Global Economy Approaches Soft Landing, but Risks Remain

https://www.imf.org/en/Blogs/Articles/2024/01/30/global-economy-approaches-soft-landing-but-risks-remain

by rbanffy • 2 years ago

64 84 2 years ago

imf.org

ulfw3• 2 years ago

Soft landing except for us in tech who have been unemployed for months or years

cj7• 2 years ago

On the flip side, tech was booming during Covid when a ton of people in retail, restaurants were affected.

All industries and all sectors can’t always be booming without there being a perpetual bubble.

We have trouble finding good engineers to hire, so I’m skeptical when I hear people having trouble finding engineering jobs. My assumption (could be wrong) is a lot of people having trouble getting work haven’t adjusted to “the new norm” whether that be decreased salary levels, changing WFH expectations, etc.

E.g. while I might have been open to hiring a digital nomad in 2021, I’m not open to that anymore because there are more “normal” candidates out there who aren’t asking for special treatment or unrealistically high salaries.

AlotOfReading2• 2 years ago

What do you consider "unrealistically high", because I find that hard to apply to what I'm seeing. For example, I was recently contacted about a bay area principal engineer spot for 150-190k. To give some context, a fast food place near my house has signs in the window offering 160k+ for managers.

Maybe fast food is paying exceptionally well these days, but I have my doubts.

EchoChamberMan2• 2 years ago

We have trouble finding good engineers to hire...

You're not looking hard enough.

pm903• 2 years ago

We have trouble finding good engineers to hire

And then

while I might have been open to hiring a digital nomad in 2021, I’m not open to that anymore because there are more “normal” candidates out there who aren’t asking for special treatment or unrealistically high salaries.

Maybe these things are related.

“Normal” has changed. The engineers I know have moved away and are very happy with the flexibility of their new WFH lifestyle and the work life balance it provides. And they will refuse to work for organizations like yours that continue to hold regressive views on WFH.

oytis4• 2 years ago

We have trouble finding good engineers to hire
while I might have been open to hiring a digital nomad in 2021, I’m not open to that anymore

Might be related?

themagician4• 2 years ago

Things are different now. The reality is that probably close to 80-90% of self-described software engineers face permnanet unemployment as they will be replaced by low paid "prompt engineers", likey from India. It's already happening and it's happening at scale. The top 10% will see enourmous income gains as they will be the only people left who actually know what they are doing and how to correct mistakes that can't be corrected via prompt. If you are great you are good. If you are average you are !@#$ed.

The shift is happening fast. It won't be measured in years, but weeks and months. By year's end everything will be different. In 24 months entire career paths will be obliterated and there is no time to retrain. It's a cotton gin moment.

hirako20005• 2 years ago

We have trouble finding good engineers to hire
I might have been open to hiring a digital nomad in 2021, I’m not open to that anymore because there are more “normal” candidates out there who aren’t asking for special treatment or unrealistically high salaries.

Let me rephrase.

"I'm not open to hire people who refuse to be dictated by me, the boss, how they should live their lives. I'm now demanding again that my employees get stuck with locality market constraints as they tend to play in my favor.

Except that, I struggle to find good enginners. I find normal people who aren't good enough to make demands though, thanks to the coordinated massive layoffs, so I will keep fighting."

See, workers, those who truly do the work that is. Have for the most part figured out the manipulations.

A layoff squeeze, or two or even 10 to pressure the job market, to make demands for fairer salary be under control, simply won't work. Temporarily, maybe. As people do need not just to eat but also pay back mortgages. But what it did mostly is creating more noise for the employer side. Great enginners don't get laid off. Those who do know usually very well their value, get recommendations and a new role in no time.

The economy isn't collapsing, demands is there otherwise there wouldn't be an inflation to fight , we need more workers than ever.

the capital refuses to accept a certain reality. That is that Workers will continue to have access to more information. Hence making it futile to exercise manipulations.

I'm for free markets and find the disguised attacks and ambushes against the "working class" appalling. Workers aren't even unionized. They just individually have neurons and access to the internet. The same who have been promoting the idea that we better all get richer finally realized that's not fun, that fewer should be much richer and the rest poorer

piva00• 2 years ago

We have no issues with hiring at the company I work for, dozens of good CVs for each open position.

The difference seems to be that we don't have a RTO policy and actually encourage WFH a lot, you just need to live in a country we have a registered entity for tax reasons, so no digital nomads either.

Maybe your new normal isn't working, you're paying the price for it.

carlosjobim2• 2 years ago

We have trouble finding good engineers to hire unrealistically high salaries

That's expected if you don't want to pay the salaries your candidates want. Admitting to not being able to find qualified workers is admitting fundamental incompetence as an employer and as a business. Hiring and retaining workers is the foundation of any business that employs people.

Haven't it struck you that maybe you are unrealistic about salaries if you are having trouble hiring?

roughly2• 2 years ago

while I might have been open to hiring a digital nomad in 2021, I’m not open to that anymore because there are more “normal” candidates out there

The folks who took advantage of the ability to leave the city and get a house somewhere other than the Bay or one of the three other cities tech was hiring in are older folks for whom moving back to be near family had some resonance. They've now had 4 years to build a life there.

Of course you can't find talented engineers who want to uproot their families and rip their kids away from their cousins, schools, and friends to go live in an apartment in a city and commute to whatever horseshit open floor plan dorm simulator you're calling an office, and especially not if you're not willing to pay an "unrealistically high salary." You'd need to pay me an unrealistically high salary to consider that, too.

As usual, there's not a skill gap or a worker shortage, there's an unwillingness to pay talent what it's worth.

bluefirebrand• 2 years ago

whether that be decreased salary levels

Who can afford to be taking smaller salaries when everything is getting more expensive?

mech4223• 2 years ago

yeah - I think people just didn't realize tech has cycles like all industries, because this is literally the first 'down' in like 14 years...

silverquiet• 2 years ago

Creative destruction is all fun and games when it’s someone else who’s being disrupted. I guess that’s the free hand of the market directing you to another industry.

bee_rider3• 2 years ago

We’ve been telling people for years that a STEM degree is a free ticket to the middle class and studying humanities is a total dead-end. It wouldn’t be that surprising for there to be too many programmers (in some sense; if you ask management there will never be enough as long as we have any negotiating leverage). This is a broader problem than the recent COVID-induced troubles.

themagician4• 2 years ago

We've been telling people for years that a STEM degree is a fast track to a six figure income. And that's been mostly true. But now people are going to find out that a STEM degree is going to place them firmly in the real middle class, not the, "I make $240k a year and live in the Bay Area I'm middle class just like you" middle class.

Possible we might see some real class solidarity if those being displaced can get over themselves.

ak_111• 2 years ago

Sorry to be critical but if you are in tech and have been unemployed for years (especially if those overlap with covid) then you are most certainly doing something wrong and need some guidance. Even now the situation is bad, but not that bad that it should take you more than a couple of months to land some kind of tech job that can pay the bills.

vasco• 2 years ago

Most times in history the real crash only happens a while after rate increases stop, sometimes only after the first reduction. Famous last words I guess.

AnimalMuppet3• 2 years ago

Define "crash". Do you mean a real crash? Or just a recession?

There's a huge difference between a normal business cycle, and, say, 2008 or 1897. In a normal cycle, there's often a lag time between where the economy actually is (especially viewed with hindsight) and where the Fed policy is. By the time the Fed starts reducing rates, business activity has already started slowing down, and six months later they will say that we're in a recession.

In a real crash, I'm less clear on the dynamics, but I think that soon after the economy starts slowing down, some speculative bubble pops because people figure out that it's not going to keep going up forever. There's not necessarily a clear cause-and-effect or timing link between that and interest rates, so far as I know.

afp14• 2 years ago

I think that's the problem, there aren't hard and fast definitions. I think "economic depression" is an unsettling word, so it keeps switching to "recession" or "slowdown" in the same way that what was once a "moron" or "mongoloid" has become "intellectual disability". I think the powers that be worry that if they announce "we're in a depression right now" it could be a self-fulfilling prophecy to a degree. And eventually, one day if not already, they'll be equally hesitant to use the word "recession" at all.

As far as a bubble, yes, it's the evaporation of a huge amount of money. 1929 stock market crash -> all that market cap was lost. In the 2008 crash, home values crashed thus losing a vast amount of hypothetical worth. We were/are/will see a similar real estate crash in the corporate/office sector since the value of these rental units has plummeted post-covid-work-from-home.

photochemsyn2• 2 years ago

IMF economic forecasts are of little value, as everyone should have learned from 2008. Let's see what the IMF forecast in 2007...

https://www.imf.org/en/News/Articles/2015/09/28/04/53/sores1...

forecast: "World growth to slow in 2008, but still expected to remain solid at 4¾ percent "

reality (Fed report 2013): "From peak to trough, US gross domestic product fell by 4.3 percent, making this the deepest recession since World War II."

If climate scientists made forecasts that were this ridiculously off base in the wrong direction, the whole field would be laughed out of the room. How is it that the neoclassical econometric modelers at the IMF aren't? It's more like astrology than science.

chiefalchemist• 2 years ago

The IMF is as much a political organization as it is a financial one. With a HQ in Washington, DC they're certain to drink the same water as all the other political BS artists. They're also not going to toss the World Bank, the Central Banks, etc. under the bus.

The point is, there's a difference between proper forecasts and (what amounts to) propaganda.

Enginerrrd2• 2 years ago

It's complicated because the forecasts of the system themselves can have some effect on the system they're forecasting.

Because of people chasing alpha in the markets, any forecast with too much predictive power will tend to alter the system in ways that reduce its predictive power

shrimp_emoji• 2 years ago

It's like if predicting the weather could hurt the weather's feelings.

mitthrowaway2• 2 years ago

Do you think these forecasts would have been accurate if they had been kept secret?

ClumsyPilot2• 2 years ago

So do the forecasts of climate scientists, and in many other fields, this not an excuse.

complianceowl• 2 years ago

If climate scientists made forecasts that were this ridiculously off base in the wrong direction, the whole field would be laughed out of the room. How is it that the neoclassical econometric modelers at the IMF aren't? It's more like astrology than science.

I have to say, this made me chuckle. Climate scientists have gone from warning us that we're entering an ice age, to warning us that the globe is warming too much. They've consistently gotten their forecasts wrong concerning rising sea levels, and their forecasts concerning when the world would end. It's pure alarmism, extremism, and is the cause for the increasing eco-terrorism we are seeing.

Anyone that would like a little more info can watch this: https://www.youtube.com/watch?v=_2Yms_-vgbU

adrianN• 2 years ago

The ice age thing was never a majority opinion among scientists.

notaustinpowers• 2 years ago

Scientists, quite literally, change their theories as more information becomes apparent. Frankly, you're better suited to blame mass media for the alarmism and extremism. "The global temperature increased 1ºC in the past 100 years" is a lot less likely to get those sweet, sweet ad revenue clicks than a headline like "Scientists say the Earth will be uninhabitable in 100 years".

Also, a philosopher cosplaying as a climate scientist may not be the best source for climate information. Until he starts having his statements and information peer-reviewed, it's nothing more than the philosophical musings of a man who, he himself, believes that the pinnacle of life is to feed the machine and consume, consume, consume.

photochemsyn2• 2 years ago

That's nonsense - you're conflating the discovery of the main drivers behind the ice age cycles that began at the end of the Pliocene (~100,000 years per cycle over ~2 million years) with the discovery of the effects of human fossil fuel combustion.

Yes, we're past the historical warm maximum period of this cycle and we'd be steadily (and very slowly) heading into another ice age over the next 70,000 years or so - but again, fossil fuel combustion and the injection of mass amounts of fossil CO2 into the atmosphere have radically altered that trajectory. This is not hard to understand, unless you're deliberately trying not to.

woobar• 2 years ago

Are you comparing their projection for the World GDP change in one year vs reality of one country over some extended period? I don't think your argument as strong as you believe.

World GDP Change in

2008 +2.1%

2009 -1.4%

2010 +4.5%

https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2...

grecy• 2 years ago

Their job is to convince everyone that everything is OK, and we should all keep going to work, spending money and investing.

If even a small percentage of people stopped doing those things, it would all fall apart.

oldgradstudent• 2 years ago

As long as the chairperson of the Federal Reserve doesn't say that the economy is fundamentaly sound[1], I think we'll be OK.

https://www.chicagotribune.com/2007/03/01/fed-chief-economy-...

screenobobeano• 2 years ago

I think we all need to thank China. They basically made recessions a thing of the past by just making them illegal. I doubt one ever happens again considering how easily the government responded to this one. They have a technocratic view of the economy and it’s the correct one.

vondur• 2 years ago

Funny enough, I was just watching a video from Peter Zeihan, where he's talking about most of the Western world is currently in recession (or close to it). Noteworthy is that North America is doing ok.

pm903• 2 years ago

The rest of the western world was squeezed by oil/gas shortages while the US just pumped more.

credit_guy• 2 years ago

As opposed to "We landed, and it was a soft landing. No more risks remaining"?

Doh.

Global Economy Approaches Soft Landing, but Risks Remain

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