From Reuters.com:
The U.S. economy rebounded sharply in the second quarter as consumers stepped up spending and businesses restocked, putting it on course to close out the year on solid footing.
Gross domestic product expanded at a 4.0 percent annual rate after shrinking at a revised 2.1 percent pace in the first quarter, the Commerce Department said on Wednesday.
The government previously had said the economy contracted at a 2.9 percent rate at the start of the year.
The second-quarter expansion was much stronger than the 3.0 percent economists had expected and added to manufacturing and services sector data in bolstering the outlook for the remainder of the year...
----
Link: http://www.reuters.com/article/2014/07/30/us-usa-economy
Wednesday, July 30, 2014
US confidence jumps in July
From CNBC.com:
Consumers were more confident about the economy in July than they have been in at least six years, The Conference Board said Tuesday, as stock markets float near record highs and expectations build for the recovery.
The Conference Board's Consumer Confidence Index rose to 90.9, above the prior month's showing of 86.4.
That was its highest level since October 2007, and well above economists' expectations of an 85.3 reading, according to a consensus survey...
Capital Economics suggested in a research note the big jump in confidence appeared "a bit suspicious," even in light of falling gas prices.
"Admittedly, it might be that the Conference Board's survey captured more of the most recent drop back in gasoline prices.
But we still wouldn't be surprised if this index dropped back in August," wrote Paul Ashworth, chief U.S. economist, in a research note to clients.
Recent economic data have painted a decidedly uneven picture of the economy.
While key measures favored by the Federal Reserve are consistent with a broad recovery, others have reflected signs of a setback.
On Monday, data showed that home prices fell unexpectedly in May.
----
Link: http://www.cnbc.com/id/101875607
Consumers were more confident about the economy in July than they have been in at least six years, The Conference Board said Tuesday, as stock markets float near record highs and expectations build for the recovery.
The Conference Board's Consumer Confidence Index rose to 90.9, above the prior month's showing of 86.4.
That was its highest level since October 2007, and well above economists' expectations of an 85.3 reading, according to a consensus survey...
Capital Economics suggested in a research note the big jump in confidence appeared "a bit suspicious," even in light of falling gas prices.
"Admittedly, it might be that the Conference Board's survey captured more of the most recent drop back in gasoline prices.
But we still wouldn't be surprised if this index dropped back in August," wrote Paul Ashworth, chief U.S. economist, in a research note to clients.
Recent economic data have painted a decidedly uneven picture of the economy.
While key measures favored by the Federal Reserve are consistent with a broad recovery, others have reflected signs of a setback.
On Monday, data showed that home prices fell unexpectedly in May.
----
Link: http://www.cnbc.com/id/101875607
U.S. inflation surged in second quarter
From Marketwatch.com:
Inflation as measured by the Federal Reserve's preferred price index surged in the second quarter to the highest annual rate in three years, potentially making the central's bank effort at managing the U.S. recovery more difficult.
The PCE index rose at a 2.3% annual rate in the April-to-June period, compared to 1.4% in the first quarter.
That's the fastest pace since the second quarter of 2011. And the core PCE that excludes food and energy climbed at a 2% clip, up from 1.2%.
----
Link: http://www.marketwatch.com/story/us-inflation-accelerates-sharply-in-second-quarter-2014-07-30
Inflation as measured by the Federal Reserve's preferred price index surged in the second quarter to the highest annual rate in three years, potentially making the central's bank effort at managing the U.S. recovery more difficult.
The PCE index rose at a 2.3% annual rate in the April-to-June period, compared to 1.4% in the first quarter.
That's the fastest pace since the second quarter of 2011. And the core PCE that excludes food and energy climbed at a 2% clip, up from 1.2%.
----
Link: http://www.marketwatch.com/story/us-inflation-accelerates-sharply-in-second-quarter-2014-07-30
Monday, July 28, 2014
"Wounds from the Great Recession still fresh" - Consumers build Cash in their Checking Accounts
----
"That weighs on people's minds," he said. "They think, 'If I lose my job will I be out of work for two years?' It's scary."
Worry about jobs remains high. Inflation is rising. The economy is different for those below the upper class.
The simple, serious fact is that the economy is of greater worry to most Americans than what the government and media pundits say. PB
----
From the L.A. Times online:
With wounds from the Great Recession still fresh, chastened Americans are hoarding more cash in their checking accounts than at any time in the last 25 years.
The defensive stance, uncharacteristic of previous periods of low inflation and an improving economy, reflects how debt-burdened Americans have striven to clean up their personal finances since the recession ended five years ago.
The lack of attractive investment alternatives, with savings accounts paying next to nothing and the stock market already at lofty heights, is another factor, financial analysts said.
A report ... by bank consulting firm Moebs Services Inc. calculated the average balance for U.S. checking accounts at $4,436 at the end of last year — more than double the average of $2,100 over the 25 years of the annual survey.
During good economic times, when unemployment and inflation are low, the average balance in consumer checking accounts is about $1,400, the survey noted.
"When times get difficult, the consumer sits things out and checking balances get larger, normally upward to $3,000 or a bit beyond," the study said. "Generally there is higher unemployment, lower inflation and falling prices."
By contrast, free-spending Americans had allowed their checking accounts to drop to an average of just $788 in 2007, the last year before the near meltdown of the nation's financial system.
The Moebs report, previously confidential for its clients, is fresh evidence of how the devastating economic downturn worldwide has changed consumer habits, especially on spending and saving.
As people have been cleaning up their financial houses, they have only slowly increased spending, and that has helped to slow the recovery because spending typically represents about two-thirds of economic growth....
UCLA economist Lee Ohanian said the study shows that despite a recent burst in jobs — employers have added more than 200,000 net new jobs in each of the last five months — there remain "some very troublesome issues in the economy."
Until recently, much of the decline in unemployment was from people dropping out of the job market, he said. "Our employment-to-population ratio is still very low."
Growth in productivity is running at less than half its usual rate, Ohanian said, and the number of long-term unemployed remains high.
"That weighs on people's minds," he said. "They think, 'If I lose my job will I be out of work for two years?' It's scary."
The result, he said, has been a wave of caution, with Americans paying down old debts, thinking twice about new borrowing and keeping cash on hand as a safeguard...
----
Link:http://www.latimes.com/business/la-fi-consumer-checking-accounts-20140718-story.html
"That weighs on people's minds," he said. "They think, 'If I lose my job will I be out of work for two years?' It's scary."
Worry about jobs remains high. Inflation is rising. The economy is different for those below the upper class.
The simple, serious fact is that the economy is of greater worry to most Americans than what the government and media pundits say. PB
----
From the L.A. Times online:
With wounds from the Great Recession still fresh, chastened Americans are hoarding more cash in their checking accounts than at any time in the last 25 years.
The defensive stance, uncharacteristic of previous periods of low inflation and an improving economy, reflects how debt-burdened Americans have striven to clean up their personal finances since the recession ended five years ago.
The lack of attractive investment alternatives, with savings accounts paying next to nothing and the stock market already at lofty heights, is another factor, financial analysts said.
A report ... by bank consulting firm Moebs Services Inc. calculated the average balance for U.S. checking accounts at $4,436 at the end of last year — more than double the average of $2,100 over the 25 years of the annual survey.
During good economic times, when unemployment and inflation are low, the average balance in consumer checking accounts is about $1,400, the survey noted.
"When times get difficult, the consumer sits things out and checking balances get larger, normally upward to $3,000 or a bit beyond," the study said. "Generally there is higher unemployment, lower inflation and falling prices."
By contrast, free-spending Americans had allowed their checking accounts to drop to an average of just $788 in 2007, the last year before the near meltdown of the nation's financial system.
The Moebs report, previously confidential for its clients, is fresh evidence of how the devastating economic downturn worldwide has changed consumer habits, especially on spending and saving.
As people have been cleaning up their financial houses, they have only slowly increased spending, and that has helped to slow the recovery because spending typically represents about two-thirds of economic growth....
UCLA economist Lee Ohanian said the study shows that despite a recent burst in jobs — employers have added more than 200,000 net new jobs in each of the last five months — there remain "some very troublesome issues in the economy."
Until recently, much of the decline in unemployment was from people dropping out of the job market, he said. "Our employment-to-population ratio is still very low."
Growth in productivity is running at less than half its usual rate, Ohanian said, and the number of long-term unemployed remains high.
"That weighs on people's minds," he said. "They think, 'If I lose my job will I be out of work for two years?' It's scary."
The result, he said, has been a wave of caution, with Americans paying down old debts, thinking twice about new borrowing and keeping cash on hand as a safeguard...
----
Link:http://www.latimes.com/business/la-fi-consumer-checking-accounts-20140718-story.html
Saturday, July 26, 2014
Grads Grind Away with Low Pay as U.S. Mends
Is everything all right in our economy? It depends on where you find those providing answers. Consider the young woman quoted in the article below. PB
----
From Bloomberg.com:
Nickole Gambrill is still paying the price for graduating college at the wrong time.
She and other students who earned diplomas in the aftermath of the deepest U.S. recession since the 1930s are experiencing an earnings hangover that could last a lifetime, even as the labor market heals.
Gambrill accepted the first paralegal job she could get after finishing classes at Towson University in Maryland in December 2010, when the unemployment rate was 9.4 percent.
“I’ve been here for three years, but I still consider myself entry-level,” said the 27-year-old from Baltimore, who makes about $44,000 annually.
“Your raises and income are based off of your original salary. If it were a better economy, I would have started off at a higher salary.”
Students entering the job market in 2010 and 2011 took a 19 percent pay cut from what they could have expected without a recession ... about double the penalty in prior downturns.
Many of the estimated 3.37 million graduates earning baccalaureate degrees in those two years accepted positions they were overqualified for out of desperation.
Those entering the workforce in the shadow of the recession were 2.2 percent of an approximately 154 million-member labor force competing for fewer jobs and now may have eroded skills and sparse resumes.
As the labor market improves, new graduates may outshine them.
“If you come out now, it really is a much better world, you’ll have much better success,” said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce in Washington, who said those who got diplomas closer to the recession will experience lasting disadvantages.
“The employer looks at the one who just graduated and the one that’s five steps back, and they think the new one is better.”
----
Link: http://www.bloomberg.com/news/2014-07-23/pay-penalty-haunts-recession-grads-as-u-s-economy-mends.html
----
From Bloomberg.com:
Nickole Gambrill is still paying the price for graduating college at the wrong time.
She and other students who earned diplomas in the aftermath of the deepest U.S. recession since the 1930s are experiencing an earnings hangover that could last a lifetime, even as the labor market heals.
Gambrill accepted the first paralegal job she could get after finishing classes at Towson University in Maryland in December 2010, when the unemployment rate was 9.4 percent.
“I’ve been here for three years, but I still consider myself entry-level,” said the 27-year-old from Baltimore, who makes about $44,000 annually.
“Your raises and income are based off of your original salary. If it were a better economy, I would have started off at a higher salary.”
Students entering the job market in 2010 and 2011 took a 19 percent pay cut from what they could have expected without a recession ... about double the penalty in prior downturns.
Many of the estimated 3.37 million graduates earning baccalaureate degrees in those two years accepted positions they were overqualified for out of desperation.
Those entering the workforce in the shadow of the recession were 2.2 percent of an approximately 154 million-member labor force competing for fewer jobs and now may have eroded skills and sparse resumes.
As the labor market improves, new graduates may outshine them.
“If you come out now, it really is a much better world, you’ll have much better success,” said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce in Washington, who said those who got diplomas closer to the recession will experience lasting disadvantages.
“The employer looks at the one who just graduated and the one that’s five steps back, and they think the new one is better.”
----
Link: http://www.bloomberg.com/news/2014-07-23/pay-penalty-haunts-recession-grads-as-u-s-economy-mends.html
Thursday, July 24, 2014
California Water Prices Jump 1,000%
Inflation can be felt at the grocery store. Soup, cottage cheese, ground beef? But some economists say nay - not true. Do they know more than you about the prices you pay?
In California water prices are soaring. Food inflation will proceed at a faster pace as farmers cannot afford to irrigate every acre. Less supply; higher prices. Shoppers know. PB
----
From Bloomberg.com:
Farmers in California’s Central Valley, the world’s most productive agricultural region, are paying as much as 10 times more for water than they did before the state’s record drought cut supply...
The drought gripping the state that supplies half the fruits, vegetables and nuts consumed in the U.S. has led federal and state providers to curtail the water they distribute to California’s farmers.
That’s prompted districts representing growers to buy and sell for escalated prices from other parts of the state as thousands of acres go unplanted.
The drought threatens to boost produce costs that are already elevated following a December frost, according to the U.S. Agriculture Department.
The price of fresh fruit is forecast to rise as much as 6 percent this year, the department said last month.
Dairy products, of which California is the biggest producer, may rise as much as 4 percent...
----
Link: http://www.bloomberg.com/news/2014-07-24/california-water-prices-soar-for-farmers-as-drought-grows.html
In California water prices are soaring. Food inflation will proceed at a faster pace as farmers cannot afford to irrigate every acre. Less supply; higher prices. Shoppers know. PB
----
From Bloomberg.com:
Farmers in California’s Central Valley, the world’s most productive agricultural region, are paying as much as 10 times more for water than they did before the state’s record drought cut supply...
The drought gripping the state that supplies half the fruits, vegetables and nuts consumed in the U.S. has led federal and state providers to curtail the water they distribute to California’s farmers.
That’s prompted districts representing growers to buy and sell for escalated prices from other parts of the state as thousands of acres go unplanted.
The drought threatens to boost produce costs that are already elevated following a December frost, according to the U.S. Agriculture Department.
The price of fresh fruit is forecast to rise as much as 6 percent this year, the department said last month.
Dairy products, of which California is the biggest producer, may rise as much as 4 percent...
----
Link: http://www.bloomberg.com/news/2014-07-24/california-water-prices-soar-for-farmers-as-drought-grows.html
Sunday, July 20, 2014
Visa, MasterCard lose ruling vs. retailers over credit card fees
This story is applicable to the investments you own and the advice you pay: discover how you can cut your annual fees by nearly 90%.
Then pocket that money you no longer have to waste on fees.
How? Own investments you can keep for life. PB
----------
From Reuters.com:
A federal judge declined on Friday to dismiss antitrust lawsuits filed against Visa Inc and MasterCard Inc by retailers who opted out of an estimated $5.7 billion class action settlement in 2012 over transaction fees.
Retailers such as Target Corp and Amazon.com Inc have accused Visa and MasterCard of fixing the fees charged to merchants each time their customers used credit or debit cards.
They also alleged the two companies prevented merchants from steering customers to cheaper forms of payment.
----
Link: http://www.reuters.com/article/2014/07/18/us-visa-mastercard
Then pocket that money you no longer have to waste on fees.
How? Own investments you can keep for life. PB
----------
From Reuters.com:
A federal judge declined on Friday to dismiss antitrust lawsuits filed against Visa Inc and MasterCard Inc by retailers who opted out of an estimated $5.7 billion class action settlement in 2012 over transaction fees.
Retailers such as Target Corp and Amazon.com Inc have accused Visa and MasterCard of fixing the fees charged to merchants each time their customers used credit or debit cards.
They also alleged the two companies prevented merchants from steering customers to cheaper forms of payment.
----
Link: http://www.reuters.com/article/2014/07/18/us-visa-mastercard
Saturday, July 19, 2014
America’s lost oomph
From the Economist.com:
BACK in the mid-1990s, America’s economic prospects suddenly brightened.
Productivity soared. Immigrants and foreign capital flocked to take advantage of what was quickly dubbed the “New Economy”.
The jobless rate fell to 4%, yet inflation remained low...
Sadly, the New Economy is no more.
The recovery from the recession of 2008-09 has been the weakest of the post-war era, and evidence is mounting that America’s potential growth rate has plummeted.
Its two big determinants, the supply of workers and the rise in their productivity, have both fallen short.
Performance in the past year has been particularly feeble: America’s labour force has not grown at all and output per hour worked has fallen.
The IMF recently cut its estimate of the country’s potential rate of growth to 2%. Other economists put it as low as 1.75%...
----
Link: http://www.economist.com/news/leaders/21607809-countrys-potential-growth-rate-barely-half-what-it-was-two-decades-ago-heres-how-raise?
BACK in the mid-1990s, America’s economic prospects suddenly brightened.
Productivity soared. Immigrants and foreign capital flocked to take advantage of what was quickly dubbed the “New Economy”.
The jobless rate fell to 4%, yet inflation remained low...
Sadly, the New Economy is no more.
The recovery from the recession of 2008-09 has been the weakest of the post-war era, and evidence is mounting that America’s potential growth rate has plummeted.
Its two big determinants, the supply of workers and the rise in their productivity, have both fallen short.
Performance in the past year has been particularly feeble: America’s labour force has not grown at all and output per hour worked has fallen.
The IMF recently cut its estimate of the country’s potential rate of growth to 2%. Other economists put it as low as 1.75%...
----
Link: http://www.economist.com/news/leaders/21607809-countrys-potential-growth-rate-barely-half-what-it-was-two-decades-ago-heres-how-raise?
Tuesday, July 15, 2014
More Evidence: Too Many People Still Left Behind
Mort Zuckerman's column in the WSJ, excerpted yesterday on this blog, drew a typical liberal's response from a writer at The Atlantic Magazine, which I once subscribed to back in high school. Tedious then...wrong now.
"The Atlantic has done our best to bust this myth." What myth?
The writer describes "the remarkably durable myth that Obama has presided over a 'part-time economy,' where full-time work has been devastated by his relentlessly anti-capitalist policies." He cites some contrary facts using 2010 as a starting point. (All links below.)
Myth? Are you mything something, Mr. Atlantic?
Here are some other views:
--------
Bloomberg.com: Fed Chair Janet Yellen Says Weak Job Market Shows U.S. Still Needs Stimulus
“It takes such a toll on families and children,” Yellen said. “Anyone who ever talked to people experiencing significant unemployment realizes what the psychological toll is and the ways it affects their well-being and that of their community.”
--------
CNBC: Family Dollar CEO: situation is only getting worse for lower-end consumers
Family Dollar CEO Howard Levine: "The low-end consumer has not benefited in this recovery at all; in fact I think (they) have slipped further back," he said.
--------
New York Times: More Part-Time Workers Facing More Uncertainty
During the recent recession, those working part-time but preferring to work full-time skyrocketed. That number has slipped, but is still almost double where it started in 2007. The trend has been even more pronounced for retail and restaurant workers.
----
Links:
http://www.theatlantic.com/business/archive/2014/07/heres-what-obamas-part-time-america-really-looks-like/374356/
http://www.bloomberg.com/news/2014-07-15/yellen-says-high-degree-of-easing-needed-amid-job-market-slack.html
http://www.cnbc.com/id/101830218
http://www.nytimes.com/2014/07/16/business/a-push-to-give-steadier-shifts-to-part-timers.html?ref=business
"The Atlantic has done our best to bust this myth." What myth?
The writer describes "the remarkably durable myth that Obama has presided over a 'part-time economy,' where full-time work has been devastated by his relentlessly anti-capitalist policies." He cites some contrary facts using 2010 as a starting point. (All links below.)
Myth? Are you mything something, Mr. Atlantic?
Here are some other views:
--------
Bloomberg.com: Fed Chair Janet Yellen Says Weak Job Market Shows U.S. Still Needs Stimulus
“It takes such a toll on families and children,” Yellen said. “Anyone who ever talked to people experiencing significant unemployment realizes what the psychological toll is and the ways it affects their well-being and that of their community.”
--------
CNBC: Family Dollar CEO: situation is only getting worse for lower-end consumers
Family Dollar CEO Howard Levine: "The low-end consumer has not benefited in this recovery at all; in fact I think (they) have slipped further back," he said.
--------
New York Times: More Part-Time Workers Facing More Uncertainty
During the recent recession, those working part-time but preferring to work full-time skyrocketed. That number has slipped, but is still almost double where it started in 2007. The trend has been even more pronounced for retail and restaurant workers.
----
Links:
http://www.theatlantic.com/business/archive/2014/07/heres-what-obamas-part-time-america-really-looks-like/374356/
http://www.bloomberg.com/news/2014-07-15/yellen-says-high-degree-of-easing-needed-amid-job-market-slack.html
http://www.cnbc.com/id/101830218
http://www.nytimes.com/2014/07/16/business/a-push-to-give-steadier-shifts-to-part-timers.html?ref=business
Monday, July 14, 2014
Mort Zuckerman: The Full-Time Scandal of Part-Time America
Writing in the Wall Street Journal, Mortimer Zuckerman accurately describes the weakness of the economic recovery and its negative effects on employment. He focuses on Obamacare's contribution to "the dismal jobs trend." PB
----------
From the Wall Street Journal online:
There has been a distinctive odor of hype lately about the national jobs report for June.
Most people will have the impression that the 288,000 jobs created last month were full-time. Not so.
The Obama administration and much of the media trumpeting the figure overlooked that the government numbers didn't distinguish between new part-time and full-time jobs.
Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics.
What has increased are part-time jobs. They soared by about 800,000 to more than 28 million.
Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security...
But there is one clear political contribution to the dismal jobs trend.
Many employers cut workers' hours to avoid the Affordable Care Act's mandate to provide health insurance to anyone working 30 hours a week or more.
The unintended consequence of President Obama's "signature legislation"? Fewer full-time workers. In many cases two people are working the same number of hours that one had previously worked.
Since mid-2007 the U.S. population has grown by 17.2 million, according to the Census Bureau, but we have 374,000 fewer jobs since a November 2007 peak and are 10 million jobs shy of where we should be.
It is particularly upsetting that our current high unemployment is concentrated in the oldest and youngest workers.
Older workers have been phased out as new technologies improve productivity, and young adults who lack skills are struggling to find entry-level jobs with advancement opportunities.
In the process, they are losing critical time to develop workplace habits, contacts and new skills...
----
Link: http://online.wsj.com/articles/mortimer-zuckerman-the-full-time-scandal-of-part-time-america
----------
From the Wall Street Journal online:
There has been a distinctive odor of hype lately about the national jobs report for June.
Most people will have the impression that the 288,000 jobs created last month were full-time. Not so.
The Obama administration and much of the media trumpeting the figure overlooked that the government numbers didn't distinguish between new part-time and full-time jobs.
Full-time jobs last month plunged by 523,000, according to the Bureau of Labor Statistics.
What has increased are part-time jobs. They soared by about 800,000 to more than 28 million.
Just think of all those Americans working part time, no doubt glad to have the work but also contending with lower pay, diminished benefits and little job security...
But there is one clear political contribution to the dismal jobs trend.
Many employers cut workers' hours to avoid the Affordable Care Act's mandate to provide health insurance to anyone working 30 hours a week or more.
The unintended consequence of President Obama's "signature legislation"? Fewer full-time workers. In many cases two people are working the same number of hours that one had previously worked.
Since mid-2007 the U.S. population has grown by 17.2 million, according to the Census Bureau, but we have 374,000 fewer jobs since a November 2007 peak and are 10 million jobs shy of where we should be.
It is particularly upsetting that our current high unemployment is concentrated in the oldest and youngest workers.
Older workers have been phased out as new technologies improve productivity, and young adults who lack skills are struggling to find entry-level jobs with advancement opportunities.
In the process, they are losing critical time to develop workplace habits, contacts and new skills...
----
Link: http://online.wsj.com/articles/mortimer-zuckerman-the-full-time-scandal-of-part-time-america
Sunday, July 13, 2014
No Real Recovery Without The Middle Class
For whom is there an economic recovery? Everybody? Does our recovery involve the widest participation of all members of society?
This link and those that follow can help us understand why the bear got its head stuck in a plastic jar.
Maybe the President and the Pope should start suggesting that we widely distribute government protected jobs.
Maybe redistributing government protected jobs will have an effect on who we designate as our leaders. PB
----------
From Joel Kotkin writing at Forbes.com:
What if they gave a recovery, and the middle class were never invited?
Well, that’s an experiment we are running now, and, even with the recent strengthening of the jobs market, it’s not looking very good....
The labor market may be strengthening, with the unemployment rate falling to 6.1% last month, but too many of the new jobs are low wage or part time.
They aren’t providing the kick the economy got in the last, more broad-based expansion from robust consumer spending.
Wage growth has been weak, rising 2.5% annually since 2009, according to Bloomberg, compared with a 4.3% annual rise from 2001 to 2007.
Consumer spending, which makes up roughly 70% of the economy, has expanded an average 2.2% since the recession ended, behind the 3% advance in the prior expansion.
And many working-age people are still sitting discouraged on the sidelines – the labor force participation rate remains the lowest since 1979.
People in marginal or part-time jobs are not likely to drive consumer spending.
Instead we have seen the emergence of a new, top-heavy consumer market.
Since 1992 the top 5% of households have increased their share of total spending to almost 40%, up from 27% in 1992...
----
Link: http://www.forbes.com/sites/joelkotkin/2014/07/10/there-will-be-no-real-recovery-without-the-middle-class/
This link and those that follow can help us understand why the bear got its head stuck in a plastic jar.
Maybe the President and the Pope should start suggesting that we widely distribute government protected jobs.
Maybe redistributing government protected jobs will have an effect on who we designate as our leaders. PB
----------
From Joel Kotkin writing at Forbes.com:
What if they gave a recovery, and the middle class were never invited?
Well, that’s an experiment we are running now, and, even with the recent strengthening of the jobs market, it’s not looking very good....
The labor market may be strengthening, with the unemployment rate falling to 6.1% last month, but too many of the new jobs are low wage or part time.
They aren’t providing the kick the economy got in the last, more broad-based expansion from robust consumer spending.
Wage growth has been weak, rising 2.5% annually since 2009, according to Bloomberg, compared with a 4.3% annual rise from 2001 to 2007.
Consumer spending, which makes up roughly 70% of the economy, has expanded an average 2.2% since the recession ended, behind the 3% advance in the prior expansion.
And many working-age people are still sitting discouraged on the sidelines – the labor force participation rate remains the lowest since 1979.
People in marginal or part-time jobs are not likely to drive consumer spending.
Instead we have seen the emergence of a new, top-heavy consumer market.
Since 1992 the top 5% of households have increased their share of total spending to almost 40%, up from 27% in 1992...
----
Link: http://www.forbes.com/sites/joelkotkin/2014/07/10/there-will-be-no-real-recovery-without-the-middle-class/
Thursday, July 10, 2014
Skills Shortage Means Many Jobs Go Unfilled
From the Wall Street Journal online:
Growing numbers of small-business owners say unfilled job openings are thwarting their growth at a time of high confidence in the economy...
The tightening of the labor market is one factor, according to economists.
The unemployment rate in June was 6.1%, down from 8.2% two years ago.
A shortage of workers with the right skills and experience is also a major impediment...
Overall, 43% of small-business owners said unfilled jobs were impeding their businesses from growth or expansion, compared with 39% in 2012...
Karla Daniel, co-owner of a 20-person company that sells and services power equipment such as tractors and mowers, says she currently has three unfilled positions for skilled repair technicians that have been open for more than a year.
Recently, business picked up so much at Lee's Outdoor Power Inc. that she had to deny customers due to being understaffed.
"We used to get a lot of technicians from the farming community, but there aren't as many farmers anymore," says Ms. Daniel, about the New Haven, Ind., company that was started by her father in 1972.
"It's hard to find anybody with mechanical ability."
Two years ago, she raised salaries for senior repair technicians to $20 an hour from $12.
She also advertises the open jobs on a wide range of websites, and uses recruiters...
----
Link: http://online.wsj.com/articles/small-business-owners-work-to-fill-job-openings-1404940118?
Growing numbers of small-business owners say unfilled job openings are thwarting their growth at a time of high confidence in the economy...
The tightening of the labor market is one factor, according to economists.
The unemployment rate in June was 6.1%, down from 8.2% two years ago.
A shortage of workers with the right skills and experience is also a major impediment...
Overall, 43% of small-business owners said unfilled jobs were impeding their businesses from growth or expansion, compared with 39% in 2012...
Karla Daniel, co-owner of a 20-person company that sells and services power equipment such as tractors and mowers, says she currently has three unfilled positions for skilled repair technicians that have been open for more than a year.
Recently, business picked up so much at Lee's Outdoor Power Inc. that she had to deny customers due to being understaffed.
"We used to get a lot of technicians from the farming community, but there aren't as many farmers anymore," says Ms. Daniel, about the New Haven, Ind., company that was started by her father in 1972.
"It's hard to find anybody with mechanical ability."
Two years ago, she raised salaries for senior repair technicians to $20 an hour from $12.
She also advertises the open jobs on a wide range of websites, and uses recruiters...
----
Link: http://online.wsj.com/articles/small-business-owners-work-to-fill-job-openings-1404940118?
Sunday, July 6, 2014
Rise in part-time workers worrisome
From USA Today:
Economists have few concerns about the number of workers employers are hiring this year, with the government reporting Friday that the economy added a surprising 288,000 jobs in June.
The number of hours employees are working?
That's a different story.
Among the few worrisome signs in Friday's generally encouraging employment report was a sharp rise in the number of part-time workers who prefer full-time jobs.
The total jumped by 275,000 to 7.5 million, the Labor Department said...
[There is] a shift in the labor market, with employers increasingly using part-time and temporary workers to handle short-term projects.
"Companies view labor more as inventory that is to be hired when they need it and let go when they don't need it."
----
Link: http://www.usatoday.com/story/money/business/2014/07/06/part-time-workers/12185871/
Economists have few concerns about the number of workers employers are hiring this year, with the government reporting Friday that the economy added a surprising 288,000 jobs in June.
The number of hours employees are working?
That's a different story.
Among the few worrisome signs in Friday's generally encouraging employment report was a sharp rise in the number of part-time workers who prefer full-time jobs.
The total jumped by 275,000 to 7.5 million, the Labor Department said...
[There is] a shift in the labor market, with employers increasingly using part-time and temporary workers to handle short-term projects.
"Companies view labor more as inventory that is to be hired when they need it and let go when they don't need it."
----
Link: http://www.usatoday.com/story/money/business/2014/07/06/part-time-workers/12185871/
Saturday, July 5, 2014
WSJ: Slack It Is!
PB: This is beautiful. The Wall Street Journal has excellent writers and this front page story from today's paper reveals some unintentional charm.
The headline of the story, As Jobs Surge, Hurdles Linger, suggests that job growth is strong, but slack and soft spots remain.
WSJ: "The U.S. economic expansion is entering its sixth year with the best stretch of job growth in almost a decade.
"Beneath the shiny exterior, however, lurk soft patches that worry economists and policy makers..."
PB: O.k., got it: 'soft,' maybe 'slack.' The story goes on...
WSJ: "...workers' earnings have been climbing about 2% annually—just enough to cover inflation—wages show few signs of breaking out of that range as an abundance of idled labor allows firms to keep payroll costs contained.
"Slack in the labor market…is dwindling, but we're not seeing that on the wage side yet," said Alan MacEachin, an economist..."
PB: 'Slack in the labor market.' Gotcha. But, who is this Slack?
WSJ: "Another factor restraining consumer spending is likely that much of the new hiring is concentrated in low-wage fields.
"The retail industry added over 40,000 workers last month and hospitality businesses payrolls rose by 39,000.
"Higher-paying sectors lagged behind. Manufacturing added 16,000 new jobs and construction added 6,000..."
PB: Wait! Here he comes! Mr. Slack:
WSJ: "...Wayne Slack of Chandler, Ariz., is one job seeker who is holding out for a better position.
"After losing a supervisory role in aerospace manufacturing, he's been unwilling to accept a lower-paying position.
"Instead, the 47-year-old enrolled in community college after being told his computer skills were lacking.
"I'm willing to go backwards a tad, but I'm not willing to take an $8 pay cut to stand in front of a machine again," he said."
PB: So is Slack the slack?
Or, could there be other reasons others hold back?
----
Link: http://online.wsj.com/articles/robust-job-gains-mask-soft-spots-in-economy-1404492379?
The headline of the story, As Jobs Surge, Hurdles Linger, suggests that job growth is strong, but slack and soft spots remain.
WSJ: "The U.S. economic expansion is entering its sixth year with the best stretch of job growth in almost a decade.
"Beneath the shiny exterior, however, lurk soft patches that worry economists and policy makers..."
PB: O.k., got it: 'soft,' maybe 'slack.' The story goes on...
WSJ: "...workers' earnings have been climbing about 2% annually—just enough to cover inflation—wages show few signs of breaking out of that range as an abundance of idled labor allows firms to keep payroll costs contained.
"Slack in the labor market…is dwindling, but we're not seeing that on the wage side yet," said Alan MacEachin, an economist..."
PB: 'Slack in the labor market.' Gotcha. But, who is this Slack?
WSJ: "Another factor restraining consumer spending is likely that much of the new hiring is concentrated in low-wage fields.
"The retail industry added over 40,000 workers last month and hospitality businesses payrolls rose by 39,000.
"Higher-paying sectors lagged behind. Manufacturing added 16,000 new jobs and construction added 6,000..."
PB: Wait! Here he comes! Mr. Slack:
WSJ: "...Wayne Slack of Chandler, Ariz., is one job seeker who is holding out for a better position.
"After losing a supervisory role in aerospace manufacturing, he's been unwilling to accept a lower-paying position.
"Instead, the 47-year-old enrolled in community college after being told his computer skills were lacking.
"I'm willing to go backwards a tad, but I'm not willing to take an $8 pay cut to stand in front of a machine again," he said."
PB: So is Slack the slack?
Or, could there be other reasons others hold back?
----
Link: http://online.wsj.com/articles/robust-job-gains-mask-soft-spots-in-economy-1404492379?
Friday, July 4, 2014
A Permanent Non-Worker Dependency Class
Long term problems created by this lengthy weak recovery, plus the expanding waste of government bloat, will inflict long term damage to our nation's growth prospects.
A new layer of fossilized dependents, the 'discouraged' workers who possess few skills of value needed in the work force, will continue to justify government efforts to inflate the Dependency Service Sub-Industries.
These Dependency Service Sub-Industries are contrived, mediocre agencies both in and out of the government who push, by their sheer bloat and redundancy, the cause for ever greater social funding. PB
----
From The Numbers Blog at the Wall Street Journal online:
Some 2.15 million people moved from unemployment to employment last month, but an even larger number of unemployed — 2.35 million — dropped out of the labor force.
In all but two months since December 2008, more unemployed have dropped out than found jobs.
That has brought the share of people working or looking for work — known as the labor force participation rate — to 62.8%, matching a 30-year low.
And that’s at the heart of why economists have been wrong about the unemployment rate lately.
They keep expecting people who have become discouraged during the recession and slow recovery to start looking for work again.
When someone starts looking for work after having given up, they are counted as unemployed, and that can lead the unemployment rate to increase.
But that hasn’t happened. In fact, the number of unemployed who were re-entering the labor market actually fell in June.
----
Link: http://blogs.wsj.com/numbers/why-have-economists-been-wrong-about-falling-unemployment-rates-1513/
A new layer of fossilized dependents, the 'discouraged' workers who possess few skills of value needed in the work force, will continue to justify government efforts to inflate the Dependency Service Sub-Industries.
These Dependency Service Sub-Industries are contrived, mediocre agencies both in and out of the government who push, by their sheer bloat and redundancy, the cause for ever greater social funding. PB
----
From The Numbers Blog at the Wall Street Journal online:
Some 2.15 million people moved from unemployment to employment last month, but an even larger number of unemployed — 2.35 million — dropped out of the labor force.
In all but two months since December 2008, more unemployed have dropped out than found jobs.
That has brought the share of people working or looking for work — known as the labor force participation rate — to 62.8%, matching a 30-year low.
And that’s at the heart of why economists have been wrong about the unemployment rate lately.
They keep expecting people who have become discouraged during the recession and slow recovery to start looking for work again.
When someone starts looking for work after having given up, they are counted as unemployed, and that can lead the unemployment rate to increase.
But that hasn’t happened. In fact, the number of unemployed who were re-entering the labor market actually fell in June.
----
Link: http://blogs.wsj.com/numbers/why-have-economists-been-wrong-about-falling-unemployment-rates-1513/
Unemployment rate among: Blacks - 10.7%; Teenagers - 21%; Black Teenagers - 33.4%
PB: I see no one reported these findings. Why?
----
From the Department of Labor:
Household Survey Data
In June, the unemployment rate declined by 0.2 percentage point to 6.1%.
The number of unemployed persons decreased by 325,000 to 9.5 million.
Over the year, the unemployment rate and the number of unemployed persons have declined by 1.4 percentage points and 2.3 million, respectively. (See table A-1.)
Among the major worker groups, the unemployment rates for adult women (5.3 percent) and blacks (10.7 percent) declined in June, and the rate increased for teenagers (21.0 percent).
The rates for adult men (5.7 percent), whites (5.3 percent), and Hispanics (7.8 percent) showed little change. The jobless rate for Asians was 5.1 percent (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.)
----
Links:
News Release: http://www.bls.gov/news.release/empsit.nr0.htm
Table A2: http://www.bls.gov/news.release/empsit.t02.htm
----
From the Department of Labor:
Household Survey Data
In June, the unemployment rate declined by 0.2 percentage point to 6.1%.
The number of unemployed persons decreased by 325,000 to 9.5 million.
Over the year, the unemployment rate and the number of unemployed persons have declined by 1.4 percentage points and 2.3 million, respectively. (See table A-1.)
Among the major worker groups, the unemployment rates for adult women (5.3 percent) and blacks (10.7 percent) declined in June, and the rate increased for teenagers (21.0 percent).
The rates for adult men (5.7 percent), whites (5.3 percent), and Hispanics (7.8 percent) showed little change. The jobless rate for Asians was 5.1 percent (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.)
----
Links:
News Release: http://www.bls.gov/news.release/empsit.nr0.htm
Table A2: http://www.bls.gov/news.release/empsit.t02.htm
Solid US job gains - a stronger recovery? Celebration in Burger Flipper Paradise!
From the Associated Press:
The 5-year-old U.S. recovery is gaining momentum from a surprisingly robust job market and moving the economy closer to full health.
Employers added 288,000 jobs in June and helped cut the unemployment rate from 6.3 percent to 6.1 percent, the lowest since 2008. (6 Years Ago!)
It was the fifth straight monthly gain above 200,000 - the best such stretch since the late 1990s tech boom. (15 YEARS Ago!)
The stock market signaled its approval. The Dow Jones industrial average surged 92 points to top 17,000 for the first time...
Over the past twelve months, the economy has added nearly 2.5 million jobs - an average of 208,000 a month, the fastest year-over-year pace since 2006....(8 YEARS AGO!)
One key challenge is whether the job gains will pull more Americans back into the workforce.
Many people who lost jobs during the recession and were never rehired have stopped looking for work.
Just 62.8 percent of American adults are working or are looking for a job, compared with 66 percent before the downturn.
The number of long-term unemployed has dropped 1.2 million over the past year to just under 3.1 million. (Don't forget Congress stopped unemployment welfare for long term unemployed last year.)
But the government data suggests that numerous people without jobs have given up their searches - a trend that could drag on future U.S. growth.
And average pay has grown just 2 percent a year during the recovery, roughly in line with inflation and below the long-run average annual growth of about 3.5 percent... (Over 40% LOWER rate of growth than normal!)
----
Link: http://hosted.ap.org/dynamic/stories/U/US_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-04-00-02-27
The 5-year-old U.S. recovery is gaining momentum from a surprisingly robust job market and moving the economy closer to full health.
Employers added 288,000 jobs in June and helped cut the unemployment rate from 6.3 percent to 6.1 percent, the lowest since 2008. (6 Years Ago!)
It was the fifth straight monthly gain above 200,000 - the best such stretch since the late 1990s tech boom. (15 YEARS Ago!)
The stock market signaled its approval. The Dow Jones industrial average surged 92 points to top 17,000 for the first time...
Over the past twelve months, the economy has added nearly 2.5 million jobs - an average of 208,000 a month, the fastest year-over-year pace since 2006....(8 YEARS AGO!)
One key challenge is whether the job gains will pull more Americans back into the workforce.
Many people who lost jobs during the recession and were never rehired have stopped looking for work.
Just 62.8 percent of American adults are working or are looking for a job, compared with 66 percent before the downturn.
The number of long-term unemployed has dropped 1.2 million over the past year to just under 3.1 million. (Don't forget Congress stopped unemployment welfare for long term unemployed last year.)
But the government data suggests that numerous people without jobs have given up their searches - a trend that could drag on future U.S. growth.
And average pay has grown just 2 percent a year during the recovery, roughly in line with inflation and below the long-run average annual growth of about 3.5 percent... (Over 40% LOWER rate of growth than normal!)
----
Link: http://hosted.ap.org/dynamic/stories/U/US_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2014-07-04-00-02-27
Tuesday, July 1, 2014
Hey Pooh! there are Bulls ... & there is this Bear who got its head stuck in a cookie jar
From AP.org:
A frightened bear cub got its head stuck in an over-sized cookie jar while rummaging through some trash and had to be rescued from a tree in New Jersey.
As the 28-pound animal tried to eat what remained in the jar, he apparently pulled it over his head and it got stuck.
The cub became spooked when approached and went up a tree, but got wedged about 40 feet up.
After the animal was tranquilized, it was brought down and local firefighters gingerly cut the jar off its head...
----
Link: http://bigstory.ap.org/article/bear-rescued-after-head-gets-stuck-cookie-jar
A frightened bear cub got its head stuck in an over-sized cookie jar while rummaging through some trash and had to be rescued from a tree in New Jersey.
As the 28-pound animal tried to eat what remained in the jar, he apparently pulled it over his head and it got stuck.
The cub became spooked when approached and went up a tree, but got wedged about 40 feet up.
After the animal was tranquilized, it was brought down and local firefighters gingerly cut the jar off its head...
----
Link: http://bigstory.ap.org/article/bear-rescued-after-head-gets-stuck-cookie-jar
Bulls Push U.S. Stocks to Record Highs
From Businessweek.com:
U.S. stocks rose to records, with the Dow Jones Industrial Average climbing to within two points of 17,000, as gauges of factory output in major economies signaled expansion.
Gold advanced to a three-month high as the dollar sagged.
The Standard & Poor’s 500 Index climbed 0.7 percent to an all-time high at 4 p.m. in New York.
The Dow average jumped 0.8 percent to a record, rising as high as 16,998.70...
----
Link: http://www.businessweek.com/news/2014-06-30/dollar-holds-retreat-as-s-and-p-500-caps-sixth-quarterly-gain
U.S. stocks rose to records, with the Dow Jones Industrial Average climbing to within two points of 17,000, as gauges of factory output in major economies signaled expansion.
Gold advanced to a three-month high as the dollar sagged.
The Standard & Poor’s 500 Index climbed 0.7 percent to an all-time high at 4 p.m. in New York.
The Dow average jumped 0.8 percent to a record, rising as high as 16,998.70...
----
Link: http://www.businessweek.com/news/2014-06-30/dollar-holds-retreat-as-s-and-p-500-caps-sixth-quarterly-gain
Subscribe to:
Posts (Atom)