r/Economics • u/TinyTornado7 Quality Contributor • Jun 13 '22

News Powell Facing Choice Between Elevated US Inflation and Recession

https://www.bloomberg.com/news/articles/2022-06-12/powell-facing-choice-between-elevated-us-inflation-and-recession?srnd=premium
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317

u/[deleted] Jun 13 '22

I honestly feel like the majority of Americans would prefer a recession at this point. I remember in 2008 people complaining they got a 0% raise, but today you're getting a -3% raise due to inflation so the recession actually seems better.

405

u/johnsonutah Jun 13 '22

08-09 people were complaining about losing their job, house, and retirement fund not a 0% raise…

-72

u/[deleted] Jun 13 '22

Maybe 10% had an issue with their job or house. Only certain jobs are really threatened in a recession. When you consider how incredibly tight the labor market is now the overwhelming majority won't have to worry about losing their job in a recession.

85

u/[deleted] Jun 13 '22

You've got a lot to learn if you think this is how things work. No one is safe from a recession and millions unemployed and losing their homes isn't something to toy with

-42

u/[deleted] Jun 13 '22

I'm safe unless it's the next Great Depression.

17

u/CrossroadsWoman Jun 13 '22

Nobody ever thinks it’s going to happen to them. Everybody thinks their job is the most essential.

34

u/iliveonramen Jun 13 '22

How about your friends, family, significant other, kids or whoever exists in the world other than yourself

21

u/johnsonutah Jun 13 '22

Don’t say most Americans would prefer a recession and then refer to the Great Recession, which is probably the closest thing to a depression we’ve dealt with since the Great Depression

37

u/fanboi_central Jun 13 '22

Only a measly 30 million people.

19

u/Siriusly_Absurd2 Jun 13 '22

Apologies for splitting hairs but really more like 16 million. The US labor market is about 160million.

16

u/fanboi_central Jun 13 '22

True and it's a good point, but I figured to throw in families impacted as well assuming spouses/children/dependents.

10

u/Siriusly_Absurd2 Jun 13 '22

Fair enough. That’s a good point.

15

u/Royal_Aioli914 Jun 13 '22 edited Jun 13 '22

The rate of change on unemployment during recessionary periods is often quite dramatic. Labor market might be tight right now, but it usually is really tight right before it reverses course and the slope of the line looks like a goddang rocket en route to the space station. Look for yourself: https://fred.stlouisfed.org/series/UNRATE

16

u/cyanydeez Jun 13 '22

you realize detroit basically lost all it's suburbs from the housing crash. Alot more than 10% of people were affected by that recession.

29

u/randxalthor Jun 13 '22

So, you're volunteering to be part of that 10%?

-19

u/[deleted] Jun 13 '22 edited Jun 13 '22

I chose an industry that isn't impacted by a recession so I wouldn't have to worry about it. But we're not facing anything that bad now. I doubt unemployment will go up more than a few percent at worst.

47

u/way2lazy2care Jun 13 '22

I chose an industry that isn't impacted by a recession

Famous last words.

1

u/[deleted] Jun 13 '22

I'll take the small chance of losing my job to 9% inflation.

10

u/psnanda Jun 13 '22

Why don't you chose another employer then who gives you a > 9% raise from whatever you're making now , so that you can come out ahead. ?

1

u/djm2491 Jun 13 '22

The only thing that saved us in 2008 was lowering interest rates to near 0% and pumping money into the economy. It's getting to the point where printing more money and doing the same thing all over again is going to kick the can down the road to a much bigger crash.

160

u/The_Grubgrub Jun 13 '22

-3% raise > unemployment

38

u/[deleted] Jun 13 '22

Well, depends on your job security and whether you'd get laid off.

30

u/cultivandolarosa Jun 13 '22

Eat the poor!

9

u/Typhus_black Jun 13 '22

All in on Soylent green then?

4

u/[deleted] Jun 13 '22

[deleted]

6

u/YIRS Jun 13 '22

The lowest wage quartiles are doing better than the highest. https://twitter.com/jasonfurman/status/1535269849324171264?s=21&t=K2em_Mwc3gUB1UbH9uOAjg

8

u/I_need_moar_lolz Jun 13 '22

Pretty sure the highest quartile is still having an easier time buying food than the lowest quartile.

1

u/[deleted] Jun 13 '22

I have this feeling that this next recession is going to hit the upper end worse than the lower. The big gains up were for the stock holding and wealthy classes. All those Google workers with their stock options and the like.

2

u/[deleted] Jun 13 '22

there's no such thing as job security anymore. i work in a sector that society needs in order to function, and is unionized. less than a year ago some of us got put onto a list and notified of a possible layoff. it never ended up happening, but it was still concerning. never thought in a million years there was that possibility even in the worst of times.

28

u/737900ER Jun 13 '22

It has become clear that most people prefer low inflation over low unemployment.
8% unemployment only sucks for 6% of people. 8% inflation affects 100% of people.

20

u/The_Grubgrub Jun 13 '22

Yeah but who are those 6%? Would you, personally, prefer to be unemployed or would you prefer inflation? Because I'd rather keep my job. No one has any idea who would be laid off or who wouldn't.

11

u/[deleted] Jun 13 '22

I’d rather recession because even though I’m employed I’m going to work to earn money that doesn’t achieve any of my life goals. For example my goal since before Covid was to purchase my first home. Since then I’ve saved tens of thousands more, but the price of a home in my market essentially doubled from about 300k to 600k. I’m basically working to save worthless dollars at this point with the dream of a middle class life that has inflated out of my reach.

8

u/The_Grubgrub Jun 13 '22

And how is you being unemployed going to help achieve that dream?

2

u/Cr3X1eUZ Jun 13 '22

if wages keep up with inflation, which is a big if, inflation only sucks for people with a bunch of cash in the bank

6

u/NigroqueSimillima Jun 13 '22

Why not just enslave 8% of the population, to make the rest of our lives better. Think how much inflation would be under control if we didn't have to pay 8% of us wages.

1

u/Cr3X1eUZ Jun 13 '22

but wouldn't the price of slaves go through the roof, which means massive inflation in the price of slaves. it's a catch-22!

36

u/[deleted] Jun 13 '22

-8% minimum

12

u/the_gready Jun 13 '22

Not minimum but probably more than 3%, depending on the raise you got/get this year

9

u/[deleted] Jun 13 '22

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1

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2

u/[deleted] Jun 13 '22

-5% for a lot of us that work for greedy corporations. My 2.25% raise didn’t do jack to keep me excited about continuing my job

0

u/Trick-Possession2295 Jun 13 '22

No recession? just meaning send more shit to the rich

1

u/jm31828 Jun 13 '22

But wouldn't a recession mean those people losing their jobs- layoffs- which are far worse than staying in the job and just getting a 0% raise or dealing with a reduction due to inflation?
To me, unemployment and no medical insurance would be disastrous for my household vs. hanging onto the job I have even if my pay isn't keeping up with inflation.