Economics Roundtable

May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

Click on the image to get a bigger version.


Jobs

The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .


Click on the image to get a bigger version.


Graph-of-the-Year Candidates

Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?

Brad DeLong favors the U.S. gdp gap.


Remember M1?

Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?


Click on the chart for a larger version.


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The Classic Economic Models cover micro, macro, and financial markets.


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- Recent Entries


August 1, 2014, 6:05 pm, 1310022

The Haven has posted the following poll question:

What do you think? Is Ron Paul right to think that a crash will be forthcoming? Or will the stock market continue to plow ahead as it has done since 2009?

“If Ron Paul Is Right, Then It’s Only ...


August 1, 2014, 6:05 pm, 1310021

Shares in Gazprom, a company that made $32bn in net income last year, trade at only 2.6 times forward earnings.

That is from FTAlphaville.


August 1, 2014, 6:04 pm, 1310020
(August 1, 2014 04:45 PM, by Art Carden) Over lunch one day, colleagues and I were talking about students' handwriting (mine is positively atrocious), and one of my colleagues suggested that students learn to write decently as they will at the very least need to be able to... (5 ...


August 1, 2014, 5:03 pm, 1309957

The oil and gas boom of the past 5 years or so is widely seen as the brightest spot of an otherwise moribund U.S. economy. In fact, a group of economists from Purdue University recently found that without this boom the U.S. economy would still be in recession. ...


August 1, 2014, 5:03 pm, 1309956
Next week’s calendar may lack the punch of this week’s Fed meeting, GDP and payrolls trifecta. But upcoming reports will detail worker productivity, credit use and price pressures among service providers. New data may raise questions about that 4% spring growth surge. Here’s what to look for:


August 1, 2014, 5:03 pm, 1309955
Based on an WardsAuto estimate, light vehicle sales were at a16.4 million SAAR in July. That is up 5% from July 2013, and down 2.5% from the 16.9 million annual sales rate last month.

This was below the consensus forecast of 16.7 million SAAR (seasonally adjusted annual rate).


August 1, 2014, 4:44 pm, 1309954
Today’s report from the BLS showed that the US economy added 209,000 payroll jobs in July. With
upward revisions for May and June, total job growth for ...


August 1, 2014, 4:34 pm, 1309953
Teaser:

Rape ...


August 1, 2014, 4:34 pm, 1309952
Teaser:

Now ...


August 1, 2014, 4:05 pm, 1309950

Congressman Kerry Bentivolio of Michigan has declared that he doesn’t want an award from the US Chamber of Commerce, which he says isn’t really devoted to “free enterprise.”  So far, so good. The US Chamber of Commerce is indeed anything ...


August 1, 2014, 4:05 pm, 1309949

The execrable Washington Post discusses how DC think tanks have become increasingly activist in the political sense, and (thereby) increasingly self-serving:

Most think tanks were once idea factories. They sponsored research from which policy proposals might flow. In the supply chain of political influence, their studies became the grist for politicians’ ...


August 1, 2014, 4:04 pm, 1309948

At the 9:40 minute point of this video, Heiner Flassbeck says…

“… But even people who are asking for more expansionary fiscal policies like Larry Summers or Paul Krugman, they are not talking about intervention in the labor market, but this is what is absolutely needed because there is ...


August 1, 2014, 3:33 pm, 1309945

Steve Horwitz

One of the really strange charges laid against Mises (and sometimes Hayek) is that their honorific "von"s were evidence of their disdain for the common person and that their preferred policies and institutions were really all about enhancing the power of the already powerful. In its most ...


August 1, 2014, 3:33 pm, 1309944
Here's a series of charts from reader Tim Wallace on various aspects of employment, labor force, and population. The charts use seasonally unadjusted data, July of 2014 compared to July in prior years.

click on any chart for sharper image

Age 16 and Over


August 1, 2014, 3:33 pm, 1309943

The National Institute on Retirement Security released its updated report “Pensionomics,” which claims that defined benefit pension plans – mostly for state and local government employees – create 6.2 million jobs and grow the economy by $943 billion. Pension benefits are spent and re-spent, NIRS claims, multiplying through ...


August 1, 2014, 3:23 pm, 1309942

The housing market appears to have endured a particularly cruel month in June. Fairly good numbers on existing home sales provided some antidote to a second consecutive monthly decline in housing starts and a sharp decline in new home sales. But that palliative is less comforting ...


August 1, 2014, 3:03 pm, 1309880

American factories are finally producing more of something that’s been in short supply: Jobs.

Manufacturers last month added 28,000 workers, boosting the total added this year to 107,000, according to Friday’s ...


August 1, 2014, 3:03 pm, 1309879

Tim Duy:

July Employment Report, by Tim Duy: The overall tenor of the July employment report was consistent with the song that Yellen and Co. are singing. Labor markets are generally improving at a moderate pace, yet despite relatively low unemployment, there is plenty of reason to believe considerable ...


August 1, 2014, 3:03 pm, 1309878
Earlier the Census Bureau reported that overall construction spending decreased in June:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during June 2014 was estimated at a seasonally adjusted annual rate of $950.2 billion, 1.8 percent below the revised May estimate of $967.8 ...


August 1, 2014, 2:05 pm, 1309873

Archived from the live broadcast, this Mises University lecture was presented at the Mises Institute in Auburn, Alabama, on 26 July 2014.


August 1, 2014, 2:04 pm, 1309872

News was released today that unemployment was 6.2% in July. How close are we to the natural rate of unemployment, or as some might say the NAIRU.

In my research into effective demand, I track the natural rate of unemployment. How do I determine the natural rate of unemployment? … By ...


August 1, 2014, 1:33 pm, 1309867

In a 5-2 decision, the Wisconsin Supreme Court yesterday upheld Gov. Scott Walker’s controversial reforms to public employee pay, which – among other things – required state government workers to contribute more to their retirement and health plans. Prior to Walker’s reforms, most Wisconsin state employees contributed nothing ...


August 1, 2014, 1:33 pm, 1309866

Let’s be clear: The Supplemental Nutrition Assistance Program, food stamps, is an important part of the safety net. As AEI’s Robert Doar recently told Congress:

SNAP alleviates material hardship, reduces poverty, helps the elderly and disabled, andprovides needed food to children in low income families. By supplementing ...


August 1, 2014, 1:03 pm, 1309803
The July employment report was less than hoped for, but not a total washout. What’s important is what the numbers tell us about “underutilization.” That’s the new buzz word when it comes to labor markets and Federal Reserve policy decisions. Here are five takeaways from the job report that ...


August 1, 2014, 1:03 pm, 1309804

U.S. employers added 209,000 jobs in July – gains, yes, but below consensus and not as strong as in earlier months. As with every first Friday of the month, Twitter lit up with quick takes, short analysis, and charts. Here are some highlights:


August 1, 2014, 1:03 pm, 1309802

Employers this year are adding to payrolls at the best clip of the recovery, 230,000 a month, and with that acceleration comes better hiring in typically higher-paying fields such as construction, ...


August 1, 2014, 1:03 pm, 1309801

Economists attempting to dissect the U.S. labor market in recent years have been perplexed by the number of people leaving the labor force entirely. In a little over a decade, the number of people either working or actively looking for work has declined to 62.8% from 67.3%. The decline started ...


August 1, 2014, 1:03 pm, 1309800

Dean Baker:

Job Growth Slows in July, by Dean Baker, CEPR Data Bytes: Wage growth slowed slightly in the last quarter to 1.8 percent from 2.0 percent in the last year.

The economy added 209,000 jobs in July, a sharp slowing from its 277,000 average over the prior three months. ...


August 1, 2014, 1:03 pm, 1309799
Earlier: July Employment Report: 209,000 Jobs, 6.2% Unemployment Rate

A few key points:
• At the current pace (through July), the economy will add 2.75 million jobs this year (2.64 million private sector jobs). Right now 2014 is on pace to be the best year for both ...


August 1, 2014, 12:45 pm, 1309798
A


August 1, 2014, 12:44 pm, 1309797

THE “trade-facilitation agreement” the 160 members of the World Trade Organisation (WTO) concluded in Bali in December may have sounded drab, but it was important for two reasons. First, it set in motion big cuts in red-tape at the world’s borders, which were projected to boost the world economy by ...


August 1, 2014, 12:44 pm, 1309796

CAN remittances help poor countries to grow rich? In many countries, the money received from workers who are toiling abroad represents a significant source of income. India received remittances last year that were almost three times as large as the inward investments made by foreign firms. In Tajikistan, as we ...


August 1, 2014, 12:36 pm, 1309795
Risk finally received its comeuppance in July. Last month witnessed the broadest round of negative returns since January among the major asset classes. Stocks in developed markets (including the US) took it on the chin, although the modest gain in … Continue reading →


August 1, 2014, 12:36 pm, 1309794

A few weeks ago, with absolutely no fanfare, the Treasury Department announced what could be a major change in the way we save for retirement. It will now permit people to shift a portion of their 401(k)s or IRAs into a deferred annuity that provides a guaranteed stream ...


August 1, 2014, 12:34 pm, 1309793
A


August 1, 2014, 12:34 pm, 1309792
A


August 1, 2014, 12:05 pm, 1309790

On the “Wake Up Call Podcast”:

Mark Thornton.

Walter Block.


August 1, 2014, 12:05 pm, 1309789

August 1, 2014, 12:04 pm, 1309788
A


August 1, 2014, 12:04 pm, 1309786

Matt Bruenig gives us a great breakdown of what poverty would look like if we relied on the market to solve it (as we did almost exclusively for thousands of years before the emergence of enlightened modern welfare states over the last two centuries).

The poverty rate among the elderly ...


August 1, 2014, 12:04 pm, 1309787

The USA is a left of center nation given the center defined by elites. This is my off topic thought (and comment) on a brilliant post on money and politics at The Monkey Cage. Ray LaRaja and Brian Schaffner note that parties give to centrist incumbents (likely ...


August 1, 2014, 11:33 am, 1309780

|Peter Boettke|

I think every student of advanced economics would do well to watch very carefully Armen Alchian's interview with F. A. Hayek from 1978, especially the segment of the interview dealing withPrices and Production and monetary theory inPrices and Production.

It is critical to understand that Hayek ...


August 1, 2014, 11:33 am, 1309779
Initial Reaction

Counting the upwardly revised 298,000 nonfarm payroll report in June (originally reported as 288,000), this was a decent report.

Yet, digging into the details, the household survey showed a gain in employment of only 131,000. Thus, for the second consecutive month, the household survey was ...


August 1, 2014, 11:33 am, 1309778

Before (2010):

After (2014):

*Could also be the effects of having three teenagers. Causality is ...


August 1, 2014, 11:33 am, 1309777
From 1993 to 2000, I served as a junior faculty member at Columbia University. Today, I received an email from Columbia's Academic Commons informing me that there have been 6580 downloads of papers I posted there in the 1990s. Re-reading some of the papers makes me cringe. ...


August 1, 2014, 11:33 am, 1309776

Each week, The LEDGER highlights AEI’s research and commentary on economic matters, covering hot issues such as the budget, tax reform, housing policy, inflation, minimum wage, and the Eurozone crisis. So you don’t miss anything, here’s a sneak peek.

Congress stays busy before August recess

Testimony from Robert Doar ...


August 1, 2014, 11:33 am, 1309775

US job growth in July was a bit light — 209,000 vs. Wall Street expectations of 233,000 — but still showed a recovery slowly grinding along. Employment has now expanded by more than 200,000 jobs for six-straight months, a streak last seen in 1997. The 1.5 million jobs created during that ...


August 1, 2014, 11:03 am, 1309712

U.S. nonfarm employers added 209,000 jobs in July, slightly below forecasts and slower than earlier gains, while the unemployment rate ticked up to 6.2% from June. But employers have now added 200,000 or more jobs in six consecutive months for the first time since 1997.


August 1, 2014, 11:03 am, 1309713

The U.S. unemployment rate increased slightly to 6.2% in July and a broader rate that includes discouraged workers also ticked up to 12.2%, but don’t be discouraged. Those numbers rose mostly for the right reason.


August 1, 2014, 11:03 am, 1309711

Click on graph for larger image.

The final Reuters / University of Michigan consumer sentiment index for July was at 81.8, down from 82.5 in June, and ...


August 1, 2014, 11:03 am, 1309710
The ISM manufacturing index suggests faster expansion in July than in June. The PMI was at 57.1% in July, up from 55.3% in June. The employment index was at 58.2%, up from 52.8% in June, and the new orders index was at 63.4%, up from 58.9% in June.


August 1, 2014, 10:45 am, 1309709
Here's a quick guide for what Fed Chairwoman Janet Yellen and other aficionados--bank economists, White House advisers, Federal Reserve officials--will look for in the July jobs report, and why it matters.


August 1, 2014, 10:45 am, 1309708
Robert Litan: The share of mature U.S. firms, or those at least 16 years old, rose 50 percentage points between 1992 and 2011. The share of private-sector workers employed in such mature firms increased over the same time. ...


August 1, 2014, 10:36 am, 1309707
The US economy minted fewer jobs than expected in July, although the year-over-year change in private-sector payrolls inched higher, reaching an eight-month peak, the Labor Department reports. Meanwhile, personal income and spending in June rose in line with expectations, according … Continue reading →


August 1, 2014, 10:36 am, 1309706

Is poverty structural or due to individuals' failings? Matt Bruenig and Noah Smith are debating this. I'm inclined to agree with both of them.

I agree with Noah that the two are not mutually exclusive. A quick thought experiment shows this. ...


August 1, 2014, 10:34 am, 1309705

Heading into today’s release of the July employment report from the Bureau of Labor Statistics, analysts were expecting a slightly less spectacular month that we had seen in May and June when we saw very ...


August 1, 2014, 10:34 am, 1309704
Teaser:

To ...


August 1, 2014, 10:34 am, 1309703
Teaser:

The ...


August 1, 2014, 10:05 am, 1309702

Mises Daily Friday by Salmaan A. Khan:

Hollywood has a long history of joining forces with the US government. In recent decades a complex system of subsidies and direct assistance from various government agencies in the making of movies has helped bring ...


August 1, 2014, 10:05 am, 1309701

Jeff Deist and Guido Hülsmann discuss Hülsmann’s years spent writing Mises’s biography (‘Mises: The Last Knight of Liberalism’), the serendipitous discovery of Mises’s papers in Moscow that made the book possible, how Mises endured and kept working as Europe burned, and how Mises’s personal sacrifices helped pave the way ...


August 1, 2014, 10:05 am, 1309700

New research by Esther Friedman of the RAND Corporation and Robert Mare of UCLA finds that parents of college grads live two years longer than parents whose kids didn’t graduate high school. That two-year bump in life expectancy for parents of the most-educated kids is surprisingly large - it amounts ...


August 1, 2014, 9:33 am, 1309697

Some highlights from today’s Employment Situation report:

1. The increase in US payrolls over the last six months through July (1,465,000) was the strongest six months for hiring in the US since April 2006, see chart above. (HT:


August 1, 2014, 9:03 am, 1309635
Job seekers wait in line earlier this summer to meet with recruiters during a job fair in Philadelphia. Associated Press

For the mere bystander, the monthly jobs ...


August 1, 2014, 9:03 am, 1309634

The Wall Street Journal’s Daily Report on Global Central Banks for Friday, August 1, 2014:

Sign up for the newsletter.

Highlights

Hilsenrath’s Take: Plosser Puts”Considerable Time” In Play for Fed Rate Hike Plans Asset Managers May ...


August 1, 2014, 9:03 am, 1309636
Toyota Motor Corp. vehicles sit parked ahead of shipment outside a plant in Ohira, Miyagi prefecture March 7, 2014. Bloomberg News

With Japanese exports showing little sign ...


August 1, 2014, 9:03 am, 1309631

Consumer prices grew tepidly in June, a sign inflation pressures remain below the Federal Reserve’s target.

The price index for personal consumption expenditures—the Fed’s preferred measure of inflation—climbed 1.6% in June from a year earlier, the Commerce Department said Friday. That was down slightly from May’s year-over-year gain of 1.7%.

Excluding volatile ...


August 1, 2014, 9:03 am, 1309632
Getty Images

trend lines

245,000

The average number of jobs the economy added over the past three months. That’s still up slightly from the average 243,000 created in the preceding three-month period, and far higher from the average 209,000 added ...


August 1, 2014, 9:03 am, 1309633

The Federal Reserve‘s promise to keep rates near zero for a “considerable time” after it wraps up its bond-buying program puts the central bank behind schedule in raising borrowing costs from rock-bottom lows, a top Fed official said Friday.

Charles Plosser, president of the Philadelphia Fed, said in a statement that ...


August 1, 2014, 9:03 am, 1309630
From the BLS:

Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 6.2 percent, the U.S. Bureau of Labor Statistics reported today.
...
The change in total nonfarm payroll employment for May was revised from +224,000 to +229,000, and ...


August 1, 2014, 8:45 am, 1309629
Here's a quick guide for what Fed Chairwoman Janet Yellen and other aficionados--bank economists, White House advisers, Federal Reserve officials--will look for in the July jobs report, and why it matters.


August 1, 2014, 8:45 am, 1309628
Robert Litan: The share of mature U.S. firms, or those at least 16 years old, rose 50 percentage points between 1992 and 2011. The share of private-sector workers employed in such mature firms increased over the same time. ...


August 1, 2014, 8:45 am, 1309627
A


August 1, 2014, 8:36 am, 1309626

Gambling with the Highway Trust Fund: The House always wins? As expected, the House rejected the Senate’s four-and-a-half month $8 billion highway funding patch passed earlier this week. The House returned its own 10-month $10.8 billion patch—the one that includes pension smoothingback ...


August 1, 2014, 8:04 am, 1309623
(Don Boudreaux)

… is from page 82 of Liberty Fund’s 1982 edition of Adam Smith’s 1759 profound classic, The Theory of Moral Sentiments – the volume that inspired Russ’s new book:

Every man is, no doubt, by nature, first and principally recommended to his own care; and as he is ...


August 1, 2014, 7:33 am, 1309618

August 1, 2014, 7:33 am, 1309617

Spirit, 30 years ago.

Charles C. writes, "This is one of those songs that simply MUST be played at full volume!"


August 1, 2014, 7:33 am, 1309616

My first beer was Stroh's:

In August 1989 the Stroh Brewery Co. was in retreat. The company that had treated employees like family laid off 300 people, one-fifth of its white-collar workforce. “I had to let go four of the five people in the marketing research department. It was heartbreaking,” remembers ...


August 1, 2014, 7:23 am, 1309615
Google could make a car that avoids nine-tenths of accidents, yet be bankrupted by lawsuits from the few that remain


August 1, 2014, 7:23 am, 1309614
To an economist, tougher sentencing in the wake of the 2011 riots offers a fascinating natural experiment


August 1, 2014, 7:23 am, 1309613
Here are some newly published resources covering aspects of behavioural economics


August 1, 2014, 7:03 am, 1309594
A Louis Vuitton store, operated by LVMH Moet Hennessy Louis Vuitton, in Ulaanbaatar, Mongolia. Bloomberg News

Mongolia’s central bank raised interest rates this week by 1.5 ...


August 1, 2014, 7:03 am, 1309593
A woman walks past an advertisement promoting Samsung Electronics’ Galaxy S5 smartphone in Seoul July 29, 2014. Reuters

South Korea’s exports grew at a faster pace than expected ...


August 1, 2014, 7:03 am, 1309590
Job seekers wait in line earlier this summer to meet with recruiters during a job fair in Philadelphia. Associated Press

For the mere bystander, the monthly jobs ...


August 1, 2014, 7:03 am, 1309591
Toyota Motor Corp. vehicles sit parked ahead of shipment outside a plant in Ohira, Miyagi prefecture March 7, 2014. Bloomberg News

With Japanese exports showing little sign ...


August 1, 2014, 7:03 am, 1309592
Agence France-Presse/Getty Images

China’s manufacturing sector hasn’t had an easy time recently, battered by worries about a slowing economy at home and declining competitiveness on international markets. But the ...


August 1, 2014, 6:05 am, 1309589

The share of firms aged 16 years or more was 23 percent in 1992, but leaped to 34 percent by 2011—an increase of 50 percent in two decades. The share of private-sector workers employed in these mature firms increased from 60 percent to 72 percent during the same period. Perhaps most startling, ...


August 1, 2014, 5:33 am, 1309586

I thought the answer might be "Because they are weird." But noooooooooo.


August 1, 2014, 5:23 am, 1309585
I hope that many economics teachers in the UK and beyond will be very interested in following the debates about reforming the undergraduate economics curriculum. This linkhttp://www.res.org.uk/view/art3Jul14Features.
html takes you to an entry in the latest RES newsletter which covers some of the changes made to the INET curriculum programme being ...


August 1, 2014, 5:03 am, 1309539
Agence France-Presse/Getty Images

China’s manufacturing sector hasn’t had an easy time recently, battered by worries about a slowing economy at home and declining competitiveness on international markets. But the ...


August 1, 2014, 5:03 am, 1309538

Earlier this week, we wrote what was perhaps one of the most timely posts ever in the history of Political Calculations, as we discussed how we may have finally succeeded in compensating for the echo effect in our forecasting method for anticipating the future of ...


August 1, 2014, 5:03 am, 1309537

August 1, 2014, 5:03 am, 1309536

"Are we as societies even capable of taking good policy advice?":

Knowledge Isn’t Power, by Paul Krugman, Commentary, NY Times: ...I’ve been looking at surveys from the Initiative on Global Markets, based at the University of Chicago. For two years, the initiative has been regularly polling a ...


August 1, 2014, 4:45 am, 1309535
A


August 1, 2014, 3:23 am, 1309533

It’s good to look at stocks that not everyone else is looking at.  A little neglect can be a good thing.

Companies that are a little illiquid.Companies with a dedicated shareholder base; they don’t sell at the drop of a hat.Companies with control investors that don’t give outside passive minority investors ...


August 1, 2014, 3:23 am, 1309532
Catastrophe Bonds (or cat bonds)areessentially abet against natural disaster - insurance companies issue the bonds and investors get paidtheirinterest in the event of natural disasters such as earthquakes not happening.According to the Financial Times, "catastrophe bondsare typically issued for three years and, if no disaster occurs in that period, bond ...


August 1, 2014, 3:03 am, 1309489
A woman walks past an advertisement promoting Samsung Electronics’ Galaxy S5 smartphone in Seoul July 29, 2014. Reuters

South Korea’s exports grew at a faster pace than expected ...


August 1, 2014, 2:05 am, 1309487

Sober Look has the numbers, for instance:

The area’s CPI is now below 0.5% on a year-over-year basis. Yesterday we saw German CPI hit new lows (see chart) and Italy’s inflation rate is now hovering just above zero.

What is the most economical model here?  The ECB invested ...


August 1, 2014, 2:04 am, 1309486
(August 1, 2014 12:09 AM, by Bryan Caplan) When I debated Mark Krikorian, he bemoaned immigrants' effect on Americans' patriotic solidarity. I think he's making a mountain out of a molehill, but Mark's concerns were much on my mind during my recent visit to New York City. I... (1 ...


August 1, 2014, 1:33 am, 1309485
Occasionally I receive a touching email that also offers a practical solution to extreme challenges. This is one of those times. Please consider this email from reader "Zentagle".

Hi Mish,

I have been following your blog for years now. Time is precious and not many writers "stick" . ...


August 1, 2014, 1:03 am, 1309432
A Louis Vuitton store, operated by LVMH Moet Hennessy Louis Vuitton, in Ulaanbaatar, Mongolia. Bloomberg News

Mongolia’s central bank raised interest rates this week by 1.5 ...


August 1, 2014, 12:34 am, 1309431

Hollywood has a long history of joining forces with the US government. In recent decades a complex system of subsidies and direct assistance from various government agencies in the making of movies has helped bring the state and the entertainment industry even closer ...


August 1, 2014, 12:04 am, 1309429

I got lots of very helpful responses to my recent post on the search theory of unemployment, here and at Crooked Timber. But it has occurred to me that I haven’t seen any answer to one crucial question: How many offers do unemployed workers receive and decline before taking a ...


July 31, 2014, 11:33 pm, 1309427

I like to say that everything is money, which is just another way of saying that all goods are liquid to some degree or other. Whether it be a house, a banknote, or ...


July 31, 2014, 11:33 pm, 1309426

1. “Credit, reputation, and innovation characterize what is presently called the sharing economy, which increases human choices and therefore enhances human freedom and the pursuit of happiness.” ~Fred Marks

2. “The biggest threat to consumers in the car-sharing process is not some random psycho driver, but the muscle of ...


July 31, 2014, 11:03 pm, 1309360

The long-running debate about the causes of America’s high rate of long-term unemployment is far from settled. A new working paper from the National Bureau of Economic Research wades into the discussion and its findings fall squarely on the side of those who see the labor market’s woes as ...


July 31, 2014, 11:03 pm, 1309359

The Wall Street Journal’s Daily Report on Global Central Banks for Thursday, July 31, 2014:

Sign up for the newsletter.

Highlights

Hilsenrath’s Take: Slow Progress Emerges on the Labor Utilization Front Growth Rebound Stokes Fed Debate


July 31, 2014, 11:03 pm, 1309362
The Tokyo Tower standing illuminated at dusk amid commercial and residential buildings is seen from the Toyosu area of Tokyo. Bloomberg News

Japan’s corporate sector and the ...


July 31, 2014, 11:03 pm, 1309363
A man walks past the Bank of Korea headquarters in Seoul. Bloomberg News

As expectations build that the Bank of Korea will lower its policy rate ...


July 31, 2014, 11:03 pm, 1309364
Japan’s Prime Minister Shinzo Abe Reuters

It’s hard to get Republicans and Democrats to team up on anything these days in Washington. Japanese Prime ...


July 31, 2014, 11:03 pm, 1309361
Large container cranes at a port in Tokyo. Japan’s exports fell about 1% in the second quarter from the previous three months, according to BOJ data.


July 31, 2014, 11:03 pm, 1309354

The income gap between rich and poor nations is more severe than the more highly publicized disparities between the top and bottom of the U.S. income ladder, according to a new study from the Federal Reserve Bank of St. Louis.

“While not to diminish the ample income inequality in the ...


July 31, 2014, 11:03 pm, 1309358

The first half of 2014 saw the U.S. economy’s strongest stretch of hiring since early 2006. The jobless rate fell to 6.1% in June from 7.5% a year earlier, its fastest one-year decline since October 1984, and nonfarm employers added a seasonally adjusted 288,000 jobs.


July 31, 2014, 11:03 pm, 1309355
The Bank of England published a paper Thursday which concluded that there is indeed some evidence of insurers behaving pro-cyclically. The evidence on pension funds was less clear cut. Associated ...


July 31, 2014, 11:03 pm, 1309353
A Louis Vuitton store, operated by LVMH Moet Hennessy Louis Vuitton, in Ulaanbaatar, Mongolia. Bloomberg News

Mongolia’s central bank raised interest rates this week by 1.5 ...


July 31, 2014, 11:03 pm, 1309356

Every month since the fall of 2012, the Brookings Institution has published a forecast for the path of the unemployment rate over the next six months. These forecasts are a familiar past-time for economists, but Brookings has a bold claim: their model “can outperform the Fed and professional ...


July 31, 2014, 11:03 pm, 1309357
Tommy Trenchard/REUTERS

Total Dead

729

This outbreak is believed to be the worst yet.

Number of Infected

1,323

The virus can kill victims within days and has a fatality rate of up to 90%.

Countries Where Cases Reported

4

Deaths attributed to Ebola have ...


July 31, 2014, 11:03 pm, 1309352

With apologies to Richard Hofstadter.

On reading “New Classical Kansas”, James Sexton comments:

What? Log? Why Log? Why not just “economic activity”, whatever that is?
Why all the babbling bs? ARIMA(1,1,1)? You believe that holds any meaning in relation to Kansas’ “economic activity”? Why?

Was there an expectation of huge ...


July 31, 2014, 11:03 pm, 1309351
From Goldman Sachs economist Sven Jari Stehn: July Payroll Preview

We expect a 235,000 increase in nonfarm payrolls and a one tenth drop in the unemployment rate to 6.0%. As far as payrolls are concerned, our forecast would be a solid gain but at a pace slightly below that ...


July 31, 2014, 10:45 pm, 1309350
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July 31, 2014, 9:33 pm, 1309346


July 31, 2014, 9:23 pm, 1309345
Here is thelatestepisode of EconPop by EconStories, which sees the Lego Movie being analysed to humorously highlighteconomic principles and themes that run through it. These are always fun and aregreat at exposingeconomics withinpopular media. Check out the Econ Storiessite for more great videos and resources, including the brilliant Keynes and ...


July 31, 2014, 9:03 pm, 1309283
Tommy Trenchard/REUTERS

Total Dead

729

This outbreak is believed to be the worst yet.

Number of Infected

1,323

The virus can kill victims within days and has a fatality rate of up to 90%.

Countries Where Cases Reported

4

Deaths attributed to Ebola have ...


July 31, 2014, 9:03 pm, 1309282

Every month since the fall of 2012, the Brookings Institution has published a forecast for the path of the unemployment rate over the next six months. These forecasts are a familiar past-time for economists, but Brookings has a bold claim: their model “can outperform the Fed and professional ...


July 31, 2014, 9:03 pm, 1309280

The income gap between rich and poor nations is more severe than the more highly publicized disparities between the top and bottom of the U.S. income ladder, according to a new study from the Federal Reserve Bank of St. Louis.

“While not to diminish the ample income inequality in the ...


July 31, 2014, 9:03 pm, 1309281
The Bank of England published a paper Thursday which concluded that there is indeed some evidence of insurers behaving pro-cyclically. The evidence on pension funds was less clear cut. Associated ...


July 31, 2014, 8:05 pm, 1309279

Using McDonals’s Big Mac as the standard, the US Dollar looks relative firm compared to some other currencies. The chart below from The Economist looks at the purchasing power of currencies relative to the Big Mac in 2009 and 2014. A half dozen currencies have been relatively weak compared ...


July 31, 2014, 7:03 pm, 1309215
Fannie Mae reported today that the Single-Family Serious Delinquency rate declined in June to 2.05% from 2.08% in May. The serious delinquency rate is down from 2.77% in June 2013, and this is the lowest level since October 2008.

The Fannie Mae serious delinquency rate peaked in ...


July 31, 2014, 6:34 pm, 1309214
Teaser:

And ...


July 31, 2014, 6:05 pm, 1309211

At the end of Mises University, many students chose to take the optional — and highly rigorous — Mises University examinations for cash awards.  64 students took the written exam, and 30 of those passed to go on and take the oral exam.

The first-place prize of $2,500, made possible ...


July 31, 2014, 6:05 pm, 1309212

The Wall Street Journal declares it a done deal.

Nicolás Cachanosky explains the road that got us here.

Forbes claims that “everyone lost” because of the default, but that’s debatable.

Chris Westley points out the advantages of an Argentinian ...


July 31, 2014, 5:33 pm, 1309208
The march for fully autonomous driverless cars marches on. In May, Google announced the Next Phase in Driverless Cars: No Steering Wheel or Brake Pedals.

Google’s prototype for its new cars will limit them to a top speed of 25 miles per hour. The cars are intended for ...


July 31, 2014, 5:33 pm, 1309206

The chart above shows the amazing increase in natural gas production in the Marcellus Shale Formation that covers Pennsylvania, West Virginia, Ohio and New York (see map below, EIA data here). In just the four-year period between June 2010 ...


July 31, 2014, 5:33 pm, 1309207

An interesting exchange today between House Budget Committee Chairman Paul Ryan and CNBC reporter John Harwood:

JOHN HARWOOD: One of the reasons why people have been – Democrats have been hostile to your ideas, and others have raised questions. Is the idea that they have taken from some of your public ...


July 31, 2014, 5:33 pm, 1309204

Well, that’s the title that Jennifer Gratz suggested on her Facebook page for the USAToday article “Jesse Jackson: Tech diversity is next civil rights step.” In that article, U.S. civil rights leader Jesse Jackson called on the Obama administration to scrutinize the tech industry’s lack of ...


July 31, 2014, 5:33 pm, 1309205

The chart above shows the amazing increase in natural gas production in the Marcellus Shale Formation that covers Pennsylvania, West Virginia, Ohio and New York (see map below, EIA data here). In just the four-year period between June 2010 ...


July 31, 2014, 5:33 pm, 1309203

Milton Friedman was born on this day, July 31, in 1912, and he would have been 102 years old today. Unfortunately, Milton died on November 16, 2006 when he was 94 years old. In an editorial in the Wall ...


July 31, 2014, 5:03 pm, 1309142

The income gap between rich and poor nations is more severe than the more highly publicized disparities between the top and bottom of the U.S. income ladder, according to a new study from the Federal Reserve Bank of St. Louis.

“While not to diminish the ample income inequality in the ...


July 31, 2014, 5:03 pm, 1309141

Tim Duy (see Dean Baker too):

On That ECI Number: The employment cost index is bearing the blame for today's market sell-off. Sam Ro at Business Insider reports:

...traders agree that today's sell-off is probably due to one stat: the 0.7% jump in the employment ...


July 31, 2014, 4:36 pm, 1309140

While Congress has been obsessing about tax inversions, it turns out another—potentially more important–tax avoidance technique is getting increased attention from the business community: Spinning off tangible assets into Real Estate Investment Trusts (REITs).

If these deals become widespread, they’d be another nail in the coffin of the corporate income tax. ...


July 31, 2014, 4:05 pm, 1309136

The notice is here, signers include Bob Solow and Dani Rodrik.  I agree with their arguments, and you will find my slightly different but still consistent earlier critique here.  Here is one bit from the press release:

“It’s a widely shared opinion among economists that the court’s ...


July 31, 2014, 4:04 pm, 1309135
(July 31, 2014 02:02 PM, by Bryan Caplan) Political scientist and game designer Chris McGlothlin has a neat Facebook post on Star Trek and the Constitution, building off the classic episode "The Omega Glory." Here's Chris, reprinted with his permission:As both a political science professor and a Trekkie,... (1 COMMENTS)


July 31, 2014, 4:04 pm, 1309134

July 31, 2014, 3:33 pm, 1309128
As I have said on numerous occasions, sanctions are a lose-lose game. So it is not surprising in the least to discover Russian Crisis Already Taking Toll on Western Businesses.

Shares in Adidas, the world’s second-largest sportswear group, dropped 15 per cent after the company issued a ...


July 31, 2014, 3:33 pm, 1309127
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July 31, 2014, 3:03 pm, 1309065
Tommy Trenchard/REUTERS

Total Dead

729

This outbreak is believed to be the worst yet.

Number of Infected

1,323

The virus can kill victims within days and has a fatality rate of up to 90%.

Countries Where Cases Reported

4

Deaths attributed to Ebola have ...


July 31, 2014, 3:03 pm, 1309063
The Bank of England published a paper Thursday which concluded that there is indeed some evidence of insurers behaving pro-cyclically. The evidence on pension funds was less clear cut. Associated ...


July 31, 2014, 3:03 pm, 1309064

Every month since the fall of 2012, the Brookings Institution has published a forecast for the path of the unemployment rate over the next six months. These forecasts are a familiar past-time for economists, but Brookings has a bold claim: their model “can outperform the Fed and professional ...


July 31, 2014, 3:03 pm, 1309062
Friday at 8:30 AM ET, the BLS will release the employment report for July. The consensus, according to Bloomberg, is for an increase of 233,000 non-farm payroll jobs in July (range of estimates between 200,000 and 280,000), and for the unemployment rate to be unchanged at 6.1%.

Note: ...


July 31, 2014, 2:44 pm, 1309061

If some or all of Argentina's Exchange Bond holders accelerate their bonds after last night's default, the amount Argentina owes NML et al. under the terms of Judge Griesa's injunction could plummet.

Here is the relevant language:

Such "Ratable Payment" that ...


July 31, 2014, 2:05 pm, 1309056

Steve Hanke points out that the anti-austerity faction in the EU led by Italy,  France, and Spain is hypocritical when it claims  that “there is nothing left to cut” in their budgets.  Senior civil servants in Italy get paid over 12 times the national average salary.  In France the ...


July 31, 2014, 2:05 pm, 1309055

1. Further evidence for political insider trading, this time for hedge funds.

2. You call it “3-D printing optimism,” I call it “order transmission and cheap delivery pessimism.”  Amazon enters the game.

3. Google search and stock prices, further results.

4. Indian monkey costume markets ...


July 31, 2014, 2:04 pm, 1309054

On a day that news comes out about wage growth perking up, the stock markets fall. (link to Dean Baker’s post) At the moment, the Dow is down 1.18% and the Nasdaq is down 1.81% for the day. The Dow has fallen ...


July 31, 2014, 1:33 pm, 1309050
James Orr

An Update on the Competitiveness of PuertoRico’s Economy, released today, offers six steps that the Island’s government should consider taking to restore its fiscal health. PuertoRico faces interrelated economic and fiscal challenges. The report characterizes economic activity in PuertoRico as flat ...


July 31, 2014, 1:33 pm, 1309049

“Then it’s war! Then it’s war! Gather the forces! Harness the horses! It’s war!” – Groucho Marx as Rufus T. Firefly in “Duck Soup.”

A breathlessly headlined Federalist piece, “Conservatives Need To Have It Out Over The Federal Reserve,” ...


July 31, 2014, 1:33 pm, 1309048

The AP is reported a few weeks ago that “Seattle taxi drivers hit charm class to improve customer service in response to competition” based on this report from Komo News:

Call it a charm school for cabbies. The region’s long-established taxi companies are sending some of their ...


July 31, 2014, 1:23 pm, 1309047
Tata Group, perhaps best known in the UK for its ownership of Jaguar Land Rover (JLR) and Corus, has set out ambitious plans to invest $35bn in capital spending over the next three years as part of its vision for the next 10 years.