These jobs may be hot in the next 10 years … or not - Marketplace

Summary

Marketplace Podcast Summary: "These jobs may be hot in the next 10 years … or not"
Release Date: December 19, 2024
Host: Kai Ryssdal

1. Economic Overview and Federal Reserve Insights

Kai Ryssdal opens the episode by discussing recent statements from the Federal Reserve Chair, emphasizing the delicate balance of managing inflation and interest rates. He notes, “We think the economy's in a really good place and we think policy's in a really good place” (01:11). Despite Wall Street's anxiety over fewer anticipated rate cuts—from four previously projected to just two next year—Ryssdal highlights the Federal Reserve's confidence in controlling inflation, targeting a 2.5% rate by year-end (03:00).

2. Housing Market Dynamics and the Lock-In Effect

Matt Levin delves into the housing market, explaining the "lock-in effect," where 60% of current mortgage holders have rates below 4%, discouraging them from selling and thus limiting housing inventory (04:00). Jane Urich from Rockford, Illinois, shares firsthand experiences of low inventory and high competition among buyers, driven by homeowners unwilling to relinquish their favorable mortgage rates (05:14). Economist Jonah Cost from the Federal Housing Finance Agency (FHFA) attributes a 1.7 million reduction in home sales nationally to this effect, resulting in a 7% increase in prices (06:00).

3. Future Job Market Projections and Skepticism

The podcast transitions to employment projections, with the Bureau of Labor Statistics (BLS) forecasting top-growing occupations over the next decade. Positions like home health aides, software developers, and registered nurses are expected to see significant growth (07:17). However, economists express caution about the reliability of these decade-long forecasts. Darrell Fairweather from Redfin points out, “That's widening the gap between the have nots and have homes” (06:30), highlighting socioeconomic disparities exacerbated by housing market trends.

Mitchell Hartman examines factors driving job growth, such as aging demographics increasing demand in healthcare, and technological advancements leading to roles in renewable energy and data science. Conversely, automation threatens administrative and clerical jobs, with economist Joe Bruceuelis warning, “The population most at risk are women 25 to 54 with less than two years of education” (10:00).

4. The Accuracy of Long-Term Job Forecasts

Matt Levin and Kai Ryssdal discuss the historical inaccuracies of long-term job forecasts, citing examples like the overestimation of driverless truck drivers. Peter Capelli from the Wharton School criticizes the overreliance on technology-driven predictions, arguing that practical implementation often lags (24:00). Greg Flores from Portland State University emphasizes focusing on adaptable skills rather than specific job titles, advising students to develop competencies that remain relevant despite changing market conditions (12:05).

5. Impact of Interest Rates on Various Business Sectors

Kai returns to the topic of interest rates, explaining how the Federal Reserve's recent rate cut affects different industries. In construction, John Kirk of Light Path Company notes that even with slightly reduced rates, high borrowing costs remain a barrier to new projects (17:56). Dominic Miartin of American Pride Bank highlights the challenges for commercial borrowers facing loan maturities amidst elevated rates, leading to scaling back of expansion plans (18:55).

In the restaurant industry, Spiro Papadopoulos of Schlau Restaurant Group discusses strategic adjustments to menus and pricing to maintain consumer value despite higher borrowing costs and inflation (19:15).

6. Shifts in Housing Market Preferences and Remote Work

Samantha Fields reports on a trend of migration to exurbs and smaller cities, driven by affordability and the rise of remote work. Skyler Olson from Zillow identifies Manchester, New Hampshire, and several Connecticut cities as top movers, while Richard Greene from USC underscores the importance of remote work flexibility in these migration patterns (20:54). Lisa Sturtevant from Bright MLS observes a shift back towards proximity to job centers, as companies increasingly require in-office presence (22:25).

7. Corporate Culture and the Decline of PowerPoint

The conversation shifts to corporate communication tools, with Matt Levin critiquing the overuse of PowerPoint in business settings. Levin argues that while PowerPoint was designed to alleviate presentation anxiety, it has become a tool for both over-prepared and under-prepared presenters, often leading to ineffective meetings (23:15). Kai Ryssdal and Levin discuss alternatives like Amazon’s 6-pager, which focuses on written memos to foster deeper understanding and more productive discussions (27:07).

8. Federal Reserve’s Stance on Bitcoin

In the episode's closing segment, Kai Ryssdal highlights a notable exchange during Fed Chair Powell's press conference. When asked about the benefits of the U.S. government building a reserve of Bitcoin, Powell responded, “We’re not looking for a law change” and reaffirmed that the Federal Reserve is not pursuing Bitcoin reserves under the current Fed Act (28:28).

Conclusion

Kai Ryssdal wraps up the episode by reiterating Marketplace's commitment to providing up-to-date economic and business news, emphasizing the importance of informed decision-making in navigating the evolving job market and economic landscape.

Notable Quotes:

Kai Ryssdal on Federal Reserve's Policy: “We think the economy's in a really good place and we think policy's in a really good place.” (01:11)
Jonah Cost on Housing Supply: “This reduction in supply increased prices by 7%.” (05:14)
Joe Bruceuelis on Automation Risks: “The population most at risk are women 25 to 54 with less than two years of education.” (10:00)
Darrell Fairweather on Housing Inequality: “That's widening the gap between the have nots and have homes.” (06:30)
Peter Capelli on Job Projections: “They're driven by people who are building the technology telling you what is possible, not what is practical.” (24:29)
Mitchell Hartman on Skill Focus: “It's most important to focus on skills and interests that will help a student develop in their career 10 years down the road.” (12:05)
Dominic Miartin on Loan Challenges: “Commercial borrowers are likely going to scale back their plans, maybe cancel a new project or new hiring.” (18:58)
Joe Bruceuelis on Technological Unemployment: “There's already evidence of technological unemployment as AI is rolled out in marketing and back office operations.” (10:00)
Matt Levin on PowerPoint: “The right question to ask is not what is the correct PowerPoint use for this presentation, but should PowerPoint be used at all?” (26:13)
Fed Chair Powell on Bitcoin: “We are not looking for a law change.” (28:33)

Timestamps Reference:

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Transcript

Kai Rysdal (0:01)

Hey everybody, it's Kai. We've got a midweek deal that you don't want to miss. Thanks to the generosity of Marketplace investors across the country, all gifts will be matched today up to $30,000. Don't delay. Give right now and double your impact. It's really that easy to become a Marketplace investor and power public service journalism. Go to marketplace.org donate and your gift will go twice as far, but only today. That's marketplace.org and thanks.

Matt Levin (0:40)

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Kai Rysdal (1:11)

Running this economy is easy, it's not unlike driving on a foggy night or walking into a dark room full of furniture. Happy Fed Day, everybody. From American Public Media, this is Marketplace in Los Angeles. I'm Kai Rysdal. It is Wednesday today, the 18th of December. Good as always to have you along, everybody. What is the first thing you think of when you hear the guy most responsible for running the American economy say this? Let me start by saying that we think the economy's in a really good place and we think policy's in a really good place. If you're a regular consumer of economic news, you might think, yeah, the economy's okay, inflation's still a tad hot and prices are higher, but generally, you know, good. If you are a Wall street consumer of economic news, though, clearly this is the end of the world because Powell also said this. Two cuts next year compared to four in September. That is back in September with inflation a tad less sticky than it is now. Guesses among the members of the Federal Reserve was that they would cut interest rates four times next year. Now, with the aforementioned stickiness holding inflation higher than the Fed and the rest of us want it to be, the central bank is banking on just two cuts next year. I think that the the lower, the slower pace of cuts for next year really reflects both the higher inflation readings we've had this year and the expectation inflation will be higher. Two and a half percent is where the Fed thinks inflation is going to be come the end of next year. Cue the market sell off. It is almost a footnote to point out, I guess, that they did cut interest rates today another quarter percentage point. The third cut this year. And two things specifically to mention here. Number one, look at the labor market. It's cooler by so many measures now, modestly cooler than it was in 2019, a year when inflation was well under 2%. So it's not a source of inflationary pressures. Not to say there aren't regional and particular professions where labor is tight, but overall you're not getting inflationary impulses of any significance from the labor market. And number two, and related, the story is still just, we're unwinding from these large shocks that the economy got in 2021 and 22, which is kind of amazing because it's been like three years, you know, Wall street on this Fed day. Everything was fine until Jay Powell started talking. We'll have the details when we do the numbers. The federal funds rate, which is the rate the Federal Reserve controls, is a powerful if blunt economic tool, but it is by no means all powerful. Exhibit A, the American housing market. Last week the average rate on a 30 year fixed mortgage was about 6.6%, which is higher than than when the Fed started its rate cutting cycle back in September. So that's not great for the housing market. But the bigger problem is that according to the Federal Housing Finance agency, something like 60% of people who are paying on mortgages right now have rates below 4%. That gets us something called the lock in effect, homeowners who don't want to give up those cheap rates, which means they don't want to sell, which means housing inventory stays low and, and housing prices stay high. Marketplace's Matt Levin has more now on the housing market's new normal.