Click to enlarge.
Within these industries, we're about 6.6 million employees below the peak. Call me crazy if you must, but I predict that we will never make it back to the trend channel.
The next chart shows the same employment data per capita (as a fraction of total population).
Click to enlarge.
I predict that we will never make it back to the historical norm. I know. I'm certifiable. Lock me up. Put a straight-jacket on me. It's just the crazy rantings of a lunatic!
I'm not done yet though. I suspect, thanks to the rise of Amazon.com and other online retailers, that we will be adding even more horsemen during the next recession. In fact, we may need to swap party hats. Something made of tin foil? Or perhaps a hat with a rodeo theme would be more appropriate? We will certainly want something to blend in with all those horsemen.
File:Strawhat.jpg (Ealdgyth)
This is not investment advice. Sigh.
Source Data:
St. Louis Fed: Custom Chart #1
St. Louis Fed: Custom Chart #2
It appears that weather has been worse than normal this century!
ReplyDeletemab,
ReplyDelete"The good is an illusion. Little fables folks tell themselves so they can get through their days without screaming too much." - Andre Linoge, Storm of the Century (1999)
Forehead. Desk. Hard whack. Aaaaahhhh! Hard whack. Aaaaahhhh! Hard whack. Aaaaahhhh!
Nothing a Fed It debit card with $160 loaded on it every month can't fix.
ReplyDelete$2000 per capita (16+) is $500B.
http://research.stlouisfed.org/fred2/graph/?g=sOe
just add a green line to go with the red & blue . . .
(actually, growth in SS and Medicare outgo will give us this $500B/yr added money drop soon enough -- 70yo+ boomers are going to be money machines for our medical sector)
baby boom's just beginning to turn 65 now . . .
Troy,
ReplyDeleteHave you considered that the Boomers might advocate for spending cuts elsewhere in the Federal budget so that your $500B/yr figure retains some real, not nominal, value? If the real value of those SS or Medicare benefits is threatened, how long does the F-35 program last?
AFAICT your argument is generally some variant of
"Ceteris paribus, this fiscal/monetary policy will have a big economic impact",
which is true by definition,
"First assume X == Y, it then follows that X + $500B > Y",
and completely ignores the possibility that something more significant will change at the same time.
Troy,
ReplyDeleteNothing a Fed It debit card with $160 loaded on it every month can't fix.
I strongly disagree. It is not being fixed. Here is a closer look at the 2nd chart, this time showing the year over year change in monthly data (including today's employment report). It's not only a pathetic recovery rate, but it is rolling over yet again.
You clearly have far more faith in the Fed's monetary printing press to solve structural employment problems than I do. It's certainly not hard to do. I have no faith, lol. Sigh.
Nathan,
ReplyDeleteOnce again, I find myself on your side of the argument.
If injecting nominal cash into an economy is all it takes to create jobs, then Zimbabwe would not have had 94% unemployment as they hyperinflated.
We're not Zimbabwe but many will think we are if we accelerate the "deficits don't matter" mindset endlessly. There's a reason my Social Security statements warn me that my estimated benefits in the distant future may be reduced.
Fed's monetary printing press to solve structural employment problems
ReplyDeleteThe $1T/yr mortgage bubble fixed things good, 2005-2007.
http://research.stlouisfed.org/fred2/graph/?g=sOO
If & when the Fed withdraws the current $1T/yr injection, hello 2008 my old friend.
But I think Yellen's appointment is an important 'tell' that the Fed is going to "bridge" things for the Dems through to 2017.
I have no idea how the Fed actually reaches policy decisions, but this is my impression.
then Zimbabwe would not have had 94% unemployment as they hyper inflated.
ReplyDeleteZimbabwe (and Weimar Germany) did not have the wealth production to back the nominal wage increase.
This is a very, very important difference.
We're using printing to get people working, not boosting nominal wages.
If & when the shelves run out of goods is when you get Weimar.
We're in a totally different regime; our economy is constipated with too much money leaking out of the paycheck economy and out to OPEC, China, and the infamous "1%".
The housing bubble and now the Fed bond buying is just refilling this leaky boat.
There's a reason my Social Security statements warn me that my estimated benefits in the distant future may be reduced.
ReplyDeleteyeah, because the system is too gutless to raise taxes to honestly re-monetize the $2.7T sitting in the SSTF, about half of which was excess FICA taxation we paid 1990-2010 (remainder being accrued interest credited to the SSTF each year).
Nota bene. Those types are hats are favored locally by landscape and field workers.
ReplyDeleteI suspect there will be a time in the not too distant future that the same people who burned their draft cards will burn their SS checks.
ReplyDeleteTroy,
ReplyDeleteIt is assumed that we can't have a recession if the Fed doesn't raise rates, just because that's the way it generally works.
I've only seen black cows. Therefore, all cows must be black?
Put another way, there can come a point when the economy has become so structurally weakened that the last thing on the Fed's mind is raising rates to cool down the overheating. It is cooling down all on its own (as the pent-up demand during the Great Recession dissipates and/or transitions to the recovery's pent-down demand).
5 years of ZIRP have given us this. Better hope the recent trend doesn't continue.
1. 10-year yield is 2.8% (considerably higher than a year ago).
2. Taper will apparently continue until there is proof it shouldn't (not that I think QE was much more than a confidence trick).
Troy,
ReplyDeleteThis is a very, very important difference.
1. You know we're not Zimbabwe.
2. I know we're not Zimbabwe.
3. What does Congress know?
Keep in mind how much our "fearless" leaders in Congress spent on job creation in response to the Great Recession. From where I sit, there was a lot of talk and not much action.
Rob Dawg,
ReplyDeleteI suspect there will be a time in the not too distant future that the same people who burned their draft cards will burn their SS checks.
At age 49, I plan on burning about 25% of them (give or take 75%). At the very least, I expect the checks to include strings ("strings attached").
Greenspan finally admits it was all bubbleconomics:
ReplyDeletehttp://www.american.com/archive/2014/march/how-to-avoid-another-global-financial-crisis
If instead of FICA you could have self directed 15% of your salary from first paycheck to now. I'd be on the Apple board for but one instance.
ReplyDeleteIt is cooling down all on its own (as the pent-up demand during the Great Recession dissipates and/or transitions to the recovery's pent-down demand).
ReplyDeleteMy only argument is that the Fed has more than the overnight rate as a policy lever.
The BOJ actually buys equities and REITs, and I think they also buy borrower's mortgage loan points to get 35 year fixed loans down to sub-2% rates.
dd,
ReplyDeleteInteresting link. I really don't think he sees the big picture though. Income inequality? Rapid automation? Trade deficit?
Rob Dawg,
ReplyDeleteFor what it is worth, I'd be 15% better off right now. I was very fortunate to have been able to retire off of investing at 35. From $1000 in cash in 1988 (but negative net worth due to a car loan) to retired and lazy bum in 1999.
Not rich by any stretch of the imagination but if I stay frugal and don't manage to do anything too stupid with my nest egg, should be able to avoid the work force from here on out.
That said, I did work more than 10 years, which means I do qualify for at least some Social Security. 40 quarters is the minimum, which is fairly optimal for me in theory.
Troy,
ReplyDeleteThe BOJ actually buys equities and REITs, and I think they also buy borrower's mortgage loan points to get 35 year fixed loans down to sub-2% rates.
And yet, they have neither gotten their CPI to rise nor have they avoided recessions over the past 20 years (they still have business cycles).
Thanks to a shrinking population and favorable trade surpluses (until recently), their unemployment hasn't really been a problem though. It's almost like they planned to replace humans with robots in a semi-sustainable way.