No recession?

You know things have truly reverted back to the pre-pandemic times when Zoom - the one technology that hard-carried us all through the pandemic - has also announced layoffs. It seems everybody is preparing for a recession that just can’t seem to arrive. The January jobs report was surprisingly strong, and the unemployment rate is at its lowest in 50 years. Doesn’t seem like we’re heading into a recession, does it?

I see layoffs in the tech sector as a mere reversion back to the pre-pandemic status quo. These companies hired massively for a reality and eventually that no longer exists. Zoom in particular tripled its headcount during the pandemic. Now that universities like the one I work at will soon return to completely in-person learning, the demand will taper off dramatically. In general, inflation and interest rates are high, therefore the appetite for spending is muted.

Even if most people are gainfully employed.

Still, it sucks tremendously to be laid off. And it doesn’t seem like the tech companies are firing only the people they’ve newly hired for the pandemic. That cohort is cheap compared to the folks who’ve been there for decades. When it comes time to trim the excess, there’s zero obligation to cut based on seniority. I directly know of a friend who got laid off from SalesForce, and she’s been there way before the pandemic years.

That’s what happens when the job is not unionized. I am glad my workplace is. If and when the cut hammer ever strikes again, at least I will have a buffer of 10 years of service credit to insulate me. No guarantees, of course. Which is why like everybody else, I am also personally preparing for a recession that may not arrive.

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Going anywhere.

Government work

Last week I wrote about the aim to not spend any money on Black Friday. I am happy to say: mission accomplished. Going away somewhere during Black Friday helped tremendously. I’m not tempted to click on the latest slickdeals tweet if I’m nowhere near a computer! Today is Cyber Monday, yet another black hole of potential spending. I’m doing my best to avoid Amazon right now.

During Black Friday we ran into a friend whilst getting lunch at Costco. Say what you want about inflation, but Costco food court prices have remained consistently low. A hot dog, a soda, and a slice of pizza can still be had for less than four dollars. If gas prices weren’t so enormously inflated, I’d drive to Costco more often for lunch. If the price of a hot dog ever increases from $1.50, surely the American economy have gone to the toilet. Hasn’t happened yet in my lifetime!

Right, the friend. He works at a credit union slinging loans to people looking for a lower interest rate than the big banks (credit unions are great). He said he’s looking to switch to a government job, perhaps with the city of San Francisco. The allure of excellent benefits and a pension at the end is rather tempting for a person in his mid thirties wanting long term stability. Especially during these uncertain times: we’ve all read about big tech massively laying off employees. Companies not doing layoffs are freezing hiring.

I guess I should consider myself lucky to be employed by the State of California. I didn’t realize a government job can be so desirous by those on the outside looking in. The conventional wisdom is that the private sector pays substantially more than the public sector. Everybody wants a solid rock to climb onto during times of uncertainty and recession. Public sector jobs also typically offer excellent work-life balance, something I cherish greatly.

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Sunset traffic.

But a recession is coming

I am ready and itching to head off on another travel adventure. It’s been a solid two months since my return from Japan, and as typical with the ebb and flow of these things, I’ve physically and mentally recovered, and recharged to set off again.

Of course, I don’t have nearly that much freedom from work to be able to skip town every two months, nor do I have the appropriate budget to do so. Indeed, the trip to Japan drained quite a bit of my cash reserves; a stash that was already lower than previous years due to my purchase of the GT3. I’m going to need at least a few more months to store back up the reserves, so even though I’m pining for another escape, the smart thing to do is to enact austerity.

Besides, I’ll be making my annual trip back home to China come the end of December. What’s another three more months of waiting, honestly. More importantly, homecoming trips don’t cost me any money because our family uses the proceeds from our rental property in China to fund it. Otherwise, I don’t think I’d be making the trip this year.

Because the recession is looming, and I think it’s important to batten down the hatches for such an event. Perhaps it’s idiosyncratic to my San Francisco locality, but I am seeing the recession signs all around: vacant storefronts, restaurants closing down, houses not selling, and rooms not renting out. Things definitely don’t look as prosperous as the stock market and unemployment numbers would indicate.

There are similar signs as well in an area near and dear to my proclivities: the automobile. The recent car auctions in Monterey back in August saw a 34% drop compared to 2018 results. You know things are turning sour when ultra rich people are holding off spending their free cash. Just yesterday, Subaru announced its first month of decline in sales after a streak of 93 months (almost eight years!) consecutive growth. That’s the proverbial canary in the coal mine stuff, and the entire auto industry in a downturn now.

I don’t think I’ll stop traveling if and when the recession happens, god willing that I myself don’t get laid off from employment, but for sure I need to build back up the war chest so to speak, for the next rainy day.

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Anywhere you go, there you are.