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Thread: The US Recovery

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    Senior Contributor DOR's Avatar
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    The US Recovery

    Having lost our way in the discussion about the economy, banks and gold, a thread that I quite enjoyed, I propose another chance.

    Surprising facts about US weekly unemployment claims (data first collected in 1967).
    (‘000)
    _ _ _ _ _ _ _Avg claims _ _ as % of Pop _ _ _of Labor Force _ _of Civ. Employment
    1967-76 _ _ 292,474 _ _ _ _ _ 1.4 _ _ _ _ _ _ _ _ _ 3.4_ _ _ _ _ _ _ _ _ _ _3 .6
    1977-86 _ _ 419,232_ _ _ _ _ _1.8 _ _ _ _ _ _ _ _ _ 3.8_ _ _ _ _ _ _ _ _ _ _ 4.2
    1987-96_ _ 360,199_ _ _ _ _ _ 1.4_ _ _ _ _ _ _ _ _ _2.8 _ _ _ _ _ _ _ _ _ _ _3.0
    1997-06_ _ 343,103_ _ _ _ _ _ 1.2_ _ _ _ _ _ _ _ _ _ 2.4_ _ _ _ _ _ _ _ _ _ _ 2.5
    2007-09_ _ 433,586_ _ _ _ _ _ 1.4_ _ _ _ _ _ _ _ _ _ 2.8_ _ _ _ _ _ _ _ _ _ _ 3.0
    2010-12_ _ 414,404_ _ _ _ _ _ 1.3_ _ _ _ _ _ _ _ _ _ 2.7_ _ _ _ _ _ _ _ _ _ _ 3.0
    2013_ _ _ _ 360,542_ _ _ _ _ _ 1.1_ _ _ _ _ _ _ _ _ _ 2.3_ _ _ _ _ _ _ _ _ _ _ 2.5

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    Senior Contributor Bigfella's Avatar
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    Can you unpack that a bit for us DOR. To what extent have chances in policy & definition impacted those numbers in different directions ie. women entering the workforce; changes to definitions of 'unemployment'; changes to welfare.


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    David I also regret the way the last thread ended as I was also enjoying it but I will regard this as a new chance for all (including myself) to be more rational and civil and hold no grudges. I wonder if you have an analysis of the Japanese sell off? Should the Japanese sentiment continue next week, no doubt courtesy of the horrid Kyle Bass, where else suffers? I assume you have noted the rises in Spanish etc bond yields. Does 'safe money' run to US bonds, of which apparently Bernanke now holds 30% of? Would this be potential out time for the Fed?

    I also welcome your thoughts on what caused the Japanese turn down turn and bond spike and any suggestions you would have for the BoJ.

    Regarding your above numbers I submit the following charts:

    Attachment 32988

    and this from the Bureau of Labour Statistics:

    Attachment 32989

    Bureau of Labor Statistics Data

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    Senior Contributor DOR's Avatar
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    .

    Bigfella,

    The numbers show that – on this one measure alone – we’re back. I put up population, labor force and employment comparisons to avoid the ‘everyone’s dropping out of the workforce because Obama’s a communist/Muslim/alien’ argument.

    The data were first collected in January 1967, so I used 10 year jumps that led me very nicely to the start of 'the recent unpleasantness.’ Then, I split 2007-13 into the worst of the crisis, the recovery and this year.

    Unemployment claims have fallen farther and faster under Obama than for any other president since LBJ.

    = = = = =

    snapper,

    I don’t do stock markets, casinos, horse racing, lotteries or other forms of gambling.

    The debt:GDP chart very nicely illustrates the past 10-12 years of crisis and resolution.

    The labor chart, which is labor force participation as a percent of the population, doesn't show people working for cash, the surge in retired baby boomers or those who stayed in or returned to school because of the lousy job market.

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    Quote Originally Posted by DOR View Post
    I don’t do stock markets, casinos, horse racing, lotteries or other forms of gambling.

    The debt:GDP chart very nicely illustrates the past 10-12 years of crisis and resolution.

    The labor chart, which is labor force participation as a percent of the population, doesn't show people working for cash, the surge in retired baby boomers or those who stayed in or returned to school because of the lousy job market.
    So given that less people are actually working how will the deficit be addressed?

    You don't trade???? Yet you're trying to tell me that the US is a good investment and gold isn't? I don't think many people invest in the markets to 'gamble', we invest to retain the value of our money mostly, if we make a profit that's a bonus. I certainly do not have the time to watch the markets 24/7 but suppose you expect the Japanese 'experiment' or 'Abenomics' to end horribly well there are funds that predict that and will manage your investment for you.

    Regarding Japan in more relative terms do you think that what happens there with 'Abenomics' can tell us anything about how the US Bernanke 'experiment' may end? It seems to me that 'Abenomics' is just Obama fiscal policy + Bernanke monetary policy writ on a smaller market so it may perhaps foretell the US policy.

    As always I welcome your thoughts.

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    Senior Contributor DOR's Avatar
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    How will the deficit be addressed?
    Gosh, I’m not making enough money because the boss cut my hours.
    Guess I’ll have to ask for a raise. (i.e., tax increase.)

    .

    No, I don’t gamble on stock markets. They have no relationship to the underlying assets and the short-term traders have ruined the market for longer term investors. I don’t recall telling anyone it was a good investment, but maybe I slipped in a moment of confusion.

    Funds that will manage my money on the assumption that Policy X or Country Z fails start by charging a whacking big fee, and then gamble – with my money – that they can make that fee plus some return. If they’re right, they take a bigger slice and if they’re wrong they keep their fees.

    The House always wins.

    Gold is different, simply because it is mono-dimensional.

    .

    Abenomics is a confirmation that Bernanke is right and most of Europe got it badly wrong.
    I’m still waiting for Obama’s fiscal policy. So far, it is just a struggle to tear down the road blocks to recovery.

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    With respect that doesn't really my questions so let me try an alternative; debt to GDP curves in the US are widening not narrowing (see the first graph above). There are less people in the US workforce now than there were in 2007-8 (see the second graph above). If the whole point of the 'stimulus (fiscal) spending' and Bernanke's monetary tricks was to reduce the deficit has it not failed?

    Regarding trading my family has been 'trading' - mostly gold - for years. I inherited some shares and other assets from my Mother so decided I'd better learn a bit about it. I have added to the investments myself somewhat since lets face it if I put my money in a bank I would have to get around 3% interest to not LOSE money - and of course any time the EUSSR feels like they need my money I could be 'bailed in' a la Cyprus. No I do not trust banks or Governments.

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    Quote Originally Posted by DOR View Post
    Abenomics is a confirmation that Bernanke is right and most of Europe got it badly wrong.
    I’m still waiting for Obama’s fiscal policy. So far, it is just a struggle to tear down the road blocks to recovery.
    QE has crushed buying power for the consumer, unemployment is 7.5% officially but with under employment closer to 1 in 4 workers. of the 165,000 jobs created last month (less than needed BTW) most were part time posistions.

    What recovery? We have gone stagnant.

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    QE has crushed buying power for the consumer, unemployment is 7.5% officially but with under employment closer to 1 in 4 workers. of the 165,000 jobs created last month (less than needed BTW) most were part time posistions.

    What recovery? We have gone stagnant.
    Confidence Hits Five-Year High as U.S. Housing Rebounds: Economy - Bloomberg
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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    snapper,

    If the whole point of the 'stimulus (fiscal) spending' and Bernanke's monetary tricks was to reduce the deficit has it not failed?
    NONE of those things were meant to reduce the deficit. they are meant to reduce unemployment.

    reducing unemployment has a happy side-effect of increasing tax revenues.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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    Housing re-bubbles funded by the Fed buying $40bn of mortgage securities every month.


    Quote Originally Posted by astralis View Post
    NONE of those things were meant to reduce the deficit. they are meant to reduce unemployment.

    reducing unemployment has a happy side-effect of increasing tax revenues.
    But overall employment has fallen! The number of people working in the US is lower than in 2008. It has failed.

    Quote Originally Posted by zraver View Post
    QE has crushed buying power for the consumer, unemployment is 7.5% officially but with under employment closer to 1 in 4 workers. of the 165,000 jobs created last month (less than needed BTW) most were part time posistions.

    What recovery? We have gone stagnant.
    My God... agreeing with zraver is new to me!

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    snapper,

    But overall employment has fallen! The number of people working in the US is lower than in 2008. It has failed.
    employment rates are a lagging indicator of the overall economy. thus while the recession started in 2008, unemployment numbers peaked at 10% in the summer of 2009, before the stimulus and QE went into effect.

    it's now at approximately 7.5%.

    EDIT:

    graphical data from BLS.

    Attachment 33004

    you can argue that the stimulus/QE has not done enough, etc etc, but please avoid inprecise comparisons regarding dates.
    Last edited by astralis; 28 May 13, at 18:47.
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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    Ok this is from the Bureau of Labor Statistics data:

    2009 65.7 65.8 65.6 65.7 65.7 65.7 65.5 65.4 65.1 65.0 65.0 64.6
    ...... Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
    2012 63.7 63.9 63.8 63.6 63.8 63.8 63.7 63.5 63.6 63.8 63.6 63.6
    2013 63.6 63.5 63.3 63.3

    http://data.bls.gov/timeseries/LNS11300000

    How would you summarise the trend?
    Last edited by snapper; 28 May 13, at 18:52.

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    you're using civilian labor force participation rate, which is problematic due to several significant factors, including demographics. here's a more detailed explanation below:

    Michelle Meyer On The Labor Force Participation Rate - Business Insider
    There is a cult of ignorance in the United States, and there has always been. The strain of anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that "My ignorance is just as good as your knowledge."- Isaac Asimov

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    Not really helpful to your argument... It shows that actual 'labour participation' or in English the number of people actually working is dropping by more around 1.5% more than can be accounted for by their demographic model. But I thought the US population was rising? So much for stimulus and QE... or maybe it just means 'moar' is needed? More market manipulation, more taxation and more stimulus... cos if at first you don't succeed... or wasn't that the definition of insanity?
    Last edited by snapper; 28 May 13, at 19:13.

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