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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August 20, 2014, 12:04 am, 1321410
(August 20, 2014 12:01 AM, by Bryan Caplan) The Case Against Education's chapter on the selfish return to education runs over sixty pages. Since I suspect that even eager readers may skim all the tables, I end with practical advice in plain English. Note: Nothing in this section... (0 COMMENTS)


August 19, 2014, 11:03 pm, 1321395
Wednesday:
• At 8:30 AM ET, the Mortgage Bankers Association (MBA) will release the results for the mortgage purchase applications index.

• During the day, the AIA's Architecture Billings Index for July (a leading indicator for commercial real estate).

• 2:00 PM, FOMC Minutes for the Meeting of ...


August 19, 2014, 10:34 pm, 1321394

The only thing worse than floating fiat currencies is fixed exchange rates based on fiat money.


August 19, 2014, 10:34 pm, 1321393

If the apes in Dawn of the Planet of the Apes are so smart, why are they hunter-gatherers? Aren’t they smart enough to think of agriculture? They’re probably smart enough, but Austrian capital theory explains why creating a more technologically-advanced society is easier ...


August 19, 2014, 10:04 pm, 1321391
(August 19, 2014 09:02 PM, by Scott Sumner) In order to do good economic analysis, it is important to distinguish between supply and demand shocks. Commenter SG pointed me to this curious post by Paul Krugman: For those new to or confused by the term, secular stagnation is... (0 COMMENTS)


August 19, 2014, 8:04 pm, 1321363
(August 19, 2014 07:58 PM, by David Henderson) Paul Krugman writes: the attack on Obamacare depended almost entirely on lies, and those lies are becoming unsustainable now that the law is actually working. No, there aren't any death panels; no, huge numbers of Americans aren't losing coverage or... (5 COMMENTS)


August 19, 2014, 7:03 pm, 1321321

More Americans than ever before are tapping government benefits. But this time the baby boomers may be responsible for the slight uptick.

Nearly half of Americans, 49.5%, lived in a household where at ...


August 19, 2014, 7:03 pm, 1321320

Big American companies have long complained that an estimated $1 trillion in cash is trapped overseas—all because the U.S. corporate tax rate of 35% keeps companies from bringing it home. A new report from a California tax-law professor counters that argument, calling it an “overstatement” advanced by large, ...


August 19, 2014, 7:03 pm, 1321319

It’s no secret that the apartment sector has been on a tear.

A big share of July’s gain in housing construction came from the multifamily sector, which tends to be fairly ...


August 19, 2014, 7:03 pm, 1321318

The U.S. Department of Agriculture released a study this week showing the average middle income family will spend $245,340 to raise a child to the age of 18 — even before paying for college tuition.

A cool quarter million to raise a child sounds like a horrifying amount of money. Who ...


August 19, 2014, 6:35 pm, 1321317

The Treasury Department put out the word that Secretary Jack Lew is considering regulatory curbs on corporate tax inversions, a step that may be intended to increase pressure on Congress to act once it returns from its summer recess in September.

The matter of how much authority Treasury has to ...


August 19, 2014, 5:33 pm, 1321313
Congratulations go to Forbes columnist John Tamny and editor of Real Clear Markets for producing the "Idiot's Guide to Austrian Economics'.

Ironically, that is not exactly what Tamny set out to do. The actual title of Tamny's article is "The Closing Of The Austrian School's Economic ...


August 19, 2014, 5:23 pm, 1321312

What will happen about fiscal policy after the tumultuous events beginning in 2010 or so in Europe and the end of Great-recession-era fiscal stimulus in the US? In the US, Paul Krugman and other economists debate the meaning of the CBO’s recent fiscal ...


August 19, 2014, 5:03 pm, 1321251

BRASILIA–True to its habit of offering a steady flow of rosy economic forecasts, the Brazilian government is expecting the second half of 2014 will be better than the first, a top official said Monday.

Brazil’s economy expanded by a meager 0.2% in the first quarter of this year compared with ...


August 19, 2014, 5:03 pm, 1321250

Antonio Fatás:

Irrational exuberance meets secular stagnation: Robert Shiller warns us in the New York Times about the potential risks of high stock market valuations in the US. According to Shiller "the United States stock market looks very expensive right now". Brad DeLong ...


August 19, 2014, 5:03 pm, 1321249

Brad DeLong tries to make sense of the labor market:

Over at Equitable Growth: In Which I Make Myself Very Confused About Cyclical Recovery: Will somebody please tell me that I have made a gross arithmetic error in what is below, and can be much more optimistic? ...

I really ...


August 19, 2014, 5:03 pm, 1321248
The BLS reported this morning:

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.9 percent over the last 12 months to an index level of 234.525 (1982-84=100). For the month, the index fell 0.1 percent prior to seasonal adjustment.

CPI-W is the index that is ...


August 19, 2014, 4:44 pm, 1321247
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August 19, 2014, 4:44 pm, 1321245
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August 19, 2014, 4:44 pm, 1321243
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August 19, 2014, 4:05 pm, 1321241

He brings new life to a much-covered topic, here is one good bit of many:

Inserts are one of the last sources of advertising to resist digitization. They are also the next to go. Businesses like Cellfire and Find & Save are working on digital coupons; stores like Kroger’s and Safeway ...


August 19, 2014, 4:04 pm, 1321240
(Don Boudreaux)

My e-mail just brought an ad for the Museum of Tolerance in New York City.  I was unaware that such a museum exists.  Visiting it might be worthwhile.  (I don’t have time now to peruse it’s website carefully.)  Yet no matter how worthwhile and educational this museum ...


August 19, 2014, 3:33 pm, 1321235
It's crystal clear Ukraine has no interest in a ceasefire under any terms. Instead it demands rebels lay down weapons and for Russia to stop intervention. In short, Ukraine demands surrender.

Thus death and destruction will continue, possibly long after Ukraine takes over Luhansk and Donetsk (or rather ...


August 19, 2014, 3:33 pm, 1321234

I used to ask myself, how much worse does the Social Security financing problem have to get before progressive start getting serious about Social Security reform?

The answer, as I outline in today’s Wall Street Journal: at least four times worse, since CBO has projected quadrupling of Social Security’s ...


August 19, 2014, 3:33 pm, 1321233

“The Big Guys.” That’s what one of my colleague Federal Home Loan Bank presidents used to call the biggest savings and loans. Where are they now?

His attitude was a lingering reflection of the great post-World War II US housing boom, when the most important residential mortgage lenders were the savings ...


August 19, 2014, 3:03 pm, 1321170

August 19, 2014, 3:03 pm, 1321169
View an interactive that explores the share of first-time homeowners, by state, since 1996. WSJ

New data show that first-time home buyers aren’t playing as ...


August 19, 2014, 3:03 pm, 1321167

BRASILIA–True to its habit of offering a steady flow of rosy economic forecasts, the Brazilian government is expecting the second half of 2014 will be better than the first, a top official said Monday.

Brazil’s economy expanded by a meager 0.2% in the first quarter of this year compared with ...


August 19, 2014, 3:03 pm, 1321168

Central-banking fans have a new tool to help them plan the rest of the year.

The Journal has created an interactive Global Central Banks Calendar, a database of coming releases by major central banks including the Federal Reserve, the European Central Bank, the Bank of England and the Bank of ...


August 19, 2014, 2:44 pm, 1321166
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August 19, 2014, 2:05 pm, 1321164

From Natural News Radio:

Guest Mark Thornton is a Senior Fellow at the Ludwig von Mises Institute. We’ll talk [Mp3 file] about his article, “How the Drug War Drives Child Migrants to the US Border” We’ll also discuss the current economic conditions. Mark Thornton was way ahead of economist predicting the ...


August 19, 2014, 2:05 pm, 1321163

Mark Thornton discusses recent economic indicators with Alan Butler.


August 19, 2014, 2:05 pm, 1321162

1. David Zetland’s economics of water book is now free.

2. How Ira Glass works.

3. Did Medicare Advantage get better?  And where is “the pizza belt”?  Is this the most important theory about pizza?  I agree with the claims in that article.

4.


August 19, 2014, 2:05 pm, 1321161

Well, Eggertsson and Mehrotra have fleshed out a theory that they think captures what Summers and Krugman are trying to get at. The Eggertsson and Mehrotra chapter in this volume is a summary of a formal academic paper that I discussed in this post. The gist of that blog ...


August 19, 2014, 2:04 pm, 1321160
(Don Boudreaux)

Berry College econ professor Frank Stephenson sent the following to me by e-mail.  I here share it with you in full with Frank’s kind permission.

I recently had firsthand exposure to what is, I think, one of the less well-known benefits of immigration.  My mother, who lives in rural ...


August 19, 2014, 1:33 pm, 1321146

Check out the top pieces we’re reading today on the economy, technology, family, and more.

1.) “The cost for a middle-income family to raise a child born in 2013 to age 18 rose to $245,340…according to a government report released Monday,” writes Peter Frost at the Chicago Tribune. “Adjusted ...


August 19, 2014, 1:33 pm, 1321147

America faces many economic challenge, but inflation — at least as defined as an “ongoing rise in the general level of prices” — hasn’t been one of them. Some folks on the right argue otherwise, but they are simply wrong. As the Bureau of ...


August 19, 2014, 1:33 pm, 1321144

University of Minnesota Transportation expert and must-follow blogger David Levinson was recently asked what he would do to help low-income residents if given a $1 billion to spend. Now the context here is the opening of $1 billion light-rail line between downtown Minneapolis and St. Paul. Levinson:

I ...


August 19, 2014, 1:33 pm, 1321145

Washington and Beijing are ostensibly having serious discussions of a bilateral investment treaty to improve transparency and other aspects of the trans-Pacific investment environment. One hopes it’s not really true, that the American side is just humoring the Chinese, because it’s impossible at present to see such an ...


August 19, 2014, 1:03 pm, 1321083

Central-banking fans have a new tool to help them plan the rest of the year.

The Journal has created an interactive Global Central Banks Calendar, a database of coming releases by major central banks including the Federal Reserve, the European Central Bank, the Bank of England and the Bank of ...


August 19, 2014, 1:03 pm, 1321082
The Cleveland Fed released the median CPI and the trimmed-mean CPI this morning:

According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.1% (1.5% annualized rate) in July. The 16% trimmed-mean Consumer Price Index also increased 0.1% (1.6% annualized rate) during the month. The ...


August 19, 2014, 12:35 pm, 1321081
There is an ebook available on "Secular Stagnation: Facts, Causes, and Cures," which consists of a set of papers by a group of economists, brought together in an attempt to understand secular stagnation, and how we might address the problem, if it is one. Some of the papers are ...


August 19, 2014, 12:05 pm, 1321076

Mises Daily Tuesday by Dante Bayona:

The Fed and the Treasury are betting on the fact that the dollar will remain the world’s reserve currency forever, and that the US can inflate without consequences indefinitely. The international victims of the scheme, however, ...


August 19, 2014, 12:04 pm, 1321075
(August 19, 2014 01:23 PM, by David Henderson) Have you seen this sign in your doctor's office? It reads, "One problem per visit, please." An editorial in the Canadian Medical Association Journal says this sign is popping up in the offices of some family physicians. This is from... (0 COMMENTS)


August 19, 2014, 12:04 pm, 1321074

What would the Fed funds rate be if we were in normal times? Basically, what would the Fed funds rate be if we used a rule instead of the discretionary policy being used by the Fed?

I use my Effective Demand rule using the CPI (less food & energy) data ...


August 19, 2014, 11:33 am, 1321072
I will be speaking at the annual conference of the National Economics Teaching Association, which this year is being held on Thursday, November 6th and Friday, November 7th, 2014 in San Diego, CA. If you want to consider attending, click here ...


August 19, 2014, 11:03 am, 1321010

TUESDAY

Australia’s central bank releases minutes from its August policy meeting at 11:30 a.m. local time

WEDNESDAY

Bank of England releases minutes from its Aug. 6-7 policy meeting at 0830 GMT Federal Reserve releases minutes from its July 29-30 policy meeting at 2 p.m. EDT Iceland’s central bank releases a policy decision

THURSDAY

Kansas City Fed releases ...


August 19, 2014, 11:03 am, 1321009

August 19, 2014, 11:03 am, 1321008

As central bankers, economists, finance ministers and other officials from around the globe get set to gather at Jackson Hole, Wyo., this coming Thursday, the world’s largest economy is coming off the best six-month run of job gains since early 2006.

It’s fitting then that the Federal Reserve Bank of ...


August 19, 2014, 11:03 am, 1321005

Ever since the the recession,  job openings have far outpaced the number of people being hired. A common refrain from employers is that workers lack proper training and education for the available jobs–in other words, that a “skills gap” is to blame.

But the fault rest with employers, not workers, says ...


August 19, 2014, 11:03 am, 1321007
View an interactive that explores the share of first-time homeowners, by state, since 1996. WSJ

First-time buyers aren’t playing as big a role in the ...


August 19, 2014, 11:03 am, 1321006
China’s yuan was among the currencies that saw the biggest increases in international debt issuance during the global financial crisis, a new San Francisco Fed study finds.


August 19, 2014, 11:03 am, 1321004

The employment boom in the West isn’t confined to energy-rich North Dakota.

Utah has emerged this year as a job creation leader, according to Labor Department data released Monday. The state’s July ...


August 19, 2014, 11:03 am, 1321001
View an interactive that explores the share of first-time homeowners, by state, since 1996. WSJ

New data show that first-time home buyers aren’t playing as ...


August 19, 2014, 11:03 am, 1321002

August 19, 2014, 11:03 am, 1321003
Singapore’s financial district REUTERS

Asian banks are finding deposits harder to come by, posing a risk to economies increasingly dependent on credit for growth.

Year-on-year growth in monthly ...


August 19, 2014, 11:03 am, 1321000

Rajiv Sethi:

The Agent-Based Method: It's nice to see some attention being paid to agent-based computational models on economics blogs, but Chris House has managed to misrepresent the methodology so completely that his post is likely to do more harm than good.

In comparing the agent-based method to the more ...


August 19, 2014, 11:03 am, 1320999
This was a solid report for housing starts in July.

There were 585 thousand total housing starts during the first seven months of 2014 (not seasonally adjusted, NSA), up 9.1% from the 563 thousand during the same period of 2013. Single family starts are up 3%, and multi-family starts ...


August 19, 2014, 10:44 am, 1320998
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August 19, 2014, 10:44 am, 1320994
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August 19, 2014, 10:36 am, 1320990
New residential housing construction bounced back in July. Although the consensus forecast was looking for a handsome rebound, the actual results were substantially better than expected. Housing starts revived to a 1.093 million annualized rate last month, which is well … Continue reading →


August 19, 2014, 10:36 am, 1320991
Making informed choices about active managers has never been anyone’s idea of a picnic, but ongoing developments in R packages eases the burden. Consider the essential work of factor analysis, which is a statistical technique for identifying the sources of … Continue reading →


August 19, 2014, 10:34 am, 1320989
Teaser:

Perry ...


August 19, 2014, 10:05 am, 1320983

Nine million Americans took a week off in July 1976, the peak month each year for summer travel. Yet in July 2014, just seven million did. Keeping in mind that 60 million more Americans have jobs today than in 1976, that adds up to a huge decline in the share ...


August 19, 2014, 10:04 am, 1320982
(Don Boudreaux)

Here’s a letter to the Washington Post:

Michael Gerson mocks Sen. Rand Paul’s “belief in a minimal state” in part because, in Mr. Gerson’s estimation, such a state would be “incapable of addressing poverty and stalled mobility.” (“Rand Paul is no Jack Kemp,” Aug. 19).  What a curious argument ...


August 19, 2014, 9:03 am, 1320921

August 19, 2014, 9:03 am, 1320920
View an interactive that explores the share of first-time homeowners, by state, since 1996. WSJ

New data show that first-time home buyers aren’t playing as ...


August 19, 2014, 9:03 am, 1320919
From the Census Bureau: Permits, Starts and Completions

Housing Starts:
Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,093,000. This is 15.7 percent above the revised June estimate of 945,000 and is 21.7 percent above the July 2013 rate of 898,000.

Single-family housing ...


August 19, 2014, 8:44 am, 1320918
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August 19, 2014, 8:44 am, 1320917
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August 19, 2014, 8:34 am, 1320916
It's nice to see some attention being paid to agent-based computational models on economics blogs, but Chris House has managed to misrepresent the methodology so completely that his post is likely to do more harm than good.
In comparing the agent-based method to ...


August 19, 2014, 8:04 am, 1320915
(Don Boudreaux)

My colleague Bryan Caplan follows up yesterday’s important post with this equally important one today.  (Note that among the sources of the problem that Bryan identifies is the anthropomorphization of groups of people, such as society or “the nation” or “the rich.”)

...


August 19, 2014, 8:04 am, 1320914
(Don Boudreaux)

… is from page 235 of Matt Ridley’s 2010 book, The Rational Optimist; (I’m re-reading Matt’s book in preparation for a new class that I’m teaching this Fall semester at GMU; the class is entitled “Economics of Sustainability”):

Suppose you had said to my hypothetical family of 1800, eating ...


August 19, 2014, 8:04 am, 1320913

Lifted from comments on Financing Social SecurityBruce Webb comments on Social Security prpaganda:

Jim, the problem is that those people with “government, financial, business
experience” who are promoting the message “No check for you!” to millennials
know full well the numbers behind the following equation:

No Check for You = ...


August 19, 2014, 8:04 am, 1320912


August 19, 2014, 7:33 am, 1320908

Three fine paragraphs from George Will:

Progressives say corporations using inversions areunpatriotic, which is amusing. When the Supreme Court’sCitizens Uniteddecision stipulated that Americans do not forfeit their First Amendment right to political advocacy when they act together through corporations (including, and especially, incorporated nonprofit advocacy ...


August 19, 2014, 7:33 am, 1320907

Amen. Amen!

Many people are tempted to resist this insight, because they hope that we can elect better and more virtuous political leaders. But politicians who prioritize principle over staying in power are not likely to stay in power for long – or even get there in ...


August 19, 2014, 7:33 am, 1320905

"Math Experts Split theCheck" and "The Mathematical DialectQuiz".

(Links courtesy of my older daughter, who teaches math.)


August 19, 2014, 7:33 am, 1320906

As I've noted before, macro is hard.

Now Loungani, with a colleague, Hites Ahir, has returned to the topic in the wake of the economic crisis. The record of failure remains impressive. There were 77 countries under consideration, and 49 of them were in recession in 2009. ...


August 19, 2014, 7:23 am, 1320904
De-mergers often figure in EdExcel Unit 3 questions e.g. on the structured multiple choice -so this one from mining giant BHP Billitonis a good example to be aware of and to understand the key drivers behind the decision.BHP Billitonplan to sell (divest)non-core assets such as theiraluminium, manganese and nickel mines.As ...


August 19, 2014, 7:03 am, 1320859
Singapore’s financial district REUTERS

Asian banks are finding deposits harder to come by, posing a risk to economies increasingly dependent on credit for growth.

Year-on-year growth in monthly ...


August 19, 2014, 7:03 am, 1320858

August 19, 2014, 5:03 am, 1320837

Two weeks ago, USA Today's Adam Shell asked: "Is it just a pullback, coming correction or beginning of bear market?"

One week ago, David Rosenberg asked: "Market correction? Was that it?"

So what was it really?

Would you believe a brief


August 19, 2014, 4:05 am, 1320835

Or should that title read “Is Neil Harbisson a cyborg?”

Protruding from the back of Harbisson’s skull is a metal antenna that allows him to convert the frequencies for color into frequencies for sound and vice versa. He was born colorblind and the appendage has essentially given him a sixth sense ...


August 19, 2014, 4:05 am, 1320834

I did not know this idea was under consideration:

Los Angeles city leaders are considering a lottery system to reward citizens for casting a ballot in local elections, in a measure to combat low voter turnout that officials and outside observers say could be a first for any U.S. municipality.

The Los ...


August 19, 2014, 3:33 am, 1320832
The mirage in Spain pretending to be a recovery, has officially dissipated into wind-blown ashes.

Spain's trade deficit doubled in the first half as imports soared. Spain is again dependent on foreign financing.

Via translation from Libre Mercado, Spain Again Borrows Abroad to Finance Consumption.


August 19, 2014, 3:03 am, 1320801

Following up on last Thursday’s post, here is a depiction of how Wisconsin and Kansas — ALEC darlings — fare against Minnesota and California.

Figure 1: Log nonfarm payroll employment for Wisconsin (red), Minnesota (blue), California (teal), Kansas (green) and ...


August 19, 2014, 1:03 am, 1320768
Singapore’s financial district REUTERS

Asian banks are finding deposits harder to come by, posing a risk to economies increasingly dependent on credit for growth.

Year-on-year growth in monthly ...


August 19, 2014, 1:03 am, 1320767

I’ve read several comments lauding the move toward a structural budget balance in Wisconsin under Governor Walker’s administration. I decided to take a look at what the actual evidence for a surplus is, and what the economic impact has been of policies purported to improve economic performance.

Figure 1 depicts ...


August 19, 2014, 12:45 am, 1320766
Robert Litan explains an interactive tool that gauges a country's quality of life by counting much more than per capita income.


August 19, 2014, 12:44 am, 1320765

Mehrsa Baradaran (University of Georgia) has a short piece in Slate tracing the history of the U.S. Postal ...


August 19, 2014, 12:34 am, 1320764

The Fed and the Treasury are betting on the fact that the dollar will remain the world’s reserve currency forever, and that the US can inflate without consequences indefinitely. The international victims of the scheme, however, are looking for a way out.