Employment has not (edit: recently) been the problem.
The problem is that food prices are insanely high, home prices are insanely high, rent is insanely high, etc. Incomes haven't kept up with inflation, especially asset price inflation, and economic inequality is as bad as it has ever been.
And this situation developed while unemployment rates were generally low (except during the pandemic). I think we're focusing on the wrong measures.
Food and rent prices are definitely out of control, but wage growth actually outpaced inflation [1]. Whether wages outpaced real cost of living including local rents, I have my doubts given the widely reported fact that half of Americans can now not afford their rent using the standard 30% rule [2].
Your first source doesn't really support its own headline. "Workers’ Paychecks Are Growing More Quickly Than Prices" becomes "most workers" in the subhead, then "57 percent" in the text.
> 57 percent earned higher annual inflation-adjusted wages than the year before
Which means 43 percent did not, which isn't that good.
And the housing situation in particular is worse, when you consider that that year-over-year CPI increase was 3.1%, but "S&P Dow Jones Indices’ CoreLogic Case-Shiller national home price index rose 5.1%"[1] over the same time. IOW, most workers' wages have fallen relative to home prices.
> Young adult workers ... have seen their real median wage rise 12 percent since the onset of the pandemic
The CPI since early 2020 has risen about 20%, so those wages, before adjustment, must have risen about 35%. But "U.S. home prices are now up 45% since March 2020, the early days of the pandemic."[1]
Other sources paint a different picture; real median personal income is flat[0] (really, within $60 a year), and real median household income is lower[1], compared to pre-pandemic.
Food prices, rent - true they are high, but there is hope. Average hourly earnings are growing faster than inflation since early 2023.
Home prices - these will fall when interest rates fall, which can only happen when the Fed sees inflation fall a bit more. While employment is high and inflation moderate (like it is now), the Fed is reluctant to cut rates.
Incomes and inflation - didn’t keep pace in 2021 and 2022, but they did in 2023.
Economic inequality - reduced in the last few years, mainly because lower wage workers have seen bigger raises than high wage ones.
This means that we are discussing the right metrics (employment, growth, inflation), because the one you care about are downstream of these. And the right metrics have looked good for about a year.
> Home prices - these will fall when interest rates fall
This is the opposite of what will happen. Homebuyers express their housing budget in the amount they can spend each month. That then translates to a home price. If rates come down, that budget translates to a higher home price. (All things equal, if a buyer has already decided to spend $X, they are not going to spend 0.8 * $X to get a lesser place just because rates have come down.)
When rates come down, houses are going to get still more expensive.
In the short term that's absolutely correct. In the medium term higher home prices and lower interest rates encourage more building. Assuming that NIMBYs don't prevent that construction (big if), that would lead to lower home prices.
But high interest rates isn't making things affordable because first time buyers can't afford a mortgage at those rates.
Will home prices ever come down without additional housing supply? If salaries are doubled, rent will also double because that much people will pay as they must live somewhere. Housing is essential; if supply is less than demand, no fiscal policy can help.
> if supply is less than demand, no fiscal policy can help
Fiscal policy means government taxation and spending - subsidies for home building would be a fiscal policy and would help.
I think you mean no monetary policy can help.
Even there I disagree. Easy money mostly flowed into the hands of the wealthy, who then bought homes as investments, driving up home prices to the point that average people couldn't afford to buy them to live in.
Or people decide that core coastal metros aren't all they're cracked up to be or that they're willing to compromise on climate/other factors for much cheaper housing prices. There's no real shortage of housing--just housing that is in areas a fair number of people prefer given the choice.
The problem is that food prices are insanely high, home prices are insanely high, rent is insanely high, etc. Incomes haven't kept up with inflation, especially asset price inflation, and economic inequality is as bad as it has ever been.
And this situation developed while unemployment rates were generally low (except during the pandemic). I think we're focusing on the wrong measures.