Why higher productivity doesn't equal wage growth
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What impact does the government shutdown have on economic data?
Remember what happened to economic data the last time the government shut down? Yeah, that again. From American Public Media, this is Marketplace.
In Los Angeles, I'm Kai Risdahl. It is Monday today. This one is the 2nd of February. If you can believe that, it is good as always to have you along, everybody. We're going to give you the bureaucratic language first. Then we're going to do our best to tell you what it's going to mean. Due to the partial federal government shutdown, read the email that Marketplace's Carla Javier got from the Bureau of Labor Statistics this morning, the BLS will suspend data collection, processing, and dissemination, end of quote. Sadly, for those of us whose job it is to know what is going on in this economy, especially at this low hire, low fire moment, what's going on in the labor market, that means we are not going to get the December job openings and labor turnover survey that was supposed to come out tomorrow.
Jolts is what we call that. And also probably we're not going to get the biggie, the January unemployment report that was due on Friday. All of that said, though, and on the theory that we're going to get the data tomorrow, Eventually, Carla made some calls to see what people are going to be looking for whenever.
Not only will these data show what's been going on in the job market recently, they'll also update the understanding of the past year through a process called benchmark revisions, says Daniel Zhao at the job site Glassdoor.
We might get a very different picture of 2025 in hindsight, where the job market was actually much slower than we originally thought and thus much closer to stall speed.
Whenever these jobs numbers are released, he'll be looking closely at health care.
It's been the pillar of jobs growth over the last year or two years. And so any slowdown we see in the health care industry is concerning.
The latest reads showed a labor market that overall is stagnant. Laura Ulrich at the Indeed Hiring Lab says she doesn't see anything in its internal data that makes her think there'll be big swings. I'm expecting to still see hires rates low, quits rates low. The layoff number, though, will be interesting because we have seen more at least media reports of layoffs, but not an increase really in unemployment claims. If the jobs report is delayed by a day or two, that wouldn't be a big deal, says Jesse Rothstein at the University of California, Berkeley. But if the shutdown drags on again and the data gets tangled up in it again, he says...
It means that we're flying blind, that we don't really have up-to-date information on how the labor market is doing at a time when we're already flying kind of half blind because of the effects of the October shutdown and at a time when the labor market seems to be teetering on an edge and it's not clear if or when it's falling off that ledge.
And if these data delays and disruptions become the new normal, he says that can make the picture of the labor market even fuzzier and harder to react to. I'm Carla Javier from Marketplace.
It wasn't anything fuzzy at all on Wall Street today. We will have the details when we do the numbers.
You know by now that President Trump has made his pick to replace Jay Powell when Powell's term as Fed chair is up in May. We did talk a bit on Friday about who Kevin Warsh is and what a Warsh Fed might look like. But there have been 16 chairs before Warsh over the course of this institution's 112 years.
You're going to have to live with the fact that forecasts have a range of uncertainty. Irrational exuberance.
In my opening remarks, I'd like to briefly first review today's policy decisions.
But first, I'll review recent economic developments in the outlook.
And we are well positioned to wait to see how the economy evolves.
Extra points if you can identify all those voices. But our point is that sharing the Federal Reserve is arguably the most powerful job in this economy, which means the process for how we get new ones matters. So we've called three historians to talk about that process and how it normally works.
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Chapters
6 chapters
1
What impact does the government shutdown have on economic data?
0:02–8:15
2
How is AI related to recent layoffs in various companies?
8:15–13:38
3
Why does higher productivity not lead to wage growth?
13:38–14:48
4
What factors are contributing to the stagnation of wage growth?
14:48–17:27
5
How does global debt affect the economy?
17:27–19:32
6
Is rising global public debt a concern for future economies?
19:32–26:23