Fake news: Drudge contributes to the false boom narrative

Drudge links to a Zero Hedge story, which doesn't use the word "boom". But Zero Hedge doesn't get it right, either. It calls the May 0.8% monthly percentage "surge" in retail sales "the biggest since January 2017" absent the hurricane surge in September 2017. Not true: The actual 0.76% spike in May 2018 was bested by November 2017 at 0.79%. They both round to 0.8%.

But was the 0.8% significant? The only way to know is to look at what has happened in May in the past, and from that we conclude that May 2018 was obviously up but unremarkably so. We did better in May 2008 and 2009 for crying out loud, in the middle of a deep recession, which just proves it takes a while to get people's attention, even after you beat them in the head with a 2 X 4, multiple times.

The bottom line is retail is struggling over the long haul. The trend isn't up even a full half point after 18 years.

Expect Rush Limbaugh to trumpet the fake news nonetheless.

The BS headline about jobs the open-borders fanatics keep repeating: Job openings outnumber available workers

The unemployment level is currently 6.06 million. The part-time who want a full-time job currently number 4.87 million. The number not-in-the-labor-force-want-a-job-now is 5.18 million in May 2018. Add 'em all up and there's 16.11 million people right here in America for the 6.55 million job openings. The employers don't fill the jobs because they can, otherwise the situation wouldn't persist.

Meanwhile 78 million gig workers work side-hustles to make ends meet.

Not enough workers? Like hell there aren't.

Trump knows his own unemployment rate is fake, but touts it anyway. Sad.

Not-in-labor-force hit a new all-time high in May of almost 96 million.

Trump has no jobs achievement, let alone an historic one

The idea that Trump has an historic jobs achievement is based on the increasingly meaningless unemployment rate, which notoriously doesn't count many people who are not working. The idea that "essentially every American who wants a job could find one" is rubbish. For the anecdotal evidence, I suggest you ask any of the millions of unemployed and underemployed non-management people over the age of 50, most of whom got their walking papers in the Great Recession because they made too much money in the opinion of management. If you are looking for the hidden, nefarious, recalcitrant forces of deflation in the American economy, look there.   

The federal government actually tracks everyone who wants a job but still doesn't have one. They presently number 5.1 million, well above the average low for the data series in 2000 at 4.4 million. But even this number fails to capture the real scope of current labor slack.

If we had a real jobs recovery going on, we'd have employment at pre-Great Recession levels. We don't. Total employed as a percentage of the population in April 2018 is at not quite 60.4%. Before the recession it averaged 63.2% over the previous twelve years. That latter rate would yield 162.6 million working in April 2018 instead of the 155.3 million we actually have.

It's that simple. We have the people. What we're missing is 7.3 million of them working.

Them's the facts, no matter what the cheerleaders for Trump keep shouting.

Laugh of the day: Trump's goal is reportedly 208,333 new jobs every month for 10 years

So says the story at The Daily Caller here.

Har har HAR........dee har har.

After 16 months (November 2016 inclusive through February 2018) the actual monthly rate of gain has been 182,500.

If you prefer from inauguration month instead of election month (January 2017 inclusive through February 2018), 14 months, the actual monthly rate has been 177,214.

February 2017 inclusive, first full month of presidency, through February 2018, 13 months, the rate has been 175,461.

From the post-recession low in February 2010 (not inclusive), exactly 8 years ago, through February 2018 the actual monthly rate of gain has been 192,197.

So by no measure of Trump's performance is he yet anywhere near the actual average performance post-recession of 2007, let alone near his own goal.

The best overall performance in living memory was under Bill Clinton when monthly gains averaged over 242,000 monthly over 8 years. But this coincided with the peaking of the Baby Boom in 1957 clocking in 20 years in the labor force by the end of the Clinton era, in 1999. The Baby Boom fueled the Clinton boom in every way, from jobs to housing to GDP, and also the stock market.

It's been all downhill from there.

Since peak total nonfarm employment in February 2001, just before the recession of that year through February 2018, the economy has added only 75,500 jobs a month. 

Good luck to Mr. Trump, but the demographic odds are not in his favor, on top of the headwinds from his own immigration policy.

In this context Trump's stated goals do not reflect knowledge of reality or self-knowledge, only hubris.

Larry Kudlow is brain dead and he's on the radio

Like Rush Limbaugh, Larry Kudlow doesn't accurately remember the Reagan era.

It's embarrassing coming from these self-appointed spokesmen for Ronald Reagan.

Unlike Limbaugh, however, Kudlow actually served in the Reagan Administration so he really ought to know better, but today on the radio he kept saying that the jobs created in February 2018 (313,000) don't get any better than that.

Flashback to February 1984: jobs added 481,000. Or February 1988: jobs added 453,000.

Need more?

June 1983: +379,000. July 1983: +418,000. September 1983: +1.115 MILLION.

1.115 MILLION!

IN ONE MONTH!

Do I need to go on?

Yes, I think I do.

November 1983: +353,000.

December 1983: +356,000.

January 1984: +446,000.

April 1984: +363,000.

June 1984: +379,000.

July 1984: +313,000.

November 1984: +349,000.

March 1985: +346,000.

July 1986: +318,000.

September 1986: +347,000.

April 1987: +338,000.

July 1987: +347,000.

October 1987: +492,000.

June 1988: +363,000.

September 1988: +339,000.

November 1988: +339,000.

The current jobs boom isn't a boom, not yet, not by a longshot, and is NOTHING like the Reagan era, and Kudlow is doing a disservice to the historical record in which he played a part.

You've become a political hack, Larry.

Total nonfarm jobs grow at the pathetic pace of 167,000 per month y/y in October 2017

PAYEMS

Multiple jobholding in July peaked in 1997, the go-go decade for jobs, at 8.05 million

In July 2017 it's only 7.3 million, not seasonally adjusted.

Complain that it's not more, not that it's too many.

Some people just don't get it. 

There's something you don't see everyday: Grossly UNDERESTIMATING "not in the labor force"

It's actually 94.6 million in July 2017, not 50 million.

Among all those millions, just 5.4 million "want a job now". The rest are old and retired, young and in school, unable to work because of disability, homemakers, etc.

You people out there just don't get it.

If employers could fire 30 million of your asses in 2009 and get along just fine without you, they still can.

Robert Shiller blames housing bubbles on get rich quick flipper narratives, still completely misses the tax angle

Here, in The New York Times:

There is still no consensus on why the last housing boom and bust happened. That is troubling, because that violent housing cycle helped to produce the Great Recession and financial crisis of 2007 to 2009. We need to understand it all if we are going to be able to avoid ordeals like that in the future.

Ordinary Americans were suddenly able to make a lot of money by flipping their homes because of the tax law changes of 1997. Capital that was previously locked-up in housing by the rules of the New Deal until 1997 was suddenly unleashed to slosh around in the economy when lawmakers gave homeowners the right to avoid most capital gains on the sale of their homes as long as they lived in them only two years. Until 1997, if you didn't buy a more expensive home after you sold yours, you were exposed to a tax hit, unless you took the option of a once in a lifetime exclusion on the gain. The old arrangement had insured, along with the 30-year mortgage, that housing capital built up over a long period of time, creating forced savings for the middle class which could be safely liquidated in retirement without adversely affecting the housing market.

The Republican and Democrat geniuses who ran our government in 1997 changed all that, and within ten years the dang thing blew up. Yeah, I'm talking about you, Bill Clinton, and you, Newt Gingrich.

Too bad Robert Shiller still doesn't get it.

It would probably be unwise to turn back the tax clock now that the damage has been done, but the reinflation of the housing bubble after the crisis wasn't inevitable. The Fed's unprecedented zero interest rate policy has been responsible for that.

When the next housing crash comes, we'll probably not understand it either.

Meanwhile, the median sales price of homes in the aggregate has never been higher, or more unaffordable, and remains the primary driver of wealth inequality in America. 

On Hannity with Mark Simone, Stephen Moore just said we still have 94 million Americans "of working age" still out of work

There's a statement which is utterly false, and should end Steve Moore's credibility as an economist forever, but it won't.

The metric measures everyone aged 16 and older who is not in the labor force, the vast majority of which are not in the labor force for very good reasons.

For one example, young people in high school, college and graduate school are included in this number. In 2017 they number about 37 million people.

For another, in March 2017 another 45.7 million were over 65 and getting Social Security. In other words, retired.

Together that's nearly 88% of the current 94.4 million "not working".

That leaves 11.7 million "not working", some of whom are disabled receiving Social Security but some disabled are still working, trying to lead productive lives despite their handicaps.

Typically the rest are homemakers, who are trying to make sure their kids aren't rotten like yours.

George Mason University should take away Steve Moore's MA in economics, if you ask me.

And even if you don't.

"Middle class" according to Pew Research Center is just trying to make everyone feel better

MarketWatch here says that Pew estimates middle class household income for a family of 3 at between about $35,000 and $105,000 for 2011.

To understand how too liberally defined that is, consider that in 2011 almost 60% of individual wage earners made $35,000 or less . . . about 91 million wage earners out of 151 million.

Actually the middle third of all those paycheck earners, 50 million, made between just $15,000 annually and not quite $40,000, the average of which is about $27,500. Make over $40,000 and you were already in the top third of individual wage earners that year.

A couple making $27,500 can survive in this world, but it wouldn't have been able to buy the median priced home of $225,000 in 2011. Just financing that without a down payment, an impossibility, at the average 30-year rate of 4.5% in 2011 would have meant 50% of income going to principal and interest.

Putting 10% down would drop that to 45% of income, still hardly affordable. And who do you know making $27,500 with $22,000 saved for a down payment on a house?

They'd be renting, most likely, and not yet solidly middle class.

In 2016 the average median sales price of a home in the US soared to nearly $314,000, putting the American dream even farther out of reach than ever before for the majority.

ADP had private payrolls up 263,000 earlier this week, but we only get 98,000 from the BLS today

When the expected BLS increase to total nonfarm was 180,000.

What's up with that?!

Long story short: Forget ADP, and employment gains have slowed by 15% in the last year. 

ADP is designed to try to predict what the BLS is going to say, and is known to fail at this. It is questioned why ADP even bothers. I agree.

A government measure from the Household Survey, the sum of usually full-time and usually part-time, not seasonally adjusted, is up only 1.89 million (157,500 per month) year over year in March 2017.

Total nonfarm, on the other hand, from the Establishment Survey, is up 2.135 million, not seasonally adjusted (178,000 per month) year over year.

That last number, 178,000 per month, is what the BLS also says is the current 3-month average in March 2017.

Compare that to March 2016 when the 3-month average was 209,000.

There's the truth.

The soft number of 98,000 in the headline today contributed to the climb-down in the 3-month average this month. It will be revised next month, probably up because it's so low. But it's the revisions down for the previous two months totaling 38,000 which are the clue to look farther back.   

The absolute number is not important because we can't be certain about it. It is only an estimate anyway, not an actual count. But we can be certain that the long-term behavior of the estimates shows an employment slow down of about 15% year over year.

It was well underway before Trump even got elected.

You can see that in full-time employment gains. Measured in March year over year, full-time gains peaked in March 2015 at almost 3 million additions. Gains have steadily fallen since, to 2.5 million in March 2016 and just 2 million now in March 2017.

And the bottom line there is we've added about only 4.7 million full-time jobs since March 2008 on net.

After NINE years.

The country remains mired in shrunken conditions from which it has not escaped.

In a real recovery, the 10 million full-time jobs lost in 2009 and 2010 would have been fully replaced by 2013 at the latest. It took until 2015, and the momentum immediately started to recede.

University of Georgia historian minimizes the magnitude of foreclosures during the Great Depression, missing their significance for the value of homeownership today

Stephen Mihm, at Bloomberg here:

While home ownership became increasingly popular in the early twentieth century, the U.S. was still a majority-renter nation in 1930, though by this time homeowners numbered 48 percent of the total population. But the Great Depression knocked that figure back down to 43 percent, roughly on par with late nineteenth century levels.

Things changed dramatically in the 1940s, when home ownership levels began moving toward unprecedented highs, hitting 66 percent by 1980. Economists are still arguing over why that happened, but the most compelling explanations are pretty banal and do little to support the sentimental blather associated with home ownership.

Does this guy even know that the nonfarm foreclosure rate nearly quadrupled between 1926 and 1933?

Through 1933 there were over 1 million completed foreclosures, about 1% of US population of the time. Compare that to the current crisis. We've had 8.5 million completed foreclosures since 2004, about 2.5% of population. 

Homeownership as a cultural value in the post-war was so high because so many people lost their homes before it.

And it still is today and will continue to be, despite what some people say with an axe to grind from the safety of their sinecures.

Noah Millman at The American Conservative discovers the inverse of "Employment Population Ratio: 25 - 54 years"

Here, excitedly writing about the inverse of this chart which has been around for a long time:

The problem with measuring employment with this chart, or unemployment with its inverse as Millman advocates, is that this cohort (25 to 54 years of age) has been shrinking due to declining birth rates. The meaning it conveys has changed over time for this and other reasons.

Rising birth rates of the Baby Boom until 1964 help explain the dramatic upward movement in the chart thereafter in the first place, along with the entry of Baby Boom women into the workforce at the same time, a second most important variable.

Additionally, at the peak of the Baby Boom in 1957, the birth rate was 25.3. Twenty years later in 1977 it was only 15.1 and has remained thereabouts and even lower ever since.

The lower birth rates have been winding their way through the employment statistics while female employment was peaking at the same time, like the inverse of a goat going through the belly of a snake but undetectable because of the female phenomenon. The peak in the employment population ratio of this cohort notably coincides with the 1957 peak of the Baby Boom hitting 20 years in the workforce in January 1999, shown above. They hit 30 years in the workforce in 2009, right in the middle of the Great Recession.

Ask how many 52 year olds lost their jobs that year (29.5 million of all ages lost their jobs in 2009), and then passed out of the range of this chart within two years, only to be replaced by . . . not enough people born after 1964.

Interestingly, employment for women in this cohort, while still not fully recovered, is off only 600,000 from the 2007 peak, but for men is off 1.8 million, both on an average basis through 2016. That's a deficit of 2.4 million, but based on declining birth rates I'd estimate most of them won't ever materialize in the future . . . because they never existed.

During the Baby Boom between 1946 and 1964, births per year averaged 4.0 million. But between 1965 and 1992, today's 25 to 52 year olds, births per year averaged just 3.6 million per year.

That's 11.6 million fewer people to take up today's slack.

This is probably as good as it gets.

Middle class brick wall: Obama ends his presidency with new housing starts down 34% overall compared with 1959-2008

Not seasonally adjusted, new housing starts averaged 1.28 million per year from 1959-2008, but under Obama they averaged just 0.84 million per year, according to the December data out today, completing his eight year record down 34% from the post-war average.

The monthly average for 2016 annualized is 1.17 million starts, which will end up being Obama's best year but only just above the post-war average cyclical low of 1.13 million per year.

So under Obama all we have done is climb back to the average cyclical low point for new housing starts.

Housing booms have been marked by an average cyclical high of 1.97 million new starts per year in the post-war, but Obama's best performance in 2016 is over 40% off that average high.

2009 marked the low point since 1959, with just 0.55 million new starts, sliding all the way down from the 2005 cyclical high of 2.07 million, a collapse of over 73% for the new housing industry.

Since September 2008 through November 2016 there have been approximately 6.5 million completed foreclosures according to Corelogic here. That means that over 16 million people have been displaced from their homes during the Obama era based on the average household size of 2.5 people.

The homeownership rate in the second quarter of 2016 fell to its lowest point in five decades at 62.9%, the same rate which prevailed in 1965.

Pew reported in December 2015 that after more than four decades as the economic majority in the United States, the middle class had become out-numbered by the combined number of the rich and the poor. Pew reports that in 1971 middle class adults were 61% of their fellows vs. only 50% in 2015. The underclass has grown by 25% while the richest tranche has grown by 125%.

At least some of the decline in the relative size of the middle class has to do with the enormous number of illegal aliens flooding the country since Bill Clinton was elected in 1992, and with a large number of Baby Boomers moving on up in an era of credentialism while eschewing larger families for themselves than they came from.

Births per 1,000 women fell to their lowest point since 1909 in the first quarter of 2016 at 59.8. The rate was 122.9 in 1957.

You can't have a decent country unless you give birth to it.

Trump to whack DC with 10% cut to discretionary spending, 20% cut to personnel

Obama's most recent discretionary budget estimates

The hive is buzzing.

A 10% cut to 2018 projected discretionary would come to about $115 billion.

There are 2.824 million federal employees, but the discretionary departments do not by any means exhaust them all. But just a 5% cut to this total would mean 141,200 would be going bye-bye.

Lots of homes would be going up for sale! 

Story here.

Steve Liesman tries to be charitable to Trump on 96 million wanting a job, but comes up short 5.9m

From the story here:

Trump said that there "are 96 million wanting a job and they can't get (one). You know that story. The real number. That's the real number."

It is unfortunately very far from the real number. There are in fact 96 million Americans age 16 and older who are not in the labor force. Of this, just 5.4 million, or 91 million fewer than the number cited by Trump, say they want a job. The rest are retired, sick, disabled, running their households or going to school. (This number is 256,000 fewer than last year and 1.7 million fewer than the all-time high for the series in 2013.)

... A more charitable explanation for Trump would expand the number to include those people who are working part time because they can't find full-time work, all the unemployed and those marginally attached to the workforce. This broader measure of slack in the economy, known as the U6, is about 14.7 million. It's the lowest since May 2008, and has come down by nearly 12 million since the worst of the job market effects of the financial crisis in 2010. And remember, many of these folks have work, though it's part time.

This isn't charitable enough because Liesman never adds the 5.4 million to the 14.7 million. He must know you can't do this because that would involve double counting. The monthly Employment Situation Summary always includes the "marginally attached" in the expanded figures, people who are not in the labor force, but they are a subset of the 5.4 million.

But this can easily be remedied, and one wonders why the BLS doesn't do this.

Here's the data, with links.

Not in the labor force, not seasonally adjusted, is 95.8 million.

Not in the labor force, want a job now, not seasonally adjusted, is 5.45 million (peak was 7.2 million in May 2013).

The unemployed represent another 7.5 million from the monthly Employment Situation Summary. Those who work part-time but would rather have full-time represent 5.6 million more in the same report. But both of those groups are in the labor force, a total of 13.1 million.

To those 13.1 million simply add the 5.4 million from not in the labor force above and you get 18.5 million unemployed.

To get that expressed as a percentage you have to add the 5.4 million in to the civilian labor force because they want a job now, here, because the unemployment rate is the unemployed as a percentage of the labor force, which by the addition is now larger, 164.4 million.

So that yields a real unemployment rate of 11.3%. The U6RATE comes up quite short of this, at 9.2%. Meanwhile most people think everything's great because the headline rate is only 4.7% (7.5 million unemployed as a percentage of 159.6 million in the labor force).

There are not 96 million unemployed as Trump laughably says, but neither are there the 12.6 million Liesman ends up with, either.

18.5 million are unemployed in December 2016, at a rate of 11.3%.

Academic Ann Douglas' analysis is a cloister-f*^k: "Even some white men feel they've been left behind"

Here, where her attachment to the ideology of "sexism" blinds her to the real consequences of Obama's intentional inattention to the fate of the white middle class of both sexes, no sex, homosex, et cetera, et cetera, et cetera:

Yes, Hillary was a flawed candidate. Her penchant for privacy—not surprising given what the Republicans and the national press have put her through since 1992—was her Achilles heel, leading to the use of a private email server that came to symbolize her alleged untrustworthiness. It also led her to be not adroit enough with the media. Hillary misread the country: the fury about the wages of neoliberalism—which, yes, she embodied—that was gripping people, young and old, on the Right and the Left. Thus, she didn’t have a galvanizing progressive message that, as the Sanders campaign demonstrated, millions were hungering for, even some white men feeling they’ve been left behind.

Even some white men? 

How about 4 million whites of both sexes, Ann, in the core of the working population aged 25 to 54 years, who've been left behind in fact and don't just "feel" they have:

WaPo doesn't mention the minimum wage is too high and attracts cheaper illegal immigrant workers, displacing teenagers, which is just fine with them

There are all kinds of jobs not worth the minimum wage of $7.25, and we should abolish it forwith. Youth employment would surge, as would respect for a dollar and the value of capitalism. Maybe that's why liberalism keeps raising the minimum wage.

US teenagers used to do those jobs, and gained the valuable work experience and good habits employers look for in adults but often do not find any longer.

In the United States children who have reached 14 years of age may work limited hours in many jobs. 

There are an estimated 24 million kids aged 14 through 19.

In July 2016 just 6 million aged 16 through 19 were employed, about 38% of that slice of teenagers.

Here:

[A]t least 8 million unauthorized immigrants are employed, most have been in this country for 15 years or longer, and typically they do jobs — tending crops, washing dishes, mowing lawns — that native-born Americans do not want. In basic economic terms, illegal immigrants meet the labor market’s demand for lower-wage employees, for which there is a shortage of available legal workers.