The whiplash of the labor market is hitting technology and cryptocurrencies hard

It’s still a good time for the job market (there are still almost two open positions for every person looking), but a series of recent headlines about high-profile layoffs may be fueling “spring 2020.”

Seeing all those household names in the headlines might make you think that the economic recovery, defined as it has been by a mind-bogglingly strong job market, might be flagging.

But labor economists warn it’s too early to tell if all this is a harbinger of broader turmoil. After all, unemployment remains near a 50-year low.

“A bunch of press releases from dozens of companies is still just a tiny, tiny, tiny fraction of the workforce,” labor economist Aaron Sojourner told me recently. “We’ve seen very fast and steady job growth…so there’s every reason to expect a slowdown; it’s not clear yet if it turns negative.”

Sojourner is in a unique position to know. In March 2020, he and fellow economist Paul Goldsmith-Pinkham were among the first to accurately predict the first spate of nearly 3.5 million layoffs in a single week, nearly three times the estimate offered by Goldman Sachs.

So far, he sees no evidence of a broad pattern to suggest the labor market is weakening. That’s not a promise that won’t change, he says, but he remains optimistic.

He cautions bearish watchers to keep in mind that many of our economic problems stem from things going too well. “People complain that consumers have too much money, spend too much and drive prices up… Everybody who wants to work is working,” he says. “These are very high class problems.”

LOOKING AHEAD: Although layoffs are fairly limited to industries that are sensitive to interest rate increases, even the Federal Reserve admits it may not be possible to control inflation without causing job losses.

“There is a risk that unemployment will increase,” Fed Chairman Jay Powell said today during a hearing before the House Financial Services Committee.

The central bank does not have “precision tools”, which means we could see job losses across the board.

Unemployment stood at just 3.6% in May, down from nearly 15% in the spring of 2020. Even at 4% or higher, Powell said, the labor market “would still be very strong.”


Some people may be a little uncomfortable investing in Big Oil in the Year of Our Lord 2022. Because of everything, you know, global warming, air pollution, and the terrible catastrophe that is the fossil fuel industry.

Not Warren Buffett. Berkshire Hathaway of the Oracle of Omaha just doubled down on its energy investment, dropping about $529 million on 9.6 million shares of Occidental Petroleum last week. If you can get past the immorality of it all, it’s a pretty solid bet: Occidental Petroleum shares are up 92% this year, while the S&P 500 is down more than 20%. So yeah…fuck you hippies, let’s get rich.


Most people are understandably pretty grumpy about rising prices for gas, food, and just about every essential item you can think of.

However, there is at least one industry dancing on the grave of our expendable income: predatory payday lenders.

Here’s the deal: Payday loans, also known as cash advance loans, are the kind of short-term bridge that can feel like a lifeline when you’re living paycheck to paycheck. But they come with criminally high interest rates, often over 500%, depending on your credit and income. And our current economic climate, marked by high inflation and low unemployment, is just the kind of environment in which these lenders thrive, my colleague Nicole Goodkind writes.

A subprime lender, Enova, recently said on an earnings call that 44% of all loans it issued last quarter were to new customers. That is awesome.

But it’s also easy to see why people get desperate:

  • Inflation in the United States is the highest in 40 years.
  • Gasoline hovers around $5 a gallon, more than 60% more expensive than a year ago.
  • Bosses across America are calling workers back to the office, which means more driving.
  • Meanwhile, the federal minimum wage remains at $7.25 an hour, where it has been since 2009.
  • About two-thirds of Americans live paycheck to paycheck, according to a survey. (That number jumps to 82% among workers making less than $50,000.)
  • People with subprime credit scores (below 650) have a hard time getting a loan through a regular bank or qualifying for credit cards, leaving them with few options when cash is tight.
  • To listen to predatory lenders, they are serving low-income communities by making loans to people who have been turned away by traditional banks. High interest rates are necessary due to the risk of default.

Consumer advocates call BS.

“There are 18 states and the District of Columbia that have banned payday loans and have gotten along just fine without these predatory lending products,” said Nadine Chabrier, senior policy adviser at the Center for Responsible Lending. “There are fair and responsible loan products that have low interest rates and fees that are available that people can use.”

Read Nicole’s full story here.
Enjoying the nightcap? Register and you’ll get all of this, plus other fun stuff we liked on the internet, delivered to your inbox every night. (Okay, most nights, we believe in a four-day week around here.)

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button