weeknights on pbs.
Jeff: As you may have heard
yesterday, the U.S. Added
431,000 jobs in March, bringing
unemployment down to 3.6%, a
pandemic era low.
But those numbers only tell part
of the story.
For more on what is ahead for
Americans in the economy, I'm
joined by the host of public
radio's "Full disclosure"
podcast which examines business
and culture.
Great to have you in the studio.
We should say this is an
exceptionally strong March jobs
report, but white house
officials I talked to are all
too aware that American's
perceptions of the economy
matter more than numbers on
paper.
And perceptions right now are
colored by inflation and high
gas prices.
Robin: If I were an alien
dropping down telling you that
unemployment is down, 11
straight months of 400,000 plus
jobs created, that is the best
clip since the end of the great
depression.
But inflation, gas prices, the
war premium abroad,
unfortunately outside of the
theoretical, the gas price print
is something you see every day.
It is emblazoned on your general
sense of cost, what you are
paying with rent, rents are
superexpensive in some markets
and housing is unattainable for
many Americans.
Jeff: There also is this notion
that it is a great thing that
more people have jobs and are
getting paid better wages, but
yet that also adds to inflation.
Robin: They want a not too hot,
not too cold market.
Wages are up 5.5%, but inflation
is up closer to 8%, right?
You don't have to subscribe to
the theoretical to know you're
not keeping up with inflation.
For better or worse right now,
the default wage for a lot of
service sector workers is closer
to $15.
That was not done by congress or
fiat, but by how slow it has
been to convince workers to come
back after the great
resignation.
Invariably that will lead to
inflation.
Jeff: What about the housing
market?
Are we on the precipice of a
housing bubble given how high
prices are for houses across the
board?
Robin: It is frothy when you
think of people foregoing home
inspections.
Jeff: Not quite a bubble, but a
little frothy.
[Laughter]
Robin: You know, stalking people
who may or may not list their
homes.
Yet the systemic outliers we had
in the crisis I 2008 are not
there.
But certainly a lot of buyers
are fetishizing this idea that
housing prices can keep going up
double digits every year.
In this case I think it is up to
19% on average.
That defies economic physics.
How are they going to handle the
let down after this?
If I have negative equity, I
will walk away from this.
If a lot of people decide to
sell, you see a housing bust if
not an outright crash.
Jeff: What more can the fed and
administration do to address
these issues?
No president has direct control
over the cost of gas.
The fed is trying to raise
interest rates.
That might not be enough to
wrangle inflationary pressure.
What more can be done?
It is a limited toolkit.
Robin: And yet this is probably
the most micromanaged economy in
U.S. History.
You used to have the threat of
bankruptcy and depression, but
by the federal reserve
ratcheting interest rates back
up, it is far removed from the
natural lake the economy was.
While we may not get bread lines
and destitution to the extent we
did during the depression, you
have problems coming out of it,
inventory problems, inflationary
problems, housing not affordable
for a generation of Americans.
We did not mention the stock
market.
Jeff: Let's talk about the stock
market.
Robin: It's don so well during
this pandemic, which is
paradoxical.
People embraced risk assets.
If you have been privileged
enough to be sitting on cash,
you have a wealth effect.
You can look at your 401k
and say that is great.
The problem is other people who
are trying to save for a home or
pay off academic debt, and now
with inflation they are feeling
so chronically behind.
Jeff: Robin, great to have you
here.
Thanks so much for your insight.
Robin: My pleasure.