Tag Archives: employment

The miracle of growth in the US economy

Summary: Let’s look at the four key measures of growth for the US economy. They show the big news about this economic cycle: six years of amazing stable and slow US growth, shrugging off repeated shocks. The latest being the apocalypse of Brexit, so confidently predicted before the UK vote. This has surprised almost everybody, and proven most forecasters wrong. There are important lessons we should learn from this.

Stagnation Snail

Real GDP

Slow growth in real GDP since Q1 2010, with only ½% swings around the average. Each of these swings, up and down, produced almost hysterical commentary. Yet they are small compared to the typical swings seen since WWII. Per capita GDP, a better measure of how well we’re doing, has grown even slower — only 1.8%/year.

Real GDP YoY since 2010

Nonfarm payrolls

Slow and stable job growth in jobs since September 2011, with only ½% swings around the average.

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You need to know 2 things about the June jobs report (neither is often mentioned)

Summary: The jobs report is a monthly gift for journalists and economists. Packed with numbers — mostly noise, with large error bars, subject to big revisions — it generates a flood of clickbait headlines and confident analysis. Lost in this are the important trends we need to know (aka “old news”, because they change slowly). Here are two of the big ones.

The experts will explain that this news is life-changingly significant, every month.

TV noise

June’s job growth was big and important!

No, the June strong headline number is not important. Like May’s horrific slow growth, it’s probably just noise. More important are the 16 months of slowing job growth (i.e., job growth decelerating from the slow grow characteristic of this recovery). In February 2015 YoY growth in non-farm payrolls was 2.3%. In June it was 1.8%. This drop erased the acceleration of Feb 2014 – Feb 2015 that got economists excited about the big Fed rate increases coming really soon. Normal days were coming again! But they’ve been delayed, again.

Employment growth in June 2016 - NSA YoY

Job growth is slow, but it’s still growth!

The number of jobs is not the best metric in the New America, with its growth in part-time, un-unionizable, no benefits, no training, disposable employees. A better (albeit, like all economic data, imperfect) measure is the total number of hours worked per month. For the full recovery it tells the same story as jobs:  slow growth since the crash (jobs are up a total of only 4.4% over nine years, hours are up 5.3%).

But total hours have been flat for the past six months. (total hours for production and non-supervisory workers has been flat for seven months). That’s a red flag. Gaps like this between similar metrics deserve attention, since they signal that something is happening.

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A UK engineer explains: elites oppose Brexit because they import cheap workers

Summary: Why did UK elites have a hysterical reaction to the vote for Brexit? There is not one answer.  Andrew Fentem (engineer, inventor) explains one logical answer: it threatens their supply of cheap workers. Also, I recommend putting The Register on your reading list if you are interested in the IT industry (changing times requires new sources of info).

Fear and Brexit in Tech City:
Digital ‘elite’ are having a nervous breakdown

By Andrew Fentem at The Register (“Biting the hand that feeds IT”).
See the money paragraph in red.

…While some sections of the British press celebrate the Brexit vote in the UK, in the technology press there has been much gnashing of teeth and rending of garments.

Forbes interviewed a clearly traumatised Brent Hoberman – of Lastminute.com fame – who seems to be in need of a reassuring cuddle: “People feeling rejection. I think this is what the Leave campaign underestimated: the psychology of rejecting openness.” Sensitive Brent’s words will no doubt remind “Peep Show” fans of this classic scene {a UK show about 2 omega men.}…

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Preening international elitists like Hoberman are exactly what Brexit voters so dislike. While the self-styled “digital elite” talk in therapy-speak about European peace, love, and understanding, they are masking their true motivation – which is the freedom to exploit low-cost mobile tech labour. Cheap labour was the top reason cited by Tech City startups for voting Remain.

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