Navigating Long-Term Unemployment

1. Inflation is heading the wrong way. March consumer prices were up 3.3% from a year ago, the highest in nearly two years, with energy costs the primary driver and the 2% Fed target now five years out of reach.
2. The Fed has limited tools. The Fed has little control over global oil markets or war, but can choose to 'look through' a one-time gasoline price surge as non-persistent inflation, as Jay Powell has signaled.
3. A supply shock could become a growth problem. If the Strait of Hormuz stays closed for months, the issue shifts from price to actual energy shortages, potentially becoming a bigger growth threat than an inflation threat with consumers already stretched.
4. Housing costs may ease soon. Shelter costs make up about a third of CPI and have stalled near 3% annual increases, but improving rental supply in metros like Austin, Phoenix, and Atlanta could pull them down, though not far below the historically normal 3%.
5. Long-term unemployment is rising sharply. The number of Americans unemployed for six months or more is up more than 300,000 over the last year, even with the overall jobless rate at 4.3%, as job-hopping froze into a holding pattern.
6. Don't let the job hunt consume you. Career coach Laniece Harris advises limiting job-search work to about two hours a day, taking gig work to pay bills, and openly framing that hustle as evidence of flexibility and resilience to employers.
7. Economics drives sustainability policy. Composting and food-waste diversion struggle in states like Ohio where landfill tipping fees are cheap and the state actually profits by importing over 8 million tons of out-of-state trash annually.
8. Inflation is changing consumer behavior. A Deloitte study found about 40% of Americans cut back on streaming services in the last three months to save money, despite more than 80% using at least one service.

The March Inflation Report and the Fed's Bind

The Labor Department reported that consumer prices in March rose 3.3% from a year earlier, the highest inflation reading in nearly two years. In the Friday wrap discussion, the mood around the report was decidedly negative. Rachel Siegel of The Washington Post noted that adjectives like 'worst,' 'biggest,' and 'largest monthly gain' were being tossed around, words you don't want to see attached to everyday prices. Much of the increase was driven by energy costs, which households feel acutely. Sudeep Reddy of MS Now called the report 'concerning' but said it had been expected for weeks given pain at the gas pump, and emphasized that whether this is a lasting trend or just a blip depends entirely on how long the ongoing war lasts and whether oil and gasoline prices correct.

On the Fed's prospects, Siegel observed that inflation has now run above the central bank's target for roughly five years, not for lack of effort. It is hard to imagine the Fed continuing to cut rates if inflation is both moving in the wrong direction and failing to make progress. A soft landing isn't impossible, but the Fed remains in its long-running conundrum of balancing risks that can pile up quickly on both the labor-market and inflation sides.

Reddy stressed how little control the Fed actually has: none over global oil markets and none over a war. The Fed does, however, have the ability to look through the shock. Chair Jay Powell has been clear that a single surge in gasoline prices is a one-time increase rather than persistent inflation, and the Fed is so far treating it that way. The unknown is duration. White House officials expressed doubt the Strait of Hormuz would reopen quickly, possibly taking a couple of months, which Reddy warned could turn this into more of a growth problem than an inflation problem in the near term, with consumers stretched and unable to stay afloat.

Oil, the Strait of Hormuz, and Long-Term Energy Risk

Oil prices kept climbing as the Strait of Hormuz remained effectively locked down during a shaky ceasefire. Reddy framed the closure of the strait as something long treated as 'lore' — a scenario everyone considered too unbelievable to actually happen — yet it has now persisted for weeks without triggering an absolute crisis. He warned, however, that the world is probably not far from one: the last shipments of oil bound for Europe and Asia have largely already arrived, and those regions will soon start dealing with shortages.

Reddy argued that when the situation shifts from a price issue to an actual supply issue — when people genuinely cannot fill up — that will be the big wake-up call for many countries about where they source their energy. The long-term implications include building more supply, more reserves, more safeguards, and more backups into the system. Countries may be forced to deal with suppliers they would normally avoid, and in other cases the disruption may accelerate the move away from oil as quickly as possible.

Consumer Sentiment and the Politics of Affordability

Consumer sentiment came out at a record low, with inflation expectations creeping up. Siegel explained that gas prices function as a 'billboard' for how the economy is faring, much as they did after Russia invaded Ukraine. Seeing the price of a gallon of gasoline compound day after day across much of the country has a real psychological impact on top of the financial sting of filling up at the pump.

She tied this directly to politics: people vote on affordability, especially on basics like housing, gas, and food, which played a major role in both how people felt and how they voted in the last election. Siegel predicted affordability will remain a prevalent part of the midterm conversation unless people start to feel real, durable relief — not just a lower current price level, but relief that feels like it will actually stick.

Housing and Shelter Costs in the CPI

Shelter costs — essentially rent plus what homeowners would pay if they were renting — make up about a third of the overall Consumer Price Index, giving them outsized influence on inflation readings. After spiking during the pandemic and then cooling, the measure has stalled over the last three months at roughly a 3% annual increase.

Jenny Schutz, a housing economist at Arnold Ventures, offered some good news: home prices are moderating and rental supply is improving. Metros like Austin, Phoenix, and Atlanta have built large numbers of apartments, and as that supply came online, housing costs there came down, pushing national average asking rents lower. According to Realtor.com, asking rents fell more than 1.5% in February.

Realtor.com senior economist Jake Krimmel explained why the CPI doesn't yet reflect this. CPI and market measures differ in what they capture: the Bureau of Labor Statistics looks at both new and old rents, and about 60% of rental units are under 12-month leases, so rents can't immediately adjust to market changes. A large chunk of the shelter calculation is owner-equivalent rent — what people think their homes would rent for — which lags as homeowner expectations adjust. Krimmel said the CPI will eventually catch up but cautioned against expecting shelter inflation to fall much below its current 3%, which actually hovers around pre-pandemic averages and is relatively normal. The implication is that the burden of pulling overall inflation lower will likely fall on other CPI components.

On the Ground: A Small Business Setting Prices

Ashley Morgan, who runs the gift and DIY store Unglued in Fargo, North Dakota, described what inflation feels like from the seller's side. Business has been roughly average — a weaker March than the prior year (partly due to snowstorms), but stronger January and February. Workshops were up considerably, while the retail side was down.

Morgan detailed concrete supplier price increases. One of her main jewelry makers raised prices 10 to 25%, the first time that had ever happened. Two suppliers of the DIY kits she purchases wholesale raised prices — one doubled its prices in the last quarter, another increased a fair amount. Acutely aware that she can't simply pass those costs along (she knows over-priced kits 'won't move' in her store), she has been hunting for alternative options at price points her typical shopper will accept.

Looking ahead, Unglued plans to produce a few of its own products for the first time — items like a Fargo cribbage board — to fill gaps and gain control over pricing for the end shopper. Morgan acknowledged that financial stress as a small business owner 'literally never goes away,' and that broader uncertainty about where the world is heading weighs on her more than the day-to-day numbers. Still, after a quarterly crew meeting she felt hopeful, concluding that pushing 'silly fun' events is exactly what people need when things feel heavy.

Long-Term Unemployment in a Frozen Labor Market

Although the headline unemployment rate sits at 4.3%, a growing number of Americans have been job-hunting for months. After six months without work, a person is officially considered long-term unemployed, and the number in that category is up more than 300,000 over the last year. Blake Farmer of WPLN in Nashville profiled several of them.

Brett Kling, an HR and technology analyst with a long resume and a master's degree in organizational psychology, received an automated rejection just three minutes before his interview began. He stays motivated by attending as many mixers, meetups, and in-person events as possible, believing that in the age of AI, human connection is his only real hope. He even attends career transition support group meetings in person.

That support group, run through the Society for Human Resource Management and facilitated by Lauren Kiproff-Downer, spans a wide array of industries — automotive, tech, and a great deal of health care. Kiproff-Downer noted the striking part: these are people who previously would never have had to wait, the same workers who just a few years ago, when unemployment was below 4%, were being offered signing bonuses to lure them into new roles.

University of Tennessee labor economist Celeste Carruthers explained the root cause: people simply aren't moving around like they used to. Both the openings and separations sides of the job market are in a holding pattern. Farmer likened it to a giant game of musical chairs after the COVID pandemic — employees job-hopped chasing higher pay and better benefits, but those left without a seat have struggled to fit back in.

Laniece Harris, a former HR executive who couldn't land a role matching her executive experience, pivoted into career coaching. She's back to work and loves it, though her salary and role look very different than before. That lived experience lends her credibility. Her advice: don't let the job hunt dominate every minute — limit it to roughly two hours a day, leaving space for self-care so you don't burn out before even starting a new job. Set aside time for work that pays the bills, and even if it's gig work like rideshare or delivery, don't hide it in interviews — it demonstrates flexibility, adaptability, and resilience, skills employers value. The hardest part, she said, is remembering you are not defined by what you do, and that ultimately you don't have control over the outcome.

Steve Jones, a marketing director for a global sewing machine company, was laid off about a year ago in a corporate restructuring. In his mid-50s, he feels his experience level works against him with recruiters even when he'd accept a pay cut, so he's considering a pivot to carry him through to retirement age. In the meantime, he's making the most of the moment by finally tackling a novel he always felt he had in him — a lifelong dream pursued amid the frustration of a drawn-out search.

The Economics of Composting and Food Waste in Ohio

Organic waste — banana peels, apple cores, yard trimmings — makes up about a third of the country's solid waste, and releases planet-warming gases when it rots in landfills. About a dozen states have policies addressing food waste, including composting requirements, but Ohio is not one of them, and reporter Kaylee Wells's own city has no food-waste program, leaving her to compost in her backyard.

The reason is economics. Tipping a truckload of trash into an Ohio landfill costs about half what it does in a state like Massachusetts. Brian Staley of the Environmental Research Education Foundation framed it as a supply-demand equation: Northeast states have higher tipping fees because they lack sufficient landfill capacity, while Ohio has more land and fewer people, so conserving landfill space and repurposing trash aren't major concerns. Waste-to-energy facilities and cost-effective composting are concentrated in the Northeast for the same reason.

Sam Crowell, Ohio University's sustainability director, worked on a regional composting effort in Athens, Ohio. Because composting would add to residents' monthly trash bills, participation came in at a fraction of what he hoped — many residents already struggling financially simply didn't want another fee. The bigger barrier is that Ohio imports more than 8 million tons of trash a year from more populated states like New Jersey and New York City, hauling it in to fill its valleys. Raising costs would jeopardize that revenue stream, meaning Ohio actually makes money on other people's trash. Without a financial incentive, Staley noted, there's little political will to create policy or regulation around composting, and sustainability is a tough sell when pitted against jobs and local revenue.

Despite the stacked deck, Nathan Rutz, director of soil at the small Cleveland group Rust Belt Riders, is committed to trying. He calls his operation 'the conductor of the food scrap orchestra in Cleveland.' The company collects roughly 4,000 tons of food scraps annually using dozens of black garbage cans deployed at drop-off sites around greater Cleveland — cans brimming with scraps and well-fed bugs — then turns the material into compost it sells. Rutz estimates he processes only about 1% of the food scraps generated locally, candidly admitting the amount diverted is 'chump change' with no significant current effect. Still, residents willing to pay extra to be sustainable are growing in number; his business is growing, and over the past decade free food-scrap drop-off sites have appeared in dozens of Ohio cities as local governments pursue their own sustainability goals absent state mandates. As Rutz put it, 'There's only ever a fool's hope. But what else am I going to do with my life?'

Markets and Final Note

On Wall Street, the Dow Jones fell 269 points (0.6%) to 47,916; the Nasdaq gained 80 points (0.4%) to 22,902; and the S&P 500 dipped 7 points (0.1%). For the week, the Dow rose 3%, the Nasdaq was up 4.7%, and the S&P added 3.6%. With CPI showing fruits and vegetables up 4% year over year, related companies moved: Calavo Growers (avocados) declined 0.2%, Seneca Foods grew 1.6%, and Fresh Del Monte dipped 2%. Bonds fell, with the 10-year Treasury yield rising to 4.32%.

In a closing note filed under 'probably because of inflation,' a new Deloitte study found that more Americans are dropping streaming services to save money — about 40% of those polled said they've cut back in the last three months. That's notable given Americans' fondness for streaming: Pew Research finds more than 80% use at least one service, a figure now likely to decline.