In a recent episode of the Top of Mind podcast by HousingWire, host Mike Simonsen engaged in a discussion with Guy Berger, the director of economic research at The Burning Glass Institute, about the current and anticipated trends in the labour and housing markets as they approach the end of 2024 and into 2025. The conversation highlights the interconnectedness of employment dynamics and housing conditions in the United States, reflecting on the changing landscape shaped by economic factors.
Berger provided an assessment of the labour market, stating, "Things are good, not great." He noted the low unemployment rates, which while historically low, are beginning to rise slowly. This gradual increase does not yet signal a significant downturn; however, Berger pointed out that concerns about a potential recession earlier in the year have not materialised into a more alarming situation. He described the current climate as a "very slow, gradual cooling in the labour market," suggesting that any significant shifts are yet to be observed.
The conversation also introduced the concept of "the Great Stay," a term used to describe the parallel between employment and housing stability. Berger explained that employers, scarred by the mass layoffs during the pandemic, are opting to retain their workforce instead of engaging in aggressive hiring. "I’ve got to ride this out, so I don’t want to let go of my existing workers," he observed, indicating that businesses might continue to curtail new hiring rather than resorting to layoffs, thus further stabilising the labour market for the time being.
Simonsen also highlighted the dynamics within the housing market, pointing out that a potential surplus of homes for sale could evolve if more homeowners decide to sell in the current climate. However, both he and Berger acknowledged that, as of now, there appears to be no significant indication of an inventory increase in the housing market.
The discussion shifted to regional variances in the labour market, particularly driven by migration patterns. Berger noted that the movement of people towards regions like the Sun Belt is influenced by warmer climates and economic opportunities. He remarked on how this migration trend fuels both labour supply and housing demand, stating, "People are buying houses or renting."
The impact of artificial intelligence on the labour market was also a topic of conversation. This emerging technology is reshaping various aspects of employment and could potentially alter workforce dynamics moving forward. As the dialogue concluded, Berger provided insight into future trends, emphasising demographic transitions such as an ageing workforce. He raised an important question regarding the median age of American workers and homeowners, suggesting that declining birth rates might affect turnover rates in the years to come, adding another layer of complexity to the employment landscape.
In summary, the discussion provided a comprehensive overview of the intricate relationship between the labour and housing markets as they evolve through economic challenges and demographic shifts, highlighting the cautious optimism prevailing among businesses and the labour force alike.
Source: Noah Wire Services