Moody's Talks - Inside Economics - Remote Work and Rising Prices

Episode Date: September 16, 2022

Nick Bunker, Research Director of Indeed, joins the podcast to share his views on the the U.S. labor market, including unemployment, job openings, quits, and remote work. Nick stumps Mark, Cris, and Ryan in the statistics game. Full transcriptFollow Nick Bunker on twitter @Nick_Bunker. Follow Mark Zandi @MarkZandi, Ryan Sweet @RealTime_Econ and Cris deRitis @MiddleWayEcon for additional insight. Questions or Comments, please email us at [e-mail]. We would love to hear from you.  To stay informed and follow the insights of Moody's Analytics economists, visit Economic View. Hosted by Simplecast, an AdsWizz company. See pcm.adswizz.com for information about our collection and use of personal data for advertising.

Welcome to Inside Economics. I'm Mark Zandi, the chief economist of Moody's Analytics, and I'm joined by my two co-hosts and colleagues, Ryan Sweet and Chris DeReedies. Hi, guys. Hey, Mark. How are things? I'm tired. Good.

Yeah, I'm tired, too. I know why I'm tired. Chris and I had a client dinner last night in New York. We're on a bit of a tour here. We were in Chicago, Toronto, D.C. and that last night was New York and I had my first gin and tonic in quite some time. That was a mistake. It's out of practice.

Huge, huge, huge mistake. Because I followed that with a fair amount of white wine. Maybe I shouldn't be saying any of this, but. Yeah, Moody's HR is going to be reaching out to you. Yeah. I'll have to say the gin and tonic tastes a good going down. Did you have any alcohol last night? No, you generally do not.

You want to be sharp, right, Chris? I want to be sharp. I did have a little bit of white wine. A little bit of white wine. Yeah. Good. And are you a gin and tonic kind of fellow, Ryan? No, no.

I learned my lesson in college. I stay away from gin. Oh, really? Yeah. You swear off Jim. So what is your, do you have a alcohol of a choice? No, not really. I'm not a big drinker.

You're not. I think we established on a prior podcast that he is Budweiser guy. right oh no no guy bud light bud light bud light not a chance wait why

you're the best one I'm you're pretty snooty that's yeah what's going on there slumming your nose up at bud light what wait what's that all about we drank in college

so well it's back I know it's back but it brings me back to my my college days and so I try to avoid it all right we're going to bring in our guest

because I want to know what he drinks yeah Nick Nick Bunker from Indeed, Nick, welcome to Inside Economics. Hi there. How you doing? So what do you, what's your drink of choice? I'm a beer guy myself.

You are. Not so much but light. I am a bit snooty when it comes to beer. How long into that. Okay. Well, let's, I want to know how snooty. What is it that you, you know, if you had your choice, it's only 10.30 a.m. Eastern time on Friday. So I guess you don't want a beer right now.

But let's say it's 5 p.m. Eastern time. Friday, which is the beer that you're going to pull out of your refrigerator? So I'll give a plug for a brewery that's based near where I am right now, which is the Tampa Bay area. So I'll have High Lie, which is like this IPA from a brewery down here, obviously named after like the very Florida-esque sport. Yeah, it's a nice solid IPA, but it's not like tons of hops. So it's not like that bitter taste, but it's a smooth, it's a smooth drink. Guys, I get the sense he knows what he's talking about. Yeah, exactly.

Yeah. I mean, like, he's like, you know, he's like commenting on the hops. They have to come through. Where in the country do they come or in the world do they come from? Do you know that, Nick? The hops for that beer? Yeah. I don't know.

I know Oregon is like a big producer of hops in general. So I think a lot of the American-based ones are out there, at least in the West Coast. But I think there's like some, maybe I'm conflating like where the brewers are, but I think North Carolina has some as well. Oh. Ryan, did you know? that? All the hops come from Oregon? I had no idea. I had no idea. I'm a little surprised. I thought Nick was going to say vodka and Red Bulls and see just had twins. So you need the energy and then you need

a little numbing factor. Congratulations on the twins. Thank you very much. Yeah, I've been drinking less beer and more coffee these days because it's definitely good. Caffeine is what I need. Caffeine is what I need. Girl, boy, boy, girl. Two boys. Okay. Oh boy. Oh boy. Oh, boy. Is that what they say. boy. Very good. It's a double coffee. Congratulations. Is indeed, I shouldn't know this, but I don't.

Is indeed HQ in Tampa? It's not. So it is, there's technically two headquarters of the company. It's Austin, Texas, and then also Stanford, Connecticut. But there's offices throughout the country and lots of people, fittingly for our topic, one of our topics today work remotely. So I used to be based in the D.C. area when I started the company about four years ago. So I've been remote from the beginning. And lots of people at the company are as well.

Yeah, and we are going to talk about remote work because you've done a lot of work in this area. And we were just commenting before we got on our dinner last night with clients. All people can talk about is remote work. Who's for, who's against it, why they're for it, why they're against it. And there seems to be this growing gap between what, CEOs think and what economists think. I don't know if you notice that, but CEOs hate remote work. There's a generational divide, it seems like. Do you think that's what it is? In part. Maybe it's the office space, right? I got all this beautiful office space. I'm CEO. What am we going to do with? Well, that's quite cynical. Comment.

Yeah. Yeah. Well, let's talk about that. We've got to talk. We definitely, and you've got, I know you got some strong views on that, that topic. But we'll come back to that. We've got a lot to talk about. But before we go down any path, Nick, can you just give us a sense of your path to chief economist of Indeed? And also, I'd like to know a little bit more about Indeed if you are willing and able to do that. Yeah. And while I appreciate the promo, I'm actually just a research director at Indeed.

So. Okay. Research Director, Chief Economist, Research Director, Chief. You know, I don't know. I like Research Director better. Which would you rather be, Ryan? Research Director or Chief Economist? Research Director.

That's what I'm saying. Now, Chris wants to be Chief Economist. We all know that. I can't turn my back to Chris, Nick. You know, I've got to be very careful when I'm around Chris. I was thinking maybe chairman. Chair. Chair.

Yeah, right. Okay. So, research director, that sounds pretty cool. So can you just tell us a little bit about your work and your job? Yeah, sure. So I think sort of how I. I got to the position where I am. So I referenced earlier that I used to live in the D.C. area.

And when I was there, I worked at a couple of think tanks in the policy world, you know, thinking about economic policy and near the tail end of that part of my career. Can I ask who which think tanks? Yeah. So the Center for American Progress. Oh, yeah. The Washington Center for Equitable Growth. Oh, they're both great.

Yeah. Yeah. No, I had really great experiences that both of them learned a bunch of things. including sort of I was the Washington Center for Equitable Growth was started in about 2013 and I actually was there from the beginning. So it was really interesting to not only, you know, the substantive work of the research and economics, but being part of a very quickly growing organization was. I'm on one of the advisory boards, the Washington Equitable Growth. Yeah, great, great new think tank. It's not relatively recent in the think tank kind of world, right? Yeah. Like less than 10 years old is?

Yeah. Yeah, something like that. So, I mean, compared to like Brookings, that's nothing. Yeah, right. Yeah. Yeah, very, very good. So I didn't realize that. So you're a cap and at Washington equitable growth.

And then you came over to Indeed? Yeah. So I started focusing more and more labor market issues. And then there was an opening at Indeed for an economist position. And I thought that'd be a really interesting place to go, in part because of all the access to the data that they now, we have. because we have, you know, lots of great data coming from the government and other sources that are publicly available. But the opportunity to see, you know, what was going on with Indeed's platform and doing research, what that was super appealing. And now that I'm at the company, I've

continued to find that to be super interesting and valuable. Yeah, very cool. So tell us about Indeed. Yeah. So Indeed, as folks hopefully know, is, you know, the world's largest job platform. I did not know that. You're the largest in the world. That is my understanding, yeah, that at least in the U.S. I thought hyperbole. That's not marketing literature. You're the largest platform. Okay, cool. And in the world. And that is one of the advantages of sort of the team that I said on, the hiring lab, is that we're doing research not just in the U.S., but across at this point seven other markets as well. So we have folks in the U.S., but also in Canada, the U.K.,

Germany, France, Australia, and we just had a Japanese economy, to start last month. So what's enlightening is that, you know, we're all using the same data source. So it's not like when you're trying to compare, say, unemployment rates or job vacancy rates across different countries. We have to think, you know, find some standardized data source or understand the difference in the definition. We know the things are consistent because we have the same platform.

So it's always interesting to be able to compare very quickly what's happening in the U.S. first what's happening in Canada or even. differences with, say, Australia, but then also we can see, given that we have users in, say, Australia, what's happening to, or other countries, their interests or search activity on, say, job postings in the U.S. So we can see sort of not only movements within a country, but also say international interest or international, you know, intended migration moves. That's actually something that my colleagues over in Europe looked at earliest year and released a report

on how the migration changes, like mobility changes. Yeah, just to, that's really interesting. Just to get a sense of the scale, how many job postings are on your platform today for the U.S. or other markets? Do you have a sense? So we do have a sense that's sort of like a number that we don't talk about really publicly for a variety of reasons. What about for inside economics?

I mean, maybe just for us. Yeah, I think one way to think about it is like the representativeness. of it. We've done a few analyses trying to understand, you know, how representative our job postings are across industry or occupational group and also just, you know, do the time series trends match up. And basically since the beginning of the pandemic, so March of 2020, we've been releasing high-frequency data, basically weekly on the growth in job posting center platform in the U.S. and then across the other markets as well. And the U.S., if you look at our measure, which starts in February of 2020, and you match up with, say, Jolt's job openings,

they move pretty in sync. It's not perfect or one for one, but the growth trends there are very consistent with each other. And Joltz's job opening labor turnover survey, which is of great interest in the current context because of the very tight labor market and all the focus on unfilled positions as a kind of barometer of how tight that market is. Exactly. And that one of the advantages of our data is that, you know, Jolt is useful, but it's not as timely as other data sources so that it lags, you know, quite some time. But our data is much more timely so that, you know, we usually update our weekly postings data on Monday or Tuesday morning. So next Monday or Tuesday, I will all have data on what job postings were as of like right now today.

So we only have a couple days of lag when it comes to our metric as opposed to joltz, which, you know, in the first week of October, we'll get data on the number of job openings the end of August. Well, we definitely want to come back to this, but can you just give us a quick hit? What's how do you, is the market slowing at all? Is a postings coming in at all? Or are they just still rip roaring? So we're seeing since the beginning of the year, pretty gradual pullback when it comes to. the job posting, it's far more concentrated in certain sectors than others. So software development jobs, which a lot of tech companies are hiring for, there's been a much more substantial pullback there. But if you were to look at job postings on Indeed compared to the pre-pandemic baseline, so beginning of February 2020, that number is still up, you know, more than 50%

from where it was then. So like it is, if you're using that sort of longer time frame, demand is still quite high. It's just come down from very, very high levels early this year, end of last year. Can I ask what was the peak? Would that be appropriate? So I could tell you the peak in terms of, you know, compared to that pre-pandemic baseline. Exactly. I'm pulling up the data right now. So for the U.S., the peak was actually, you know, roughly the end of last year, beginning of last year, and it was up 62.9% from that pre-pandemic baseline. And now, it's closer to 50. That feels like the jolts data unfilled positions.

Feels similar. Yeah. I do think the jolts has been, jolts openings have been a bit more robust, especially with the latest day that we got where there was. Well, that was weird, that latest data point. Yeah. Yeah.

Yeah. I don't believe it. Yeah. Those, I mean, they do get revised substantially. And that was sort of what we saw before is that the, I mean, we got July and June. And the June was revised up in July was higher than expected. Yeah. Okay.

All right, yeah, we'll definitely come back to that. But this week, I want to, we've got to talk about inflation. Consumer price inflation. CPI came out this week for the month of August on Tuesday. I think it was Tuesday. Right, Tuesday. Yeah. So let's talk about, you know, I'll have to say, obviously look at a lot of economic statistics.

And almost always the statistics kind of are, consistent with my priors. You know, they don't change anything about the way I think about the economy and where it's headed. But there are times when I get a release that really challenges my view of things. And I'll have to say that CPI report did that. It's very, very disconcerting, I thought. But anyway, let me turn to Ryan. Ryan, you want to give us a sense of those numbers? And I'm really interested in, you know how you do that decomposition of the factors, forces driving the inflation? Yep. If you could do that for us, too, that would be helpful. Thank you. Yeah, of course. So overall, it was a very disappointing report. The headline, so the total consumer price index rose just one tenth, but the expectation, you know, we expected it, the consensus for a small decline. And that 10th, why we got a lot of moderation in inflation month-over-a-month was because of an enormous drop in retail gasoline prices. They were down more than 10% month-over-month.

But when you strip out food and energy and look at core inflation, and this is a better barometer of where inflation is headed, it was up six-tenths of a percent month-over-month, and that was much stronger, double what the consensus was anticipating. And when you look through the report, inflation is broadening out. So there's more price increases across different goods and services. And I think that's what's concerning is that inflation is becoming a little bit stickier than what we had it anticipated. We were hoping that inflation would be rolling over by this time. And it's just occurring more slowly. So if you look at some of the stickier components, rents were up a lot and they haven't peaked yet. The good news is that probably going to peak later this year early next if you look at the Zill rent data.

But inflation over the next few months could be stronger than what we anticipate in our baseline. So even with the small increase in the headline number, it was still up 8.3% year over year. And when you break it down. Okay. Before you move on before the breakdown, can I ask one quick question? Yeah, of course. So in the July CPI report, that came in softer than what folks thought, we thought. bought three tenths of a percent on core CPI, core being X food and energy.

And we, just to remind everybody, we focus on that because that tends to be a better forecast of where inflation is going to be going forward. And obviously that's what the Federal Reserve looks at when setting monetary policy. It was 0.3, and that made me feel pretty good when that came out. And then, as you say, the August number was 0.6. you know, we have all learned not to place too much weight on any given data point. Would it be fair, do you think to take the 0.3, add the 0.6 divide by 2 and get 0.45, and that's the reality of where we are or not?

Yeah, I usually average over three months. Okay. So we're still, you know, 0.4, 0.5. So I would agree with you that, you know, even in the inflation data, things can be a little bit choppy. So taking, you know, a moving average of a few months is probably the best approach. Right. And there were some things in the report, at least to my eye, that seem kind of monthly, vagaries of the monthly data, or measurement issues, like the continued strong increase in new vehicle prices. That feels a little weird and maybe related to some methodological changes at the Bureau.

Yeah, they changed their methodology last, I believe last year, and now they're using transaction data by JD Power. The other thing that caught my eye was a very small decline in used vehicle prices. There was, other data was pointing towards a much larger decline in used vehicle prices. So there's a possibility that you get, you know, some revisions. I mean, we always weren't about like response rates. And response rates for some of the components of the CPI are very, very low. So to your point, we could see some revisions and you got to really take each month with a grain of salt. But the other thing that jumped out was college tuition.

Hold it, revisions, do they, they don't, I don't think, there's no CPI revisions, are they? They revise the seasonal factors. Oh, the seasonal factors. Oh, yeah. Good point. Yeah. So, I mean, I don't think it's going to make big changes, but it might smooth out some of the volatility. And I mean, the other thing is, you know, the pandemic brought back volatility and inflation.

So, you know, that's why I think you're seeing some of these big month to month swings and in some of the components of the CPI. Got it. Okay. So the decomposition, can you decompose the 8.3 percent? year over your CPI inflation number into what's driving it? Just one comment on college tuition. Yeah. That rose more than I anticipated.

And that's because in the last couple of years, colleges were trying to keep tuition down, the increases. So August is normally when the CPI for college tuition goes up and it rose more than the seasonal factor anticipated. So that kind of choose to even more. And that's why we got, you know, a point six on core inflation. Okay. All right. So the decomposition. So 8.3, so just as a reminder, the CPI was up 8.3 year over year.

Supply chains. So that's poster child is new and used vehicles. It also includes children's apparel, electronics, things that are being disrupted by global supply chain stress. That added one percentage point to year over your growth in the CPI, which was identical to what it was in July. Energy added 2.1 percentage points, which is down from 2.9 percentage points contribution in July, and that's just a reflection of lower prices at the pump. Food is adding 1.5 percentage points to growth in the CPI, and Shelter is adding 2 percentage points. So that shelter one, that's the highest since I think the early 90s. So that's a significant contribution. And that's sticky. That's going to

hang around for a lot longer, whereas energy and food and supply change should start adding less and less over the next few months, shelter could add a little bit more. Okay, so let me ask you this. So let's just assume oil prices stay roughly where they are, give or take, you know, going forward. And, you know, that's a big assumption, obviously, a lot related to the Russian invasion, what the European Union decides to do or not do with regard to sanctions on Russian oil, whether a hurricane blows to the Gulf and knocks out a refinery, who knows. But, you know, that's our working assumption.

And let's assume the supply chains continue to iron themselves out. And that goes to the pandemic becoming less and less of an issue. Again, a big assumption given China's no COVID policy, you know, maybe they have to shut down big parts of their economy again. But let's subtract from that. No railroad strike. No railroad strike, you know, nothing like that, which, thank goodness we have heard that one. That would have been a disaster. Okay, those are my two assumptions.

So that basically says the energy contribution comes out of the CPI. The supply chain contribution comes out of the CPI. A big chunk of the food price inflation comes out of the CPI because a lot of that's just the cost of getting, it's diesel, getting the food from the farm to the store shelf. Where do we go on inflation? And, you know, we were at 8.3, do you do your decomposition, that analysis? Where are we going, roughly? Down close to four. Four. Okay. Four percent. Okay. And I would characterize the Fed's inflation target on the CPI

probably high-end two and a half percent because there's methodological differences between the CPI and the core consumer expenditure deflator, which is what the Fed targets at 2 percent. And right now the gap between the CPI and the PCE deflator are about a half a point. So we have to go from four to two and a half. Correct. And that the road from four to two and a half runs through shelter, rent, medical care, those kinds of things. Especially for the PC deflator. Medical care is a much bigger weight.

So if you look at what is medical adding to the CPI, it's 50 basis points. So it's not an enormous contribution, but it will be larger in the PCE. Yeah. And I'm doing all this right now because we're going to, and Nick, this, I don't think I mentioned this, but I'm going to ask you for your odds of recession at the end. Gotcha. And this is all kind of setting things up for that discussion because it's important to understand all this stuff.

And Nick, there's only one right answer. Yeah, exactly. How many significant digits do I have to respond out to? As many as you desire, Nick, we take them all here inside economics. Good to know. You know, we have to offset, you know, Ryan is kind of, you know, wishy-washy out there. It doesn't give us real numbers, you know. So we have to, you know, offset that with some real numbers.

Mark guarantees things. Apparently I did. I can't. This doesn't sound like me. That's a reference to another podcast. We're not going down that path. What was I going to say? Oh, anything else, Ryan, you want to bring up on the report, CPI?

Were you as disconcerted? I mean, I was, I'm kind of, I've been depressed ever since Tuesday, slightly depressed. Maybe it's the gin and tonic. Well, that was the reason for the gin and tonic. Oh, that was the reason for the geniton. Yeah. Oh, yeah, when I talked to you on the phone after the CPI report, we were both kind of glum about it. Yeah, bummer.

I was hoping inflation becoming in faster than it is. Okay. Hey, Nick, oh, sorry, go ahead. Oh, no, it really altered market expectations for the next meeting. Oh, yeah, tell us about that. So, no, the Fed meeting. Yeah, so the markets are fully pricing in a 75 basis point rate hike. The odds of a 100 basis point rate hike went up to 25% and now they're back down to like 16%.

So I think it's pretty much a slam dunk that they're going 75 next week. Yeah, okay. Hey, Nick, do you have any thoughts on the C? CPI report. Do you look at that as closely as we do? I definitely do not look as closely at it as you all do. Basically, that was a bad question because Ryan is definitely down and dirty with that report. You're right. No one is down into the battles of that more than Ryan, I'd say. It's a high high bar to clear. I think when those numbers, the CPI numbers come out, I basically just look at what happened to rent of shelter and just sort of check. in on that every month. So the number that we got in the latest data was obviously not great because that's still super high. So that's sort of my, you know, for me, thinking about inflation, it's usually just what's happening to rent. And then also I already keep track of this already, but just wage growth trends. Yeah. And we're definitely coming back to that.

I mean, the one thing I'd add on the rent, if you, the CPI, you can break it down regionally as well. The BLS, the Bureau Labor Statistics releases regional data, which I think is, you know, fascinating now because rent, shelter, and the south is up almost double digits. So that's just a reflection of migration patterns and things like that. So if you rank order, I think on top of my head to southwest, Midwest, and then much lowers the northeast. Yeah, this is a good place for me to turn to you, Chris, in the housing markets, because what I've heard anecdotally is that some of those previously high flying markets in the

south and the west are now really cooling off. and we are starting to see some real moderation, certainly in house prices, they're starting to fall. But also in rent growth, I've heard, again, anecdotal, I haven't seen it in the data yet. But the rate of increase in market rents, you know, what new renters need to pay to move into a rental unit is coming in pretty quickly.

And actually some places are actually now declining because of demand destruction. You know, we're having. rents so high that people can't form households. They can't leave their parents home or they can't strike out on their own. They need roommates. So it's having a real impact. And, of course, the remote work dynamic is still playing out, but not nearly as forcefully.

I mean, we're not seen as many people from L.A. move out to Phoenix or from New York down to Tampa, you know, that kind of thing. Is that, have you been watching this? Have you, am I, are those anecdotes, same thing you're hearing? Yes, yes, definitely seeing a slowdown across the board when it comes to housing. Now, you're right, the multifamily, the apartment market is also slowing, but it's not nearly as dire as what we're seeing in the housing prices and the home prices. Because if people can't afford to buy homes, if they can't rent, then they just don't form the household to your point. So there is still that dynamic.

So things are slowing, but I have to. haven't seen that or heard of really sharp declines in rents just yet. We are getting more supply. And if you look at permits, right, the multifamily construction market is, I won't say healthy, but it's healthier than the single family. So builders are clearly responding to the demand. So that will also help. But that, you know, that takes a bit of time for those multifamily properties to come online

and actually help to reduce rents further. But I think the direction is clear at this point. There's really no opportunity for an apartment manager to raise rents very aggressively. The affordability is just out of reach. Right. So we're getting supply, more supply. Yep. And we're getting, it feels like demand destruction.

Some demand destruction. So the net of all that feels like rent growth is going to start market rent growth is starting to moderate. rate, and that should start to show up in a moderation in the CPI rent, not quickly, but perhaps by next spring or so we might be able to see some rolling over of the contribution of rent, cost of shelter to the overall inflation. Is that kind of sort of right? I think that's accurate. Okay.

That would be nothing quick. Yeah. Okay. Of course, the other aspect of inflation is the service price inflation, and that is critically tied back to the labor market, you know, because the services are labor intensive. Labor markets are, by any measure, tight, very tight. Wage growth has been very strong, depending on the measure. It's five, six percent-ish sort of, I think that's roughly consistent with the wage data. So, Nick, maybe we can turn back to you.

Let's explore, you know, how really, how tight is this labor market? And let me just preface it by saying some of the tried and true measures of labor market slack I've used in the past, they're not screaming, you know, this labor market. The labor market's at full employment. There's no doubt about it. Maybe a little bit beyond, but it's not screaming, you know, excruciatingly tight, except for one statistic. and that's the one you have a good view on, and that's unfilled positions. That's different this time. So how do you think about all this?

How tight is the labor market? Yeah, I think if you were just to go back in time and say to someone in late 2019, say, okay, it's the early fall of 2022. The unemployment rate's 3.5%. And then you start describing some of the wage growth statistics and some of the, you know, about the labor markets, I would be pretty perplexed because it was basically the same unemployment rate. And if anything, the labor force participation rate has dropped. So the share of people with a job is actually a little bit lower than where it was. And even for prime age workers,

the same thing. So I think for me, like the number one metric I was looking at is nominal wage growth. And that number obviously is also sort of pointing out a very, very tight labor market. and that there is this question of the job openings, and particularly that ratio of job openings or vacancies to unemployed workers. I like follow the Joltz report pretty closely, and that's a statistic that you can like that I've tracked for quite some time, but it went from something that like no one really talked about

to now I feel like every other time or like every time, Chair Powell talks about the economy of late market. that's a statistic he turns right to talk right to talk about how tight delay market is. So I think part of what we're seeing is that, you know, economic growth and demand for workers just burst out of the gates in the spring of 2021 and that there's just been such fervent demand for workers after we got, you know, mass vaccination started rolling out. There was a lot of fiscal support for households, especially with that, you know, the American Rescue Plan. and that sort of turbocharged, at least consumer demand,

and employers just thought, okay, now it's time to quickly staff back up. And we're just still in an environment where there's high level demand for new hires, but also at the same time we're seeing really high levels of quits. So there's sort of this desire to backfill for the people who left. So we're just in sort of a, in some ways, a self-sustaining environment of really high demand for workers. And that is, I think, different from what we're seeing back in 2018, 2019, when it was a more slow and gradual recovery. And that's why the labor market just feels and is much tighter than it was back then. Okay.

So right now, according to Joltz, the, again, job opening labor turnover survey, there's a little over, I believe, 11 million unfilled positions. And there are, I believe, 7 million number of unemployed. So you divide one by the other. It's almost two times, not quite two times. What's one in it, what is that? One and a half times, you know, something like that. Yeah, I think the latest data was like it was just under two. Was it just under two?

What am I missing? Did I, or maybe it's five million unemployed. Yeah, I think it's five million unemployed. Yeah, sorry, I've miscalculated. So it's around two, let's say. And then you're saying pre-pandemic, it was elevated. It was probably like one and a half. It was 1.2, 1.3.

Okay. Which prior to, which, you know, Joltz only goes back to the end of the year 2000. But 1.2 was the all-time high for that series over that almost 20-year period. And then obviously now it's even more elevated. I think what's also interesting is that if you look at that ratio, it obviously spiked or sort of dropped significantly in the spring of 2020. But the pandemic. the pandemic. But if you think about sort of how the unemployment rate rose so much, it was lots of people on temporary layoff. And those are people who get recalled. And job openings are for,

or at least the way you think about in BLS is trying to capture is that it's demand for new hires. So recalls don't get counted. Or like when they ask employers about open positions, they say, but recalls don't count for this. So if anything, if you take away those temporary layoffs, that ratio didn't really dip that much because, you know, demand dropped, but the huge rise in unemployment was mostly for temporary unemployment. And you actually see it sort of does line up with some of the wage growth measures, like the ECI. Like it drops in 2020, but not to the extent that it drops back in, you know, after the global

financial crisis. The employment cost index ECI. That's like the gold standard for wage growth because it controls for wages because it controls for occupation industry mix, that kind of thing, which is a little over 5% as well. Okay, so it sounds like the way you, your favorite go-to measure of, uh, how, uh, of labor market slack, how tight is the labor market is that I, you look at unfil positions, divide by unemployed. That's a pretty good rule of thumb for how tight the labor market is. I, I'd say for thinking about the differences between, say, 2019 to now. I think that's, that's in my top tier. I would also put

And I think the one that would go slightly above that is the quits rate. So the share of people who voluntarily left their job in a month, there's a pretty strong correlation between the openings rate and the quits rate. And I think the sort of quits rate has a clear pass-through or connection with wage growth. Because you think about it, a lot of wage growth happens when people are leaving their old jobs and taking new ones. So I think that if you look at, say, the different industries over the pen, endemic era who've seen some of the fastest gains in wages, it's also the sectors that have seen some of the proportionally the biggest rises in their quits rate. So leisure and hospitality,

which has seen tremendously fast wage growth, also saw very large rise in quitting. So I think of those metrics, I would weigh up, I sort of rank fairly highly. And the quits rate, I think, would be up there near the tip top. The other thing I've observed in the jolts, and I'm I'm wondering if you see the same thing in your data is the increase in unfilled positions is across the board. It doesn't feel like there's the only industry in the jolts where we haven't seen a huge increase in unfilled positions is construction, I believe. But other than that, it feels like it's up a lot. You know, health care, financial services, professional services, manufacturing, retailing, you mentioned leisure hospitality. the, do I have that right?

So in our data, it is a very similar trend. That it is, it is the differentiation there. It's just like how much things have grown, not whether or not they are, whether or not they are above the pandemic global or below it. And that, I think, was, that's the case now back in late 2020, early 2021. There's not so much the case, but really it was that spring of 2021. and we're trying to see things really sort of explode when it came to job postings on our platform, but also I think that characterizes the Jolt's opening's data pretty well.

What about regionally? Do you have any sense of this across the country? Is it just uniformly coast to coast? So we have, we're able to look at our data by metropolitan areas, so MSA. And one thing that we noted is still the case now is that a lot of the larger metros have seen slightly weaker job posting growth than other parts of the country. And part of that is compositional, just like some sectors have bounced back, or occupational groups have sort of bounce back much quicker than others. And so some of the like hospitality and tourism or even some of the like loading and stocking. So that's sort of where. housing jobs, those have bounced back quite a bit, and they tend to not be concentrated in some

these bigger metros. But also one thing that we saw in our data fairly early on, sort of the bounce back from the pandemic, was that we were seeing weaker growth in job postings for food service and retail jobs in some of these big metros, which also were metros that tended to have more uptake of remote work. So it would, and this is actually something we saw. saw in our UK data too, where basically cities or metropolitan areas where there was more remote work or even more direct measures of fewer people going into downtown business districts. You're seeing weaker growth in postings for food service and retail jobs.

We're to think about it sort of there's less demand for going to a lunch spot or an after work, happy hour place, if there's fewer people in the downtown area. So it looks like that sort of shift in movement of people within metro areas was having a spillover effect when it came to demand for positions that basically relied on people going to those areas. So it's up everywhere, but you're saying not up as much in big urban centers where remote work might be a might be an issue, that people are leaving those big, have left those big cities and moved to other parts of the country. Essentially, yeah. Yeah. What about globally? Do you see the same thing?

I think you mentioned you're in six or seven countries. Are you seeing the same thing across all six, seven countries? Roughly. So I think. Roughly. So it is, we are seeing that demand or sort of postings on Indeed are elevated across, you know, the seven markets that we've been tracking throughout the pandemic. It's just the extent to which they have risen.

The U.S. definitely saw much more rapid growth early in 2021. So sort of that initial stage of the reopening of the economy. But now I think, you know, we have seen some fading, say, in the U.S. and job posting on our platform. But Canadian job postings have held up more than others. We know that we were in Toronto and we were listening to your clients in Toronto. And they, some of the stories were pretty incredible. You know, we're trying to hold on to labor. Talk about a quit rate.

They were really having trouble. Yeah. So I think, especially in 2021, a lot of what we were seeing was that there were trends that were starting. You'd see it happen like sort of first in the U.S. and then the U.K., Canada, and then sort of continental Europe, where it was like demand started surging. Our posting started picking up and sort of sequentially went along the line. And even just anecdotally, because a lot of our economists also talk to clients as

up and deed as well, and sort of like the stories about, hey, we're having hard time feeling all these positions and then sort of concerns about labor force. participation, you start, again, it followed like the same route of which markets it was happening at. Let me ask you, look, of a pet theory I have, which I can't prove one way or the other, but it doesn't mean I can't hold to the pet theory. So, but maybe you can disabuse of me of this, is that not all job postings are equal that, you know, I call them, I would call them soft openings.

Like, you know, economy reopened a year ago, now a little over a year ago. spring of 21. Everyone back to work posted a lot of job openings. And once you put up as an employer, you put up openings, you're reluctant to take them down. But you can do a lot of things to keep them up, but navigate around. So for example, okay, just don't hire that anybody until the next budget year or downgrade the position effectively from, you know, a high skill to a medium medium skilled or a medium skill to a low skilled. You know, there's a lot of, not all job postings mean the same thing. Can you measure that or do you have any sense of that?

Do you think that's having any impact on what we're observing? Yeah. So I think I broadly agree that not every posting is equal to other postings, but I think there are ways that we've looked at our data to try to understand, you know, how much that has shifted. So, you know, on that first point, the idea that there are some, you know, I've heard people first as this sort of perma posting, that people put up a posting and let it set on the platform.

That's a great way of describing it, permaposting. So one way that we try to account for that in our data is that, so I've been talking about the sort of series that we create a job postings. That's sort of the total stock. We also do create a series that what we call new job postings. So it's postings that have been on deed for seven days or less. So it's more of like a flow metric. So you imagine if there's those perma postings,

they're just not included in this metric because we can see how many days a posting has been on Indeed. So we've sort of track what that measure has done. And over the course of the pandemic, it's been, it's more volatile. It's a smaller share of postings. And it's, you know, it's more, it led the way down and it led the way up. But the trends are basically very similar where like it follows the same course. So I think, you know, when it comes to, you know, recruiting, there's definitely some

postings that are like endure for quite some time. But we have a metric there that shows, you know, when it comes to just new postings, it paints a very similar picture of what's happening to at least hiring intentions. And also that, you know, there could be those perma postings, but even if we were to, say, an increase in the duration of job postings on our platform, that also, you know, it could be reflective of some of those tactics. It also could be reflective of just it's harder to hire for those positions and that there's a thinner market for the kinds of thinner or tighter market for a higher.

So it's going to take you more time to fill that position. So that could be one. But I do think that do the new postings accounts for that. And then there are other. So your sense is that that that's not a significant phenomenon here. That we can't discount the level of postings compared to where we were a year ago or that that's not right. That the postings we're seeing now are as good a posting as was about a year ago, roughly speaking. Yeah.

And that phenomenon existed back in 2019. It existed now. I have not seen any indication that it has become more common or more prevalent than it was. Okay. back before the pandemic. Okay, interesting. Do you see any differences by sector or occupation along those lines? So is the banking sector more likely to have a lot of promo postings or has that trend shifted

than other sectors like services? So we haven't done any like direct analysis or like coming up with a metric of like the perma posting share of Indeed postings or anything like that. We do look at those new postings by sector. and for the most part, like the aggregate series, the new and total postings roughly move in line. So I think it's my read is that we've, at the sector level, it doesn't look like there's been a significant change in sort of the cross, like the cross section or within a sector. It doesn't look like there's been a material change there either. So there's no real compositional shift.

It's what I'm hearing. It doesn't look like it. Yeah. Okay. Yeah. we need an ECI for Indeed job postings. Yes. So that actually is something that we have not done,

we have not released this for the U.S. yet, but my colleagues in the UK have used data on salary and wage information and indeed job postings and I've calculated basically a compositionally adjusted measure of growth in offered wages in postings. It does look like it sort of leads. Gosh, I have so many questions. I've got so many questions. questions and I've got so much ground we want to cover. I'll ask one more kind of in the weed kind of question. Sure. And this goes to my ignorance around your business model.

Do you do employers pay you a fee for the posting? So they're unlike like Moody's could have a posting, but you know, we're not going through it. I don't know if we go through indeed or not, probably not. There's no penalty to keep that posting up there, you know, per se. But if I'm paying you a fee, indeed, there's a penalty and therefore you might not see the perma postings. Do you see where I'm going with this? So the idea being that if you're not a paying customer of Indeed, like it's more like the, yeah, that shifts in who. So let me put this way, the way that like a posting shows up on Indeed, you could be a paying customer or not. what Indeed's trying to do is capture all the job postings on the internet and putting it in one spot so job seekers can find it.

So if paying customer or not, it's going to show up on our platform. And there's like rules for the platform so that they try to be applied consistently so that if there has been a posting on the platform, even if it's not put on the platform by an employer, that someone in Indeed saying that's been up there for X period of time. Well, I have to say, now I'm getting the real sense of why you took that job. This really is interesting. You've got a lot of really cool stuff to look at. I got two more things I want to explore. So Moody's does have postings on indeed. Oh, do we?

Do we? Oh, so they must be. Well, thank you. That's great. It may be unpaid, is what I'm hearing. It could be unpaid. I don't know. We don't know.

I have no idea. We don't know. We don't know. I have no idea. I have no idea. I have two more questions about this. Then I'd like to play the statistics game, and I have a sense you're going to be really good at that.

I can feel it in my bones. Yeah, there you go, fingers crossed. And then I want to come back and talk about remote work, and we've got to all do that. We've almost been talking for an hour. I can't believe it. It feels like this is going so fast. But my two questions, first question is,

how do you square that? compared to other measures of labor market slack, like Ryan's favorite measures, the employment population ratio for prime age workers, that are the rule of thumb there is 80% EPOP, prime age 25 to 54, we're at 80.3, which says, okay, you're within spitting distance of where we should be, or labor force participation, or, you know, the other one is the fact that we're just creating so many jobs. I mean, how can the economy have a problem with labor market slack if it's creating three, 400, 500,000,000 jobs a month? I mean, that doesn't feel like a labor market that's running out of people.

So how do you square that in your thinking about this? So earlier in our conversation, you said you were confused, and I all have to about the state of the labor market. And I have to admit that I think about this a lot. And there's just lots of conflicting signals. and that, but I think I have a story in my head that tries to square as much as possible. So I'll say that like Ryan, I'm a big fan of the prime age to, prime age employment to population ratio. I think before the pandemic, back in 2018, 2019, if you'd ask me what would be like my top measure of lay market slack, I would have said that.

But I think what happened is we just entered a dynamic where, you know, the recovery we saw after the global financial crisis in the labor market was sort of a slow and steady one, where demand was growing, you know, slowly but steadily, and supply was like coming back with a lag. And I think that's happening right now. Just everything has been turbocharged and sped up. So that demand, which leads supply in the labor market just went firing ahead really quickly. And there have been a variety of factors, especially, you know, in the depth of the pandemic. and the immediate aftermath as we sort of transition out of the acute phase that really held back

participation. And some of them are fading. So, you know, fear the virus itself, even after vaccination, looked like there's evidence there. There's some of these excess savings or financial cushions that seem to have helped some people ride out not working. And then also some like child care issues, which at least compared to pre-pandemic baselines have faded. So that, We're just, it was a very demand, like a quick rise in demand. And that is why I think measures that account for either the level of demand for workers or like job to job flows are better capturing what's happened to late market right now, rather than a recovery that's like a slow and steady drawdown of supply. So I think that is sort of the story that I tell myself, that it's just the speed of the recovery, even if there's the destiny. nation, we're not quite at the level. So I think it's more of a, to put another way, is that

the sort of the tightness or the temperature of the labor market is being driven now by the speed at which it's moving, not its distance from its final destination. So that as things slow down, you might get a fading in the tightness of the labor market or that temperature might decline a little bit, but it'll sort of get back to where you would have expected if, say, the prime age employment to population ratio gets back to that pre-pandemic or a little bit higher. So it's sort of like overshot what you would think given supply at the level of supply or level of employment because of the speed of the recovery. Okay.

Very interesting. So now I want to last question on this. And unless Chris or Ryan want to explore something in more depth, but the crux of the matter, wage growth and ultimately inflation. and, you know, if you go back before the pandemic, you do a nice scatter plot over time comparing employment cost index growth vis-a-vis E-pop 25 to 54. Just one axis is E-pop, the other axis is E-C-I. This is the Adam-Ozimek, if you know, Adam. I do.

I'll call it the Adam-Ozimic line or relationship. The Osmec curve, yeah. The Oz-M-E-O-L-A-H-L-E-L-L-L-E-L-L-E-L-L-E-L-L-E. He'll love that of the O-MECMEC. curve it did a beautiful job right the relationship was very strong you know you could see it now you put the pandemic quarters in the chart it's like a level shift up it's like just a literal level shift up and my kind of theory up to this point has been well that's a one-time level shift okay gas prices oil prices surge gas prices surge food prices surge going back to the russian invasion we had all these shortages because of the supply chain issues, vehicle prices. Workers said to employers,

hey, you know, look what's happening here. Give me a bump to my wage. And so you see this level shift up in wage growth. But if that kind of narrative is correct, that diagnosis is correct, then as now that oil prices are back in and we start to see, you know, these inflation for food and vehicle prices, all the things that we think we're pretty confident are going to happen here. Assuming the invasion doesn't go down a dark path or we get another problem with the pandemic, we're going to see that wage growth come right back to the OZMEC curve. And life is good. You know, we don't need to see the Fed jack up interest rates to a place where we're going to push us ourselves in the economy.

What do you think of that theory? So I have similar thoughts, but I think for me, the story of like how we get back. back the OZMEC curve, and I hope Adam really enjoys this, is that... Oh, he will. He will. He will. Oh, he's going to tweet about this. He can feel it.

He better. He better. He better. He better. Because you're a big Twitter guy, too, I believe. I am, unfortunately. What's your Twitter? What's your Twitter handle?

It's just Nick underscore bunker. Okay. You see how I'm helping you advertise here, Nick. I appreciate that. Thank you. And I'm at Mark Zandi. I'm just saying, yeah. plug everyone.

Brian is rolling his eyes. I knew that it was coming. Yeah, absolutely. It's been a while. It's been a while, yeah. Anyway, sorry, Nick, I interrupted you. Go ahead. No worries.

So I think my view of that is that one of the things that differentiates sort of 2019 and 2022 labor markets, even if they have somewhat similar employment to population ratios for primary workers is that the quits rate is much higher. That, you know, within employment, there's far more churn in particular. particularly in sectors that already had lots of voluntary churn, so quits, so leisure, hospitality, retail. So I think some of that dynamic is, it's those sectors. That's not reflected in that metric because an employed person is an employed person

and an employed person in that metric doesn't account for like lots of churn within that metric. I think a story I could tell is that we start to see the quits rate start to really fade from, you know, the very, that's still high levels we're seeing right now, it has faded a little bit this year, but still well above pre-pandemic levels. You know, that could start to come down. I think the issue there is that some of the sectors that have seen the biggest rise in churn that have seen some of the strong wage growth aren't sectors that aren't necessarily directly affected by interest rates. It's like if the Federal Reserve is trying to cool down wage growth, their tools might not be well equipped just because, you know, There's a lot of safety leisure in hospitality. It's hard to see the direct pass through from higher interest rates necessarily to fewer people going out to restaurants. You know, I have this bad feeling when we get to the odds of recession where Nick is going to land on this. I'm just getting that dark foreboding feeling. Okay.

All right. I think you need to worry about Nick. I think you got to worry about Chris. Oh, yeah. Oh, yeah. We already a conversation last night. We already had a lengthy conversation about this. Yeah.

What was I going to say? Oh, the game. We're going to play the statistics game now. And that is, just to remind everyone, I know people get annoyed who've listened to the podcast before, but, you know, tough. I'm the moderator. How do you play the game? Oh, the game. Each of us give a statistic. The rest of us try to figure it out with the clues and questions, deductive reasoning. The best statistic is one that's not so easy that we get it slam dunk, not so hard. that we never get it. And this is where I kind of go off the rails a little bit. It has to be related to what we're talking about and the statistics of the week. Sort of.

You know, that would be nice. Okay. Chris, I'm going with you first. Let Nick absorb this. You're up. What's your statistic? You want easy but clearly highly relevant or hard. I want one that I can get, Chris, you know, before one.

Before Ryan gets it. Yeah. I want one you guys didn't talk about last night. I'm going to go hard. Yeah. Nick is tough. No, we didn't collude.

There's no collusion in this thing. No. Every man for himself. Okay. I'm going to give you a three. This is tough. What? Three related statistics.

Oh, okay. I thought that statistics was three. Okay. No, no. 15.8 percent. 61.2 percent. and 188.8%. Oh, goodness.

And they're related. My guess is Chris is going different CPIs. It is CP. No, not by country. Oh, oh. By country. Kind of sort of, but not all CPIs. One of them is a CPI.

Are these natural gas prices? Oh, you got natural gas price. Which one? Which one's natural gas? 108 188 is natural gas for which area

Europe? Yes I'd say that's the price at the Dutch port you know what I'm talking about Yeah yeah

That's the The hague The hague I get I get some credit for that I don't know No Damn

Okay okay but that's only one of the That's only one Are the other two Also energy price related They're all energy price-related. Okay.

What were the numbers again? 15.8 is the increase in U.S. natural gas prices. Oh, no, but you're close. You're getting... It's the middle one. What was the middle one? Yes. 61.

61. Okay. Year of year increase in U.S. natural gas. 15.8 percent? No. Oil? It's not gas. It's not U.S. gas.

Is it U.S. related? It is U.S. and it's CPI related. This is a one of the components. Oh, is food? No. No, food is, it's got to be energy related, right? Electricity prices or something. Yes, yes.

Okay, I get credit for that. Geez. Yeah, you get that one. Yeah. Oh, my gosh. All right. That's amazing. Who got that way?

Okay. I think it was a team effort there. Team effort. Nick, Nick, where were you? You got to come on, man. I clearly need to read up more on energy prices. Cover that well enough. No, the trick here is not to read anything.

Deductive reasoning. Deductive reasoning. So 15.8% electricity price year over year, that's big, right? That's huge. That's not inconsequential. And on top of that, the natural gas prices are even higher than that, right? 61% in the U.S., 180% in Europe. So consumers haven't even really felt the full effect of the higher gas prices on electricity prices,

about 40% of U.S. electric generation is from natural gas. But because we have regulated utilities, right, there's limits on how high the prices could go. So my fear is that this is one of those other factors that is going to continue to weigh on inflation going forward, right? Even as gas prices normalize, if they do at a higher level, still utility prices could continue to rise as those rate hikes filter in. The other thing related, oh, sorry, go ahead, Chris. Go ahead. Sorry. Other statistic related to this that came out this week was a study that about 20 million households are behind on their utility bills.

So that is certainly an ominous sign. Well, what's it typically, Chris, do you know? I don't. Okay. It sounded like it's elevated. It sounds elevated, yeah. Well, my, because I look at things glass half full, I should say, is that it feels like natural gas prices, have peaked here. They can't go much higher, at least in the United States, because of the

capacity constraints on LNG, liquefied natural gas. Because the gas prices, natural gas prices have risen here a lot because we've been shipping natural gas to Europe where they're obviously very high because they got cut off from Russian natural gas. But there's a physical constraint on how much can be shipped. We're at that constraint and therefore the natural gas is now bottled up here in the U.S. You can't do any more arbitrage. And therefore, the price has peaked. Does that, does that resonate? I think for now, and also the demand maybe is moderating in Europe to somebody, right? They are at, yeah, they are close to their capacity, right? Yeah, right. Yeah. So I'm not particularly concerned about, obviously, should be concerned about

anything that could happen, but I think we're in reasonably good shape now as we go into this, this winter. I'm actually more concerned on the other side of this as we get to the spring and summer of next year, right? Europe would usually be filling up their tanks with Russian gas at that point. Much of the gas in their tanks today is already Russian gas. What happens then if we are still in this situation where there's no gas provided by Russia? Yeah, the U.S. is going to try to supply the world at that point. But I think that will continue to put significant demand on prices.

Maybe prices don't go up significantly, but I don't see them coming back down anytime soon as well. Yeah, makes sense. Hey, Nick, you want to go next? Sure thing. So my statistic is 17.9%. Is it labor market related? Yes. Did it come out this week?

It did. Ooh. Is it an Indeed number or is it a government statistic? It's a government statistic. Okay. 17.9. That would have been good, though, to use an Indeed number. Yeah.

I thought about it, but I didn't want to be that much of a shill. You would have gotten quite a bit for us, man. Yes. I figured that as well. Borderline cheating. 17.9% labor market related came out this week. Unemployment insurance claims related. Nope.

No. Did it come from, do you come from an NFIB survey, the small business survey? Nope. Nope. Okay. Nick might be going like the American Time Use survey. Oh, really?

No, I'm just saying, I don't know. Not much came out. Lebron. Yeah. That's some, That's where we're struggling. Labor market related. Anything you with the rail strike?

Not with the rail strike? Any other strike? Is it a number of, a number, it's related to strike, strike action? It's not related to strike action. Oh, gosh.

Mark was getting excited there. I was getting so excited. Yeah. Almost that. I came out this week. Yeah. Can you give us another? Series.

It gets released. So it is a new statistic from a regular series. Oh. That's interesting. Oh. It's going to be good. Yeah, we're going to learn something here. Hmm.

That claims. Can you give us another rough hint? Yeah. It came out from the Census Bureau. That's a good one. That's another good one. Yeah, I don't know. I'm stumped.

I'm drawn on blank. What is it, Nick? Yeah, so this is from the Census Bureau released a new data from the American Community Survey. So 17.9% was the share of people who worked primarily from home in 2021, which is up from 5.7% back in 2019. Oh, that's a great statistic. That's an awesome one. You should get a cowbell just for a back. Thank you.

Thank you. Very, very well done. Very deserved us. I feel a little ashamed. All the criteria. All the criteria. for obviously remote work, which is something on the document for us to talk about, but also the fact that when it comes to official statistics on the number of people actually

working remotely, it's been a bit tricky to track that because in May of 2020, the BLS and census added this question to the household survey for the jobs report asking about people working remotely. But the way they phrased that question was because of the pandemic. So that number has been drifting down over time. But mostly that's probably people saying, well, I'm not doing it because of the pandemic anymore. So this metric accounts for that by asking people, do you work primarily from home.

And it's more than triple. Like it's tripled over a two-year period. And I also like that it's phrasing about primarily at home as opposed to like just working remotely, which I think is a bit more wishy-washy. So this is from the American Community Survey. So, okay. And we only have two data points, one from 2021 and one from 2019.

2019, sorry. Yeah, it was 2019 to 21. That is like the number that was in the press release from the census. And I was trying to find the actual underlying data. But I couldn't find it quite yet. But I imagine there'll be microdata sometime soon. Yeah, we take a close look at that. That's fantastic.

Okay, well, let's do one more because we got 15 minutes left. and I do want to talk a little bit about remote work. Can I ask Nick, though, can we have you back? Because we're not having enough time. We're not having enough time to dig into the remote work thing as much as I'd like. Is that okay? Would you come back relatively soon? Okay.

All right. You wouldn't tell me otherwise on maybe he'll, he's going to send me an email on Mark. You know, I'm not so sure. I want to come back, you know. Yeah, I'm not going to reverse my opinion on this. Okay, very good. Okay. One more.

We'll do Ryan. Ryan. You go next. All right, so it's a goose egg. Zero. Zero percent. Okay. CPI related?

It is not. Well, prices affect this thing, but it's not directly in the CPI. It's price related. It's not price related. Retail sales related. Is retail sales related? Is this the control group for retail sales? Yep.

Yeah. Oh, I told you he's a rock star. He's a rock star. Yeah. Thank you. Thank you. Yeah. And July was revised lower.

I got cut in half. So it was up 0.8% initially. Now it's up 0.4. And why this is important, this feeds into the... Explain, can you just explain? Yeah. So control retail sales. Total retail sales, excluding autos, building materials, gasoline, and restaurants.

So this feeds into the government's estimate of real consumer spending. So with the new revision to July, the new August data, real consumer spending is on track to rise. less than 1% annualized in the third quarter. This might not be a very good reflection of the entire state of the consumer because we're shifting away from goods stuff, which is retail sales, into services. So we'll get services data later this month. But right now, spending looks a little soft in the third quarter. And that lowered our tracking estimate from 1.7, our tracking estimate for GDP from 1.7 to 1.1% annualized. So it's kind of the same pattern that we've seen in each of last two quarters. We started off okay. And then as the source data came in, we were just started nosediving.

So you know what I'm going to say? You get a third quarter. Oh, no. That's going to kill me. Then how are we, how, geez, how do we, so if it declines, I got this question at a presentation I gave. And it was an interesting question. If we get three. I know. And I said it depends on, you know, what drove the decline. If it's inventories and trade again, then no, I wouldn't say it's a recession, but it's going to be harder and harder to. Oh, my gosh. Oh, right. Okay. The job full of recession. One thing you, one question you might not know the answer to quickly is

retail price inflation. Do we have a sense of, because, you know, for retail goods, inflation can be very different than, you know, for the CPI. They're, you know, obviously going to be tied to each other, but do you have any sense of that? You know, what's the inflation rate for retail goods in the retail sales report? That's a great question. I don't know off the time I had. Okay. But I can look it off for you.

Yeah, because I, you know, we should start seeing some weakness there because of all the, I think we have. Yeah, we have. So, okay. So that goods disinflation is happening. It's just not as significant as I think we were anticipating. And this is really into the battles, but quickly, in your, in the tracking, GDP tracking, are you using overall inflation or are using retail goods inflation?

We use retail goods of inflation. So the model, I run it and it spits out the number, and I don't have to, I can go into the model and look at what the retail inflation is. But we map it to the high frequency model is a bean counting approach. We use similar methodology as the BEA users to calculate GDP. Okay. All right. Okay. Let's move on.

Just for sake of time, I had a great statistic, but I'm not going to give it to you because I want to get to remote work. So, Nick, maybe you can just riff a little bit. here and just give us a general sense of your take on on remote work obviously it's it's becoming more of a deal 17.9% in 20 I think you said that in 2021 that's pretty significant rising so what do you think is this here to stay and what does it mean I think it's very much here to stay that I think what we saw in prior to the pandemic I think for a lot of jobs there was this potential for jobs to be done remotely and by remotely, I mean sort of totally untethered from location with the U.S. sort of the situation I'm in, but also more hybrid work.

So people working more days remotely, but still going into the office from day to day. The potential was there. It just took sort of Zoom existed. I've been using Zoom since like 2018 video conferencing. The technology was there. We just need a shock. And unfortunately, a shock that we got was the pandemic. But what we've seen is that, at least,

the acute phase of the pandemic is now over. People are starting to leave their homes, go to offices, but we're still seeing remote work endure. And this is something that we can see in Indeed data that we've been tracking the share of postings across a number of markets that mentioned terms related to remote work. So sort of the share of postings are advertising remote work.

And that jumped up significantly in the early days of the pandemic, but it's not drifted down. I mean, it's come down a little bit, It's still very elevated in the U.S. in 2019. It's about two and a half percent, somewhere in the two, two and a half percent of postings mentioned those terms. Now it's 8.8 percent. And so it's been a significant rise.

And that's something that we're seeing hold up across markets. So my colleagues did a joint report with the OECD on this, and you look across 20 different markets that deed has coverage of. And you can see a similar trend, that restrictions and lockdowns happen. in the spring of 2020, remote work really rise, but that there has been some gradual shift down, but there's been no significant retreat of it, even as we're starting to get closer to a post-pandemic life. It looks like the adoption is pretty sticky. Yeah, I don't see this. I think it feels like a game changer to me. I mean, it's going to happen and it's going to flow. I mean, I assume as office

buildings reopen now here in New York and in L.A. San Francisco and CEOs are adamant that they get their folks back into those towers, that we're going to see maybe some unwinding, but that doesn't feel like that's the trend. The trend feels like, you know, we're going to continue to see more remote. People want it, workers want it, and given the state of the labor market and given it feels like we're going to have labor supply issues for a long time to come, given demographics, workers have the upper hand in these kind of negotiations. They're going to get it.

Yeah. And what we can see is we're also tracking searches on the Indeed platform, the share of those searches that are for those remote work key terms to understand job seekers interest. And that is a little under 10% of all searches on Indeed right now in the U.S., which is, again, I think that's more than four times what it was before the pandemic. And that that is not directed down nearly as much. What's also interesting is that there has been a decline in the share of postings that mentioned remote work or advertise remote. work beginning of this year, but a lot of that is like a compositional shift. They've just seen postings pull back more in software development, other tech-related jobs. But if you look inside of those kinds of jobs, the share of those postings that advertise remote work has basically

held content over time. And for software development, it's just south of 40% advertise remote work. And there's a possibility that more of those jobs are remote or flexible in some way, but just don't advertise it. So it does look like, you know, it's one sector. It's one particular remote-friendly sector. But even as, you know, demand for workers, like, as postings have come down, there hasn't been a shift within that sector. So it's not as though, so those employers are retreating and, like, becoming less willing to advertise remote work. It's just that they're pulling back in general. Yeah. The other narrative I have in my mind, I'm just curious what you think, is that with technology, as it continues to improve.

And also, as businesses form, they're more likely going to optimize around remote work. They're not going to optimize around the cube or an office space. That those two dynamics, technology and business formation, that's just going to reinforce this move towards remote work over time. Yeah, if you think about it, I think part of the, one of the barriers still at this point to remote work is just for incumbent or existing businesses. like they had a way of doing business before the pandemic that was pretty reliant on people being in the same spot and like having face-to-face meetings. So if you have new companies and all they know is a remote first or hybrid first world, there's ways they can sort of set up the structure of their company to be more remote friendly.

And maybe some of that is even within a company, there's distinction within certain job types that, yeah, there's some jobs that need to, within a company, need to come into the office just because face-to-face, interaction, same with clients is really important, but there might be some jobs within the same firm that management decides it's fine if you just, you know, video conference in for certain calls or just visit the office a few times a year. So I think that distinction between, you know, even within a company, the certain kinds of jobs or occupations that can be done. And then also how much of the future of remote is hybrid. So sort of just stay in the same metro area versus fully remote because for the most part, the rise has been a lot of hybrid work, even if there has been an increase in people who have, myself included, moved to different metro areas

over the past two plus years. Well, here's the money question. Is this positive for productivity or negative for productivity? I mean, you've got the CEOs on one side of this, or seemingly, and I'm painting with a broad brush office, not every CEO, but you got some pretty vocal CEOs saying this is you know people are taking advantage they're not they're shirking it's hurting productivity it's hurting young young workers because of a lack of mentoring you miss the kind of serendipity the it's the water cooler I have a hard time saying that because I can't there's no such thing but anyway and then you got the economists saying oh well you know you look at the data and we don't have a whole lot of data points yet, but they're pretty, so, you know, what do you

think? Is this productivity enhancing or productivity impeding? So I think if I had to come down one way, I did be on enhancing. I think, you know, there's the research that I've read and also personal experience have indicated that it's not really been a huge hindrance to productivity. I think Nick Bloom and his, Nick Bloom was at Stanford and his co-authors have done some research on the productivity, sort of wider effects. It doesn't look like it's, it definitely doesn't look like it has held back productivity. In terms of like, again, this is more personal experience, but in terms of like serendipity or the digital water cooler, I think that's just a, requires a shift in people's perspective

about how you do work. Now, my bias is that I've, even before the pandemic, I was at a team where very few of us we're in the same city, but there's ways that you can do things digitally. It's actually really easy to just chat with someone, be like, hey, you want to jump on a call really quickly to talk something through. And also there's the fact that just because you're based in one area doesn't mean you can't from time to time all meet in person. Our team has done that back in July.

We did a meeting where we all sort of convened for the first time for the pandemic, and it was really generative for ideas and lots of great research possibilities came out of it. You don't need to do team brainstorms every week or every day. You can sort of plan that out and have some of the benefits of those in-person contact, but getting some of the benefits also of more of the day-to-day work being remotely or done at home. Let me ask, because we are running out of time and have a hard stop. Are there any, is there an economist out there or economists out there that are coming up with opposite results? I mean, you mentioned Nick Bloom.

I've seen stuff out of the University of Chicago. You've seen your great work on this and others. I've not seen the other side of this. Have you? I have not. I do wonder if part of it is that if there are potential issues, and that that's the sort of thing that's been highlighted by, you know, again, broad brush. like CEOs or like senior management, it might be something that doesn't pop up for quite some time.

Like one thing, potentially, you know, mentoring or career advancement, maybe that's something that doesn't show up in the data a few years down the line. So maybe it's less there is no. Unintended consequences. You don't know.

Or unintended consequences. We need. Reality needs to. We need time. For us to see that. Yeah. Okay. Okay.

Definitely. I'm going to book you right away to come back on. And we're going to dig her deep. dig deeper into the remote work. And maybe we, I just had a brilliant idea. I don't know what you think. Why don't we get Ozamec on at the same time? Wouldn't that be fun?

That would be fun. Yeah, it would be fun. Yeah. Maybe we can get you two to argue with each other somehow. We'll figure that out. Not happy to do that. Okay. I knew you would be.

And here's the other thing. Adam and I do agree on a lot. So it might be less of a situation. Okay. Well, then I'll pick a fight with both of you. I'm really good at that. Yeah, I can do that. problem. And what was I going to say? Oh, probabilities of recession. We can't do it.

We ran out of time. We're no, so I do feel, how convenient. The world will never know. No, wait, wait, wait, wait. On Monday, don't we have a podcast live in person podcast? Don't we? We do. Okay. We do it then. We'll do it then. Nick, are you really bummed that you couldn't tell us your probabilities of recession? Or do you like? I'll survive. Well,

where you're coming back and don't know, this thing about recession is not going away any time soon. I'll refine my estimate so there's four decimal points. All right, you got it. Well, next time you're back, we'll probably be in a recession. So.

Yeah. Maybe booked me before you. Oh, yeah, with that GDP number. You're scaring me with that, Ryan. I'm getting scared. Gosh.

Okay. All right. With that, we're going to call it a pie. This is a great pod. Thank you, Nick Blu. Nick Bunker. Thank you so much for coming on and really enjoyed the conversation.

And I'll see you guys on Monday, right? See you on Monday in the office. In the office. Yeah. Don't get used to it now. You know, we're remote now. Okay. All right.

All right, guys. Take care. Have a good weekend.