2024 The year we hold our breath.

The last couple of years we’ve felt like  been tumbling down one stair case after another. Hoping, after reaching the bottom of each flight “this has to be the bottom” but it just keeps going and going. Sure, some areas have done ok in the economy but by-and-large every business sector is looking over their shoulder and cutting costs and jobs rapidly. The real estate market has been feeling the head winds of high interest rates, less demand in several areas which has halted hiring and creating lay-offs. As I researched more into our sluggish market ( source: JOLT reports from US Bureau of Labor Statistics) looking for signs that we will be returning to healthier hiring trends I learned something that I never would have thought possible and felt I should share this with all of you. Turns out one of the major tools our current Federal Reserve Bank is using to combat runaway inflation is, Job Loss.

Everyone looks at lay-offs as a bad thing. As well we should, it causes a loss of needed income to families and individuals, drastically changing the trajectory of peoples lives and careers. The stress alone from getting laid off is huge. But evidently the Fed looks at this very differently. Jerome Powell (chair of the Federal Reserve Bank) sees job losses as a positive indicator in the war against out of control inflation. The idea being, jobs need to be lost in order to bring down inflation more “naturally” by calling on businesses to reign in their expenses as interest rates rise. “the intended consequence is to prod firms to lay off workers to cut costs. The theory of the Fed is that if more people are unemployed they’ll spend less money and inflation will slowly edge downward”. Wow, I never expected such a heartless  plan! I had to re-read this report about 5 times to understand that this wasn’t an opinion piece or some made up post on X. This is real. While prices have sored in the last couple of years putting housing, gas and just going out to eat almost out of reach for the average American the Federal Government’s best solution is to take jobs away! It scares and boggles the mind. This is the best they can come up with?

So now that we are seeing these layoffs happening, and we are in almost every sector, will we start seeing gas under $2/gallon in large metropolitan areas (like we had 3 short years ago), will food prices drop, will construction costs for renovating our homes get reigned in, will mortgage rates decline,will costs in almost every area of our lives come down? All I know is that when the bulk of the population is hurting economically, someone else is getting rich. When prices get jacked up it’s hard to ever bring them back down again unless we all just resist the urge to splurge. We can do that on our own without the Fed’s intervention. 

Finger’s crossed as we head into 2024!