Every month since this pandemic began, Marketplace has taken a look at unemployment numbers. Why? Because, in a sense, jobs have always been the economy.
But are they? Even though recent surveys show labor confidence at its highest level in decades, consumer confidence has been trending down. That split is unusual.
People’s feelings about the labor market and the greater economy usually run in tandem — two parallel lines on a graph.
“Business cycles tend to affect many parts of the economy in synchronization. This business cycle has been different,” said Laura Veldkamp, a professor of finance at Columbia Business School.
Jobs outlook is about people’s sense of what’s happening right now, their answers to the question “If I am laid off today, can I get a job tomorrow?”
But when it comes to confidence in the economy, “it’s a little bit more of an abstract question,” Veldkamp said. “And I think for many of us it creates associations with what might be happening in the longer run.”
If we’ve learned anything since March 2020, it’s that it’s hard to predict the future when it depends on a deadly virus.
“With this health crisis for the last couple of years, certainly there are other reasons to feel uncertain,” said Ayelet Fishbach, who researches consumer behavior at the University of Chicago.
Will there be another variant? Will there be more lockdowns? And a newer element of uncertainty on our minds: inflation.
“The question is how much I can buy with the money that I make,” Fishbach said. Maybe workers are getting a couple of extra bucks an hour, but they’re unsure of how far those extra bucks might go — or if their wages will continue to match the rising prices of goods and services.
But people’s feelings about their jobs and the outlook for the economy haven’t broken up; they’re just taking a break. Those two sentiments are intertwined, per Adam Hersh at the Economic Policy Institute.
“If a lot of people are souring on the economy, they stop spending, they stop buying houses and starting businesses,” he said.
And they stop fueling jobs.