June 24, 2022
The Supreme Court has overturned Roe vs. Wade, the legal decision that protected the right to an abortion. It could have lasting economic consequences, as our colleague Emily Peck covered last month.
- Today in Macro, we look at how Americans are spending their time and the survey on inflation that helped prompt a policy pivot — but may have been misleading.
Today's newsletter, edited by Javier E. David, is 643 words, a 2½-minute read.
1 big thing: How we spent our time
New Labor Department data shows how the pandemic has had lasting effects on how we live our lives — with deep implications for the economy's underpinnings.
Why it matters: Some of the shifts in the department's annual American Time Use Survey say a lot about the COVID-19 economy and signal why some sectors haven't returned to normal while others continued to thrive.
- Changes in work commuting reflect shifts in economic geography and labor force participation.
By the numbers: We spent 39 minutes grooming ourselves — the least amount of time on average in at least 10 years, which may be explained by Americans having fewer places to go.
- Less time was spent traveling to buy stuff (13 minutes versus 10 minutes per day in 2019), perhaps a nod to the wider adoption of online shopping.
- We also spent more time sleeping (nearly 9 hours each night) than any year since 2003, when the government started collecting data.
But the most striking shift was where Americans worked, with knock-on effects for businesses that once relied on heavy office traffic. In year two of the pandemic, almost 40% did at least part of their job from home (versus 25% in 2019).
- The average time spent working among the general population fell, with millions still out of work compared to 2019. Among the employed, those who worked at a workplace did so for roughly 8 hours a day (little changed from 2019, not including travel). Those at home worked for about 6 hours each day.
- Prime-age adults who were looking and interviewing for work spent more time doing so in 2021 (an average of 2.8 hours each day) than in 2019. That may reflect a higher share of job searchers entering the labor force or more searchers looking to switch industries, among other factors, but both could lengthen the process, says Kathryn Edwards, an economist at RAND.
One dynamic that persists is the gap in household labor. That fact remains the same: women continue to bear the bigger burden.
- On average, working women did 35 more minutes of housework each day than working men in households with older children. (In 2019, it was 39 more minutes.)
- In households with children under age 6, women spent twice as much time than men providing physical care to their children.
Of note: The agency said it couldn't produce an accurate estimate for how people spent their time in 2020 since COVID-19 lockdown hindered its data collection for several months.
2. Inflation head-fake
Last week, the Fed made an abrupt pivot by raising interest rates 0.75 percentage points, after weeks of signaling that only a half-point rate hike was likely.
- But a key data point that triggered the change is looking like a misleading head-fake.
Driving the news: The University of Michigan consumer sentiment index includes a question about long-term inflation expectations. The June 11 preliminary release showed Americans expecting 3.3% longer-term inflation, up from 3% and ringing the Fed's alarm bells.
- But the final June reading released this morning showed it ticked up only to 3.1%, a less worrying number.
Yes, but: That came after chair Jerome Powell specifically mentioned the "eye-catching" number as a factor in the Fed's last-minute change of plans.
Between the lines: There were other, more reliable indicators that triggered the pivot, specifically the red-hot May Consumer Price Index. But the Fed's knee-jerk reaction to the survey is a bad look for Powell.
What they're saying: Bloomberg columnist Jonathan Levin had a prescient piece earlier in the week warning that the Fed may have put too much weight on the preliminary survey, which is based on only 500 respondents.
- "[T]o the extent that it was the Michigan survey that cemented the decision, the Fed made the right decision for the wrong reasons," Levin wrote.