"but the more recent number is more consistent with what you would expect in an economy already getting close to full employment." Really? With some of the lowest labor participation that is equivalent to say that "fewer people are working ever, and that's OK because these folks will never find work anyway." No wonder revolutions (and Trump elections) happen. All unemployment discussions should primarily refer to larger measures of unemployment and labor participation.
1
The Fed and all our Economic overseers are set up to benefit large corporations and publicly held stock. They themselves are stock holders so why bother with developing tools to employ people at median wage? Our indicators and leaders focus on Wall Street. Let us revise the mission statement and goals of the Fed to stop loaning money to rich bankers to loan money to rich companies to buy back stock at 0% interest. Let's require interest be low for banks that loan to little people and small businesses and Fed charge high interest for banks that loan to more tightly concentrate capital.
1
Are any of us surprised?
This is what happens when a republican congress makes party over country their priority.
This is what happens when a republican congress makes party over country their priority.
1
Report is based on faulty data. Less than halfway into Obama first term the Administration changed the formula for counting and tsbulatingbthe unemployment rate. The new method creates the false impression that unemploymentvhas dropped significantly. Had the original methidokogy been applied this graph would look different. The entire report would be inaccurate and misleading. Note to NYTimes when combining data constructed of differing parameters, you have an obligation to inform your readers so they don't make the same inference as you have done. The economic outlook is bleak to say the least. Your branch of the Hillary propaganda ministry is doing as disservice to its readers into mistakenly thinkingballs is well when it is not well at all.
4
Partisan thinking is not illuminating, its reductive.
The United States Department of Labor Bureau of Labor Statistics (BLS) is staffed by apolitical professionals tasked with tabulating data.
The BLS refreshes methodologies, re-benchmarks seasonal effects and tries to improve estimate accuracy and has for decades.
No direction from the Executive branch is required or welcome.
Just to prepare you, this September 7, 2016 at 10 AM EST a new Preliminary Benchmark Revision will be Released of labor market conditions.
See the details of their methodology here:
http://www.bls.gov/web/empsit/cesprelbmk.htm
If you read this and still think it is a partisan President Obama/Secretary Clinton/Democratic Party/ New York Times/plot to overstate the economic outlook, I wish you peace and serenity in your life.
The United States Department of Labor Bureau of Labor Statistics (BLS) is staffed by apolitical professionals tasked with tabulating data.
The BLS refreshes methodologies, re-benchmarks seasonal effects and tries to improve estimate accuracy and has for decades.
No direction from the Executive branch is required or welcome.
Just to prepare you, this September 7, 2016 at 10 AM EST a new Preliminary Benchmark Revision will be Released of labor market conditions.
See the details of their methodology here:
http://www.bls.gov/web/empsit/cesprelbmk.htm
If you read this and still think it is a partisan President Obama/Secretary Clinton/Democratic Party/ New York Times/plot to overstate the economic outlook, I wish you peace and serenity in your life.
4
Thank you David Parsons. It's too easy to just throw the Monopoly board into the air when you're losing, as if you're a child who learned a little in school and thinks now that the game is rigged.
1
Neil Irwin is a national treasure. My only objection is that his contributions are often hidden.
1
It seems to me that both the stock and bond markets are unreasonably high and have been for several years partly as a result of quantitative easing by the fed. Of course the markets don't want the punch bowl taken away but better to strike while the iron is hot and a small increase would help put the casino supporters on notice that the croupiers are honest.
2
My comment is directed to policymakers:
Global central bankers are well aware of the profound post Crisis change in transferring the banking liquidity framework from a flexible unsecured interbank system to a fixed liquidity system derived from the sovereign.
QE was the first necessary step in Basel III reform, when reserves once referred to as excess became required and scarce.
Lets consider the EU and the ECB:
The EU was understood to be structurally incomplete when disparate economies and nations joined together in a single currency monetary union in 1999.
Brexit made it easier to complete the EU structural reforms required because the UK did not want to join the monetary union, now closer fiscal and banking integration, only access to the EU Single Market.
The reform that must occur now is for the ECB to replace all of the debt purchased under QE - public and private - with EU Eurobond sovereign debt backed by the ECB held by Brussels.
Doing so makes it eligible as high quality liquid assets HQLA under the Basel III framework useful to recapitalize all European banks now under one common regulator.
Private companies and EU members of the integrated fiscal union accept Euros in permanent replacement of debt, de-risking banking and ushering in flexible member-state budgets wiped clean of pre-existing member-state debt.
Taxation flows adjust accordingly.
Brussels becomes a representative government of elected EU leaders with authority proportionate to voters.
Global central bankers are well aware of the profound post Crisis change in transferring the banking liquidity framework from a flexible unsecured interbank system to a fixed liquidity system derived from the sovereign.
QE was the first necessary step in Basel III reform, when reserves once referred to as excess became required and scarce.
Lets consider the EU and the ECB:
The EU was understood to be structurally incomplete when disparate economies and nations joined together in a single currency monetary union in 1999.
Brexit made it easier to complete the EU structural reforms required because the UK did not want to join the monetary union, now closer fiscal and banking integration, only access to the EU Single Market.
The reform that must occur now is for the ECB to replace all of the debt purchased under QE - public and private - with EU Eurobond sovereign debt backed by the ECB held by Brussels.
Doing so makes it eligible as high quality liquid assets HQLA under the Basel III framework useful to recapitalize all European banks now under one common regulator.
Private companies and EU members of the integrated fiscal union accept Euros in permanent replacement of debt, de-risking banking and ushering in flexible member-state budgets wiped clean of pre-existing member-state debt.
Taxation flows adjust accordingly.
Brussels becomes a representative government of elected EU leaders with authority proportionate to voters.
1
It is OK to run a EU federal deficit for the birth of a continent; certainly much more has been spent in the name of war and destruction of a continent in the course of European history.
I meant to say in the prior comment that the UK did not want a monetary union, or fiscal integration or a common banking regulator. They just wanted access to the European Single Market as a means to an end - low friction exports.
They can have it like all other non-EU members in the EU Single Market as long as they accept the fundamental principles of Free Movement of Labor, Trade Regulation Standards and help defray administrative costs to curtail free rides.
They gain the ability to form their own trade agreements and they keep UK sovereignty with the same ability to influence an integrated Europe as any outside sovereign.
The common defense ties that bind all NATO nations remain well intact and secure.
As is well know, the US has had a monetary union for centuries, flexible state budgets, a representative federal authority and state and local governments with direct representatives and budgets.
20% unemployment is a European emergency and must be treated as such. It is as or more important than a large influx of immigrants Europe is trying to protect. security is also paramount. Only by thinking big can great leaders do both.
Be willing to take decisive sensible action if not for yourselves, for all your ancestors and for your generations to follow.
See structural changes.
I meant to say in the prior comment that the UK did not want a monetary union, or fiscal integration or a common banking regulator. They just wanted access to the European Single Market as a means to an end - low friction exports.
They can have it like all other non-EU members in the EU Single Market as long as they accept the fundamental principles of Free Movement of Labor, Trade Regulation Standards and help defray administrative costs to curtail free rides.
They gain the ability to form their own trade agreements and they keep UK sovereignty with the same ability to influence an integrated Europe as any outside sovereign.
The common defense ties that bind all NATO nations remain well intact and secure.
As is well know, the US has had a monetary union for centuries, flexible state budgets, a representative federal authority and state and local governments with direct representatives and budgets.
20% unemployment is a European emergency and must be treated as such. It is as or more important than a large influx of immigrants Europe is trying to protect. security is also paramount. Only by thinking big can great leaders do both.
Be willing to take decisive sensible action if not for yourselves, for all your ancestors and for your generations to follow.
See structural changes.
1
Last comment today I *promise*: some strong large EU member states have benefited from a weak euro and a strong budget and current account surplus (see Germany)
At the same time, some smaller more fragile economies have been hurt by the relative strength of the euro as they have trade and current account deficits (see Greece, Spain and Italy)
Rather than extremist monetarist policies by the ECB that have been stretched:
- after exchanging ECB debt holdings with Eurobonds backed by the ECB, indebted struggling small economies with have that burden lifted to help the people,
-and the relatively small EU federal deficit would be cost effective (Eurobonds backed by ECB) and a light burden on all
- the strong prosperous countries would have the most influence in a stronger more prosperous and safer Europe, more financial stable, with less suffering, less political and monetary extremism
- short funding rates would turn mildly positive, currency would strengthen in parity with USD but structural issues solved worth weight in gold; trade may even be a winner
At the same time, some smaller more fragile economies have been hurt by the relative strength of the euro as they have trade and current account deficits (see Greece, Spain and Italy)
Rather than extremist monetarist policies by the ECB that have been stretched:
- after exchanging ECB debt holdings with Eurobonds backed by the ECB, indebted struggling small economies with have that burden lifted to help the people,
-and the relatively small EU federal deficit would be cost effective (Eurobonds backed by ECB) and a light burden on all
- the strong prosperous countries would have the most influence in a stronger more prosperous and safer Europe, more financial stable, with less suffering, less political and monetary extremism
- short funding rates would turn mildly positive, currency would strengthen in parity with USD but structural issues solved worth weight in gold; trade may even be a winner
1
Greece Italy are failing because the spend too much just like we do. Simple.
Exactly so. We're in goldilocks at the moment and have been for at least two years. Despite the endless doom saying ALL of which is politically motivated, the reality is that the US economy is doing very nicely both in absolute and relative terms.
6
Perhaps relative to most of the rest of the world. However, in absolute terms this entire recovery has been substandard in growth.
4
Worse than that it has assured economic collapse because of the accumulated debt which continues its accent into the history books to a place of no retreaval, soon as the dollar completes its fall from grace weep are plunged into 3rd world has been. So has every nation before us with this massive size fed spending
"U3 is the official unemployment rate. U5 includes discouraged workers and all other marginally attached workers. U6 adds on those workers who are part-time purely for economic reasons. The current U6 unemployment rate as of August 2016 is 9.7%."
The U6 unemployment rate August 2007 was 8.4%.
Labor force participation rate August 1997 was 67.2%.
Labor force participation rate August 2016 is 62.8%.
Total labor force August 1997 was 136,618,000 people.
Total labor force August 2016 is 159,463,000 people.
Simple arithmetic indicates the participation rate has dropped by 4.4%, while the ready, willing, and able workforce has increased by nearly 23,000,000 souls.
See, here's the thing, when presenting data,.one must present real data, and all of it, for people to analyse so determination as to whether truth or obfuscation and perception management is the intent.
As I sit here this Sunday mornimg, I wonder, sadly, with a great sense of loss, where did we lose our way, or the better question is, how did we become so dangerously apathetic, and permit the plutocratic takeover of our lives, our government, our wealth, and our future.
The U6 unemployment rate August 2007 was 8.4%.
Labor force participation rate August 1997 was 67.2%.
Labor force participation rate August 2016 is 62.8%.
Total labor force August 1997 was 136,618,000 people.
Total labor force August 2016 is 159,463,000 people.
Simple arithmetic indicates the participation rate has dropped by 4.4%, while the ready, willing, and able workforce has increased by nearly 23,000,000 souls.
See, here's the thing, when presenting data,.one must present real data, and all of it, for people to analyse so determination as to whether truth or obfuscation and perception management is the intent.
As I sit here this Sunday mornimg, I wonder, sadly, with a great sense of loss, where did we lose our way, or the better question is, how did we become so dangerously apathetic, and permit the plutocratic takeover of our lives, our government, our wealth, and our future.
15
Oh gosh hopefully for the last time though I sincerely doubt it:
The falling labor participation rate reflects demographics.
The % of prime age workers is falling around the world with the advent of more effective birth control in the early 1960s to prevent global overpopulation.
When people throw out massive numbers of Americans not working - estimates as high as 94 million - they are referring to babies, children and teenagers in school, young adults in college and graduate school, the sick and disabled, retired and seniors, etc.
Cross check Census data with BLS granular demographic data to have an understanding of the open economy then add in the underground economy to have an informed historical discussion of true unemployment.
Since I cannot continue to repeat myself, I encourage all those who seek the truth to copy and paste my response when you see people go off the rails on the number of unemployed in America in 2016.
The unemployed of today either have a geographical or skills mismatch. Monetary policy doesn't address that.
David Parsons all rights granted to reproduce.
The falling labor participation rate reflects demographics.
The % of prime age workers is falling around the world with the advent of more effective birth control in the early 1960s to prevent global overpopulation.
When people throw out massive numbers of Americans not working - estimates as high as 94 million - they are referring to babies, children and teenagers in school, young adults in college and graduate school, the sick and disabled, retired and seniors, etc.
Cross check Census data with BLS granular demographic data to have an understanding of the open economy then add in the underground economy to have an informed historical discussion of true unemployment.
Since I cannot continue to repeat myself, I encourage all those who seek the truth to copy and paste my response when you see people go off the rails on the number of unemployed in America in 2016.
The unemployed of today either have a geographical or skills mismatch. Monetary policy doesn't address that.
David Parsons all rights granted to reproduce.
4
@Mel Farrell
New York
Since when did U3 cease to be the official measure of employment? We have full employment. There are reports from all the 12 regional Feds of tightening labor markets. And it's a Saturday morning! You need to wake up and deal with reality.
New York
Since when did U3 cease to be the official measure of employment? We have full employment. There are reports from all the 12 regional Feds of tightening labor markets. And it's a Saturday morning! You need to wake up and deal with reality.
3
Do you have any evidence that http://data.bls.gov/generated_files/graphics/latest_numbers_LNS11300000_... can be explained by demographics?
http://nypost.com/2016/09/03/keep-dreaming-if-you-think-youre-retiring-i... "Some 24 percent of seniors over 65 years old are now in the US workforce."
If you don't have any such evidence do you mind not continually making these empty claims?
http://nypost.com/2016/09/03/keep-dreaming-if-you-think-youre-retiring-i... "Some 24 percent of seniors over 65 years old are now in the US workforce."
If you don't have any such evidence do you mind not continually making these empty claims?
The author is missing the forest for the trees. There is a bubble bursting in luxury real estate that is global. The commodities bubble has already burst. The jobs report is a lagging indicator. It always gives the wrong signals at major turns and is subject to drastic revisions. The effects from bursting bubbles take time to spread, but they eventually do. Low interest rates are masking the turmoil but that cannot last for long.
4
"Confidence", is the most important word, actually feeling, that government must maintain at all costs, for to not do so will result in a rapid loss of belief in the game.
The mask is manufactured using manipulated data, presented in such a way it engenders confidence, albeit these days it is becoming increasingly more difficult as people surf the net trying to find answers to why they don't seem to be benefiting.
Perception management is big business; take a look at one of the largest such organizations, Rendon.com.
Rendon has an international client list, which includes the United States government, and their services were "artfully" employed during the first and the second Iraqi wars, less so now as our government uses in-house operations to present its "story".
The mask is manufactured using manipulated data, presented in such a way it engenders confidence, albeit these days it is becoming increasingly more difficult as people surf the net trying to find answers to why they don't seem to be benefiting.
Perception management is big business; take a look at one of the largest such organizations, Rendon.com.
Rendon has an international client list, which includes the United States government, and their services were "artfully" employed during the first and the second Iraqi wars, less so now as our government uses in-house operations to present its "story".
1
@Rahul:
I am heartbroken over the possibility of the luxury real estate bubble bursting, though there is little evidence of that on the West Coast, where corrupt and legitimate money appears to continue to pour into urban properties from around the world.
There are many private US wealthy individuals lending to Chinese buyers of $ multi-million properties, who face restrictions on taking money out of China and don't want conventional loans at lower rates (can't imagine why they would want to pay a premium to borrow money from individuals instead of banks unless it's to evade... oh, never mind, banks are no fun anymore with all of those job killing regulations on money laundering and other fun stuff)
I am heartbroken over the possibility of the luxury real estate bubble bursting, though there is little evidence of that on the West Coast, where corrupt and legitimate money appears to continue to pour into urban properties from around the world.
There are many private US wealthy individuals lending to Chinese buyers of $ multi-million properties, who face restrictions on taking money out of China and don't want conventional loans at lower rates (can't imagine why they would want to pay a premium to borrow money from individuals instead of banks unless it's to evade... oh, never mind, banks are no fun anymore with all of those job killing regulations on money laundering and other fun stuff)
4
Not enough attention is paid to demographics. We cannot sustain growth at 200,000 civilian nonfarm payroll jobs a month for much longer not just because we are near full employment but also because we are just plain running out of people. While there was a 2,482,000 net increase in such jobs in the year ended in June, over the same time period the civilian noninstitutional population in the prime working age group, 25 to 54, only increased by 701,000. Even at the highest annual average labor force participation rate for that age group, 84.1%, more than 1,900,000 of those jobs must have been filed by the old and the young. That is without adjusting for those in the workforce who are not employed on nonfarm payroll jobs. The noninstitutional population of prime working age group decreased every year from December 2007 (when the recession began) until December 2012 and it remained below the 2007 levels through the end of 2015.
3
47% of USA households receive their income from the government without working. They pay no federal income taxes. We have 11+ million illegal alien invaders and their 50+ million welfare anchor babies. There is no one left to support the country.
2
My comment is directed to policymakers.
When one considers the paradigm shift in the post Crisis Basel III banking and liquidity framework, the rationale to nudge short rates higher soon is clear.
LIBOR is already at 90 basis points in lieu of October's money market reform.
The real return for short rates is higher than the real return for higher duration investments in long bonds and other instruments that promise higher nominal returns but entail greater risk.
Nudging rates higher sooner in the absence of clear data warning otherwise provides both greater flexibility to policy makers to move once or twice in 2016.
It discourages retail investors from chasing nominal yields by taking greater market risk than necessary. It benefits small savers and investors.
Capital markets can adjust the risk to unsophisticated investors.
Financial advisors would inform retail clients to shift to floating rate investments for greater risk adjusted real returns.
Sophisticated institutions will focus on higher duration cross currency investments with other embedded risks.
Policymakers understand the economy is not understood by trickles of daily data but rather the totality of data published and unpublished.
The economy has made great strides from the depths of the Great Crisis.
Nudging short rates higher will not derail the economy, jobs, investments, 401ks, etc.
But it will shine the light on politicians to make the structural changes necessary to continue progress.
When one considers the paradigm shift in the post Crisis Basel III banking and liquidity framework, the rationale to nudge short rates higher soon is clear.
LIBOR is already at 90 basis points in lieu of October's money market reform.
The real return for short rates is higher than the real return for higher duration investments in long bonds and other instruments that promise higher nominal returns but entail greater risk.
Nudging rates higher sooner in the absence of clear data warning otherwise provides both greater flexibility to policy makers to move once or twice in 2016.
It discourages retail investors from chasing nominal yields by taking greater market risk than necessary. It benefits small savers and investors.
Capital markets can adjust the risk to unsophisticated investors.
Financial advisors would inform retail clients to shift to floating rate investments for greater risk adjusted real returns.
Sophisticated institutions will focus on higher duration cross currency investments with other embedded risks.
Policymakers understand the economy is not understood by trickles of daily data but rather the totality of data published and unpublished.
The economy has made great strides from the depths of the Great Crisis.
Nudging short rates higher will not derail the economy, jobs, investments, 401ks, etc.
But it will shine the light on politicians to make the structural changes necessary to continue progress.
1
I do appreciate more thoughtful comments like this. I would add that you do need to be mindful of the impact on relative currency valuations. The likely result would be an increase in the value of the dollar, putting even more pressure on US manufacturing, a critical sector not doing well. The Fed is surely mindful of this.
1
Thank you Mike.
Negative real USD rates have the affect of weakening the USD relative to other global currencies as you know.
Since the USD is the reserve currency of choice held by most every global central bank, and given the highly diversified nature of the US economy largely driven by services not goods exports nor trade deficits, only the US can lead the world economy higher at this time.
Other global central banks, from the UK, ECB, BOJ, etc and emerging markets are adopting beggar-thy-neighbor extremist monetary policies in an effort to depreciate their respective currencies.
This undermines confidence and leads to capital misallocations and capital asset inflation that is dangerous to retail investors.
We don't need another Crisis following the last one.
I trust the wisdom of policymakers having spent many years listening and actually hearing them.
Enjoy Labor Day!
Negative real USD rates have the affect of weakening the USD relative to other global currencies as you know.
Since the USD is the reserve currency of choice held by most every global central bank, and given the highly diversified nature of the US economy largely driven by services not goods exports nor trade deficits, only the US can lead the world economy higher at this time.
Other global central banks, from the UK, ECB, BOJ, etc and emerging markets are adopting beggar-thy-neighbor extremist monetary policies in an effort to depreciate their respective currencies.
This undermines confidence and leads to capital misallocations and capital asset inflation that is dangerous to retail investors.
We don't need another Crisis following the last one.
I trust the wisdom of policymakers having spent many years listening and actually hearing them.
Enjoy Labor Day!
1
Mike,
Sorry, to address your specific point, when the global economy is healthier, US manufacturing will ultimately be stronger with more customers around the globe.
Is there a lag? Yes.
Is it worth it. Yes, in my opinion.
That is what capital is for, to buffer periods of slow growth or contraction.
With the tightness of the labor market, any smart manufacturing company would hold on to their top quality employees with the understanding brighter days are ahead and they will be essential.
While manufacturing has been less important to the growing and evolving economy, much like agriculture, it is essential for national interest.
Sorry, to address your specific point, when the global economy is healthier, US manufacturing will ultimately be stronger with more customers around the globe.
Is there a lag? Yes.
Is it worth it. Yes, in my opinion.
That is what capital is for, to buffer periods of slow growth or contraction.
With the tightness of the labor market, any smart manufacturing company would hold on to their top quality employees with the understanding brighter days are ahead and they will be essential.
While manufacturing has been less important to the growing and evolving economy, much like agriculture, it is essential for national interest.
1
Few educated people today still believe that there actually is a “Janet Yellen,” or not in the way the superstitious or unlettered may imagine, yet we live our lives as if there were and teach this to our children. As doves and hawks argue the fine points, each confident they’ve correctly interpreted her words and read the omens, we all search and wait for direction—but when it comes, is our faith any greater or lesser for it? Does it make a difference? Will we live are lives any differently?
Economic truth is within each of us.
Economic truth is within each of us.
Traders do not obsess over Yellen's every move because she does not make moves.
On the whole I would prefer the young President Clinton. President Obama should have obsessed on his "you can keep your current insurance." Mrs. Clinton and Bernie got rich by betraying their public.
On the whole, though, I agree with the author. Things are pretty good in America!
On the whole I would prefer the young President Clinton. President Obama should have obsessed on his "you can keep your current insurance." Mrs. Clinton and Bernie got rich by betraying their public.
On the whole, though, I agree with the author. Things are pretty good in America!
"An economy close to full employment?" If this is supposed to be funny, I find it anything but not.
15
No these fools actually believe those inaccurate measurement systems, that indicate that it is near full employment.
3
Dear jdd & vulcanalex
This is semantics: full employment could alternately be defined as the maximum unemployment that can be addressed via monetary policy.
The unemployment that remains is structural, requiring fiscal policy to respond.
Fiscal policy mitigates the skills gap (see JOLT Survey) through affordable access to higher education, vocational training and apprenticeship programs, and enhancements to infrastructure (see Geographical Mobility).
Why do you think the Free Movement of Labor is so foundational to the EU Single Market?
They haven't completed the EU structural reform, but they have at least figured that out.
This is semantics: full employment could alternately be defined as the maximum unemployment that can be addressed via monetary policy.
The unemployment that remains is structural, requiring fiscal policy to respond.
Fiscal policy mitigates the skills gap (see JOLT Survey) through affordable access to higher education, vocational training and apprenticeship programs, and enhancements to infrastructure (see Geographical Mobility).
Why do you think the Free Movement of Labor is so foundational to the EU Single Market?
They haven't completed the EU structural reform, but they have at least figured that out.
1
"...Year-over-year pay raises have been larger many times in this expansion..."
Let's remove the top 5% of earners and run those numbers again, shall we?
Let's remove the top 5% of earners and run those numbers again, shall we?
23
"Slow and steady" is vastly preferable to fast and volatile. High growth rates typically precede huge drops, that are far more damaging to the economy and the individual household than "sluggish" growth is. If 5% unemployment and 1-2% GDP growth is the new norm, I would be find with that. Stability is the name of the game. The economy should be boring.
2
"High growth rates typically precede huge drops"
The GDP grew at an average rate of 3.8% from 1946 to 1973 without any huge drops.
(If you want to raise the "Europe was Rubble Myth,". look at http://piketty.pse.ens.fr/files/capital21c/en/pdf/F1.1.pdf which shows that the out put of Europe was about the same as the US in the Great Prosperity 1946 - 1973).
The GDP grew at an average rate of 3.8% from 1946 to 1973 without any huge drops.
(If you want to raise the "Europe was Rubble Myth,". look at http://piketty.pse.ens.fr/files/capital21c/en/pdf/F1.1.pdf which shows that the out put of Europe was about the same as the US in the Great Prosperity 1946 - 1973).
3
Unemployment at 4.9%? It's Obama's fault!
13
Just think with wages at an all time low, plenty of corporate profits and free money from the Fed there is plenty of money to drive unemployment to an all time record low!
2
Bloomberg reported yesterday that the first print of the August employment report has been revised upward in the final revision by an average of 47,000 for the last five years in a row. This predictable statistical miss has something to do with August vacations and the start of the school year. The ADP private sector report earlier in the week suggested a higher number of new jobs as well.
The US employment topic du jour in 2017 will be incrwasing labor shortages, from low wage to high wage categories.
The US employment topic du jour in 2017 will be incrwasing labor shortages, from low wage to high wage categories.
4
The ADP number is usually way off and totally useless. ADP does not pretend that the number will match the preliminary number instead claiming it will match the final number for August which will be released on November 4. Also they only include private payrolls instead of the top line of all nonfarm payroll employment. Here is their record for the last twelve months with final Bureau of Labor Statistics (BLS) numbers:
Month........ ADP....... BLS........... Error
.5/16.... +173,000..... -1,000... +17,400%
.4/16.... +156,000. +147,000..... +4.1%
.3/16... +200,000. +167,000....+19.8%
.2/16... +214,000. +222,000.... -3.6%
.1/16... +205,000. +155,000.... +32.3%
12/15.... +257,000. +259,000..... -0.1%
11/15.... +177,000. +279.000..... -36.6%
10/15.... +182,000. +304,000..... -40.1%
.9/15.... +200,000. +162,000..... +23.5%
. 8/15.... +190,000. +123,000..... +54.5%
. 7/15.... +185,000 +245,000..... -24.5%
. 6/15.... +237,000 +226,000........ +4.9%
In five out of the twelve months ADP was off by more than 30%, in seven by more than 20% and in eight by 19.8% or more. Throwing out the huge miss in May, the mean absolute error over eleven months was 22.2%. This is partly because while ADP proudly says they have access to the payroll records for 21 to 23 million employees the BLS sample is larger including more than 28 million employees. More importantly it is a selected sample instead of a sample including only the customers of one company.
Month........ ADP....... BLS........... Error
.5/16.... +173,000..... -1,000... +17,400%
.4/16.... +156,000. +147,000..... +4.1%
.3/16... +200,000. +167,000....+19.8%
.2/16... +214,000. +222,000.... -3.6%
.1/16... +205,000. +155,000.... +32.3%
12/15.... +257,000. +259,000..... -0.1%
11/15.... +177,000. +279.000..... -36.6%
10/15.... +182,000. +304,000..... -40.1%
.9/15.... +200,000. +162,000..... +23.5%
. 8/15.... +190,000. +123,000..... +54.5%
. 7/15.... +185,000 +245,000..... -24.5%
. 6/15.... +237,000 +226,000........ +4.9%
In five out of the twelve months ADP was off by more than 30%, in seven by more than 20% and in eight by 19.8% or more. Throwing out the huge miss in May, the mean absolute error over eleven months was 22.2%. This is partly because while ADP proudly says they have access to the payroll records for 21 to 23 million employees the BLS sample is larger including more than 28 million employees. More importantly it is a selected sample instead of a sample including only the customers of one company.
One point Neil Irwin should have made, but did not, is that the evidence that has unfolded over the past nine months demonstrates that there was no reason for the Federal Open Market Committee to raise rates in December 2015. Even more clear is that those hawkish Board members who vocally advocated raising rates in early 2015, and before that in 2014, have been shown to be decisively wrong in their views on incipient levels of inflation. The latest inflation rate for the United States is 0.8% through the 12 months ended July 2016, that follows four years of below target inflation. That is troubling when one realizes that the current inflation target is a mere 2%. Add to this picture a labor market that still shows no signs of sparking inflation, and it is quite clear that the FOMC has no business raising rates for the remainder of 2016. Indeed, given how demonstrably wrong Fed hawks have been in their prognostications, there really needs to be clear and convincing evidence of inflation before their views can be taken seriously.
23
You are not distinguishing between core PCE and headline PCE, and I suspect from your intelligent comment you know the difference.
1
Inflation rate is inaccurate doesn't account for highest price gainers. Ask any average American they know things are much higher then federal reporting agencies say they are
1
MLJensen
We agree! Hurrah!
We agree! Hurrah!
1
This single August payroll report is a combination of raw data and seasonal smoothing and other adjustments, likely to be revised shortly.
Unadjusted ADP data released Wednesday further confirmed healthy jobs data reflective of full employment.
Policymakers look at the totality of market data, not just a single data point at a single point in time.
Services inflation that represent the US economy is above 3% and rising.
This record jobs expansion looks like full cyclical employment, with record number of unfilled job openings (JOLT) that require structural policy changes (education, training) to reduce.
I would not be too quick to assume the Fed is on hold.
Unsophisticated investors are assuming too much unfamiliar market risk chasing yield.
The compelling arguments to me is that the Fed should want to retain the flexibility to nudge rates higher twice this year, not just once.
For practical purposes that only leaves September and December FOMC.
The Fed has teed up the rationale for normalizing rates so many times that they risk losing credibility if they don't move in September unless data preempts them, and to date nothing has.
It was telling that the market responded so anemically to "hawkish" talk recently, a sign the market has already lost credibility in the will of Fed policymakers to normalize.
Nudging up rates in September is a sign that we have made significant progress from the depths of the Great Crisis and that should be welcome news to all.
Unadjusted ADP data released Wednesday further confirmed healthy jobs data reflective of full employment.
Policymakers look at the totality of market data, not just a single data point at a single point in time.
Services inflation that represent the US economy is above 3% and rising.
This record jobs expansion looks like full cyclical employment, with record number of unfilled job openings (JOLT) that require structural policy changes (education, training) to reduce.
I would not be too quick to assume the Fed is on hold.
Unsophisticated investors are assuming too much unfamiliar market risk chasing yield.
The compelling arguments to me is that the Fed should want to retain the flexibility to nudge rates higher twice this year, not just once.
For practical purposes that only leaves September and December FOMC.
The Fed has teed up the rationale for normalizing rates so many times that they risk losing credibility if they don't move in September unless data preempts them, and to date nothing has.
It was telling that the market responded so anemically to "hawkish" talk recently, a sign the market has already lost credibility in the will of Fed policymakers to normalize.
Nudging up rates in September is a sign that we have made significant progress from the depths of the Great Crisis and that should be welcome news to all.
2
We've got a record high number of job openings in our area. 1,089 job postings in August was even higher than June & July and the most ever. And they are all kinds of jobs - high and low skilled. Garage door installers being offered $18-22/hr. depending on experience. Fast food offering $13/hr plus $500 signing bonus. Construction, welders, master plumbers, marketing, sales, hr managers, health care workers, nurses, engineers, lab techs, DISH installers, electricians, graphic design/CAD, bus drivers, etc.
Plenty of jobs out there but not enough people to fill them.
Plenty of jobs out there but not enough people to fill them.
6
Any sitting down jobs for the 50+-ers with bad backs who can't do most of those jobs?
15
Number of openings would be fine, if employers were actually to hire. In addition, the positions do not take all comers--one must be in the occupation in order to qualify for the position.
So, an out-of-work accountant, for example, may not be interviewed for any of the positions advertised.
This result is the aftermath of the Great Recession and an indicator of the so-called recovery.
So, an out-of-work accountant, for example, may not be interviewed for any of the positions advertised.
This result is the aftermath of the Great Recession and an indicator of the so-called recovery.
17
Looks like heaven to me.
2