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In the newest episode of the Top of Mind podcast, host Mike Simonsen, the founder and president of Altos Research, sits down for a conversation with Guy Berger, director of economic research at the The Burning Glass Institute. They explore the intersectionality of trends in the labor and housing markets.
This conversation has been edited for length and clarity. After diving into some background on The Burning Glass Institute, Simonsen and Berger dive into the state of the labor market heading into 2025.
Simonsen: Let’s get some baseline about the state of the labor market rolling into the end of 2024. Are there surprising things about the job market? What should we know about employment right now?
Berger: Things are good, not great. We have unemployment, but it’s low by historical standards. It’s a low level, but it’s going up very slowly. If you think about the labor market from that perspective, moving from great to good, it’s a long way to go before we get to something that starts approximating bad at the current pace.
There were worries earlier this year about tipping into recession. There are no real indicators that this is accelerating. It’s just a very slow, gradual cooling in the labor market.
Simonsen: I don’t know if you or me started using this term, “the Great Stay,” but I noticed parallels between employment and housing in your work. Do you see the housing and employment parallel? Tell me more about how you think about “the Great Stay.”
Berger: They are similar. In the labor market, employers’ headcount strategy seems to have changed. People still have PTSD from the pandemic, where they laid off a lot of people and had to rehire them.
The thought is, “I’ve got to ride this out, so I don’t want to let go of my existing workers. I’m going to just turn off the top of hires.” Could hiring keep falling a little while longer before layoffs go up? I think so.
Simonsen: That’s a parallel with housing too. People may have to sell their homes. We get some inventory, and we get a supply and demand imbalance. But there’s no sign of it.
Later on, the conversation shifts to unemployment relief and immigration-based changes in the labor market.
Simonsen: Have you noticed regional differences in the Great Stay, where things are tightest?
Berger: A lot of it is very much driven by migration. It’s not just people within the country moving around but also where the economic opportunity is that tracks people to the Sun Belt. People are showing up if it’s warm, then labor supply is showing up, and people are buying houses or renting.
After a few discussion points on artificial intelligence usage in the labor market, Berger closes the conversation with his forecast on the labor and housing markets for 2025.
Berger: What is the median age of the American worker or homeowner? As the population ages, it might start going up faster. It’s happening everywhere with falling birth rates. As a labor economics guy, I already talked briefly over the decades that the aging population has led to turnover falling, and is it going to actually cause it to go down further?
