statistics?

OP has a great point: most recessions have low job numbers (because of weak demand).

Speaking for the US: This 'recession' is weird because consumer demand is strong, job openings are high, the unemployment rate is near record lows, and GDP grew in the last quarter. So, to echo OP - what recession? A drop in the stock market does not a recession make.

It almost seems as if some quarters are willing a recession into being, but consumers are not having it. Granted the federal reserve is trying to curtail consumer spending to curb inflation, so I get why businesses would predict a recession. In all, it feels like the twilight zone.

My wife is currently looking for a job in Western Europe and 90% of open positios are 'fake' -- they keep previous positions open because showing that you are in a hiring freeze can impact the company's perception. Plus they want to keep collecting info so when they need to eventually hire they have a good source.

Speaking of ghost job postings - https://careers.twitter.com/en/roles.html

Who knows, maybe the person who is supposed to update this got laid off.

I've seen this lately. Recently, I've done interviews with multiple companies over product-related roles. They all get back to me weeks later saying "we ended up hiring internally" or "we ended up eliminating the role completely".

But if you look on LinkedIn, Indeed, etc... these companies are still keeping job postings up and adding new ones all the time. It seems kinda fraudulent IMO

Yeah having job postings is not free but I think too many people believe that "companies put job offer only when they have an opening".

Ideally in a company one should have job ads all the time and if someone valuable drops CV only then reply - if you catch someone who is specialist and good burning couple thousands for an ad will still be worth it.

Just spoke to a company with a booth at a conference a few days ago.

"We've got 1000 job openings right now! What are you looking for?"

Yet... I don't actually think even if they found 1000 perfect fits tomorrow they'd all be hired.

I've posted this elsewhere, but I'll repeat it.

First they send your work home, and then they send it next door.

Corporate learned during COVID that the metro premium isn't worth it any more. These layoff announcements--which have always occurred in the shadows--have three purposes:

1. Shift jobs to cheaper locales. In the US, many metro jobs are being moved to cheaper locations like the midwest. Western European labor is also relatively cheaper. Work from home works for you and your boss. I live in Raleigh-Durham. Things are on fire over here. Google, Apple, Oracle, Microsoft, and Amazon are all hiring at a rapid clip. My fiance just finished her PhD in comp bio, and she has competing offers... but last I heard, biotech is dead and some other thing about long term R&D slowing down due to rate hikes (more on why I think this is nonsense later).

2. Off set the massive over-hiring. The rush of cash during COVID and record profits lured many companies into growth-mode-at-any-cost. While they still need the head count in many cases, people were willing to cut corners in hiring and project quality (i.e. does this really have returns to justify the investment) so a cull is needed. Think about crypto for example. I have a feeling a good number of companies are regretting jumping on the crypto NFT train right about now.

3. I believe companies and the media loudly communicate layoffs in part to reduce labor's negotiating power. I can't prove this, but it seems about right. In December, Facebook was struggling to hire. It was in the news. Right now, I'm sure many people are afraid to ask for more money, but I've managed to wring out 10-20% more than what's being asked for by recruiters despite what everyone is hearing.

I know people thinking this is all Fed induced, but you have to remember, the money that was spent during COVID hasn't gone anywhere. It's still circulating. Companies also borrowed record amounts of cash during ZIRP that's due in 30+ years. Many of these companies have returns in the 10-30% band. A bump to 4-5% is no where near enough to slow down business given how much cheap money was created.

For more evidence, go look at the start up raises. In a recessionary environment, VC would be completely dead. Yes, deal making has slowed and garbage companies can't find financing, but let's be real: those companies should have never existed in the first place.

> 3. I believe companies and the media loudly communicate layoffs in part to reduce labor's negotiating power.

I thought this was to make share holders happy. Fewer employees, more money for the owners. But to improve negotiation seems useful, too.

Hadn't thought about that. Good point. I'm sure that plays into as well.

Large layoffs are always newsworthy. Same as M&A.

> Corporate learned during COVID that the metro premium isn't worth it any more.

I'm quite sure they were realizing it before that. Here in Canada, Statistics Canada data was already showing stronger job markets away from the large urban areas during the mid-2010s, which continues today, and the 2016 census showed a meaningful decline in large urban areas with communities of 1,000-29,999 seeing the largest growth. The 'counter-urbanization' moment was already well underway.

It is fair to say that COVID sped things up. There was, and still is, a lot of friction involved in making that transition, but COVID no doubt provided a lot of grease.

> Shift jobs to cheaper locales. ... I live in Raleigh-Durham.

Me too. Moved here 17 years ago. It's becoming far less a 'cheaper locale', much like many of the other formerly cheaper locales. Housing here is one of the areas still going up while other areas are cooling off, though I've just started seeing some cooling and price reductions in the past month or so. I'm not even sure what counts as 'cheaper' any more.

It's still an oasis relative to the hubs. Gas is $3.50, you can get a condo for $150K. There are trees and flowers. People are nice.

This. I get that prices in many metros are still too high for your average earner, but I don’t understand how people can compare the price of housing in LA to a place like Indianapolis.

Can you actually get a condo for $150k in Raleigh, Durham, or Chapel Hill? Or is this in some distant town like Sanford or Pittsboro?

I'm genuinely curious, that sounds unreasonably low to me given what the housing market has done in the last few years. The triangle has a sprawl problem and it's only getting worse as most of the affordable housing is pushed further into the exurbs.

Agreed. I'm up in Youngsville (20 miles north of Raleigh) and... it'd be hard to get housing for a family of 3 for under $250k. Under $250k, it's mostly mobile homes. There's a smattering of condos in that range, but mostly over $250k.

We talked to a builder in Youngsville about building - mid 2021. Had initially verbal priced at high 400s. They back a few weeks later with "it's gonna be mid 500s, to low 600s." We backed out. 3 months later they're listing spec homes - in the same sub with $350k homes built 2 years ago - for $900k+.

Can you get something for $150k that a single person might want to live in? Probably, but you'll be commuting a lot to get to the Triangle proper.

Compared to LA, perhaps, this is 'affordable', but it's really... been a problem here (and it seems all over) the last few years.

Yeah, I'm in Durham near Southpoint. If you're not trying to be in Downtown, it's still affordable. Two bedrooms, two bath.

But beware, the universe is trying to move here.

So far most of the layoffs I've seen have been for nontechnical roles at big tech.

In the 2000 crash it was still fairly easy to find a job if you could code. Even though the big tech companies of the time were doing mass layoffs and losing 95% of market cap.

Who knows what it will be like this time. But I wouldn't take layoffs at high profile publicly traded tech companies as an indicator of the whole market. In some cases these companies are still even hiring a few engineers here and there while doing layoffs.

So far as I can tell demand for software engineers may actually be slightly higher than it was a year ago in the larger market.

> So far most of the layoffs I've seen have been for nontechnical roles at big tech.

That's not the case. Engineers may not be as numerous but in each of the recent layoffs engineers were let go as well.

You wrote: <<In the 2000 crash it was still fairly easy to find a job if you could code.>>

Personal anecdata: I lived in Silicon Valley in this era. It was awful. That was absolutely not true. I spent two years sorting papers for ~12 USD per hour ("temp worker"). Eventually, I gave up on SV and moved to New York City. I found a very good job in less than two months.

Seems like it was true in your case given that all you had to do was look in NYC, where you found a new job almost immediately.

Most people wouldn't consider a 2500 mile move for a job a "fairly easy" thing to do.

Moving may not be easy, but the original claim was merely that finding a job was easy. The anecdote supports it.

That was exactly my point. Finance was booming in New York City, but the valley would not look at junior hires. So many cheap mid-career devs (with a mortgage) were desperate for a job! I had no chance.

Random anecdote: One thing I remember moving from SF to NYC (in that era): Instantly lower quality of life. I know, I know, that was a long time ago! The weather in NYC is awful compared to SF. I could walk to supermarket without a coat for 11 months a year. And no endless police & ambulance sirens or loud garbage trucks! And housing was more expensive and much lower quality.

I got hired at Amazon about a month after 9/11 pretty much at the depths of the 2000-2001 tech recession, after having lost my prior job only a month or two before that.

Companies posting job ad does not necessarily equate to companies hiring. Some of these ads may be disingenious - they still interview candidates only to have a list of desirable people to make offers to once the company starts hiring again.

And of course, on top of that there's standard recrutiment scam of "oh, sorry, this position was just filled, but may I interest you with $WORSE_JOB_FOR_LESS_MONEY instead"?

Right. “We’re hiring only junior developers currently”

Just happened to me this week with a quite large international company: I got interviewed for an engineering manager role (that was also the title of the meeting in the email), at the end of the interview (2 hours), the interviewer told me that he is sorry but "they want someone with 10 years of experience and my CV doesn't match" but they will be able to recruit me as a SWE role if I want and then wait one year and maybe I will get promoted. Needless to say that even if I was interested, I will never work for this company.

The Recession is being talked about but will be felt in the middle of the winter/spring as high energy costs start hitting the bottom line of companies//costs of war, consumers aren't spending like they used to and interest rates are higher (costs of borrowing for their consumption hurt more).

No one is saying there is a recession currently but rather that is coming down the pipeline.

From a personal perspective: I would say though as a new employee of a company - hope that they have good revenue and that you have a protected role, prove your value quickly as typically new hires have a risky position if the firm is facing layoffs.

Anecdotal, but I know of a few companies that are cutting jobs in the US and moving them to lower-wage areas including Western Europe. Huge difference between employee compensation in SF vs much of Europe, even after taxes/benefits/etc.

If the goal is to save money, why not move those jobs to even cheaper countries?

Perhaps a perception that people in western Europe will be a closer cultural fit? Perhaps timezone proximity? Perhaps because executives want an excuse to travel regularly to Berlin or London or Paris or Barcelona?

More similar culture and laws.

And timezones. Western/Central Europe works fine especially from the East coast of the US. Asia is much harder.

What other people said, plus also if you open an office in Western Europe, you are also proximate to a new set of advertisers in relatively high-income countries.

I believe it's a good compromise on timezone (8-9 hours is manageable), political stability, safety and reasonable talent pool. You can still relocate people from cheaper countries yo richer ones. You can convince Romanian to move to Germany, but you can't convince German to move to Romania.

The funny thing is, from what I noticed living in both countries, there might be more US companies hiring talent in Romania because of the big local talent pool willing to grind, low corporate taxes, lax regulations and bureaucracy, than they're hiring in Germany due to the high taxes, strict labor laws and complex bureaucracy. When US companies want to move to EU they usually go for a low-tax, low-bureocracy country, like Netherlands, Luxembourg, or Ireland. I could be wrong, but that's my anecdote.

Dev immigration from Romania to Germany was big 10-20 years ago, but now, most Romanian devs these days, unless they get offers that go above six figures, aren't rushing to move to Germany as most take home dev wages have almost caught up, but the CoL and housing is way cheaper than in Germany. I think the push to remote work since the pandemic really convinced more US companies to double down on hiring remotely in Romania pushing wages up. I think it's similar in Poland.

From what I saw, they open a small office in Germany when they either want to tap some university/research institution or open a big office when they want to bring in (and low-ball) a lot of Indian/Turkish/non-EU devs who's goal is moving to the EU, as Germany is a popular immigration destination for non-EU devs rather than Romania or Eastern Europe which are less desirable immigration destinations (although that does seem to be changing slowly).

Interesting insight. Thanks!

> but you can't convince German to move to Romania.

I think nobody is trying, but with the right salary I'd love to. Some acquaintances did something like this: they moved from France to Poland and have a salary that's locally really good. There's more companies that hire like that on the basis that a certain salary gets you further somewhere east.

Are there any left ? I heard anecdotes that tech salaries in places like Bangalore are now on par with of Western Europe.

Without really getting into the economic nitty gritty, the current environment feels a lot like late 2007. While the broader economy was still humming along fine, but the sector (finance then, tech today) that led the growth during the expansion was going off the rails.

During that cycle, the frothiness was led by the financial sector instead of the tech sector. The mega banks like Citi, JP Morgan, and Goldman had a lot of analogies to the FAANG tech giants today. During the bull run their market caps exploded, everyone thought they were geniuses to the point that the orgs started getting complacent, and they were scooping up people left and right paying huge total comp packages. The hedge fund explosion in the mid 2000s felt a lot like the VC and startup excesses of 2021. Money was sloshing around, and basically anyone could raise a ton of funding off a pitch deck with minimal due diligence.

All that being said by late 2007 there was major distress in high finance. The structured credit markets had already basically imploded, the banks knew they were facing major imminent losses, and hiring was basically frozen. But this didn't really affect the broader economy until about a year later. It took a while for the complex credit markets on Wall Street to really impact vanilla credit markets on Main Street. But just because it was slow, didn't mean the tidal wave wasn't massive.

I don't know if history will play out the same. But my point is recessions don't happen all at once. They typically take some time to really unfold across the entire economy. We can expect that there are "leading sectors" and "lagging sectors". Probably the sectors that were really the tip of the spear during the expansion phase are generally most likely to be the canary in the coal mine during the crash. And we know that tech has been responsible for a huge amount of growth in American over the past ten years. My guess is this is very unlikely to play out as "tech gets clobbered and everything else pulls through fine" just as 2007 was very unlikely to play out as "Bear Stearns collapses but the good times keep rolling".

A notable difference between 2007 and now is that in 2007, major banks were highly leveraged and held large quantities of assets whose value was highly sensitive to increases in interest rates (specifically: ARM-financed mortgages). So when the single-family residential mortgage delinquency rate when from under 2% to over 10%, it was a balance sheet catastrophe for those banks.

There's no analogue to that highly leveraged dependence on rate-sensitive assets among the FAANG tech giants today. The FAANG companies are low-leverage, high-return monsters with an incredible 50+% average return on equity in 2021 and a low average debt-to-equity ratio of 1.8. (For comparison, in 2006 Bank of America had a return on equity of 15.6% and a debt-to-equity ratio of 9.8).

> There's no analogue to that highly leveraged dependence on rate-sensitive assets among the FAANG tech giants today.

The open question is how much VC spending (this was how easy money flooded into tech) poured into compute and ad spending, how much will it pull back, and what share of FAANG's revenue was it.

To me, it's different in a very important way. The financial sector is central to the economy in a way that the tech companies aren't. 2008 felt like the world might end (I was literally 24 hours away from withdrawing all my money into physical cash). 2023 may be a lot of people out of jobs, but it won't be systemically threatening in the same way... unless banks have been as stupid as they were in 2003-2006.

Tons of corporate debt has been issued in last ten years at historically low rates. If floating, they are screwed, but anyone with a smart treasury / corp fin dept will use a tenor-matched interest rate swap to convert float-to-fixed... so fine. However, if you need to roll-over expiring debt... uh oh, that will now be more than twice as expensive. Junk debt (and rated just above) will see more bankruptcies and "loan workouts" in next year than we have seen in last 10 years. Still, I cannot see a crash. I do see a "major slowdown" -- recession -- but not a depression.

Oof. The last recession I remember people asking "what recession" just before everything really came tumbling down. There are moments when sentiment shifts in comments seem to portend doom, and I feel right now the way I felt back in late February 2020, when it started to sink in that the tone in HN comments was changing and I realized COVID was going to be a very bad thing.

I think the better heuristic for the state of the job market is job openings rather than headlines. There are still thousands of job openings you can find on LinkedIn. News outlets are built to grab attention and not help you build an accurate representation of reality. The news sounds alarming, but I think all it amounts to is the tech job market cooling off from being red hot, and big tech companies getting bloated because of inflated earnings during the pandemic. That being said, things can change quickly, just a year ago people were paying millions for jpegs on the internet lol.

There are job openings and even active recruiting for many of them. But from what I've seen companies are being much more selective, hiring processes are being stretched out, and offers may be less generous.

IMO non top paying companies have been hiring more regularly, across the world. It's nice that you do not consider FAANG, but some people do just for the 2x-3x raise is income.

When the top payers do layoffs and/or stop hiring, overall the max compensation you can get goes way down

Just as an example, Stripe who just did layoffs yesterdays, pays $450k a year for a senior software engineer. How does that compare to your recent 20% raise?

The tech sector in the U.S is definitely still hiring if you're a senior software engineer who's willing to make $200k. But lots of people got used to very high compensation, and some also depend on it with loans they took out, that cutting their compensation by 50% would make them go bankrupt

A recession is complicated and may not be highly coupled to a specific field of employment.

A shortage of labor may cause a recession. And this seems to be the case in different places, for multiple reasons.

Countries at war are losing a large number of people (directly or indirectly). Even for those not involved directly, reduced trade makes some goods less available, and the alternative is more work needed on the buyers side (e.g., cannot buy gas, need to chop down trees manually). Limitation of available energy is a bigger driver for the transformation to renewables than any climate change fears ever were before, which requires a huge work force, which isn't available.

People have been screaming about a recession for the last year now, with not a whole lot of hard data to back it up. Inflation aside, the US is doing well, and even on that metric we're doing better than most of Europe right now. Stories of doom grab eyeballs, and a bunch of people really want the US/Europe to have a bad time, so there's also a lot of wishcasting going on.

The U.S. and especially the dollar are doing better than pretty much everyone right now… but haven’t we been told for years that we are now part of a globalized economy? If the EU, Japan, and China all fall into recessions at the same time won’t they take the US down with them?

It's super complicated because part of the reason the other economies are having issues is because of the US dollar strength. Obviously the impact of a strong US dollar from inside the US is different because it makes importing cheaper and exporting harder but does affect domestic consumption.

There are hundreds(thousands) of physical supply chains that are each different and which will react differently. The financial supply chains are incomprehensibly convoluted.

In short the economies will influence each other but no one knows when or how the US will be affected.

Bear in mind that tech can decouple from other industries. It's possible you have a recession, say, in Banking while Fintech is growing like crazy (because it has a much smaller starting base).

People have been screaming about a recession for the last year now, with not a whole lot of hard data to back it up.

Other than 2 quarters of negative GDP growth - which was the common understanding until it became politically inconvenient.

In which case the recession is over, since we just finished a quarter of positive GDP growth.

Or maybe one metric is insufficient to judge an entire economy.

Perhaps a little overstated. In the past, -0.1% growth was considered flat. We only got the “-0.1% is the same as -9%, technically speaking” arguments when they became politically convenient.

If US growth had rebounded from -0.1% to +0.1%, I suspect partisan hacks’ positions would instantly reverse and we’d have republicans telling us that a tenth a percent is not really growth, and democrats yelling that technically it’s no different than +9% so there’s no recession.

I'd reserve judgement until they're done raising interest rates. These things take time to propagate throughout the economy.

And if one thing’s clear, it’s that even if we aren’t in a recession now, they will absolutely keep raising rates until we are.

Unlike the 2008 recession that was a result is mismanagement in the financial sector, this recession is very much an intentional act of monetary policy.

My company stopped hiring for about a month when there was a lot of uncertainty but we seem to be doing well financially and are now hiring more headcount so the mood around hiring seems to have gotten better.

Twitter might fire 3500 people this year. Headline news. SpaceX and Tesla will each hire tens of thousands this year. Not news.

To be fair, SpaceX and Tesla have two sides: manufactoring (low wages) and design/engineering (high wages). Few on HN care about manuf jobs that pay less than 40 USD/hour. When you say "tens of thousands" -- you can say the same about Amazon warehouses. My guess about Tesla: Lean and mean design and engineering teams. Twitter? Bloated as hell with people who don't code or have sales revenue targets.

The "recession" is aspirational. They will keep talking about it until investors get spooked and cause a recession.

https://theintercept.com/2022/11/04/federal-reserve-interest...

  > “We see today that there is a bit of a savings buffer still sitting for households, that may allow them to continue to spend in a way that keeps demand strong,” she said. “That suggests we may have to keep at this for a while.”

Here in the US, our recession is apparent in every day life. Various issues are causing disruptions in our supply-demand balance, which in turn has caused many essential industries and businesses to remain under staffed. Many of the skilled people I know have been unemployed or under-employed for the better part of a year. This imbalance has also caused the prices of goods and services to be inflated, making it difficult for everyone, including the properly employed, to enjoy life without worrying about finances.

Choosing to ignore news while asking why your own experience doesn't match news seems disingenuous. News like recession is not made up for political or humourous reasons.

How about news optimizing for news pieces that are the most controversial/fear inducing/outrageous to get more clicks and thus more revenue?

Or as another poster posted, perhaps the media is pushing this to keep tech workers afraid of moving to another job or asking for more money.

Not to stray into conspiracy theory territory, but if inflation is a massive issue, bringing it down by smashing confidence through the media would be a very effective way to do it.

It explains why few people are seeing a downturn with their own eyes in spite of what the media is telling us.

Its also probable you are in a bubble with your friends.

The cost of living has gone up a lot where I live, but myself and friends earn enough that the significant grocery and energy bill spikes have zero impact on us, but if we were on a lower income and already on a tight budget we would definitely need to be cutting back on any non essentials.

Choosing to ignore your own experience whilst the news doesn’t match seems more disingenuous.

I’ve been reading about this cost of living crisis and recession since 2021, and still waiting for it to bite despite the media’s best efforts to kill confidence.

>News like recession is not made up for political ... reasons.

This is such an absurd statement I feel like it must be tongue-in-cheek.

I run email servers and one of the pulses I've been keeping an eye on over the last 2 and a half years is recruiter mail, both real and spam. I did notice early to mid 2020 the volume of this type of mail was reduced to almost nothing. But it seemed to recover to normal by the end of the year and has stayed just about that way ever since.

This is subjective - I'm basing this off of how much mail I remember seeing. I haven't ran numbers or anything like that.

In what capacity do you "run email servers"? Do you "keep an eye" on other people's email?

Analyzing frequency of email addresses would be enough for what GP posted here. Questionable, but not as egregious as reading peoples email. But hey, gmail has done it for years so.... meh.

This sounds like pretty much every network admin gig I've ever had, but I'm old.

My first job in 2001 involved running around trying to back up everyone's Outlook files and yeah, you see a lot of email.

The tone of this comment suggests a young'un who has never been face to face with a /var/spool/mail that is mounted over NFS because your supervisor worked at BAE in 1992 and it was SOP there for reasons that were never, ever, ever relevant in your shop of 14, but NFS didn't come up this morning so you're trying to figure out where the hell everyone's email went

And yes this is vaguebooking about my supervisor from 2001 (you know who you are)

Now this is interesting information. It's too bad we can't get a time series chart of recruiter email frequency over the past few years, because that would be nice to look at.

Still, your anecdote here is much more interesting than all of the uninformed hot takes on this thread. Thanks for sharing, seriously.

We're not in a recession (a period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.), at least not in the US. https://fred.stlouisfed.org/series/GDP

People typically use the "Real GDP" (adjusted for inflation) when making that argument: https://fred.stlouisfed.org/series/GDPC1

It did shrink for two quarters in a row, Q1 and Q2 2022. Q3 went back up.

Here's a "Real GDP percent change" graph that makes it easier to see: https://fred.stlouisfed.org/series/A191RL1Q225SBEA

Those data lag real time quite significantly.

Interestingly, according to a recent poll, most Americans believe the U.S. is now in a recession. That belief alone may be enough to make a recession a reality.

https://www.politico.com/f/?id=00000184-3674-ddd7-afd7-3ef41...

"We have jobs" is a very low threshold to say there is no recession

I'd be more focused on 10%+ inflation and the 0.x GDP growth rate forecasts, especially since these forecasts are known to be somewhat optimistic

> Just landed (3 months ago) on a job that pays me 20% more than the previous one.

Well that doesn't even cover the 20% food price increase and ~40% energy price increase

You've nailed it.

I bailed on a MAAMA job in the states to move back to Canada.

Salary expectations (and currency!) are generally lower here, but the job market itself is hotter than I've ever seen it here.

My theory is that USA tech companies are friendshoring like mad.

In other words, Canada is picking up the recoil from the trade war with China. Biz that used to go to China (or even India) is now going to Toronto.

And every time a US company looks at their bottom line, they will recall that, if they hire three hours north of Seattle, they'll get something like a 40%-50% discount on total comp, PhDs out the wazoo, and a convenient, well-funded federal immigration system.

It's a no-brainer. What kind of fool would start a business in a politically unstable disaster-country where some populist executive order could cut you off from your supply of H1Bs next year?

Your job is moving to Canada (or possibly Europe,) and if you're smart, you'll move with it.

Overall the unemployment rate is not bad at all

https://ycharts.com/indicators/us_unemployment_rate

and we are not in a recession yet. Certainly some firms are looking at economic trends, concerned that rising interest rates will cause a recession, and laying people off preemptively. One might fear this could lead to a recession but I think if you lose your job today you are much better off than if you lose your job a year from now and the economy gets much worse.

Normal companies are still having a hard time hiring, I think FAANG companies are bloated and not terribly efficient because they tend to be monopolists who don't have competition that would force them to be lean.

But, the fear that i have (as i look for a new job), is that now i might be competing for jobs against former FAANG people - yikes!

You may be assuming FAANG are recruited on quality rather than background and networks.

And also pliability. A certain way to not get hired at FAANG is to show any tendency towards independent thought. For instance it's clear Mark Zuckerberg does not want to hear from any independent thinker in 2022 if ever.

People mistakenly look to the badly named FAANG for best practices for software development and management but if you think critically the truth is the opposite, actually they should be lumped together with Boeing, Epic, Cerner, Adobe, Microsoft, etc.

These are highly profitable because of monopoly concentration and can afford to hire a huge number of excessively paid developers and waste their time with Byzantine practices, assign them to work on dead-end projects, etc. Quality of their products is beside the point because people are going to use them no matter how bad they are.

You can imagine for yourself what will happen to a person who works in that kind of environment, but I think getting a person like that to contribute to a normal business is like getting a pig to fly.

Can't wait for the world to admit that based on stock prices and corresponding average TC, companies like Oracle have more of a justification for being in the "FAANG" than Facebook, at least right at this moment...

Too-low unemployment rate is one of the signals for a possible coming recession. The idea is that people are too worried about getting a new job after leaving their current one, or are less able to handle periods with no income, so job mobility is low.

Unemployment rates for the past 70 years with recessions marked: https://fred.stlouisfed.org/series/UNRATE

It's a little hard to believe right now.

Normal employers are struggling to fill positions at supermarkets, salt mines, medical device factories, hair salons, restaurants, bus companies and other firms in my area.

If you believe the business cycle is like "economy runs too hot and inflation is high, the fed pulls back and crashes the economy, the economy gradually grows back to full capacity" then the low unemployment is a sign you're at a particular point in that cycle.

It sounds like you're describing a recession to me.

People tend to confuse "recession" with some sort of "economic armageddon". But double digit % layoffs at some companies and pulling back hiring by 66% (by your estimates) at others is a pretty huge pullback, no?

Overall unemployment and job opening numbers are still fine, at least in the US. The headlines are a handful of high-profile previous market darlings that overhired like crazy and added 20-50% headcount during the pandemic. They're not indicative of any kind of trend, just like the great resignation panic wasn't, either, and labor force participation declines overall tracked at about the same rate as they have for decades. Trend lines are bumpy, but they're still generally moving at any smoothed multiyear line as they have for a long time. The only real outlier is headline CPI inflation, but even that bumped up mostly earlier in the year and hasn't stayed high, though the way it's reported "year over year" means it'll look that way until a year after the initial shock unless prices actually go down again, which is unlikely due to ratchet effect.

Other than inflation, most of what we're seeing is just regression to the mean after a lot of shit went bonkers during the pandemic.

The "mean" for software jobs is still about the best sector job market the world has ever seen outside of the last two years of software jobs and 2005-era mortgage finance. Maybe early Iraq War oil exploration, but you had to move to the Dakotas or bumfuck West Texas if you wanted in on that.

Western Europe is in a recession. Manufacturers are shutting down: glass https://archive.ph/giBnx steel https://archive.ph/Wu9gD food packaging https://archive.ph/9xoBc take your pick. Inflation is over 10% https://archive.ph/1DSsd and way over when you stop listening to government lies. Tax takes will be down so they are talking about stealing more from energy https://archive.ph/cYBBD https://archive.ph/T2r8q https://archive.ph/OmaJS and pharma.

I chose regime media so I can't be accused of providing fake news.

Jobs like ours which are providing the circuses will matter less when the breads disappear. The regime better hope that global warming does continue to provide a mild autumn and winter.

how can anectoda even from regime media prove that economy as a whole is in recession?

This is the evidence the regime cannot hide anymore of the recession caused by their own actions.

I can share some first hand insights, the place where I work at the moment hired 3 engineers last quarter and is planning to hire another 3 within coming weeks/months.

In the same time some colleagues left because they were picked by other companies offering 30% increase (and they are already on very good pay).

I get contacted by recruiters couple of times each week, although as some already mentioned this might not be a good indicator since interviewing might not lead to hiring.

Employment is a lagging indicator.

The stock market is a leading indicator however. While down 20%, it's still above pre-pandemic highs. I don't the stock market is screaming severe recession at the moment.

If the recession fear-mongering thesis is right, the stock market is at a local maximum right now because of several mispricings: stock markets have priced in a lower "pivot" from the fed than there will be, and there's a lot of "dip buying" - pent up demand that has stayed out of the market so far. These two factors give you the expectation for another 20-30% drop in the S&P.

If the "what recession" thesis is right, chances are this was just a price correction, where companies' values are adjusted based on non-infinite time horizons. Stocks may still drop a bit as this correction finishes and earnings some in, but they are equally likely to rise.

There's a chance that the fear mongers are right.

Of course there is a chance the pessimists are correct. After all, that is largely the consensus view.

It's not there yet, but it's coming.

There will pretty much always be job openings in large companies, as people who fill essential roles retire, move away, etc. Sounds like the companies you monitor have reduced open roles by 66-90+% which is quite significant. Most companies, before they start laying off existing workers, will simply cut their hiring and hope to shrink their business through natural attrition (hiring fewer people than are leaving), which is probably what you're seeing.

EDIT: More broadly though, we are not actually in a recession yet, it's just that there are numerous signs of an emerging global economic slowdown. It's difficult to draw any concrete conclusions about the state of the economy from traditional metrics such as asset prices, inflation, GDP, unemployment, etc, because years of loose monetary policy coupled with recent shocks such as the pandemic and the war in Ukraine have messed with those metrics.

Recession and layoffs are slightly different. I view the more proximate cause of layoffs etc is the increase in the cost of capital and more of a feeling that there might be a slowdown. Company execs, boards and investors had a different denominator in their projections about present value of cash flows in Q4 of last year (this is always an approx calc in practice, but the mechanics / views follow the equations) and now investments that might have made sense may not. People are calculating the risks of recession differently. All of this is idiosyncratic to each company. Some companies may be operating in a domain where it makes sense to invest or for larger companies based on their estimations, and in large companies you may have some bets that make sense to expand and others that should shrink.

All these people complaining about not being able to afford the price of bread. Why don't they just eat cake?

Exactly, it's so simple! /s

The recession(s) are fucking different demographics in different ways.

One thing that's certainly happening in London is that there's hundreds of entry-level candidates fighting for only a handful of openings.

The industry has generally become more risk-averse. Hiring less experienced people is now extra risky, as it is a bet that they'll generate some value for the company before moving on for a higher salary elsewhere. Hiring juniors is a great long-term move, especially in a 0% rates landscape and when VC funding is plentiful but if you only have 12 months cash it's pretty hopeful.

This budget is now being used to hire safer, more predictable hires: seniors (know what you're getting into) and contractors (can cut them with 28 days notice or even less, no employment contract to complicate things)

Few believe we are currently in a recession, although they can really only be identified in hindsight. There is strong belief that we will end up in one soon, with most predictions seeming to target early next year. Preemptive measures are being taken to prepare for the anticipated storm.

> many companies went from having around 1000 job offers open in linkedin on a weekly basis to having now around a third of that.

But if we want to use labour as an indicator of recession for the sake of discussion, that's a rather substantial decline. Why is that not indicative of a recession? A recession is considered a decline in business activity and if businesses are now not seeing the activity to support two thirds of that prior activity, that seems like a meaningful decline to me.

Perhaps frothy high paid jobs at the big tech companies are going, but people doing useful stuff for average salaries in Europe for companies making profits are going to be safe. I think the software eats the world > recession still, so as techie our bubble is safe. I have not had problems finding work in 20 years. Granted that is a short time and the worse economic times were probably in 30's, 70's, etc.

I think tech will be strong for the next 100+ years, as we face more and more challenges that will need tech solutions. Such as climate change. People getting 300k+ a year to code (or the equivalent?) will come and go and generally be in pockets and driven by bubbles.

I live in the UK we are defiantly in recession but there is still more tech jobs than there are people to fill them. I got two job offers in two weeks of searching both paid more than the job I am in. I nearly didn't bother looking because of all the fud.

when the black plague killed a huge portion of the workforce of Europe, GDP probably shrunk significantly. The resulting labour shortage also give the nascent guilds so much bargaining power that a significant middle class arose and the Feudal system was seriously undermined.

Covid was obviously a much smaller plague, but coupled with a lot of people retiring at once, it would probably give a modest boost to employee's bargaining power at the cost of GDP as a whole shrinking.

So I predict we'll see a period of shrinking GDP and shrinking inequality. Still technically a recession, and not great if you're investor class, but not really impacting living standards in an adverse way for the rest of us.

The financial system of today is under full control of international banks, it has levers to be anything they want at any given time, with few limitations.

The financial collapse will likely come early next year, with CBDCs being promoted and offered as a way out of it.

The labour market is very tight, but recession is not synonymous with mass unemployment It's about economic growth. It's possible (even sometimes necessary) to have a recession with low unemployment and high wage growth.

Congratulations on landing a new job! I had a misfortune of being unemployed for a number of months during and shortly post-pandemic, the job market was out of wack even then, now add inflation, energy prices, political instability, and Fed's drastic intervention... It's just wild, illogical, and doesn't make any sense whatsoever.

A note of caution on LinkedIn though: number of open positions in LinkedIn (at least in the US) means squat. The amount of fake, deceiving, spammy, outright scammy job postings is such that I ultimately stopped using it altogether, Indeed was a bit more helpful but far from ideal as well.

Looking at the US labor statistics, you'd think this was a golden age. But that 20% raise you got is only about 9% when you factor in the likely inflation taking place in your area.

The thing is that recessions start somewhere. They never hit the entire economy at once. This one started in the most highly-leveraged areas of the economy because the crisis that's brewing is all about money. More specifically, it's all about access to collateral that allows money to flow. That pipe is constricting by the day.

Sooner or later, the recession hits everyone.

>> that 20% raise you got is only about 9% when you factor in the likely inflation taking place in your area

Food and energy prices are up, but asset prices are down. Cash goes further today in some ways that in did last year this time.

What assets are you buying today with cash that are cheap and offset the pain of higher food and gas? Meta stock isn’t a great milk substitute.

Housing is one asset class that is dropping in price, but the increasing cost of borrowing is more than offsetting that decline.

I was looking at buying some farm equipment to reap the rewards of that higher food price, but it certainly hasn't fallen in value. Very much the opposite.

He has a point, though. On a developer salary, the basics like food and gas make up only a small portion of one's income. It may be an increasing portion, but still just a portion. The remainder can buy more, depending on what you want to buy.

Well, the entire market is cheaper, not just Meta stock.

Housing is cheaper if you have available cash, it it isn’t if you need to borrow. The reason it costs more to borrow is because cash is more valuable now.

> But that 20% raise you got

I'd gladly take a 20% raise with this inflation. I'm taking a pay cut, plus the inflation's reduction to real pay, plus rent will be going up at a rate outpacing inflation.

I don't think demand for experienced software engineers is ever going to drop. But there's a lot more in the world than just our field.

Also, I think this recession isn't so much caused by a lack of demand, but a lack of supply. Supply chains were disrupted by the Covid crisis, and now the Russian invasion of Ukraine is causing lots of other shortages. This is causing shortages in all sorts of industries, but apparently not so much in ours. Although I would have expected that the CPU shortages would have had some impact on us.

Anecdotal, but I also just landed a job starting on November 7th that will be making the most I have made in any given role, close to $200K with base and bonus here in the US. I know people and companies are getting spooked right now, but if you can find the right niche there are plenty of profitable companies hiring out there. It took me a week from notification that my contract in the last role was not being renewed to finding this new gig, and is also the shortest job search I will have been on.

Where did you find your job from?

devopsengineers.slack.com

>"How did you go bankrupt? Two ways. Gradually, then suddenly."

I have a feeling that we are in a similar situation economically. I've definitely noticed prices rising at the grocery store and my insurance premiums have gone up roughly 40%, even after shopping around for a better rate. I haven't made any claims or did anything that would make me a greater risk. I feel like people have mostly managed to absorb the inflationary pressure but I don't think it will last.

Perhaps we should judge not by what is happening only with ourselves, but take a look around us ;-)

The inflation is rising, central banks in EU, UK (and US) are increasing rates to fight inflation (in a wrong way IMHO), energy prices are rising without a solution in the horizon, food prices have also increased considerably, small shops are closing, small businesses are struggling, but hey look, I switched jobs, got a 20% pay rise and can't understand why you're all complaining... :-(

Slightly flippant but I think mostly accurate explaination:

Most central banks have decided to have a recession. The fact they haven't gotten it done yet just makes it a matter of time...

The market segment I work in (tangible goods, not software) is highly subject to discretionary spend by consumers. The slowdown is already on the radar and everybody in the game is readying up for things to slow down a lot more. All business has felt like an engine revving 9k non-stop for the last two years, and from the moment it started happening nobody thought it was sustainable. It feels like we need this, but it's going to suck.

Companies need to hire after layoffs because some people they did not intend to lay off may leave and the people who they laid off may not be fitting to replace them.

"- Just landed (3 months ago) on a job that pays me 20% more than the previous one. I could have switched jobs years before, but I just got the courage to do it now"

Congrats! Your are now the new person and will be the first fired when the recession hits!

There is a recession/depression coming and I am sorry to tell you your timing is awful. Hiring can be pretty much stable or increase until a recession hits.

In the US, at least, a recession happening is possible but not backed up by actual economic trends: https://www.cnn.com/2022/08/15/economy/recession-inflation-e...

It changes from one industry to the next, some are counter-cyclical. When everything goes down, those go up.

Portable jobs, such as software, tend to remain in high-demand, because even if some companies are struggling, others are flourishing.

Niche-tied jobs have it harder, since they cannot jump industry so readily.

Sure, as long as it doesn't affect you / your industry, it doesn't exist.

You are either very naive, were manipulated into this conclusion, or you are playing naive to spark discussion (which would actually be commendable).

Breaking news: talented software engineers are recession proof. Now think about 99% of the rest of the population, and how they are doing now that every single thing costs more while the labor market is tightening.

Well the world is a bigger place than your own experience. I'm not feeling a recession quite yet but I wasn't really feeling the hiring craze in the past couple of years either.

I've talked to 3 recruiters in the last few weeks - all 3 said some variation of "yes, yes, we have open jobs. We're looking to start interviewing in 2-3 months"

Usually employment is good when inflation is high, and when Fed kills inflation it will kill employment too. I think it's called Phillips curve or something.

It's more complicated than that.

One way to think of this is by splitting the economy into companies that make consumer goods, and those that make capital goods. For example, think of airlines, and Boeing.

When interest rates go up, airlines become more reluctant to buy new planes. The airlines may still have full seats, but things slow down at Boeing. Maybe they lay people off.

Capital goods companies are something like 40% of the economy. Higher interest rates hit them harder than they hit consumer goods companies. The layoffs often start there.

I think that's the mechanism (or at least part of it) where higher interest rates lead to unemployment and recession.

Lots of highly paid tech jobs relied on company stock via RSUs which have been creamed. Relying back on regular salary doesn't seem so good any more.

So your entire analysis of whether or not there's a recession revolves around anecdotal evidence of employment in a very niche sector?

That's called "Hacker News economics".

If you don't mind me asking, how much is your current rate?

As I've seen a lot of offers coming up but at lower salaries than usual.

It's definitely suspicious that we've gone from 'can't find workers' to recession.

Anecdotal evidence is not helpful when trying to evaluate an economy.

For that matter, an economy is always too complicated to usefully describe in a single word. They come up with broad terms like "recession" and give them rigorous definitions in order to get some kind of handle on it, but it doesn't reflect everybody's experience. In fact, it may not reflect anybody's experience: some will do worse, and some will do better.

The definition is "less total stuff getting done". Measuring "stuff" is already hard; defining how much "less" constitutes something to be worried about is even harder.

One common definition is "Two straight quarters of declining GDP". GDP isn't a great metric, but at least it's consistent-ish.

The US had one declining quarter of GDP, at the end of last year, and it's been up ever since. Europe as a whole has not had any negative quarters, though a few countries have.

GDP isn't a great metric, and others use a more complicated metric trying to get at how people and businesses feel: the price of goods, how much they earn, etc. GDP is supposed to be the aggregate of all that, but aggregates are misleading, in the same sense as "Mark Zuckerberg in a room full of poor people means billionaires on average". Sometimes it's useful; sometimes it isn't.

It's clear that inflation is up; that's good for some people (like people who owe debts, and can now sell their goods for more money to pay off those debts) and bad for others (those with money in the bank). None of it is where economists want it to be -- even the low unemployment figures mean something is off kilter. (Too many people employed means that people who would otherwise be doing something like training or hobbies or retired are dragged into working for some reason.)

In other words... the economy is what it is. If you're doing OK, fantastic. Others are not. Others are doing better. Overall, it's not a crisis, but worrying. There are signs that it will improve, as we get past the pandemic and start to treat the Ukraine war as a baseline rather than a downturn.

Does that help clarify at all? Or just make it more confusing?

Serious Q: what % of the GDP is silcon valley/tech-market? vs the fraudulent financial market?

Right now, US Tech is about $1.3 trillion, out of a total GDP of $23 trillion.

It's pretty consistently about 10% of GDP. Enough to have a noticeable effect: a 1% decline in GDP is an enormous deal, so if one imagined a 10% layoff through the tech industry it would be a real crisis. It's not that bad, of course.

It would be more worrying if it were an indicator of broader employment issues. Instead it seems to be specific to the Silicon Valley business cycle: a lot of growth with more hiring than really necessary, followed by an outsized contraction.

but if 50% of twitter employees are cut, regardless of role, where will they go? you have skilled employees (3500) actual people suddenly looking for work and likely in a small area of circumference...

Maybe nowhere. But since total US unemployment is 6 million, it's not a big deal in the context of "national recession".

I get the impression that it's unlikely that Twitter employees will remain unemployed long in Silicon Valley, unless they want to take an extended break. Lots of places are looking to hire. It may be a step down, but right now unemployment just isn't a national issue. (Six million total unemployed sounds like a lot, but economists expect about 4% of the ~200 million American workers to be unemployed at any moment due to the inevitable friction of people not finding jobs instantly.)

Sure, but I am wondering how many of those employees are actually in the bay area...

FB is flailing, Goog is a nightmare to get hired at, as is Apple (because of their corp egos)... (ive been here and in industry for 26 years, I know these companies DNA well... they are age-ist egomaniacs... so if you dump 3500 twitter workers on the streets os san francisco... thats going to be a tough market. and with the likelihood that many are renters, in one of the most expensive cities in the US, outcomes will be grief.

Musk better give a good severance for the careers he's abt to kill - because he can afford to do so.

> ...and others use a more complicated metric trying to get at how people and businesses feel...

Yeah, agreed, but i wonder how much of what will happen is more self-fulfilling prophecy, where a critical mass amount of people "feel lousy", and hence unconsciously push all sets of invisible levers of the economy which push the world/countires/companies into something closer to a recession. I'm going to call the global economy the "mopey teen economy"...because even if things are not "that bad", the consensus will make everyone feel like things are not so great. ;-)

In the 1970s, Jimmy Carter got hammered for saying that.

    The threat is nearly invisible in ordinary ways. It is a crisis of confidence. It is a crisis that strikes at the very heart and soul and spirit of our national will. We can see this crisis in the growing doubt about the meaning of our own lives and in the loss of a unity of purpose for our nation.

The situation was worse then, but oil played a huge part in both. It wasn't just malaise. A key input had gone up, causing genuine inflation, regardless of monetary policy. (The solution in the 1980s was a massive expansion of government debt, with the same expansion of the money supply as the Fed could do with low rates.)

As always, there is a lot of politics: some people want the economy to feel bad, others don't. Today we have a lot more vigorous public square holding the same old discussions.

> causing genuine inflation

There's something obfuscatory about calling this inflation instead of what it fundamentally is: scarcity. I get that inflation means a price rise, but inflation is (or should be) fundamentally about monetary policy (devaluing money) rather than supply and demand.

The term predates monetarism. It means price rises of all kinds.

It's difficult enough to condense prices into a single measure without distinguishing what causes what. All the economists want for that term is to say, "Here is a standard basket of goods, and here is the average price paid for it." Even that much is hard enough to do that it requires a government bureau to do the calculation.

It would add extra confusion to redefine the term "inflation" to refer solely to price changes caused by monetary policy rather than supply or demand. Economists are likely to continue to use the term to mean what they've meant by it for over a century.

> It means price rises of all kinds.

but my point is that isn't the idea of "genuine" (like you said) inflation almost useless to say then? what's a fake rise in prices?

> Too many people employed means that people who would otherwise be doing something like training or hobbies or retired are dragged into working for some reason

Is this right? I'm sure I was taught the labour force figure used in calculating unemployment figures doesn't include people like this

You're correct, and I got ahead of myself. I got it right(er) in a sub-comment later.

Economists expect a certain number of people to be looking for jobs and not finding them because they don't match what their local market needs. It's friction. If the rate dips too low, it suggests that employers are digging too deeply to find anybody, probably by raising salaries, and risks unbalancing the rest of the economy.

The recession isn’t happening yet. But because there’s anxiety it might happen, we are making it happen.

"A recession is when your neighbor loses his job. A depression is where you lose yours."

if you do a lay off naturally attrition also increased after. Simple instability emotion. So, yes, Hiring is always a thing after any mass lay off. Does that add jobs to the market? no.

I see... the Reddit crowd is here again posting useless trash

Let's see if this ages like wine or ages like milk.

The recession where my electricity bill quadrupled.

A lot has changed in 3 months.

Care to share your excel list for (West) European companies?

The Fed is raising interest rates to execute a deliberate policy to target aggregate demand by making the price to borrow money more expensive. However, for every borrower, there is a lender. So money is redistributed from borrowers to lenders. Secondly, the US Federal government is a net payer of interest. So, they are paying out much more in interest to Federal debt holders. This increases income, increases deficits, and stimulates demand (mostly for rich people who earn interest). Is this a vicious feedback cycle ? Nobody is really talking about it but a select few. See Argentina. Not going to well as far as fighting inflation with monetary policy over there.

What you say has an element of truth, but you have to consider time spans.

That is, I've borrowed money on my credit card. The interest rate could go up next month. But I've also borrowed money in the form of the fixed-rate mortgage on my house, and the interest rate isn't going up until I take out a new mortgage to buy a different house.

The federal government borrows money in a bunch of time spans, from 3-month notes to 30-year bonds. The 30-year bonds are sensitive to what people think the interest rates are going to do over the next 30 years, not to what the interest rates do this month.

I think what you're confused about is the nature of why you say "in theory we should be more screwed up than other Western countries... but:"

Because of WMDs we ought never see another war between nuclear/bio states. Ukraine doesn't matter and isn't what the war is about.

https://en.wikipedia.org/wiki/China%E2%80%93United_States_tr...

Western europe is probably going to be one of the best places to be.

But more importantly, the layoffs aren't obvious. Stripe layoffs is the current one in the HN list.

https://stripe.com/en-au/newsroom/news/ceo-patrick-collisons...

But check out the 7 pages of jobs they are still hiring for: https://stripe.com/jobs/search?skip=600

Its not layoffs in the economic sense. It's layoffs in the war sense.

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