Archive for Economy

It’s Little Changed!™

The companion game to It’s Unexpected!™

How many different ways do they find to say “meh”? You have 10 seconds…GO!

Total nonfarm payroll employment increased by 142,000 in August, and the unemployment rate was little changed at 6.1 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services and in health care.

In August, both the unemployment rate (6.1 percent) and the number of unemployed persons (9.6 million) changed little. Over the year, the unemployment rate and the number of unemployed persons were down by 1.1 percentage points and 1.7 million, respectively. (See table A-1.)

Among the major worker groups, the unemployment rates in August showed little or no change for adult men (5.7 percent), adult women (5.7 percent), teenagers (19.6 percent), whites (5.3 percent), blacks (11.4 percent), and Hispanics (7.5 percent). The jobless rate for Asians was 4.5 percent (not seasonally adjusted), little changed from a year earlier. (See tables A-1, A-2, and A-3.)

The number of long-term unemployed (those jobless for 27 weeks or more) declined by 192,000 to 3.0 million in August. These individuals accounted for 31.2 percent of the unemployed. Over the past 12 months, the number of long-term unemployed has declined by 1.3 million. (See table A-12.)

The civilian labor force participation rate, at 62.8 percent, changed little in August and has been essentially unchanged since April. In August, the employment-population ratio was 59.0 percent for the third consecutive month but is up by 0.4 percentage point from a year earlier. (See table A-1.)

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed in August at 7.3 million. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job. (See table A-8.)

Among the marginally attached, there were 775,000 discouraged workers in August,
little changed from a year earlier.

Last and probably least:

The change in total nonfarm payroll employment for June was revised from +298,000 to +267,000, and the change for July was revised from +209,000 to +212,000. With these revisions, employment gains in June and July combined were 28,000 less than previously reported.

There you have it: Recovery Summer V has been as big a dud as Recovery Summers I-IV.

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Jobbed and Jobless

Jane Austen’s novel of bad manners on the state of Americans under the burdens of ObamaCare:

On Thursday the Federal Reserve Bank of Philadelphia reported the results of a special business survey on the Affordable Care Act and its influence on employment, compensation and benefits. Liberals claim ObamaCare is of little consequence to jobs, but the Philly Fed went to the source and asked employers qualitative questions about how they are responding in practice.

The bank reports that 78.8% of businesses in the district have made no change to the number of workers they employ as the specific result of ObamaCare and 3% are hiring more. More troubling, 18.2% are cutting jobs and employees. Some 18% shifted the composition of their workforce to a higher proportion of part-time labor. And 88.2% of the roughly half of businesses that modified their health plans as a result of ObamaCare passed along the costs through increasing the employee contribution to premiums, an effective cut in wages.

Those results are consistent with a New York Fed survey, also out this week, that asked “How, if at all, are you changing (or have you changed) any of the following because of the effects that the ACA is having on your business?” For “number of workers you employ,” 21% of Empire State manufacturers and 16.9% of service firms answered “reducing.”

To complete the triptych, an Atlanta Fed poll earlier this month found that 34% of businesses planned to hire more part-time workers than in the past, mostly because of a rise in the relative costs of their full-time colleagues. ObamaCare may be contributing to that surge to the extent the law’s insurance mandates and taxes increase spending on fringe benefits for people who work more than 30 hours.

Somewhere between one-fifth and one-third of employers are cutting hours for their employees. The Left likes to think of itself as fact-based and scientific. But ObamaCare was built on the promise of sugar plums and unicorns. Define full time workers at 30 hours a week, and that’s what you’ll get, an army of 29-hour a week workers without health care. The Soviet Union learned that a command economy doesn’t work. Now we don’t work.

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Out, the 99%; In, the 35.4%

Nice lack of work, if you can get it:

109,631,000 Americans lived in households that received benefits from one or more federally funded “means-tested programs” — also known as welfare — as of the fourth quarter of 2012, according to data released Tuesday by the Census Bureau.

The Census Bureau has not yet reported how many were on welfare in 2013 or the first two quarters of 2014.

But the 109,631,000 living in households taking federal welfare benefits as of the end of 2012, according to the Census Bureau, equaled 35.4 percent of all 309,467,000 people living in the United States at that time.

Oh, and by way of comparison:

In 2012, according to the Census Bureau, there were 103,087,000 full-time year-round workers in the United States (including 16,606,000 full-time year-round government workers). Thus, the welfare-takers outnumbered full-time year-round workers by 6,544,000.

Another point of comparison:

In the fourth quarter of 2008, when President Obama was elected, there were 96,197,000 people living in households taking benefits from one or more federal welfare programs. After four years, by the fourth quarter of 2012, that had grown by 13,434,000.

Let’s do a little cipherin’ as Jethro used to say on the Beverly Hillbillies. Obama took office during the worst recession in recent memory, but not an overly long one: the economy started growing again in early-to-mid 2009. Even so, the welfare rolls swelled by more than the population of Illinois (or the nation of Chad). Meanwhile, more people receive welfare than pay for it—by six-and-a-half million.

And if one includes all social spending (SocSec, Medicare), but excludes veteran benefits, nearly half the country (48.5%) receives a check from the gummint every month. Hard to win elections on the motto of limited government against that demographic.

PS: The economy has continued to grow—if you can call it that—since the end of 2012. How many of you think people have left welfare and gone back to work over the last year and a half? Me neither.

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“It’s Essentially Unchanged!”™

It’s that time again: time for the weak, tepid cup of tea masquerading as the US economy.

Both the unemployment rate (6.2 percent) and the number of unemployed persons (9.7 million) changed little in July. [Changed little, but changed for the worse.]

[T]he unemployment rate for adult women increased to 5.7 percent and the rate for blacks edged up to 11.4 percent in July, following declines for both groups in the prior month. The rates for adult men (5.7 percent), teenagers (20.2 percent), whites (5.3 percent), and Hispanics (7.8 percent) showed little or no change in July. The jobless rate for Asians was 4.5 percent (not seasonally adjusted), little changed from a year earlier.

The number of long-term unemployed (those jobless for 27 weeks or more) was essentially unchanged at 3.2 million in July. These individuals accounted for 32.9 percent of the unemployed.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers), at 7.5 million, was unchanged in July. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

The civilian labor force participation rate, at 62.9 percent, changed little in July. The participation rate has been essentially unchanged since April. The employment-population ratio, at 59.0 percent, was unchanged over the month….

You all know what a fan I am of the labor force participation rate. Nothing so clearly demonstrates the economic cataract of job loss under Obama:

He “inherited” a tough economy, but one that had routinely turned in a 66% participation rate. Now, he dreams of getting back to 63%. Oh, and note that the “recovery” [chortle] began in June 2009, just as the rate plummeted down a triple black diamond slope. Five years of such recovery and we’re barely “little changed”, “changed little”, “unchanged”, or “essentially unchanged”.

And I thought the jobs report was supposed to be good news.

Guess not:

The Dow fell 70 points Friday on what turned out to be a volatile day of trading.

The blue chip index finished the week lower and is now down for the year following Thursday’s 317-point drop.

Employers added 209,000 jobs in July. That was well shy of the 288,000 jobs that were created in June and below the gain of 230,000 jobs predicted by economists polled by CNNMoney.

The weaker-than-expected jobs report could ease fears on Wall Street that the Federal Reserve will hike interest rates early next year.

The government said the unemployment rate ticked up to 6.2% from 6.1%.

“The employment data was not too hot, not too cold. It was just about right…

Thanks, Goldilocks. I said at the top the economy was tepid tea, but I stand corrected. It’s porridge.

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United States of Indebtedness

Just be glad you don’t live in Nevada:

Americans have a debt problem.

An estimated 1 in 3 adults with a credit history — or 77 million people — are so far behind on some of their debt payments that their account has been put “in collections.”

That’s a key finding from a new Urban Institute study.

It examined non-mortgage debt, including credit card bills, car loans, medical bills, child support payments and even parking tickets.

The debt in collections ranged from as little as $25 to a whopping $125,000. But the average amount owed was $5,200.

Geographically, no area of the country is untouched.

Among the states, Nevada had the highest percentage of residents with debt in collections — 47% – as well as the highest average amount owed – $7,198. That was helped in part by the Las Vegas metro area, where 49% of residents had debt in collections.

In any of those cases, however, the cost to the consumer is high and long-lasting.

“[It] can harm credit scores, which can tip employers’ hiring decisions, restrict access to mortgages, and even increase insurance costs,” said Caroline Ratcliffe, a senior fellow at the Urban Institute.

Of course, Aggie and I are the only ones in the nation who think this is a direct result of President Obama’s policies. This recovery-that-wasn’t, now five years old, has led to prosperity-that-isn’t and jobs-that-aren’t. You heard all about this in the Bush years, when (until 2008) there really were prosperity and jobs; nothing now.

Rather, if this story gets any traction (it won’t), you’ll see the regime’s puppets and jesters try to make the case that Obama needs more of his failed policies. The economy will never be fully healed, despite what the unemployment numbers say, until Obama leaves office. He’s that damaging.

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Household Net Worth Has Declined Approximately 40% Since 2007

The NY Times hides this by going back to 2003, but if you read the full article you learn that the problem began with the financial meltdown on 2007/08 and just hasn’t improved since. They state a 36% decline, based on 2003, but since American wealth grew between 2003-2007, the real decline has to be larger, right?

Economic inequality in the United States has been receiving a lot of attention. But it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.

The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.

The Russell Sage study also examined net worth at the 95th percentile. (For households at that level, 94 percent of the population had less wealth and 4 percent had more.) It found that for this well-do-do slice of the population, household net worth increased 14 percent over the same 10 years. Other research, by economists like Edward Wolff at New York University, has shown even greater gains in wealth for the richest 1 percent of households.

For households at the median level of net worth, much of the damage has occurred since the start of the last recession in 2007. Until then, net worth had been rising for the typical household, although at a slower pace than for households in higher wealth brackets. But much of the gain for many typical households came from the rising value of their homes. Exclude that housing wealth and the picture is worse: Median net worth began to decline even earlier.

“The housing bubble basically hid a trend of declining financial wealth at the median that began in 2001,” said Fabian T. Pfeffer, the University of Michigan professor who is lead author of the Russell Sage Foundation study.

The reasons for these declines are complex and controversial, but one point seems clear: When only a few people are winning and more than half the population is losing, surely something is amiss.

They are trying to write about the evil 1%, and I suppose their readers will buy it. But to my mind, this is mostly a story about the economic failures of the Obama administration. Consider this: September 11 2001 didn’t harm us as much as the presidency of Barack Obama.

– Aggie

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Out -1%; In -2.9%

Crikey, that must have been one hell of a winter!

The U.S. economy contracted in the first quarter by the most since the depths of the last recession as consumer spending cooled.

Gross domestic product fell at a 2.9 percent annualized rate, more than forecast and the worst reading since the same three months in 2009, after a previously reported 1 percent drop, the Commerce Department said today in Washington. It marked the biggest downward revision from the agency’s second GDP estimate since records began in 1976.

Not to worry, experts say, Spring is here!

The first-quarter slump is “not really reflective of fundamentals,” said Sam Coffin, an economist at UBS Securities LLC in New York and the best forecaster of GDP in the last two years, according to data compiled by Bloomberg. “For the second quarter, we’ll see some weather rebound and a return to more normal activity after that long winter.”

Winter and George W. Bush get blamed for everything!

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BREAKING: ObamaCare Hurts Economy, Workers

Who could have seen this coming?

[U]nlike Settles’s other experiments, this one hasn’t been great for his business. He put raises and expansion plans on hold as he figured out the cost and logistics of making the changes. To his surprise, his employees have not leaped at the chance to get health insurance. And he is still trying to figure some things out — for example, how to safeguard employee information that must now be reported to the Internal Revenue Service, such as the Social Security numbers of children who are covered under their parents’ health plans.

“We don’t want to be liable for that,” he said. “What if we get hacked?”

In recent weeks, criticism of the Affordable Care Act’s employer mandate — one of the law’s most controversial components — has intensified, as employers such as Settles complain publicly and even some Obama administration allies acknowledge that the mandate has harmed some workers.

A number of businesses, including Regal Entertainment and SeaWorld, have reduced hours for part-time workers to fewer than 30 a week — the law’s definition of full time — to avoid having to offer them health insurance. Other companies say they are holding back on hiring to avoid the insurance requirement. Seasonal employees and low-wage workers, such as adjunct professors and cafeteria staffers, have been hit especially hard.

You’ll pardon Aggie and me, I hope, for laughing at Democrat stalwarts, “low-wage workers”, as the “law of the land” targets their asses. It’s more than we could have hoped for.

Did I say “law of the land”? Hardly:

“We’ve never thought [the employer mandate] was particularly good policy, and while people have probably screamed too loudly about the effects on employment, there is some of it that’s certainly true, and it’s not worth the price we seem to be paying,” said John Holahan, a fellow at the Urban Institute and a co-author of the recent paper “Why Not Just Eliminate the Employer Mandate?”

Am I the only one troubled by the concept of an optional mandate? It’s like asking your calculator to divide by zero. And the media pretend to discover these collateral damages as if they weren’t there all along.

See you in November.

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We Are the 2%

Yet another Recovery Summer™ goes down the tubes:

So much for that hopeful thinking. Half-way through the year, forecasts are being slashed. The latest Zorro move comes from the International Monetary Fund. The organization said Monday that the U.S. economy would only grow 2% this year, down from it earlier forecast of 2.8%.

This comes on the heels of the World Bank announcement last week that it was cutting its prediction for the United States and the broader world economy. Many expect Federal Reserve policymakers to do the same downward revision when they meet this week.

What went wrong?

Uh…George Bush?

Blame it on the deep freeze that caused a very weak start to 2014.

“In the early part of the year, as a harsh winter conspired with other factors… momentum faded in the U.S economy,” the IMF said.

That was my second guess!

But I thought denying global warming was like saying the moon was made of cheese!

Anyhow, the IMF gets this right:

[T]he report is also quick to point out problems that will put a drag on the U.S. economy in the coming years such as population aging and “modest prospects for productivity growth.”

To boost output, the IMF urges the U.S. to undertake a “skills-based approach” to immigration reform and to lift restrictions on U.S. oil exports.

Welcome immigrants with skill, not diseases, and export oil (esp. at $100+ a barrel). Where do they come up with these crazy schemes?

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It’s Unexpected!™

In an economy that can be described only as bipolar, jobless claims rose more than…wait for it…expected:

U.S. retail sales rose less than expected in May and first-time applications for unemployment benefits increased last week, but that will probably do little to change views that the economy is regaining momentum.

[T]he Labor Department said initial claims for state unemployment benefits climbed 4,000 to a seasonally adjusted 317,000 for the week ended June 7.

With job growth rising solidly in May and manufacturing and services industries expanding strongly, the retail and jobless claims reports probably will not cause too much anxiety.

The economy added 217,000 jobs in May, the fourth straight month of job gains above 200,000. It has recouped all the 8.7 million jobs lost during the recession. The unemployment rate held steady at a 5-1/2 year low of 6.3 percent.

Economic growth in the second quarter is expected to top a 3.0 percent annual pace after contracting at a 1.0 percent rate in the January-March period.

Reuters seems awfully blasé about an unexpected jump in unemployment claims. But then, they have jobs. The economy may indeed grow by 3% in the second quarter, but I’ll need to see it before I believe it. I don’t put the contraction last quarter down to the harsh winter. So I’m not buying an Economic Spring any more than I bought an Arab Spring. Not with these job numbers.

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Blue States, Red Ink

What a shocker! Left-leaning states are more hostile to small business than right-leaning states:

Untitled

Before we get to the story, compare that map to the results of the 2012 election. Note the correlation:

Anyhow, enough from me.

Thumbtack, in partnership with the Ewing Marion Kauffman Foundation, has released the results from the third annual Thumbtack.com Small Business Friendliness Survey. The study, drawing upon data from over 12,000 small business owners, provides new insights into state and local business environments across the nation.

“Creating a business climate that is welcoming to small, dynamic businesses is more important than ever, but rarely does anyone ask small business owners themselves about what makes for a pro-entrepreneur environment,” says Jon Lieber, Chief Economist of Thumbtack. “Thousands of small business owners across the country told us that the keys to a pro-growth environment are ease of compliance with tax and regulatory systems and helpful training programs.”

Some of the survey’s key findings include:

Utah, Idaho, Texas, Virginia and Louisiana gave their states the highest rating for friendliness to small business. Small businesses in Colorado Springs, Boise and Houston gave their cities the highest ratings.

In contrast, small business owners gave California, Rhode Island and Illinois an “F,” while Connecticut and New Jersey both earned a “D” grade. Sacramento, Providence and Buffalo were the survey’s worst-performing cities as rated by their small business owners.

Small businesses in Texas, Utah and Idaho have rated their states in the top five every year this survey has run, while California and Rhode Island have been rated in the bottom five every year.

The friendliness of professional licensing requirements was the most important regulatory issue in determining a state’s overall friendliness to small businesses. Closely following licensing requirements was the ease of filing taxes.

Once again, tax rates was a less important factor than the ease of regulatory compliance in determining the overall friendliness score of a jurisdiction. Two-thirds of respondents said they paid their “fair share” of taxes – that is, they felt like they were neither under-paying nor over-paying.

Despite what business-bashers like Barack Obama bloviate, owners of small businesses don’t bitch about taxes. It’s the red tape and the power-mad whims of the bureaucrats (if I may paraphrase) that drive them crazy. That’s why places like California are bleeding jobs to places like Texas. And why the country as a whole still hasn’t recovered from a recession (however Great it was) that ended five years ago. (If I may extrapolate.)

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Party Like It’s 2008!

We’ve “recovered” all the jobs lost in the “Great Recession”! Hooray!!

The U.S. economy has regained all of the jobs lost during the Great Recession. The economy added 217,000 jobs were added in May, with the unemployment rate holding steady at 6.3%. The recovery has been the slowest in U.S. history and most of the new jobs are not paying as much as the jobs that were lost. Still, unemployment in America is at its lowest level since September 2008.

So what if the population has grown by 14,000,000 people in the interim? Most of them are still in short pants. We’ve essentially added the combined population of Maine, New Hampshire, Rhode Island, Montana, Delaware, South Dakota, and Alaska (Obama’s 57 states now makes sense!)—but they’re all on welfare. Let’s celebrate!

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