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Shrinking’ review: Jason Segel is the ultimate sad therapist
To Jason Segal, the entire process of creating a show from scratch feels like a “rafting trip.” You draw a map, plan for the weather, and get your gear from REI, but nothing can really prepare you for what’s to come.
“This moment happens, where you get in the river, and you realize the river’s in charge. That’s what making a show is like,” he said of his latest series “Shrinking” in an interview with the Deseret News.
Two of the show’s co-creators, Brett Goldstein and Bill Lawrence, worked intimately on “Ted Lasso,” a two-season hit that earned a handful of Emmys and a Golden Globe, too. Segel joined them as a writer, creating a relatable comedy that isn’t afraid to tackle mental health.
The 10-episode series isn’t like his other, more cheerful, work, like “Forgetting Sarah Marshall.” He plays a widowed therapist, putting his sad eyes to good use while starring opposite “Indiana Jones” actor Harrison Ford, a solemn shrink.
The first three episodes debuted on Apple TV+ on Jan. 27 and follow Jimmy (Segel), who is trying to cope while being a dad, friend and therapist. He decides to try a new approach — ignoring his training and ethics — by being brutally honest.
Unorthodox therapy
An opening montage in Episode 1 reveals a bunch of Jimmy’s patients. Grace, who is one of them, is sitting on the couch, and venting about her boyfriend when Jimmy, still drunk and disheveled from last night, breaks.
“We’ve been doing this for two years — two years of your life,” he exclaims while standing up.
“And you keep telling me how great it is. Well, I saw him. He’s not that great. His muscles are too big, his shirts are too tight — no one likes that, it’s gross,” he claims.
The blonde woman is especially startled when Jimmy tells her that her partner is emotionally abusive and that she should leave him, or he will dump her as her therapist. But alas, therapy is more complicated, and the creators of the show understand that.
Jason Segel and Luke Tennie in “Shrinking.”
“It’s not generally one and done. And this is a process and even with his new radical method of therapy … he doesn’t say that this is a solution,” explained Segel. The truth, though, can clear room for the real work.
Jimmy replaces the typical procedure — “How does that make you feel?” — by getting personal. Consider the way he helps Sean (Luke Tennie), a former soldier, by taking him to an MMA sparring gym to help him cope with his anger issues.
The first four episodes, which were available for review, create a sense of trust between the two, but whether it pans out in therapy is unclear for now.
Getting Harrison Ford on board
Creators Segel, Goldstein and Lawrence didn’t think the veteran actor would take on the role of Paul, the serious but secretly loving therapist.
“You offer something to Harrison Ford, knowing that he’s gonna say no,” Segel said, noting that it was still brag-worthy.
“But then he said yes. It’s like you’ve asked the prettiest girl in school to prom. And somehow she said yes,” he said. “And then you’re like, panicked. ‘What am I going to wear? Where do I take them to dinner? Oh, no, I don’t even really know how to dance.’”
Harrison Ford in “Shrinking.”
Meanwhile, Goldstein, who wrote and acted in “Ted Lasso,” told The Hollywood Reporter that the cast and crew incessantly asked how they landed Ford.
The moment the star arrived on set, he tried “to break through any sense of awe that might be in the room and treats everybody like a peer,” Segel said.
The “Star Wars” alum anchors Segel’s erraticness and supplies a voice of reason with stoicism, easily becoming my favorite on the show. When Jimmy tells Paul of his new approach to therapy, the principled shrink, who’s in the early stages of Parkinson’s, shuts it down fast.
“Great idea. We just rob them of their autonomy to help themselves, right?” he says in Episode 1. “Then we become what? Psychological vigilantes?” Count on Ford to relax into his role as the chief of the practice.
‘Shrinking’ is darker than ‘Ted Lasso’
Paul is Jimmy’s anchor and Alice, his daughter played by Lukita Maxwell, is his entire heart. While dealing with grief, Jimmy abandons his responsibilities as a dad, burdening the teenager, who gives him a morning aspirin after his night of partying and gets her own ride to school.
Stepping into Jimmy’s shoes was “a really special journey” for Segel, teaching him the character’s struggles of being a good dad. Meanwhile, Christa Miller plays Liz, who’s like a mother to Alice, a dynamic that works well on-screen.
“She is a master at comedy and she has been doing it a long time,” Segel said of working with her and sharing a vocabulary for humor.
Fans of “Cougar Town” will see the actress playing a nosy neighbor again but with more dramatic flare as Jimmy and Liz negotiate who gets to take care of the struggling teen.
The moving scenes fit right into the “dark space of grief and loss and trauma” that Jimmy’s character exists in, Goldstein told the Deseret News prior to the show’s release. The tone is a departure from the open and loving story of Ted Lasso, an American football coach teaching soccer in the U.K.
“‘Shrinking’ is sort of a much more intimate show. It’s set in this little community of neighbors, work colleagues and a family … just three or four streets. And that’s it,” Goldstein said. The starkest difference is that Jimmy “begins in a place of self-destruction.” And it seems the 43-year-old is the perfect guy to play the part.
Jason Segel: The ultimate sad therapist
For the comedy actor, Jimmy was within his comfort zone, allowing him to easily put on the “resting-dead-wife face,” as he says in the show.
“I’ve always had a lot of issues with anxiety and depression and sought help when I needed it, and it’s why I’m still here,” Segel said.
Jason Segel in “Shrinking.”
“I’m sad a lot of the time,” he joked. “I’ve never worn life very lightly. It’s worked out great for me because it’s made me want to write and make made me want to express things. I have some sense that I’m not alone in that.”
He got his big break in 1999 when he got cast in Judd Apatow’s well-regarded series “Freaks and Geeks,” and found more fame through “How I Met Your Mother” and “The Muppets,” which he also wrote.
“So, when I write something, I really write from a place that starts with this belief that we’re all probably having a hard time figuring out what the point of any of this is,” he said, smiling. “And maybe there’s some fun in figuring it out together.”
The show is rated TV-MA for some sexual references, violence and gore, multiple uses of profanity, and some crude humor.
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Working On Shrinking Showed Jason Segel That Harrison Ford Is A ‘Comedy Savant’
In a promo featurette for “Shrinking,” Segel said that when Ford signed on, he, “thought it was a practical joke, it seemed unreal.” That was likely many people’s reaction, as Ford isn’t necessarily who you’d expect to appear alongside the star of “Forgetting Sarah Marshall” or “I Love You, Man.” But as his recent performance in HBO’s “Winning Time” proves, Segel is perfectly capable of delivering the drama. And as it turns out, the curmudgeonly Ford is perfectly capable of delivering the laughs.
Talking to Moviefone, Segel said he and his co-creators, “underestimated how funny Harrison Ford was” and that while they planned to write him as “the gruff straight man” he actually proved pretty quickly how funny he could be:
“Harrison Ford is funny! He’s like a comedy savant […] It just goes to show you how we all are limited by our own imaginations, but this guy knew what he was capable of doing and wanted to show it off.”
That sentiment was echoed by Goldstein, who told The Hollywood Reporter that Ford was “f****** excited to be funny” with Lawrence adding:
“Initially, your thought is, ‘OK, you’re gonna write Harrison Ford gruff and everyone will do comedy around him, and he will respond, gruffly, to people being funny.’ A couple of episodes in, you’re like, ‘Oh, he’s doing moves.’ Like, Harrison Ford’s here to make comedy, not to react to comedy.”
It’s ‘now or never’ to stop Japan’s shrinking population, PM says
Jan 23 (Reuters) – Japanese Prime minister Fumio Kishida pledged on Monday to take urgent steps to tackle the country’s declining birth rate, saying it was “now or never” for one of the world’s oldest societies.
Japan has in recent years been trying to encourage its people to have more children with promises of cash bonuses and better benefits, but it remains one of the most expensive places in the world to raise a child, according to surveys.
Births plunged to a new record low last year, according to official estimates, dropping below 800,000 for the first time – a watershed moment that came eight years earlier than the government had expected.
That most likely precipitated a further population decline in a country where the median age is 49, the highest in the world behind only the tiny city-state of Monaco.
“Our nation is on the cusp of whether it can maintain its societal functions,” Kishida said in a policy speech at the opening of this year’s parliamentary session.
“It is now or never when it comes to policies regarding births and child-rearing – it is an issue that simply cannot wait any longer,” he added.
Kishida said he would submit plans to double the budget for child-related policies by June, and that a new Children and Families government agency to oversee the issue would be set up in April.
Japan is the third-most-expensive country globally to raise a child, according to YuWa Population Research, behind only China and South Korea, countries also seeing shrinking populations in worrying signs for the global economy.
Other countries are also coming to grips with ageing and shrinking populations. Last week, China reported that its population dropped in 2022 for the first time in 60 years.
Reporting by Sakura Murakami; Editing by John Geddie and Gerry Doyle
Our Standards: The Thomson Reuters Trust Principles.
China’s Shrinking Population Is Deeper Problem Than Slow Growth for Its Economy
Economists said China’s shrinking population poses a major future challenge for the world’s second-largest economy, while President Xi Jinping’s top economic adviser sought Tuesday to restore investor confidence after one of the most disappointing growth rates in decades.
China has already rolled back the zero-Covid policies that restrained growth for much of 2022, setting the stage for a recovery this year. The U-turn, in the wake of public protests, was part of a broad policy reset aimed at boosting the economy, including an easing of regulations on the property sector and signals that the clampdown on the tech sector has ended.
Beijing is now betting on a robust rebound in economic activities as officials increasingly signal that the recent wave of infections is reaching its peak. Some government advisers say the central leadership likely will announce a growth target of between 5% and 5.5% for 2023 at the coming legislative sessions in March. China on Tuesday posted 3% growth for 2022, its second-worst growth rate since 1976.
Speaking to the World Economic Forum in Davos, Mr. Xi’s top economic adviser, Vice Premier Liu He, sought to send a message to investors and executives that China’s growth would return to prepandemic levels this year as the country reopens.
On a Davos panel titled “China’s Next Chapter,” speakers also projected optimism. China’s reopening and exit from its zero-Covid policy is the “most positive catalyst” for global markets this year, said
Hong Kong Exchanges and Clearing Ltd.
’s Chief Executive
Nicolas Aguzin.
Vice Premier Liu He sought to restore investor confidence in China at the World Economic Forum in Davos, Switzerland.
Photo:
Markus Schreiber/Associated Press
“If China produces a solid growth number for 2023, 5% or 5% plus, that will actually underpin much global growth for the year to come,” said
Kevin Rudd,
president and CEO of Asia Society.
China’s recent measures, however, won’t address a host of challenges, some of which were exacerbated by the pandemic. A rapidly aging population, slowing growth in productivity, high debt levels and rising social inequality will weigh on the country’s economic ascent for decades to come, economists said.
On Tuesday, the same day that China posted 3% growth, the second-worst growth rate since 1976, it also said that for the first time since 1961, its population shrank.
China’s population dropped by 850,000 to 1.412 billion. The shift toward a shrinking population, which came faster than Beijing had projected, marks a watershed moment in China’s history with profound implications for its economy and its status as the world’s factory floor.
The demographic milestone comes when, despite its enormous size, China’s economy is still that of a middle-income, developing country, as measured by average worker incomes when compared with the U.S. and other rich-country peers. China’s leaders have long held the ambition of leapfrogging the U.S. to become the world’s biggest economy, a task made harder by this strengthening demographic headwind, economists say.
The global economy has grown to rely on China’s vast pool of workers for manufactured goods.
Photo:
Kyodonews/Zuma Press
“The likelihood of China someday overtaking the U.S. as No. 1 economy has just gone down a notch,” said Roland Rajah, lead economist at the Lowy Institute, a Sydney think tank.
The global economy has grown to rely on China’s vast pool of factory workers for manufactured goods, and its consumers represent a growing market for Western-made cars and luxury goods. A dwindling population means fewer consumers when China is under pressure to power growth through greater consumption instead of investment and exports.
Any rebound in consumption will also likely be constrained by a weak labor market and a housing downturn that has eroded the wealth of Chinese families. The jobless rate among people age 16 to 24 remained elevated at 16.7% in December, versus the peak of near 20% last summer. Growth in disposable income per capita could slow to around 4% each year in the next five years, downshifting from around 8% before the pandemic, according to David Wang, chief China economist at
Credit Suisse.
A smaller workforce will likely restrain economic growth. An economy can only grow by adding workers or producing more with the workers it has. China’s working-age population, which peaked around 2014, is expected to fall by 0.2% a year until 2030, according to S&P Global Ratings.
Productivity growth has been slowing. It slid to 1.3% on average in the 10 years through 2019, from 2.7% in the preceding decade, according to estimates from the Conference Board, a nonprofit research organization.
“It seems like it’s going to get old before it gets rich,” said Andrew Harris, deputy chief economist at Fathom Consulting in London.
There are some grounds for optimism, economists say. China could make better, more productive use of underemployed urban workers in state-owned enterprises as well as those still laboring in the countryside.
It is also adding automation and related technology to its factories rapidly, replacing or augmenting its shrinking pool of workers. Advances in robotics, artificial intelligence and other high-tech sectors that could turbocharge worker productivity “is the potential out for China,” Mr. Harris said, though he added whether it will succeed or not is unclear.
Meanwhile, China remains tied to its old playbook of fueling growth by encouraging governments and companies to borrow more to fund investments, a model that economists warn will be unsustainable in the long run.
The country’s overall debt as a share of its economy reached a high during the pandemic, as local governments borrowed to finance infrastructure projects and boost the economy. As of June 2022, credit to the nonfinancial sector reached $51.8 trillion, or 295% of gross domestic product, according to data from the Bank for International Settlements.
China’s policies throughout the pandemic have focused heavily on the supply-side rather than the demand-side of the economy. Unlike many countries in the West, the Chinese government refrained from handing out cash to households, directing most of its efforts toward supporting manufacturers.
“The systemic problems that China had in its economy before Covid are still there,” said
George Magnus,
an economist and research associate at Oxford University, “In some aspects, the pandemic made them worse.”
A dwindling population means fewer consumers as China is under pressure to power growth through consumption.
Photo:
Qilai Shen/Bloomberg News
Despite the optimism expressed by some speakers in Davos, investors and corporate executives both inside and outside China remain wary of Beijing’s willingness to sufficiently roll back its restrictions on businesses of the past few years to re-embrace private capital.
Mr. Liu sought to allay those concerns during his Tuesday speech. He told the Davos crowd that a return to a planned economy, where the party-state dictates economic activities, is impossible.
But economists say Mr. Xi’s drive for self-sufficiency across a range of industries and his penchant for dictating how private business should be run will continue to sap vitality from the economy.
To achieve self-reliance in key sectors, Beijing has focused on channeling low-cost loans to favored sectors, such as semiconductors, renewable energy and pharmaceuticals. But the spending, which often involves less-productive state-owned enterprises, has also been plagued by waste and corruption, economists say, with limited evidence of real innovation.
“Xi’s desire to make sure that the Party’s control extends across society runs far deeper than his commitment to growing a market economy,” said Mark Williams, chief Asia economist at Capital Economics.
—Rebecca Feng contributed to this article.
Write to Stella Yifan Xie at stella.xie@wsj.com and Jason Douglas at jason.douglas@wsj.com
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U.S. banks get ready for shrinking profits and recession
NEW YORK, Jan 10 (Reuters) – U.S. banking giants are forecast to report lower fourth quarter profits this week as lenders stockpile rainy-day funds to prepare for an economic slowdown that is battering investment banking.
Four American banking giants — JPMorgan Chase & Co (JPM.N), Bank of America Corp (BAC.N), Citigroup Inc (C.N) and Wells Fargo & Co (WFC.N) — will report earnings on Friday.
Along with Morgan Stanley (MS.N) and Goldman Sachs (GS.N), they are the six largest lenders expected to amass a combined $5.7 billion in reserves to prepare for soured loans, according to average projections by Refinitiv. That is more than double the $2.37 billion set aside a year earlier.
“With most U.S. economists forecasting either a recession or significant slowdown this year, banks will likely incorporate a more severe economic outlook,” said Morgan Stanley analysts led by Betsy Graseck in a note.
The Federal Reserve is raising interest rates aggressively in an effort to tame inflation near its highest in decades. Rising prices and higher borrowing costs have prompted consumers and businesses to curb their spending, and since banks serve as economic middlemen, their profits decline when activity slows.
The six banks are also expected to report an average 17% drop in net profit in the fourth quarter from a year earlier, according to preliminary analysts’ estimates from Refintiv.
Still, lenders stand to gain from rising rates that allow them to earn more from the interest they charge borrowers.
Investors and analysts will focus on bank bosses’ commentary as an important gauge of the economic outlook. A parade of executives has warned in recent weeks of the tougher business environment, which has prompted firms to slash compensation or eliminate jobs.
Goldman Sachs will start laying off thousands of employees from Wednesday, two sources familiar with the move said Sunday. Morgan Stanley and Citigroup, among others, have also cut jobs after a plunge in investment-banking activity.
The moves come after Wall Street dealmakers handling mergers, acquisitions and initial public offerings faced a sharp drop in their businesses in 2022 as rising interest rates roiled markets.
Global investment banking revenue sank to $15.3 billion in the fourth quarter, down more than 50% from a year-earlier quarter, according to data from Dealogic.
Consumer businesses will also be a key focus in banks’ results. Household accounts have been propped up for much of the pandemic by a strong job market and government stimulus, and while consumers are generally in good financial shape, more are starting to fall behind on payments.
“We’re exiting a period of extraordinarily strong credit quality,” said David Fanger, senior vice president, financial institutions group, at Moody’s Investors Service.
At Wells Fargo, the fallout from a fake accounts scandal and regulatory penalties will continue to weigh on results. The lender expected to book an expense of about $3.5 billion after it agreed to settle charges over widespread mismanagement of car loans, mortgages and bank accounts with the U.S. Consumer Financial Protection Bureau, the watchdog’s largest-ever civil penalty.
Analysts will also watch if banks such as Morgan Stanley and Bank of America book any writedowns on the $13-billion loan to fund Elon Musk’s purchase of Twitter.
More broadly, the KBW index (.BKX) of bank stocks is up about 4% this month after sinking almost 28% in the last year.
While market sentiment took a sharp turn from hopeful to fearful in 2022, some large banks could overcome the most dire predictions because they have shed risky activities, wrote Susan Roth Katzke, an analyst at Credit Suisse.
“We see more resilient earning power through the cycle after a decade of de-risking,” she wrote in a note. “We cannot dismiss the fundamental strength.”
Reporting by Saeed Azhar, Niket Nishant and Lananh Nguyen
Editing by Nick Zieminski
Our Standards: The Thomson Reuters Trust Principles.
Unabated Carbon Is Shrinking Earth’s Upper Atmosphere, Scientists Warn : ScienceAlert
Rising levels of carbon dioxide in Earth’s atmosphere could exacerbate efforts to clean up our increasingly cluttered shell of orbiting space junk.
According to two new studies, the greenhouse gas has significantly contributed to the contraction of the upper atmosphere. This contraction has been hypothesized for decades; now, for the first time, it’s been actually observed.
Some of the observed shrinkage is normal, and will bounce back; but the contribution made by CO2 is, scientists say, probably permanent.
This means that defunct satellites and other bits of old technology in low Earth orbit is likely to remain in place longer due to the reduction of atmospheric drag, cluttering up the region and causing problems for newer satellites and space observations.
“One consequence is satellites will stay up longer, which is great, because people want their satellites to stay up,” explains geospace scientist Martin Mlynczak of NASA’s Langley Research Center.
“But debris will also stay up longer and likely increase the probability that satellites and other valuable space objects will need to adjust their path to avoid collisions.”
Descriptions of Earth’s atmosphere generally set the layers at specific altitudes, but the truth is that the volume of gases surrounding our world isn’t static. It expands and contracts in response to various influences, the biggest of which is probably the Sun.
Now, the Sun isn’t static either. It goes through cycles of activity, from high, to low, and back again, roughly every 11 years. We’re currently amid the 25th such cycle since reckoning began, a cycle that started around December 2019. The previous cycle, number 24, was unusually subdued even at the peak of solar activity, and this is what enabled Mlynczak and his colleagues to take measurements of atmospheric contraction.
Their attention was focused on two layers, collectively known as the MLT: the mesosphere, which starts at about 60 kilometers (37 miles) altitude; and the lower thermosphere, which starts at around 90 kilometers.
Data from NASA’s TIMED satellite, an observatory collecting data on the upper atmosphere, gave them pressure and temperature information for the MLT for a nearly 20-year period, from 2002 to 2021.
In some lower layers of the atmosphere, CO2 creates a warming effect by absorbing and re-emitting infrared radiation in all directions, effectively trapping a portion of it.
Up in the much, much thinner MLT, however, some of the infrared radiation emitted by CO2 escapes into space, effectively carrying away heat and cooling the upper atmosphere. The higher the CO2, the cooler the atmosphere.
We already knew this cooling is causing the stratosphere to contract. Now we can see it’s doing the same to the mesosphere and thermosphere above it too. Using the data from TIMED, Mlynczak and his team found that the MLT contracted by about 1,333 meters (4,373 feet). Approximately 342 meters of that is the result of CO2-induced radiative cooling.
“There’s been a lot of interest in seeing if we can actually observe this cooling and shrinking effect on the atmosphere,” Mlynczak says.
“We finally present those observations in this paper. We’re the first to show the shrinking of the atmosphere like this, on a global basis.”
Given that the thermosphere extends out to several hundred kilometers, that 342 meters might not seem like a lot. However, a paper published in September by physicist Ingrid Cnossen of the British Antarctic Survey in the UK showed that thermospheric cooling could result in a 33 percent reduction in atmospheric drag by 2070.
Atmospheric drag is what helps satellites and rocket stages deorbit after their missions end. This reduction in drag could prolong the orbital lifespan of defunct space junk by 30 percent by 2070, Cnossen found.
As more and more satellites are launched into low-Earth orbit, this is going to become an increasing problem, with no real mitigation measures in sight – either to decrease the number of satellites, or the amount of CO2.
“At every altitude, there is a cooling and a contraction that we attribute in part to increasing carbon dioxide,” Mlynczak says. “As long as carbon dioxide increases at about the same rate, we can expect these rates of temperature change to stay about constant too, at about half a degree Kelvin [of cooling] per decade.”
The research has been published in Journal of Geophysical Research: Atmospheres.
China is seeding clouds to replenish its shrinking Yangtze River
Several regions on the Yangtze have launched weather modification programs, but with cloud cover too thin, operations in some drought-ravaged parts of the river’s basin have remained on standby.
The Ministry of Water Resources said in a notice on Wednesday that drought throughout the Yangtze river basin was “adversely affecting drinking water security of rural people and livestock, and the growth of crops.”
On Wednesday, central China’s Hubei province became the latest to announce it would seed clouds, using silver iodide rods to induce rainfall.
At least 4.2 million people in Hubei have been affected by a severe drought since June, Hubei’s Provincial Emergency Management Department said Tuesday. More than 150,000 people there have difficulties accessing drinking water, and nearly 400,000 hectares of crops have been damaged because of high temperatures and drought.
The Yangtze is just one of many rivers and lakes across the northern hemisphere that are drying up and shrinking amid relentless heat and low rainfall, including Lake Mead in the US and the Rhine River in Germany. These extreme weather conditions have been supercharged by the human-induced climate crisis, driven by burning fossil fuels.
Communities often rely on these bodies of water for economic activity and governments are having to intervene with adaptation measures and relief funds, costing huge amounts of money.
China is deploying such funds and developing new supply sources to deal with the impacts on crops and livestock. Some livestock has been temporarily relocated to other regions, the Ministry of Finance said earlier this week, adding it would issue 300 million yuan ($44.30 million) in disaster relief.
To boost downstream supplies, the Three Gorges Dam, China’s biggest hydropower project, will also increase water discharges by 500 million cubic meters over the next 10 days, the Ministry of Water Resources said Tuesday.
The heat also forced authorities in the southwestern province of Sichuan — home to around 84 million people and a key manufacturing hub — to order the shutdown of all factories for six days this week to ease a power shortage.
‘Longest’ and ‘strongest’ heat wave on record
China issued its highest red alert heat warning for at least 138 cities and counties across the country on Wednesday, and another 373 were placed under the second-highest orange alert, the Meteorological Administration said.
As of Monday, China’s heat wave had lasted 64 days, making it the longest in more than six decades, since full records began in 1961, the National Climate Center said in a statement. It also said it was the “strongest” on record and warned that it could worsen in the coming days.
“The heat wave this time is prolonged, wide in scope, and strong in extremity,” the statement read. “Taken all signs together, the heat wave in China will continue and its intensity will increase.”
The heat wave has also registered the largest number of counties and cities exceeding 40 degrees Celsius (104 degrees Fahrenheit) since records began, according to the statement. The number of weather stations recording temperatures of 40C and above has reached 262, also the highest. Eight have hit 44C.
Persistently high temperatures are forecast to continue in the Sichuan Basin and large parts of central China until August 26.
A “special case” of high pressure from the West Pacific subtropical high, stretching across much of Asia, is likely to be the cause of the extreme heat, said Cai Wenju, climate researcher with CSIRO, Australia’s national scientific research institute.
CNN’s Larry Register, Angela Dewan and Laura He contributed to this report.
The economy is growing by one measure, shrinking by another
Only eight days separated the two government reports, yet they seemed to describe entirely different realities.
The first showed a weak economy that — coupled with the highest inflation in 40 years — offered consumers nothing but grief. The second reflected a juggernaut that was minting jobs faster than workers could be found to fill them, with an unemployment rate that matched the pre-pandemic low of 3.5 percent.
“It’s normal for different economic indicators to point in different directions. It’s the magnitude of the discrepancies right now that’s unprecedented,” said Jason Furman, formerly President Barack Obama’s top economic adviser. “It isn’t just that the economy is growing in one measure and shrinking in another. It’s growing incredibly strongly in one measure while shrinking at a pretty decent clip in another.”
In Washington on Friday, President Biden took a victory lap for the job growth while claiming credit for gas prices having declined for more than 50 consecutive days. Yet he also acknowledged the disconnect between the sunny employment report and the inflation headaches that afflict many households.
“I know people will hear today’s extraordinary jobs report and say they don’t see it, they don’t feel it in their own lives,” the president said, speaking from a White House balcony. “I know how hard it is. I know it’s hard to feel good about job creation when you already have a job and you’re dealing with rising prices, food and gas, and so much more. I get it.”
The surprisingly robust jobs number seemed to call into question the president’s argument that the economy is undergoing a “transition” from its faster growth rates last year to a slower, more sustainable pace.
No one expects the economy to continue producing half a million new jobs each month. No one thinks it could without inflation remaining at uncomfortable heights.
Almost five months after the Federal Reserve began raising interest rates to cool off the economy and to bring down the highest inflation since the early 1980s, the labor market report showed that the nation’s central bank has more work to do. Average hourly earnings for private sector workers rose by 5.2 percent over the past year, which hints at the sort of wage-price spiral that the Fed is determined to prevent.
Last month, the Fed lifted its benchmark interest rate to a range of 2.25 percent to 2.5 percent, its highest level in almost four years. Yet in “real” or inflation-adjusted terms, borrowing costs remain deeply negative, which acts as a spur to economic growth.
Fed Chair Jerome H. Powell said last month that additional rate increases are likely when policymakers next meet on Sept. 21. The size of the next increase – either half a percentage point or three-quarters of a point – will “depend on the data we get between now and then,” he told reporters.
Investors see a 70 percent chance of the larger move, according to CME Group, which tracks purchases of derivatives linked to the central bank’s key rate.
On Wednesday, the government is scheduled to release inflation readings for July, which are expected to show a modest improvement compared to June’s 9.1 percent figure, thanks to falling energy prices.
Powell’s decision to stop telegraphing Fed moves by providing “forward guidance” of its plans is itself a sign that the current environment is murkier than usual.
“A lot of what’s happening in this economy is being driven by the pandemic, and then the pandemic response. And so, we are in a very unusual time, in many ways [it’s] challenging to sort of read through those data,” Loretta Mester, president of the Federal Reserve Bank of Cleveland, and a voting member of the Fed’s rate-setting committee, told The Washington Post this week.
Almost 22 million Americans lost their jobs between February and April of 2020 in covid’s first months. The unemployment rate hit 14.7 percent, the highest figure recorded by the Labor Department in a series that began in 1948.
With July’s gains, the economy now has recovered all of the lost jobs.
But the workforce has been reshaped. There are more warehouse and logistics workers today and fewer employees working for hotels and airlines.
Employers are reacting differently than they did before the pandemic to indications that the economy may be slowing, according to Gregory Daco, chief economist for EY-Parthenon. Rather than immediately resorting to significant layoffs, they are instead scaling back hiring or engaging in targeted job cuts.
Weekly first-time unemployment claims are up, but only to 260,000 from their 54-year low of 166,000 in March.
Consumers have also acted differently, buying more goods than normal while trapped at home during the pandemic’s initial wave. Retailers that ordered unusual volumes of furniture, electronics and apparel from overseas suppliers later misjudged the pace of consumers’ return to traditional buying patterns, leaving stores stuffed with unwanted goods.
On top of the pandemic’s lingering ills, the war in Ukraine has disrupted global commodity markets, contributing to higher inflation.
All of these forces combined to produce economic data that is unusual and sometimes contradictory. Friday’s jobs report showed 32,000 new construction jobs and 30,000 new factory jobs created in the month. Yet housing starts have fallen for the past two months and the latest ISM manufacturing reading was the weakest in two years.
“We are in somewhat of a dizzying business cycle. We’re getting economic data that is fluctuating quite rapidly and it’s very hard to get a precise read on where the economy is at any point in time,” Daco said.
Individual data points also provide snapshots of the economy that are out of sync, said Kathryn Edwards, an economist at the Rand Corp.
Friday’s Labor Department report tallied up jobs gained in July. The last consumer price index reading covered June. And the gross domestic product reading that started the recession furor described activity that occurred between April and June – and will be revised twice.
“It’s a challenge for an economist, but also for a reader who wants to understand how at risk they are for an economic downturn,” she said.
Labor market and output data have been telling different stories about the economy all year. After six straight months of shrinkage, the economy is roughly $125 billion smaller than it was at the end of 2021, according to inflation-adjusted Commerce Department data.
Yet employers have hired 3.3 million new workers over that same period.
How could more workers be producing fewer goods and services?
One explanation is that workers are less productive today than during the emergency phase of the pandemic, when companies struggled to keep producing their required orders with fewer workers, Furman said.
Indeed, non-farm business productivity in the first quarter fell 7.3 percent, the largest decline since 1947, according to the Bureau of Labor Statistics. Preliminary results for the second quarter will be made public on Tuesday and are likely to show the largest two-quarter drop in history, he said.
Those figures may overstate the change. During the pandemic, companies may have been able to maintain output with a covid-thinned workforce by exhorting or incentivizing the remaining workers to work harder or longer. But there is a limit to how long bosses can motivate people by citing emergency conditions.
“They worked extra hard, but they wouldn’t work extra hard forever,” Furman said.
Likewise, the labor force participation rate usually rises when employers are adding jobs and the unemployment rate is falling. But since March, it has fallen, according to the Bureau of Labor Statistics.
Some Americans retired instead of risking working during the pandemic. Others — mostly women — who lacked adequate child care, stayed home with young children or other vulnerable relatives.
An April paper by economists at the Federal Reserve Bank of Richmond found that “the pandemic has permanently reduced participation in the economy.”
Participation by Americans in their prime working years, ages 25 to 54, has almost entirely recovered. But for those 55 and older, there has been almost no improvement since the initial plunge at the outset of the pandemic. And for younger workers, age 20 to 24, participation is lower now than at the end of last year.
“I don’t think we have a great handle on why other workers are not coming back,” said Kathy Bostjancic, chief U.S. economist for Oxford Economics. “It’s just such an unusual period.”
Demand for big mortgages is shrinking as expensive homes linger
A “For Sale” sign in Crockett, California, on Tuesday, June 14, 2022.
David Paul Morris | Bloomberg | Getty Images
As consumers worry more about inflation, fewer are buying homes — and if they are, they’re buying less expensive homes. Mortgage demand fell last week compared with the previous week, and the average loan size shrank as well.
Mortgage applications to purchase a home fell 4% for the week and were 18% lower than the same week one year ago, according to the Mortgage Bankers Association’s seasonally adjusted index. The MBA also included an adjustment for the July Fourth holiday.
Buyers have been pulling back due, in part, to higher mortgage rates, but rates held steady last week. The average contract interest rate for 30-year fixed mortgages with conforming loan balances ($647,200 or less) remained at 5.74%, with points decreasing to 0.59 from 0.65 (including the origination fee) for loans with a 20% down payment.
“Purchase applications for both conventional and government loans continue to be weaker due to the combination of much higher mortgage rates and the worsening economic outlook,” said Joel Kan, an MBA economist. “After reaching a record $460,000 in March 2022, the average purchase loan size was $415,000 last week, pulled lower by the potential moderation of home-price growth and weaker purchase activity at the upper end of the market.”
Applications to refinance a home loan, which have been incredibly weak due to higher interest rates, rose 2% for the week but were 80% lower than the same week one year ago. At the same time last year, the average mortgage rate was 3.09%. There are very few remaining borrowers who don’t already have lower rates on their mortgages and who could benefit from a refinance.