Marketplace - Wrapping up the 2024 job market

Episode Date: December 7, 2024

It’s been a wonky year for the labor market. Unemployment is down and inflation has eased. But ask an average American, and they might not feel like everything is peachy keen. In this episode, we asked economists to sum up the complicated year … in a song. Plus, homebuilders worry incoming President Donald Trump’s immigration policy will leave them short-handed, and retail hiring plateaued in November — unusual for the holiday shopping season.

The American labor market discuss from American public media. This is Marketplace. We will begin. City is at the Washington Post. Hey, you two. Hi, Kai. So, Heather along, the jobs report came out today for November 227,000 new jobs, 4.2% the unemployment rate, but you are not completely satisfied, shall we say. I call it a mixed report. It was certainly good to see that bounce back from hardly any jobs gained in October. But you also have to recognize that the unemployment rate went up and that means more people are unemployed. I tweeted how there are 883,000 more Americans unemployed now than a year ago. You know, that has some real consequences.

I would say in the big picture context, I look at this and I saw it, you know, it's a pretty good time to be employed. Wages are rising really fast. We do have the return to office push, which is a little annoying. But it's a really crappy time to be looking for a job. I hope I can say crappy on public radio. Well, you just did, so I guess you can. But look, hiring is really weak, the weakest

we've seen in over a decade. And obviously, we saw an increase in the amount of people who are unemployed for six months or over. So it's hard to find a job right now. Sudeep, Jay Powell sees these numbers yesterday afternoon and thinks what? This is a slightly slowing job market, but nothing alarming. There's no reason for him to radically change course. It is still an overall reasonably strong economy for all of the fears he's had over the last

two years that everything was going to fall apart. We're really not there yet. This is a stable job market. This is a healthy wage growth. Yes, the unemployment rate has ticked up a little bit, but also he jacked up interest rates for a couple years and he's bringing them down. And so this is still what he would consider a soft landing scenario.

We'll see whether that changes next year. It's so interesting you said soft landing. We haven't heard that in a while, Sadiq. We haven't. It's a magic phrase now, isn't it? Yeah, right. We want to talk about it. Heather, 4.2% is historically on the low end of where this thing goes, but it's well above

wherever we were at the low, which I forget was 3.4%, 3.5%, something like that, right? Yeah, that's right, 3.4%. And so, I mean, look, we've said, Sudeep said the overall takeaway here, I would call it, there's some cracks and the cracks aren't troubling right now, but you don't want to start the domino effect. And if we see a lot more unemployment in the coming months, then that starts to mean more people unemployed pulling back on consumer spending and it starts that chain effect that you don't want to see.

And so that's why I think most people are still betting that the Federal Reserve will do another rate cut here in December just to ensure that domino effect doesn't start. Sudeep, on the unemployment rate, and then we'll move on, it is a little bit like that Hemingway phrase, right? How do you go broke? Very slowly and then all at once, right? The unemployment rate goes up slowly, but then it's really hard to start getting control of again. It really is. The one caveat I would offer is that this cycle has been unlike any other,

and so you have to be careful in drawing concern from that. But it is true that every time the unemployment rate has just started to curve up a little bit. Usually a shock comes a few months later and sends it skyrocketing. And so again, this has been a different cycle. So we will hope that that does not happen in the same way. Fair enough. Heather, consumer confidence came out today, seventh month in a row, it went up. That's got to be good for something. It was such a fascinating report. You're right. And this is one of the ones you have to read the details on because like you, I saw the headlines and thought, Hey, this is good. You know, finally, we're getting some good vibes again in

the economy. And then you read the details and it's basically Republicans are super happy. Democrats are now gloomy. Independent saw a small jump. But the really fascinating thing in this report is the reason, a big reason that the sentiment went up a little bit is because people think now is a good time to buy a car or a washing machine or an oven before they anticipate tariffs coming in 2025. So it's kind of, it's kind of one of those mixed bag where you're like, this doesn't sound quite so good if you feel you must buy now. Well since Heather took us there, Sadiq, let me keep going. On a scale of one to 10, your

level of concern about economic disruption after January 20th? I think economic disruption is part of the plan here. And I say that with the understanding that the idea of radically scaling back regulation is a goal of the administration and disruption in some ways can be good. We've heard that term in the positive phrase, but there's also a form of disruption that I don't think people have fully absorbed. One of them, as Heather mentioned, is the tariff effect and what could happen with inflation as product prices are reflecting tariffs. The other is immigration. We don't like to talk about the fact that the low end of the labor market is filled with undocumented labor. And when you remove that, product prices will

respond whether it's farms, whether it's cleaning homes, whether it's food deliveries, all of that will suddenly create disruption in the labor market that could get us back to inflation just as we thought it was in the rearview mirror. So there are a lot of things percolating here when you do such an abrupt shift in economic policy And that's what we are on the cusp of seeing in the coming months Heather one of the reasons I love to read your stuff in the post is that you actually to that point that Sudeep Was just mentioning about disruption in the labor market You have a keen eye for what people are worried about

Do you get a sense in your reporting and in your writing that that people are worried about. Do you get a sense in your reporting and in your writing that people are worried about the the coming Trump administration or are they just keeping their heads down trying to get their jobs done? That's a good one. There is a lot of real fear about tariffs right now, and maybe people are listening to your show, Kai. They're getting the message that, you know, they don't want anything to cause more inflation. People are so ready for lower prices. But, you know, at the same time, they think that President Trump will deliver those lower prices, and that a lot of those costs for tariffs would be paid for by China or by other countries. So, you know, it's wait, it's wait and see mode at the moment. I think they see it just like Wall Street does, more as bluster and talk than actual harm coming their way.

It is. Unknown unknowns. Heather Long at the Washington Post on this Friday. Sudip Reddy at Politico. Thanks you two. Good to talk to you. Thanks Kai. Have a great weekend. Wall Street today. Heather was just talking about that. Kind of a mixed message actually as traders tried to read the job market tea leaves. Details numbers when we get there. There was one kind of surprise in that unemployment report this morning. Retail jobs in November fell by 28,000. That is seasonally adjusted. And it comes, of course, at the time of year when retailers are staffing up to handle all the holiday

shopping they are hoping is coming their way and When the National Retail Federation expects holiday spending to total at least to get a load of this number nine hundred and seventy nine billion Dollars marketplaces Henry app has more on what's going on with retail hiring this year at the job listings site? Indeed, there's a pretty typical trend in postings for seasonal retail jobs says company economist Corey Staley They tend to rise pretty gradually through September October, you know peaking in mid November That's how this season started out He says but then instead of kind of having a typical spike in mid November Like we usually see it actually kind of plateaued a little bit one explanation could be that we are doing a lot more shopping online Which means retailers need fewer people in stores and more in warehouses and transportation

Jobs in those areas have grown significantly the last few years. However says independent economist Aaron Terrazas the last few years. However, says independent economist Aaron Tarazas, It's not a one for one trade off. Because he says companies have also added more warehouse automation. There has been all this investment in robotics and scale that makes warehouse workers a lot more productive than they were five or 10 years ago.

On the transportation side, he says more companies are hiring gig workers to deliver packages, which means those workers might not show up the same way in jobs data. The robots are coming for brick-and-mortar stores, too, says Monica Haynes at the University of Minnesota Duluth. If you go shopping in a lot of stores, they have one cashier who manages a number of different self-checkout spots. number of different self-checkout spots. So, in the front and back end, retailers may just not need quite as many people as they used to, even in a busy holiday shopping season.

But there is one more wonky explanation for the slightly weaker retail hiring numbers this November, seasonal adjustment and the pandemic years, says Sarah House at Wells Fargo. The statistical methods are essentially looking for a bigger increase this time of year because they're still incorporating what happened in 2020 and 2021. Remember, that was when there was a big bounce back in hiring after the pandemic lockdowns. I'm Henry Att for Marketplace. The operator of the power grid in Texas goes by the acronym ERCOT, which stands for Electric Reliability Council of Texas, about which two things. Number one, ERCOT says there's an 80% chance

of blackouts if there's a severe winter storm down there. And number two, just this week, Urquhart's meteorologist said winter weather this year is turning out pretty similar to 2021, which you might remember is when a major winter storm took out electricity across that state. In the event storms do come though and outages do happen this winter,

a lot of Texans are going to be better prepared. And that's because of what's on or inside or around their homes, as Marketplace's Elizabeth Troval explains. Houstonian Mike Dishburger had about had it with blackouts. Last year he installed solar panels and battery storage. Then when Hurricane Barrel knocked out power this summer, we got through the whole night with the battery backup. Dishburger is a home builder in Houston, and he says that especially after outages last

summer, home buyers want their homes to be prepared. They want to know what you're doing. A lot of my homes after I sell them are getting solar panels now too. His homes are Energy Star. They're more efficient and stay hot or cold longer in an outage. A lot of people will say, hey, can you increase the insulation in the attic or maybe between the bedroom floor in the garage below you possibly? And in Austin and Dallas, home builder Lennar is partnering with the electricity retailer Base Power to install backup power batteries in new homes. Base Power COO Justin Lopos. For a Lennar customer, a new home buyer here in Texas,

especially if they're moving from out of state, they have this sort of added resiliency that they might not have otherwise had had they gone to either another home builder or bought a home without a backup solution. Base Power installs the battery for free for their electricity customers and own and operate the battery.

So we get access to the battery when the grid's up and running to serve the Texas grid, and the homeowner gets access to the battery when the grid goes off. While batteries make for great backup power during outages, Mark Kreswick with the American Council for an Energy Efficient Economy favors building to the top efficiency standards. Installing insulation and air sealing can be the difference between life and death for people. A Department of Energy study found that new homes built to 2021 building codes could stay habitable for days longer than older homes. Still, he says, many cities and states haven't

updated their building standards. In Houston, I'm Elizabeth Troval for Marketplace. Coming up. A full third of the workers are immigrants. Once again, everybody, immigration is a labor market story. But first, let's do the numbers. Dow Industrial is down 123 today, about 3 tenths percent, 44,642. The Nasdaq gained 159 points, about 8 tenths percent, 19,859. S&P 500 down 15 points, a quarter percent, 6090 there, 6090.

For the five days going by, the Dow off 6 tenths percent, the Nasdaq gained nearly 1 percent. S&P 500 was up 3%. Health care was one of the sectors showing an uptick in today's jobs report. 54,000 new jobs for the 11th straight month of growth. Positions were in ambulatory services, hospitals, and home health care. So in some related stocks, Tenet Health Care Corporation was unchanged. Option Care Health grew 0.6% today. The U.S. Department of Agriculture has announced

it's gonna start testing the country's milk supply for H5N1, that's a strain of bird flu spreading in dairy cows. So dairy-related stocks, shall we? LifeWay Foods filled up 0.9%, General Mills down 0.7%, Unilever shed 0.9% today. Bond prices were up. That means the yield went down.

Ten years at 4.14 percent. You're listening to Marketplace. Understanding personal finance can feel like an impossible task, but it doesn't have to be that way. I'm Janelia Espinal, and on Financially Inclined, I'll guide you through simple money lessons that will change your financial future. Learn about credit scores, how to avoid scams, and why you need a savings account. Plus, we explore the brain science behind FOMO

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Money, money, money. Kids always have questions about it. And maybe you do too. That's why Million Bazillion, the webby winning podcast from Marketplace is here to answer the awkward and sometimes surprising questions your kids have about money. We explain concepts like savings accounts, retirement, and the differences between brand names and non-brand names. Million Bazillion is the place for you and your kids to learn about money together. We help dollars make more sense, get it? Listen to Million Bazillion wherever you get your podcasts.

This is Marketplace. I'm Kyle Rizdahl. Jobs and the labor market are the backbone of the program today, in case you couldn't tell. And we'll pick up on one industry in particular right now, construction hiring, which was basically unchanged in November, which is actually okay, because it's a sign a longstanding labor shortage

in the construction industry has been easing. The Joltz data that we got from the Labor Department earlier this week showed just a little less than 250,000 unfilled construction jobs in October. That is down for more than 400,000 a year ago. Good, but still a shortage at a time when, honestly, we need more houses. And it comes as another potential threat to the construction workforce looms with the change in administrations. Marketplace's Amy Scott is on that one. At a new housing development in suburban Baltimore called Joppa Crossing, a crew of 10 or so men is

framing a row of future townhouses. Most of the workers are immigrants, including Marlon Garcia, who's originally from El Salvador. This guy's from Mexico, another guy from Guatemala, and some of them from Honduras. Garcia's mom brought him to the U.S. as a teenager, seeking a better life. Now he has four kids of his own and says this job pays well. He got it through a connection. Because my wife is the daughter of my boss. Yep, his wife is his boss's daughter. Garcia's immigrant background is common in this industry. The latest construction market labor report from the Home Builders Institute estimates foreign-born workers now make up a quarter of the overall construction workforce, a new high.

When you kind of get down to the subcontractors that work in the residential space in particular, you're talking about a full third of the workers are immigrants. Jim Tobin is CEO of the National Association of Home Builders. He says the workforce is still recovering from the housing crash that triggered the Great Recession in the mid-2000s. Many workers left the industry and never came back. And as skilled tradespeople get older and closer to retirement, fewer young people have entered the pipeline. Immigrant labor makes up that shortfall in the labor pool that we don't have because

we're not either attracting domestic workers or training enough domestic workers to fill the roles that we need. So Tobin says homebuilders are concerned about the incoming Trump administration's immigration policies. The president-elect has promised mass deportations of undocumented immigrants. The Pew Research Center estimates 13% of construction workers are undocumented. Even the threat, Tobin says, could have a chilling effect. Just even talking about mass deportations

could take people off of job sites and melting back into the shadows at a time when we need to build more housing, which means we need more workers, which means we need to find a way to bring more people into this country legally in order to work in the industry. Tobin says the association has been pushing for a new visa program for construction workers. Marisa Diaz directs the Immigrant Worker Justice Program at the National Employment Law Project. She expects the Trump administration won't just target undocumented workers.

There's also fears around what could happen to programs that exist now that provide temporary immigration protections and work authorization and Trump attempting to end those programs. The Trump campaign blamed demand from immigrants for driving up housing costs. But Allie Wolf, chief economist at the housing data and consulting firm Zonda, says stricter immigration policy has an economic price too. And if we find that we see a more severe labor shortage and that ends up increasing the cost to build homes, that cost is simply going to get passed on to consumers. LESLIE KENDRICK, CNN CORRESPONDENT, UNIVERSITY OF UTAH, WIS. A recent study from the universities of Utah and Wisconsin found that the deportation of more than 300,000 undocumented immigrants

between 2008 and 2013 during the Obama administration was associated with a slowdown in homebuilding and an increase in housing prices. At Joppa Crossing, cost is top of mind for Earl Robinson. He's president of the developer Ward Communities. He says he's had no trouble finding workers, so he's not worried about Trump's immigration policies. But in this tight labor market, his vendors, the framers and roofers and carpet installers are charging a lot more.

It is strictly labor. My guess is a little bit of two things. It is is they have to pay a little bit more, but it's also they have an opportunity to charge more and they do. Robinson welcomes what he hopes will be less regulation under a Trump administration. But there's another unknown he says could add to his costs, the threat of new tariffs on building materials. If you subscribe to the music streaming giant Spotify, you have probably seen by now what's become something of a year-end tradition, your Spotify wrapped playlist, where the company

tells you the artists and the songs and the genres you've listened to most over the past 12 months. Share on social media if you dare. I did this year. Seeing though as how we got the last jobs report for calendar year 2024 today, we thought it might be fitting if we created a Spotify wrapped for the American labor market, the songs that capture the ebbs and flows of the workforce we devote so much of our time to. Marketplaces Matt Levin made some calls.

Economist Olu Sinola at Fitch Ratings wants you to know he actually isn't a super fan of early 2000s post-Grunge pop rock. It's just when I asked him what song he would pick to best describe the trajectory of the labor market in 2024, what immediately popped in his head was Crypto Knife, Three Doors Down. The fan was supposed to be the crypto knife of the US labor market. That didn't happen. And I'm thinking of the labor market pretty much in superhuman terms. We started the year at 3.7% unemployment.

The Fed didn't cut rates until September, and unemployment is still really low. That's unusual, especially when you look outside our borders, which brings us to Bank of America economist Stephen Juno's selection. They not like us, they not like us, they not like us. Not like us by Kendrick Lamar, because compare the US, you know, us to the rest of the world, we're just really the standout. Our unemployment rate right now is 4.2%. The eurozone is over six. Canada's is nearly seven. I don't think Drake has filed for

unemployment yet. Still, even if US workers had an objectively better 2024 than many of their foreign counterparts, every consumer sentiment survey and political poll said we didn't feel that way. Betsy Stevenson at the University of Michigan says if she was going to describe the labor market in 2024, she turned to the lyrics of one Demi Lovato. We added what? Over 2 million jobs. Real wages are up. And yet the response of the public is it's complicated.

I think it's underrated. Stevenson hopes the labor market will remain strong in 2025, but she wouldn't say she's 100% confident. Sorry. I'm Matt Levin for Marketplace. This final note on the way out today, a fun-ish thing I like to point out from time to time, the American labor force is, give or take, 168 million people strong. And trying to measure it as closely as we do is, well, it's tricky. So I find it helpful to remember the margin of error for the monthly unemployment report,

the November version of which, of course, we got today. This economy added 227,000 new jobs last month, plus or minus 130,000. And the unemployment rate is 4.2 percent, plus or minus 130,000. And the unemployment rate is 4.2% plus or minus 2 tenths of a percentage point. Try trotting that out at your next dinner party. Make new friends, see what they say. Our theme music was composed, I don't go to any dinner parties. Our theme music was composed by BJ Liederman,

Marketplace's executive producer is Nancy Fargoli. Donna Tam is the executive editor, Neal Scarborough is the vice president and general manager. I'm Kyle Rizdahl, have yourselves a great weekend everybody, we are back on Monday, it's not going to be me though, have you heard how I sound? This is APM. Money, money, money. Kids always have questions about it, and maybe you do too. That's why Million Bazillion, the webby-winning podcast from Marketplace, is here to answer the awkward and sometimes surprising questions your kids have about money. We explain concepts like savings accounts, retirement, and the differences between brand names and non-brand names. Million

Basilion is the place for you and your kids to learn about money together. We help dollars make more sense, get it? Listen to Million Basilion wherever you get your podcasts.