US economy avoids recession with help from moms and remote work jobs

US economy avoids recession with help from moms and remote work jobs

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  • The stability of the US economy is enhanced by a strong labor market.
  • Women, especially mothers, have seen sharp increases in labor force participation.
  • More remote work opportunities are credited with helping women with young children get jobs.

The US economy remains in such a fragile state that it seems that anything could push it into recession. The fact that this hasn’t happened yet is largely due to a perpetual job market, and two profound forces have emerged to help keep it afloat: young women, especially mothers, and remote work opportunities.

Wells Fargo economists found that 83.5% of prime-age people, ages 25 to 54, are either working or actively looking for a job, the highest level since 2002.

Within this group, women enjoy participation in the labor force rate 77.8%, the above Since the outbreak of the epidemic in 2020.

This strong growth can be attributed to several factors, including rising levels of education and an increase in the number of single women, trends that were on the rise before the pandemic.

In addition, economists at Wells Fargo have also identified women with young children as a new force for the labor market. This group has long been underrepresented in the workforce — thanks to the challenges of finding affordable child care — but the increase in their participation in the workforce since 2020 is due to a sharp rise in remote work. Opportunities, according to Wells Fargo.

While mothers with young children still lag behind women without children under the age of 18, their labor force participation has increased at a faster rate.

This increase in employment, especially among mothers with young children, has played an important role in boosting the economy. Some recent studies have given more hope for a “soft landing” despite the many ongoing economic challenges. (moved down)

Women with young children are participating in the labor force at accelerating rates.
Wells Fargo

A recent Brookings Institution study using mothers with children under five found a similar jump in labor force participation recently.

In a Brookings Institution study, 70.4% of mothers with at least one child under the age of five are now participating in the labor force. That’s higher than the pre-pandemic peak of 69%, which had remained fairly constant in the 10 years before the COVID-19 outbreak.

“While child care remains a persistent challenge for women in this age group, the rise in remote work opportunities has helped drive a particularly strong rebound in labor force participation among mothers with young children,” Wells Fargo economists wrote.

To be sure, this level of labor force participation may decline in the coming months as child care opportunities become harder to find. Nearly $24 billion in federal funds, which Help keep child care services afloat Over the past two years, ending on September 30. More than 700 thousand child care programs It could shut down as a result.

Jobs are key to the economy

The workforce was slow to recover early from the coronavirus recession. However, since then, labor force participation has risen steadily to 62.8%, approaching pre-pandemic levels.

In September, US Treasury Secretary Janet Yellen cited the strength of the labor market as one of the main reasons she saw “no signs that the economy is at risk of contraction.”

US Treasury Secretary Janet Yellen pointed to the labor market as one of the main reasons the economy is avoiding a recession.
Drew Angerer/Getty Images

A strong labor market helped boost the economy even though inflation remains above the Federal Reserve’s 2.0% target.

That was the message delivered by Daniel Greenhouse, chief strategist at Solus Alternative Asset Management, during a recent appearance on CNBC’s “Last Call.”

“At the end of the day, people have jobs and make money,” Greenhouse said. “They have more net money today. As long as they’re working, all these other things are affordable.”

Unemployment remains low and has stabilized in recent months at 3.7%. The U.S. also added 263,000 nonfarm payrolls in November, down slightly from the revised reading of 284,000 in October, but still better than the average forecast of 200,000 from economists surveyed by Bloomberg.

At the same time, the percentage of the working-age population with a job has remained near high levels not seen since the late 1990s.

Former PIMCO chief economist and current Georgetown University Business School professor Paul McCauley was recently a guest on CNBC’s “Fast Money” show and also pointed to the labor market as to why “consumer power.”

“It is important to note that we are seeing a decline in wage inflation, and this is a key part of the soft landing story,” McCauley said. “What we’re not seeing is a sharp slowdown in job growth. People may not be getting big raises, but they’re getting jobs and keeping them. I think that’s the strong part of our economy, and there’s every reason to expect it to continue to be strong.”

Among other promising economic indicators, if this trajectory continues for the employment landscape, even in the face of persistent challenges such as child care and inflation, it will raise hopes for a soft landing in the economy.

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