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Thread: The US Recovery

  1. #736
    Senior Contributor DOR's Avatar
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    Follow on to an earlier theme: unemployment, as we all understand it, is a consistent measure. Inserting caveats such as “people are dropping out of the labor force and going on disability,” or “you’re not counting those who gave up looking for a job” just don’t cut it.

    (Ignore the sharp drop-off on the right of the first graph: no data on population for the final data point.)

    ADD: Since 2014, we've had the lowest weekly claims as a percent of the relevant population, in 50 years.
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    Last edited by DOR; 11 May 17, at 18:19.

  2. #737
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    Yea sure, like there x many unemployed in the UK (whatever the number is) apart from those living on the streets, in hospital or on some benefit which makes them 'not unemployed' in the bureaucratic sense, in prison and all the rest because they don't count right? There are lies, 'spin', damn lies and statistics and we all know how the unemployment figures can be fiddled.

  3. #738
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by snapper View Post
    Yea sure, like there x many unemployed in the UK (whatever the number is) apart from those living on the streets, in hospital or on some benefit which makes them 'not unemployed' in the bureaucratic sense, in prison and all the rest because they don't count right? There are lies, 'spin', damn lies and statistics and we all know how the unemployment figures can be fiddled.
    None so blind as she who will not see ...

  4. #739
    Global Moderator Defense Professional JAD_333's Avatar
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    Score one for Trump? Yet to see the particulars. Could be window dressing or could be the real deal.

    "Reshaping their trade relationship, the U.S. and China have revealed a new 10-point package that will see the latter open its market to American companies and agencies. Commerce Secretary Wilbur Ross said the import/export deals on beef, poultry, natural gas, agriculture, financial services and biotechnology will help reduce the massive trade deficit with Beijing."

    From Seeking Alpha news feed.
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  5. #740
    Senior Contributor GVChamp's Avatar
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    Quote Originally Posted by snapper View Post
    Yea sure, like there x many unemployed in the UK (whatever the number is) apart from those living on the streets, in hospital or on some benefit which makes them 'not unemployed' in the bureaucratic sense, in prison and all the rest because they don't count right? There are lies, 'spin', damn lies and statistics and we all know how the unemployment figures can be fiddled.
    Was working on a post last night, forgot to submit before leaving work.

    "Not working" is not the same thing as "unemployed." Unemployment needs a consistent, useful measurement and definition, so we can target economic policy accordingly. So various people who dropped out of the labor force for any reason and are no longer looking for work are not "unemployed." You have to actually be looking for a job in order to get a job, and that's the figure we target.

    Our unemployment figure is quite low. This suggests that we are at, or near, full employment. So we are not going to begin massive stimulus programs, which will have little affect besides driving up inflation.

    Our other labor market indicators tell us the same story:

    1. Quits are up. People are voluntarily leaving their jobs. That means they think they can get new, better paying jobs.
    2. Jobless claims are down. Companies are not laying people off like they used to.
    3. Wage growth is there.
    4. Labor cost growth is there.

    All our indicators tell us that we are nearing full employment. There's been a decline in the labor force, but more stimulus is not going to affect that.
    "The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood"-Otto Von Bismarck

  6. #741
    Senior Contributor DOR's Avatar
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    Quote Originally Posted by GVChamp View Post
    Our unemployment figure is quite low. This suggests that we are at, or near, full employment. So we are not going to begin massive stimulus programs, which will have little affect besides driving up inflation.
    That's the kind of logical, useful observations that never make it into reality for the simple reason that economists understand such things and politicians don't care.

    We probably will get a large fiscal stimulus, because the Trumpeting GOPers want to further line the pockets of their big-money donors. Taking money from the many to redistribute to the few -- basic GOPer philosophy over the past 35 years -- and doing so in a way that ramps up the fiscal deficit -- again, GOPer 101 -- is always going to be "stimulating."

    It might well drive up inflation in normal times, but the on-going recovery from the 2007-09 economic disaster has left us with very little that is normal.

  7. #742
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    Economists are puzzled about why incomes aren’t rising — but workers have a good hunch
    By Pedro Nicolaci da Costa

    Economists are often wringing their hands over why, despite a continuous eight-year economic recovery, workers’ wages remain largely stagnant, extending a trend that began some three decades ago.

    Yet anyone who has applied for a job in the last couple of years knows that, while the US unemployment rate is historically low at 4.4%, the labor market isn’t exactly bustling.


    Companies have become a lot more reticent about making new investments in the wake of the Great Recession and during the weak economic recovery that has followed it. That includes investing in people, and the hiring process has become slower and more onerous.

    It also means wage increases have become even harder to come by.

    The recession caused lasting damage to the job market which still resonates to this day. Steven Partridge, vice president for workforce development at Northern Virginia Community College (NOVA), says the crisis created what he calls "degree inflation" in job requirements — a trend correlated with stagnant and sometimes falling incomes as workers lost their jobs and considered themselves lucky to take lower-paying ones.

    In other words, because applicants were so desperate and the pool was so wide, the bar for hiring became unrealistically, and often unnecessarily high. The trend has abated, but not fully receded.

    "The downturn made everyone push up their education requirements,” Partridge told Business Insider.

    Several job market indicators point to underlying weakness — high levels of long-term joblessness, low labor force participation and, yes, a distinct lack of wage growth.

    Albert Edwards, market strategist at Societe Generale, deserves credit for doing something that’s rather rare on Wall Street — admitting he was wrong, specifically about the prospect of imminent wage increases.

    "Talking about wrong, I have to put my hands up. I have been expecting US wage inflation to roar ahead over the past three months to well above 3%, yet every data release has surprised on the downside," he wrote in a note to clients.

    "Wage inflation, as measured by average hourly earnings, has actually leveled off at close to 2-1⁄2% while wage inflation for ‘the workers’ is actually slowing! Strictly speaking, the workers are defined (by the BLS) as those who are not primarily employed to direct, supervise, or plan the work of others. Hey, that's me!"

    Fed officials have also struggled to understand the absence of wage increases. In a recent research brief from the San Francisco Fed, staff economist Mary Daly and co-authors reflect on what they see as a surprising trend.

    "Standard economic theory tells us that wage growth and unemployment are intimately linked. Wage growth slows when the unemployment rate rises and increases when the unemployment rate falls," they write. "The experience since the Great Recession has been very different."

    "This slow wage growth likely reflects recent cyclical and secular shifts in the composition rather than a weak labor market. In particular, while higher-wage baby boomers have been retiring, lower-wage workers sidelined during the recession have been taking new full-time jobs," they said. "Together these two changes have held down measures of wage growth."

    Their explanation provides little comfort in the face of the depressed labor market many Americans still face, especially lower-income and minority families.

    The Fed authors also suggest a factor in low income growth that might ring true to those families: " As long as employers can keep their wage bills low by replacing or expanding staff with lower-paid workers, labor cost pressures for higher price inflation could remain muted for some time."

    As suggested in that last excerpt, labor’s bargaining power vis-a-vis employers is probably at least as important as unfavorable demographics in explaining slow wage growth. It will take a substantially stronger economy to tilt that balance back in workers' favor. Link
    __________________

    Something I've been saying for years. This "recovery" is nothing of the kind for your average working stiff.
    Far better it is to dare mighty things, than to take rank with those poor, timid spirits who know neither victory nor defeat ~ Theodore Roosevelt

  8. #743
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    Quote Originally Posted by TopHatter View Post
    [
    __________________

    Something I've been saying for years. This "recovery" is nothing of the kind for your average working stiff.
    Finally seeing improvement in my career field. The economy has grown strong enough that more and more wrecker companies are telling motor clubs like AAA and All State Roadside to bugger off. This has lead to major delays in service as the companies that promise service find they cannot deliver until they flat out pay a local company local rates. That is not how they make money. This is forcing them to raise rates offered to contracted carriers. This might not mean much for drivers who work on salary or hourly schemes, but for those of us who work on commission it is a raise.

  9. #744
    Defense ProfessionalSenior Contributor tbm3fan's Avatar
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    Quote Originally Posted by TopHatter View Post

    Something I've been saying for years. This "recovery" is nothing of the kind for your average working stiff.
    and out here we have a news article one week ago about how Google and Facebook are paying summer interns $8000/month. No wonder the pay scale of some (roughly 20% in tech) has so distorted the cost of living for the majority in the Bay Area. There are a few places where $100,000 is considered poverty level.
    Last edited by tbm3fan; 21 May 17, at 05:25.

  10. #745
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    Quote Originally Posted by tbm3fan View Post
    and out here we have a news article one week ago about how Google and Facebook are paying summer interns $8000/month. No wonder the pay scale of some (roughly 20% in tech) has so distorted the cost of living for the majority in the Bay Area. There are a few places where $100,000 is considered poverty level.
    Anyone interested in actual data?
    https://news.research.stlouisfed.org...cators-series/

    Quits nearly at pre-crisis levels.
    Nearly: https://fred.stlouisfed.org/series/DHIDFHQTRT

    Vacancy-to-unemployment blew right past pre-crisis levels: https://fred.stlouisfed.org/series/DHIDFHVTUR

    Vacancy duration at unprecidented highs: https://fred.stlouisfed.org/series/DHIDFHMVDM

  11. #746
    Senior Contributor GVChamp's Avatar
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    Those wage increases are not adjusted by CPI. CPI has been much more muted during the recent recovery than during past business cycle recoveries. You can't see it too well, but the right-hand % is wage growth after accounting for CPI. The left hand is the year. I bolded the last few years of each cycle.

    Year Jan Average CPI Inflation Real Wage Wage Growth
    1964 2.5 31 1.30% 8.064516129
    1965 2.58 31.5 1.60% 8.19047619 1.56%
    1966 2.68 32.5 3.00% 8.246153846 0.68%
    1967 2.79 33.4 2.80% 8.353293413 1.30%
    1968 2.94 34.8 4.30% 8.448275862 1.14%

    1969 3.12 36.7 5.50% 8.501362398 0.63%
    1970 3.31 38.8 5.80% 8.530927835 0.35%
    1971 3.52 40.5 4.30% 8.691358025 1.88%
    1972 3.8 41.8 3.30% 9.090909091 4.60%

    1973 4.03 44.4 6.20% 9.076576577 -0.16%
    1974 4.26 49.3 11.10% 8.640973631 -4.80%
    1975 4.61 53.8 9.10% 8.568773234 -0.84%
    1976 4.9 56.9 5.70% 8.611599297 0.50%
    1977 5.26 60.6 6.50% 8.679867987 0.79%
    1978 5.66 65.2 7.60% 8.680981595 0.01%
    1979 6.14 72.6 11.30% 8.457300275 -2.58%

    1980 6.57 82.4 13.50% 7.973300971 -5.72%
    1981 7.19 90.9 10.30% 7.909790979 -0.80%
    1982 7.72 96.5 6.10% 8 1.14%
    1983 8.06 99.6 3.20% 8.092369478 1.15%
    1984 8.38 103.9 4.30% 8.065447546 -0.33%
    1985 8.61 107.6 3.50% 8.001858736 -0.79%
    1986 8.85 109.6 1.90% 8.074817518 0.91%
    1987 9.02 113.6 3.70% 7.940140845 -1.67%
    1988 9.29 118.3 4.10% 7.852916314 -1.10%
    1989 9.65 124 4.80% 7.782258065 -0.90%

    1990 10.02 130.7 5.40% 7.66641163 -1.49%
    1991 10.38 136.2 4.20% 7.621145374 -0.59%
    1992 10.65 140.3 3.00% 7.590876693 -0.40%
    1993 10.93 144.5 3.00% 7.564013841 -0.35%
    1994 11.21 148.2 2.60% 7.564102564 0.00%
    1995 11.49 152.4 2.80% 7.539370079 -0.33%
    1996 11.87 156.9 2.90% 7.565328235 0.34%
    1997 12.29 160.5 2.30% 7.657320872 1.22%
    1998 12.79 163 1.60% 7.846625767 2.47%
    1999 13.27 166.6 2.20% 7.965186074 1.51%

    2000 13.75 172.2 3.40% 7.984901278 0.25%
    2001 14.29 177.1 2.80% 8.068887634 1.05%
    2002 14.76 179.9 1.60% 8.204558088 1.68%
    2003 15.22 184 2.30% 8.27173913 0.82%
    2004 15.5 188.9 2.70% 8.205399682 -0.80%
    2005 15.9 195.3 3.40% 8.141321045 -0.78%
    2006 16.42 201.6 3.20% 8.14484127 0.04%
    2007 17.09 207.3 2.90% 8.24409069 1.22%

    2008 17.74 215.3 3.80% 8.239665583 -0.05%
    2009 18.4 214.5 -0.40% 8.578088578 4.11%
    2010 18.89 218.1 1.60% 8.661164603 0.97%
    2011 19.3 224.9 3.20% 8.581591819 -0.92%
    2012 19.57 229.6 2.10% 8.523519164 -0.68%
    2013 19.94 233 1.50% 8.557939914 0.40%
    2014 20.4 236.7 1.60% 8.618504436 0.71%
    2015 20.81 237 0.10% 8.780590717 1.88%
    2016 21.32 240 1.30% 8.883333333 1.17%
    2017 21.83 244.3 1.80% 8.935734752 0.59%



    CPI overstates inflation regardless, and you can see that the wages of non-supervisory workers is doing better, post-CPI adjustment, than most other business cycles.


    EDIT: There's a better looking graph, but it's all private workers (not excluding supervisory). Also weekly and not hourly, but it points to the same general point.
    https://fred.stlouisfed.org/series/LES1252881900Q

    Also, supervisors and managers are important parts of the economy. We aren't talking "CEOs," we're talking almost a fifth of workers. Mostly middle management. They are an important labor cost and an important part of the economy.
    Last edited by GVChamp; 22 May 17, at 17:22.
    "The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood"-Otto Von Bismarck

  12. #747
    Senior Contributor DOR's Avatar
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    GVChamp,

    CPI overstates inflation regardless,
    If the numbers don’t come out as you think they should, just blame the data.

    Why oh why won’t they go back to the good old 1970s definition of CPI?
    After all, aside from the fact that they are totally obsolete and irrelevant to the cost of living in the 21st century, what’s wrong with

    Rotary dial home landline phones,
    Betamax cassettes,
    Hamilton Beach popcorn poppers,
    Benson & Hedges cigarettes,
    Roadrunners, Rancheros and, let’s not forget the
    AMC Pacer.

    That’s what a CPI should look like in 2017!
    [/sarcasm]

    Try these graphs:
    https://fred.stlouisfed.org/series/LEU0252881600A

  13. #748
    Senior Contributor GVChamp's Avatar
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    I don't have a problem with that graph, but the article is specifically calling out wages for non-supervisory workers. I didn't find any series like that in the FRED databases, so I had to back into my own.

    Either way, the reason wage growth looks lower is just because the overall inflation is lower. Wages are rising faster than they were in most prior recoveries. There's not a lot of evidence we have much labor slack left and wages are increasing to reflect that.
    "The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood"-Otto Von Bismarck

  14. #749
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    Quote Originally Posted by GVChamp View Post
    I don't have a problem with that graph, but the article is specifically calling out wages for non-supervisory workers. I didn't find any series like that in the FRED databases, so I had to back into my own.

    Either way, the reason wage growth looks lower is just because the overall inflation is lower. Wages are rising faster than they were in most prior recoveries. There's not a lot of evidence we have much labor slack left and wages are increasing to reflect that.


    It took me all of 20 seconds to find nonsupervisory wages data.

    Average Hourly Earnings of Production and Nonsupervisory Employees: Total Private
    https://fred.stlouisfed.org/series/AHETPI

    Average Hourly Earnings of Production and Nonsupervisory Employees: Manufacturing
    https://fred.stlouisfed.org/series/CES3000000008

    Average Hourly Earnings of Production and Nonsupervisory Employees: Construction
    https://fred.stlouisfed.org/series/AHECONS


    Just type "nonsupervisory" into the search engine

  15. #750
    Senior Contributor GVChamp's Avatar
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    Weird, I tried searching at my work computer and my phone and got nothing.
    "The great questions of the day will not be settled by means of speeches and majority decisions but by iron and blood"-Otto Von Bismarck

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