Squeezing The Consumer From Both Sides

The Federal Reserve raised the Federal Funds rate on December 13, 2017, marking the fifth increase over the last two years. Even with interest rates remaining at historically low levels, the Fed’s actions are resulting in greater interest expense for short-term and floating rate borrowers. The effect of this was evident in last week’s Producer Price Inflation (PPI) report from the Bureau of Labor Statistics (BLS). Within the report was the following commentary:
‘About half of the November rise in the index for final demand services can be traced to prices for loan services (partial), which increased 3.1 percent.’
While there are many ways in which higher interest rates affect economic activity, the focus of this article is the effect on the consumer. With personal consumption representing about 70% of economic activity, higher interest rates can be a cost or a benefit depending on whether you are a borrower or a saver. For borrowers, as the interest expense of new and existing loans rises, some consumption is typically sacrificed as a higher percentage of budgets are allocated to meeting interest expense. On the flip side, for those with savings, higher interest rates generate more wealth and thus provide a marginal boost to consumption as they have more money to spend.

This post was published at Zero Hedge on Dec 27, 2017.

Fed Gets More Ammo for Rate Hikes

Producer Price Index rises most in six years.
The Producer Price Index for final demand – which tracks prices received for goods, services, and construction from the perspective of the seller, as opposed to a measure like CPI which tracks prices paid from the perspective of the buyer – jumped 0.44% seasonally adjusted in November from October, after having risen 0.44% in October and also 0.44% in September, the Bureau of Labor Statistics reported today. After those three sharp monthly increases in a row, the index has now risen 3.1% year-over-year (not seasonally adjusted), the fastest increase since January 2012.

In the chart above, note the impact of the collapse of energy prices in 2015 and early 2016, which was just a temporary blip on the longer-term inflation scale.

This post was published at Wolf Street on Dec 12, 2017.

November Jobs Report: 228K New Jobs, Better Than Forecast

This morning’s employment report for November showed a 228K increase in total nonfarm payrolls, which was better than forecasts. The unemployment rate remained at 4.1%. The Investing.com consensus was for 200K new jobs and the unemployment rate to remain at 4.1%. September and October nonfarm payrolls were revised for a total gain of 3K.
Here is an excerpt from the Employment Situation Summary released this morning by the Bureau of Labor Statistics:
Total nonfarm payroll employment increased by 228,000 in November, and the unemployment rate was unchanged at 4.1 percent, the US Bureau of Labor Statistics reported today. Employment continued to trend up in professional and business services, manufacturing, and health care.
Here is a snapshot of the monthly percent change in Nonfarm Employment since 2000. We’ve added a 12-month moving average to highlight the long-term trend.

This post was published at FinancialSense on 12/08/2017.

Labor Market Conundrum: Number Of Millennials Living At Home With Mom Continues To Surge

Nary a day goes by that President Trump and/or the talking heads on CNBC fail to mention the following unemployment chart as evidence that “everything is awesome” with the U. S. economy…
…which might be true unless you’re among the 95 million-ish Americans who have been looking for a job for so long that you no longer even count as a human being to the Bureau of Labor Statistics…

This post was published at Zero Hedge on Nov 22, 2017.

Taxes: here’s what’s going to stay the SAME

On October 3, 1913, US President Woodrow Wilson signed the Underwood-Simmons Act into law, creating what would become the first modern US income tax.
The legislation (at least, the income tax portion) was only 16 pages and imposed a base tax rate of just 1%.
The highest tax rate was set at 7% – and it only applied to individuals earning more than $500,000 per year, which is about $12.6 million today according to the Bureau of Labor Statistics.
And individuals earning less than $3,000 (about $75,000 today) were exempt from paying tax.
Tax rates moved up and down over the years – the government raised rates to fund World War I, then lowered them in peacetime.

This post was published at Sovereign Man on November 21, 2017.

New York Fed’s ‘Underlying Inflation’ Hits 11-Year High

Something is moving beneath the surface. Today is inflation day. After the Bureau of Labor Statistics released its Consumer Price Index for October this morning, several other inflation gauges were released, all based on rejiggering in some way the minute disaggregated details of the BLS data pile. This includes the Atlanta Fed’s ‘Sticky-Price CPI,’ which ticked up 2.2%, and the New York Fed’s ‘Underlying Inflation Gauge,’ which hit the highest level since August 2006.
Inflation – when defined as increase in consumer prices – is very much in the eye of the beholder, or rather of the spender. Every household has its own inflation rate, depending on whether they have kids in college, have high medical expenses, or rent an apartment in a city where rents are high and soaring at double-digit rates.
And now that the New York Fed’s Underlying Inflation Gauge has hit an 11-year high, in a sign of things to come, we better take a look at it.
The UIG comes, like most inflation measures, in two forms: The ‘prices-only’ UIG, which is based on 223 disaggregated price series in the CPI and is comparable to a ‘core’ inflation measure; and the ‘full data set’ UIG, which incorporates all the data of the ‘prices-only’ UIG plus 123 macroeconomic and financial variables.

This post was published at Wolf Street on Nov 15, 2017.

Employment: The Cooked Books of SCAmerica

The Bureau of Lies and Scams vomited forth:
Total nonfarm payroll employment rose by 261,000 in October, and the unemployment rate edged down to 4.1 percent, the U. S. Bureau of Labor Statistics reported today. Employment in food services and drinking places increased sharply, mostly offsetting a decline in September that largely reflected the impact of Hurricanes Irma and Harvey. In October, job gains also occurred in professional and business services, manufacturing, and health care.
Suuuure it did.
From the household survey (which is reported from an actual survey of real people) the employment:population ratio declined three ticks to 60.2%. This put us back to approximately April or, if you prefer, last July (2016, not 2017, which was 60.1%.)

This post was published at Market-Ticker on 2017-11-03.

Unemployment Is a Geography Lesson

According to the Bureau of Labor Statistics (BLS), the US economy is at full employment, or close to it. Yet it doesn’t feel that way for many Americans. Even if you have a secure job, you probably know people who don’t.
On the other hand, many small-business owners and HR people complain that they have trouble finding qualified workers – and that’s true for well-paid, low-skill jobs too.
What gives?
My theory: it’s all about geography.
Percentages Are People
In September, the US unemployment rate dropped to 4.2%. That number got overshadowed by a more disturbing 33,000-person drop in total employment, due to Hurricanes Harvey and Irma.
But 4.2% unemployment is about as low as we’ve seen in recent history. Here’s a chart showing the monthly jobless rate since 1970.

This post was published at Mauldin Economics on OCTOBER 17, 2017.

Yellen Was Right: ‘Transitory’ Factors of ‘Low’ Inflation Are Reversing, with Much More to Come

What’s Boiling Beneath the Surging Inflation?
Consumers are going to shell out more money for the same stuff, that’s for sure. Inflation as measured by the Consumer Price Index jumped 2.2% in September compared to a year ago, the Bureau of Labor Statistics reported this morning. All fingers pointed at energy costs: the index jumped 10.1% year-over-year. Within it, ‘motor fuel’ prices (gasoline and diesel) jumped 19.2%.
Food prices rose 1.2% year-over-year, kept down by prices for ‘food at home’ – the stuff you buy at the grocery store – which inched up only 0.4% year-over-year in part due to the price war currently tearing into the supermarket sector.
In the chart below of CPI, note the dreadful ‘Deflation Monster’ – one of those rare and brief occasions in the US when the purchasing power of wages actually rose just a tiny bit on a year-over-year basis. It was caused by the energy bust. And it was ‘transitory’:

This post was published at Wolf Street on Oct 13, 2017.

About Those “Hedonic Adjustments” to Inflation: Ignoring the Systemic Decline in Quality, Utility, Durability and Service

The quality, durability, utility and enjoyment-of-use of our products and services has been plummeting for years.
One of the more mysterious aspects of the official inflation rate is the hedonic quality adjustments that the Bureau of Labor Statistics makes to the components of the Consumer Price Index (CPI). The basic idea is that when innovations improve the utility (and pleasure derived from) a product, the price is adjusted to reflect this improvement. So if television screens become larger, while the price per TV remains the same, the hedonic quality adjustment adjusts the price down when calculating the CPI. In other words, since we’re getting more for our money–more quality, more features, more goodies, more pleasure–the price is adjusted down to reflect this. If a TV that cost $250 had a 19-inch screen in the old days, and now a $250 TV has a 27-inch screen, the price of TVs in the CPI is adjusted down to reflect this increase in what the consumer is getting for her $250. So while a TV still costs $250 to the consumer, in terms of measuring inflation the TV is reckoned to cost (for example) $225, as the consumer is getting a larger screen for her $250.

This post was published at Charles Hugh Smith on TUESDAY, OCTOBER 10, 2017.

Here’s How the Unemployment Rate Dropped Last Month While U.S. Lost 33,000 Jobs

This morning’s September jobs data from the Bureau of Labor Statistics (BLS) does not actually capture the extent of the economic misery in the U. S. mainland last month. The data showed a stunning loss of 33,000 jobs (the first time the U. S. has had a negative figure since 2010) while simultaneously reporting that the unemployment rate dipped to 4.2 percent from 4.4 percent in August.
But here’s the quirky thing about how the U. S. government’s counts people as being employed: according to the official web site of the U. S. Department of Labor’s Bureau of Labor Statistics, an individual can be counted as employed even if they didn’t receive a dime in salary during the week the data is collected. The BLS explains its rationale as follows: (Italic emphasis added.)
People are considered employed if they did any work at all for pay or profit during the survey reference week. This includes all part-time and temporary work, as well as regular full-time, year-round employment. Individuals also are counted as employed if they have a job at which they did not work during the survey week, whether they were paid or not, because they were:
On vacation;
Experiencing child care problems;
On maternity or paternity leave;
Taking care of some other family or personal obligation;

This post was published at Wall Street On Parade By Pam Martens and Russ Marte.

Economic Slowdown Confirmed: The U.S. Economy Lost Jobs Last Month For The First Time In 7 Years

Don’t worry – even though the employment numbers are terrible the mainstream media insists that everything is going to be wonderful for the U. S. economy in the months ahead. According to the Bureau of Labor Statistics, the U. S. economy lost 33,000 jobs during September. That was the first monthly decline in seven years, and as you will see below, overall 2017 is on pace for the slowest employment growth in at least five years. But the Bureau of Labor Statistics insists that the downturn in September was due to the chaos caused by Hurricane Harvey and Hurricane Irma, and they are assuring us that happier times are right around the corner.
Economists were projecting that we would see an increase of around 80,000 jobs last month, and we need to add at least 150,000 jobs each month just to keep up with population growth. So the -33,000 number was a huge disappointment.
But even though we lost 33,000 jobs last month, the Bureau of Labor Statistics says that the unemployment rate fell from 4.4 percent to 4.2 percent.
Yes, I know that doesn’t make any sense at all, but that is what they are telling us.
Perhaps if several volcanoes go off inside this country, terrorists detonate a dirty bomb in one of our major cities and Godzilla invades the west coast next month the unemployment rate will drop all the way to zero.
Of course I am being facetious, but I just want to point out the absurdity of what we are being told. There is no way in the world that the official unemployment rate should be at ‘a new 16-year low’.

This post was published at The Economic Collapse Blog on October 6th, 2017.

BLS Caught Fabricating Wage Data

While it’s not the first time we have observed the BLS manipulate data (the last time was in “This Is What Happens When The Bureau Of Labor Statistics Is Caught In A Lie“), never before had we actually caught the Bureau Of Labor Statistics openly fabricating data. Until now.
As reported earlier today, in one of the most closely watched statistics in today’s payrolls report, the BLS reported that the annual increase in Average Weekly Earnings was a whopping 2.9%, above the 2.5% expected, and above the 2.5% reported last month. On the surface this was a great number, as the 2.9% annual increase – whether distorted by hurricanes or not – was the highest since the financial crisis.

This post was published at Zero Hedge on Oct 6, 2017.

The Best Jobs Without A College Degree 2017 (In One Simple Chart)

The Great Recession destroyed the job market for workers without college degrees, and the situation hasn’t gotten any better.
This begs the question – can you still enjoy a high standard of living without a college degree? And what are the highest paying jobs for people without a traditional higher education?
This new chart, from HowMuch.net, sheds some light on these pressing questions.
The Bureau of Labor Statistics tracks which professions do not require a college education, how many people currently hold those jobs, and their median salaries. We combined this information into a scatter plot graph. The more dots you see, the more people work in that profession. And the higher the dots on the vertical axis, the more money they make.

This post was published at Zero Hedge on Sep 20, 2017.

August CPI: Shelter Inflation Fastest Since 2015 And The Home Price Bubble

This is a syndicated repost courtesy of Snake Hole Lounge. To view original, click here. Reposted with permission.
While Venezuela has an inflation rate of over 2,000%, the US has an inflation rate of 0.4% for August 2017 (and 1.9% YoY).
According to the Bureau of Labor Statistics (BLS), Energy led the US inflation in August with gasoline at 6.1% MoM growth (and 10.4% YoY growth).
But among the non-energy items, shelter leads the way with an increase of 0.5% MoM (and 3.3% YoY). The fastest growth rate in shelter since 2005 and the house price bubble.

This post was published at Wall Street Examiner on September 14, 2017.

August Employment: Crap

Oh boy the screamers are all over themselves saying this is a “good report.”
Of course they didn’t read anything except the headline establishment survey.
I did.
Total nonfarm payroll employment increased by 156,000 in August, and the unemployment rate was little changed at 4.4 percent, the U. S. Bureau of Labor Statistics reported today. Job gains occurred in manufacturing, construction, professional and technical services, health care, and mining.
Suuuuureeeee we did. With so-called “adjustment”, that is.

This post was published at Market-Ticker on 2017-09-01.

These Are The States Where $1 Million Lasts The Longest

If you had a million dollars, would you retire?
For most Americans, the answer to that question would be no. Which is especially problematic for millennials, who, having been permanently scarred by the financial crisis, are investing at lower rates than members of Generation X or the Baby Boomers, making it more difficult for them to build wealth. Furthermore, the generation that now comprises the largest share of working Americans is having trouble saving money, thanks in no small part to their $1.3 trillion in student debt.
Their present financial predicaments suggest that millennials probably won’t retire in the large numbers that members of their parents’ generation will, primarily out of necessity. Even for some baby boomers, perennially low interest rates since the crisis – and possibly from here on out – have made things more difficult for conservative savers who may now need to redo their longstanding retirement plans to make do with less.
For workers in this situation, choosing a location where they can stretch their money the furthest in retirement is paramount. Enter a new study by GoBankingRates that measures how long $1 million will last in different locations around the country.
‘A new report from GOBankingRates measures how long a million dollars would last for retirees 65 and older, state by state. It did that by multiplying the Bureau of Labor Statistics’ mean annual expenditures for that age group by a cost-of-living measure for each state, provided by the Missouri Economic Research and Information Center. The tally separated out annual spending on health care, housing, groceries, transportation, and utilities.’

This post was published at Zero Hedge on Aug 25, 2017.

Builders Complain Of Record Labor Shortages: Up To 75% Of Employers Can’t Find Workers

Late last month we reported the remarkable anecdote of an Ohio factory owner who has numerous blue-collar jobs available at her company, but has one major problem: she is struggling to fill positions because so many candidates fail drug tests. Regina Mitchell, co-owner of Warren Fabricating & Machining in Hubbard, Ohio, told The New York Times this week that four out of 10 applicants otherwise qualified to be welders, machinists and crane operators will fail a routine drug test. While not quite as bad as the adverse hit rate hinted at by the Beige Book, this is a stunning number, and one which indicates of major structural changes to the US labor force where addiction and drugs are keeping millions out of gainful (or any, for that matter) employment.
Mitchell said that her requirements for prospective workers were simple: ‘I need employees who are engaged in their work while here, of sound mind and doing the best possible job that they can, keeping their fellow co-workers safe at all times.” And yet, almost nobody could satisfy these very simple requirements.
Whether it was due to pervasive drug abuse, or for some other reason, but fast forward two weeks when in response to a special question in the July NAHB/Wells Fargo Housing Market Index (HMI) survey, US homebuilders said that labor and subcontractor shortages have become even more widespread in July of 2017 than they were in June of 2016.
This is a concern as the inventory of for-sale homes recently struck a 20-year low. And while economists and the public cry for more inventory, many builders are pressed to meet demand. A labor and subcontractor shortage in the building industry has worsened over the past year, according to the National Association of Home Builders/Wells Fargo Housing Market Index survey of single-family builders. The July 2017 HMI survey asked builders about shortages in 15 specific occupations that were either recommended by Home Builders Institute (NAHB’s workforce development arm) or that NAHB found to be particularly significant when tabulating Bureau of Labor Statistics data for a recent article on Young Adults & the Construction Trades. Shortages (either serious or some) were at least fairly widespread for each of the 15 occupations, ranging from a low of 43 percent for building maintenance managers to a high of around 75 percent for the three categories of carpenters (rough, finished and framing).

This post was published at Zero Hedge on Aug 20, 2017.

GLD Shrinks Like It’s Sept 2011 Before US Jobs Data Send Gold Prices -0.6% for Week

Gold prices sank 0.6% against the Dollar on Friday as the US reported stronger-than-expected jobs data for July.
New York’s stock markets opened the day lower as the Dollar rallied from its latest 31-month lows to the Euro and bond prices fell, pushing longer-term interest rates higher.
Listen to Avi Gilburt on Stock Market Peak, Future of the US Dollar and Gold
Non-farm payrolls expanded by 209,000 last month, the Bureau of Labor Statistics said, beating analyst forecasts of 183,000 with June’s figure also revised higher.
Having recovered last week’s finish of $1269 on Friday morning, Dollar-priced gold dropped $7 immediately after today’s new US jobs data.
Gold prices had previously risen 3.9% from 1 month before, the fastest rolling 1-month rate of gain since start-June’s peak at $1295 per ounce.

This post was published at FinancialSense on 08/04/2017.

Employment: Hmmm…

The screambox says….
Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 4.3 percent, the U. S. Bureau of Labor Statistics reported today. Employment increased in food services and drinking places, professional and business services, and health care.
Oh look – we get people drunk, feed ’em unhealthy food and then suck up more of GDP in overpriced, monopolist “health care”.
In fact that’s been good for 327,000 “jobs” over the last year. You need look no further for what’s wrong with health care in America; nearly all of those jobs have never and never will provide one second of actual care to an actual person — they’re almost all administrators.
Remember, the usual bleat is that we don’t have enough doctors and nurses. Well if that is true then we have added 327,000 worthless “employees” over the last year that simply serve to vacuum all the money out of your wallet. We cannot address the cost of “health insurance” without addressing this issue, and doing so trashes the so-called “robust employment situation.”

This post was published at Market-Ticker on 2017-08-04.