With all of the noise coming from general politics there’s hardly been any space left over for economic news. There’s nothing like a huge distraction to keep people’s minds off of how things are going in the areas which really matter the most.
So how are we doing?
One handy measure comes to us from what Barataria has taken to calling Yellen’s Dashboard. This is a list of the five most stubbornly bad indicators that were simply not turning around 3 years ago, despite many signs of improvement. With the Fed sending strong signals that rate hikes are assured in coming months they make a good place to start the conversation.
The Republican Convention is over – but, of course, the arguments will continue. If you watched any of the speeches, especially the gloom ridden rant delivered by Donald Trump, you may be wondering about some of the horrifying statistics thrown around. Is America really in such peril, with such incredibly high unemployment and violence in the streets?
The short answer is no, not at all. We’re at a turning point, as we’ve shown many times. The long Depression which started about the year 2000 is coming to an end. We’re literally at the glass half full stage, for us optimists. It’s fairly easy to counter that it’s half empty if you’re a pessimist, and there’s no reason we can’t have great time arguing about those perspectives while draining down a few pint glasses of beer if you’re so inclined. But there’s also no reason to tolerate those who say the glass, or our great nation, is somehow completely empty.
You may run into some of these arguments in social media, a family gathering, or from the cranky guy at work who is really into talk radio. They are easy to refute if you have a few facts and figures under your belt. Here are some of the most common and pressing arguments that everything is bad and/or worse under Obama and how they can be refuted.
When the summer livin’ is easy, I enjoy sitting out on the porch with a few tunes. Today’s lazing soundtrack was “Three Views of a Secret” by Jaco Pastorius as I went over some old posts to see if anything needed revisiting. And this piece from July 2011 popped out as a debate that is still raging – but with some resolution. It seemed to fit the tension that always builds in a Jaco piece.
Economists, as noted before, have widely divergent views about the economic situation and what should be done about it. But the experiments that have been running through various economies are teaching us all a little bit along the way as to who may be right. It’s worth revisiting.
Are you not working a full 40 hours a week, though you would like to? A solid 4.1% of all workers report that they are, in technical terms, “Part Time for Economic Reasons”, which is to say that they’d jump at the chance for a full time job but don’t have one yet. It’s a decent improvement from the 5.3% in this position two years ago, when we last looked at the problem, but it’s still not good.
Worse, the San Francisco Federal Reserve, who studies the phenomenon, has come to believe that it’s a feature of the new economy.
Where are the jobs? Job creation has been the hot economic topic since the big downturn in 2008. The sooner we have full employment the sooner demand for goods and services will turn around and there will be a net upward pressure on wages. But in 2015 the rate of increase in jobs has slowed somewhat, barely hitting 200k net every month from a solid run of 220k the year before. What happened?
The data is even more confounding when you look at the net good news on jobs – that initial claims for unemployment per week are at an all-time low as a percent of total jobs. We’re not creating jobs as fast as we should, but we also aren’t losing them. Along with a large backlog of unfilled job postings there is substantial evidence that something is wrong. Is it a skills gap? Or something else?
It’s been nearly a year since Janet Yellen, in her first testimony press conference after a Fed Open Market Committee (FOMC) meeting, told the world just what she was looking for before raising the Fed Funds Rate (and everything that rises along with it). The openness was remarkable for a Fed Chair and a sign of a new era as a woman took control of what is arguably the most power job in the world.
Since that time, we have followed “Yellen’s Dashboard” with periodic updates to just just how we’re doin’. Nearly everyone agrees that interest rates will rise sometime this year, probably around June, as she has told us. But how does that stack up against her very public criteria? It’s worth checking in with some math to see where we are with rates and what we can expect.
If you need a dose of Christmas cheer, it’s best to look in a very unlikely place. The business and financial press is positively melting down over the most recent jobs report, which showed an impressive 321k net increase in jobs. Given that Barataria has been very positive on the US economy in 2014, you would expect us to join in the merriment.
Sure, why not. Just don’t over-do it, because this is only a make-up call. There is nothing reported this week that hasn’t been true for a year, and the noise in the data makes it look especially strong for November. The truth is that job growth has been strong all year and we are on pace for a good 2015.
There are plenty of reasons to cheer, but like the office Christmas party a good time is no reason to get crazy.