Category Archives: Economy

Chance of Recession: April 2020

Probability of US Recession

Probability of US Recession

Back in the day when Mark Perry was running Carpe Diem at his private location, I would follow his recession data. A fun leading indicator is the nugget he uses: The treasury spread data found at the NY Fed site.

Prepare yourself. Winter is coming.

Why So Many Without Work

Help Wanted

It’s not there aren’t good jobs – it’s that there aren’t good candidates:

Durham, N.C. — U.S. job openings are at a record high of 5.8 million, and a new survey from Duke University provides a key reason: Employers say they can’t find workers with required skills for many openings. As a result, employers are planning to boost pay in an attempt to find workers. They also continue to push for more foreign workers through high-tech visas known as H-1Bs. The risks of a workers’ skills gap? A less competitive U.S. economy, and companies might be forced to relocate overseas if they can’t find workers here, warns a Duke economics professor.

*Mostly they are saying they can’t find employees with the required skills,” Duke finance professor John Graham tells WRAL TechWire, referring to the just-released Duke-CFO Global Business Outlook survey.

It’s just not high-tech, either. Graham says companies need more mechanics, more people who can work in the “trades” like welders.

Affirming U.S. government data released Wednesday about the millions of open jobs, 93 percent of companies participating in the Duke survey say they have job openings.

Why? Finding talent.


Democrats Fail To Allow Amendments

Delta No No No

Senate Defeats Unemployment Benefits Extension

Thus afternoon the senate voted to defeat a bill that would extend the 99 weeks of extended unemployment benefits:

The Senate voted 58-40 Thursday on a proposal that would have continued unemployment insurance for three months, just short of the 60 votes needed to end debate.

“I’m beginning to believe there is nothing that will get Republicans to yes,” Senate Majority Leader Harry Reid (D-Nev.) said. “It’s a ‘no’ vote because they don’t want to extend unemployment insurance.”

“We’re one Republican vote away from restoring benefits to 1.7 million Americans,” Reid said. “There is one Republican vote standing in the way of a lifeline to these 1.7 million people.”

Reid is, of course, not being totally honest.  There is ONE thing that will get republicans to yes.

Capitalism Is Evil And Wicked


Capitalism And The Rise Of The One Percent

If you aren’t careful, the only thing going on in the world is the rising wealth of the 1% at the expense of the rest of us.

The rich are getting richer while the poor are getting poorer.

Don’t believe it.

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Deciding To Make Money Or Not Make Money


What Do You Want To Make

In many ways it’s perverse – an individual has to make a decision in their late teens – early twenties that will impact the rest of their lives.  But there it is, the decision: What are you going to do with your life.

And for a lot of people, this feathers into which degree they will obtain while attending college.

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North Carolina Employment – The Obama Dilemma

Glass Half FullNorth Carolina Unemployment Falls

The big headlines here in North Carolina, at least if you’re a republican, is that the unemployment rate has fallen further and faster in North Carolina than anywhere else:

“Federal jobs data shows that North Carolina’s unemployment rate dropped further in one year than any other state in the nation,” Tillis said. “We will continue to implement policies that will enable our citizens to get back to work.”

By itself, the news is good news, heck, even GREAT news.  But it rarely is “by itself”:

Economists say the fast drop in the unemployment rate could be because so many people have become discouraged, are giving up on finding a job and are no longer being counted.

The state’s population of working-age adults who are looking for jobs shrank by 111,000 in 2013.

This is, of course, the same phenomenon that nation republicans use to knock Obama.  There the big story is that the national labor force participation rate has plummeted to lows that we haven’t seen in decades.

What Do The Numbers Mean

So, what does it mean?  Are the policies in North Carolina really working?

Well, first, the policies in North Carolina really describe the new laws regarding how benefits are paid out to unemployed workers here in the Old North State.  For example, North Carolina recently revamped the laws that allowed extended benefits to 99 weeks – we now only offer benefits extending up to 20 weeks – much less than the 99 weeks being suggested by the feds.

Now, in my mind, the unemployment insurance is meant as a bridge to sustain an individual during a reasonable job search.  And if that search hasn’t produced fruit after 20 weeks,  5 months, the job search needs to be reconsidered and adjusted.  But the program should come to an end.  The insurance was not created to sustain an out of work individual for perpetuity.

Now, if after the “job search” is over or run its course, that individual in still in need of assistance then other methods should be utilized.  And, in North Carolina, that is the case:

A different federal survey that interviews households instead of businesses found the size of North Carolina’s labor force shrunk by 111,000 in 2013.

Where did all those people go? Some died or retired, others left the state and still others may have found other means of financial support, such as a family member.

More people also sought welfare or disability benefits. The number of people using food stamps in North Carolina, for example,  surged by nearly 50,000 in October, according to the latest federal figures. The 3.2% spike was the biggest in the nation and was at least twice as large as the increase in every other state except for New Jersey.

So yeah, the unemployment picture isn’t all that the republicans would have us believe it; there are people out there that are struggling.  But, BUT, without the extended benefits under the federal version, at least the incentives are in the right place.

Household Income

I just finished a post that explained, in part, the rise of income levels of the 1%:

…the primary source of income of the wealthy is the market and not salary.

It’s important to point this out as our current administration continues to rail against income disparity all the while pushing for policies that help contribute to the “problem” all the while.

But check out a recent post from AEI:

During his economic speech yesterday, President Obama again suggested that the typical US middle-class family has seen no economic progress over the past 30 years:

Because even though our businesses are creating new jobs and have broken record profits, the top 1 percent of Americans took home 20 percent of the nation’s income last year, while the average worker isn’t seeing a raise at all. In fact, that understates the problem. Most of the gains have gone to the top one-tenth of 1 percent. So in many ways, the trends that have taken hold over the past few decades of a winner-take-all economy, where a few do better and better and better, while everybody else just treads water or loses ground, those trends have been made worse by the recession.

Now I have debunked this claim several times. And now so has the US Census Bureau. The above chart, from the agency’s new income and poverty report, clearly shows real median household income indeed rose over the Long Boom of 1983 through 2007. And remember, the Census Bureau is just tracking pre-tax, pre-transfer, non-fringe benefit market income. As agency itself concedes: “The money income measure does not completely capture the economic well-being of individuals and families.”

091713census1-600x198Leading up to the recession, real median income was rising.  It’s only been since Obama’s time in the White House that such incomes are dropping.

Obama’s Economy – His Legacy


To demonstrate that good intentions don’t guarantee good policy:

Helene Pearson’s belief in homeownership was shattered in Roseland, the mostly black Chicago neighborhood where President Barack Obama got his start as a community organizer.

Pearson, who bought her two-bedroom, red-brick bungalow on South Calumet Avenue in Roseland for $160,000 in 2006 with a high-interest loan, put it on the market a year ago for $55,000 and didn’t attract a single offer. Her bank has agreed to take it back.

Markets come and then markets go.  But the true testament of our intervention?

For most Americans, the real estate crash is finally behind them and personal wealth is back where it was in the boom. For blacks in the U.S., 18 years of economic progress has vanished, with a rebound in housing slipping further out of reach and the unemployment rate almost twice that of whites. The homeownership rate for blacks fell from 50 percent during the housing bubble to 43 percent in the second quarter, the lowest since 1995. The rate for whites stopped falling two years ago, settling at about 73 percent, only 3 percentage points below the 2004 peak, according to the Census Bureau.

I find it tragically ironic that Obama’s legacy is going to be a more racially divided nation in addition to a more economically separated one.

This Is Obama’s Economy

Barack Obama

The United States is experiencing job growth, to be sure.  But look at the kinds of jobs being created:

(Reuters) – U.S. businesses are hiring at a robust rate. The only problem is that three out of four of the nearly 1 million hires this year are part-time and many of the jobs are low-paid.

Executives at several staffing firms told Reuters that the law, which requires employers with 50 or more full-time workers to provide healthcare coverage or incur penalties, was a frequently cited factor in requests for part-time workers. A decision to delay the mandate until 2015 has not made much of a difference in hiring decisions, they added.

“Us and other people are hiring part-time because we don’t know what the costs are going to be to hire full-time,” said Steven Raz, founder of Cornerstone Search Group, a staffing firm in Parsippany, New Jersey. “We are being cautious.”

Raz said his company started seeing a rise in part-time positions in late 2012 and the trend gathered steam early this year. He estimates his firm has seen an increase of between 10 percent and 15 percent compared with last year.

Other staffing firms have also noted a shift.

“They have put some of the full-time positions on hold and are hiring part-time employees so they won’t have to pay out the benefits,” said Client Staffing Solutions’ Darin Hovendick. “There is so much uncertainty. It’s really tough to design a budget when you don’t know the final cost involved.”

Watch the word from the Left as they mention “anecdotal”

Laffer’s Curve

The Laffer Curve

The Laffer Curve.  It’s the idea that as tax rates rise beyond a certain point, tax revenue declines.  It makes sense at the extremes; a tax of 0% raises zero dollars.  A tax of 100% also raises zero dollars.  No one works for free.

An example of this concept was displayed in Washington DC last month:

Wal-Mart Stores (WMT) no longer plans to build three stores in the nation’s capitol, after the city’s council voted to force large retailers to pay starting wages that are 50% higher than the minimum wage there.

The world’s largest retailer also said it will consider its options related to three other Washington, D.C., stores that are still under construction.

D.C., a wildly successful example of a city that lifts its poor and most fragile citizens out of poverty:


has once again created a law that really proves who is waging a “war on the poor.”

It isn’t the conservative whole embraces the free market that “hates” the poor, no.  Rather, it’s the intellectual liberal that “hates” the poor.  How else to describe the mentality of a people who vote to force job creators out of the market?

You’ll probably never get rich at Wal-Mart, but a job there is better than not a job anywhere.