The good US economic news Thread

[Bacon King]

Q1 GDP comes in at 2.2% annualized.

And it would have been higher without government cuts and the phaseout of some tax advantages for business investments.

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Remember from Econ 101, GDP = consumption + investment + government spending + net exports. What we see here is consumption increasing, government spending decreasing, and investments becoming temporarily tepid.

[Bacon King]

I don't have a link to hand because I'm lazy, but apparently initial claims plunged by the most in nearly a year, which is nice. CARLHAYDEN was spotted walking into the ocean.

WASHINGTON (MarketWatch) — The number of people who applied for jobless benefits fell last week for the first time in a month to just slightly above a four-year low, according to the latest government data.

[Bacon King]

Unemployment Rate Dips 0.1%, But Workforce Participation Rate Falls 0.2%
 
By Gregory Gwyn-Williams, Jr.
May 4, 2012

The April jobs report showed employers added fewer workers than expected with nonfarm payrolls rising by only 115,000.

http://cnsnews.com/blog/gregory-gwyn-williams-jr/unemployment-rate-dips-01-workforce-participation-rate-falls-02

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All the need to do is keep reducing the alleged labor force!

To simplify this for Obama supporters:

I agree that the pace of growth could be greatly improved, but your analysis here doesn't really tell the whole picture and makes things appear unnecessarily negative by excluding some key details.

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180,000 new people 16 and over in the United States. Presumably, 180k = (# of people turning 16 - # of adult deaths) + net migration.

Using the estimated CIA World Factbook net nigration rate and population for the US in 2012 to figure out expected migration for the year, and dividing it by 12, that give us an estimated net migration of roughly 95k for the month. Using these CDC statistical tables for death by age group, I estimate that 195k deaths 16+ occurred in April. So, with the 180k increase, that means 280k kids reached age 16 last month. (As an aside, I did estimate a 325k total for this number using census records for 1996 births and the infant/juvenile death rate, but that number's the most likely to be inaccurate of my three estimates because there's a much bigger month to month variation in births than in deaths or migration).

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First off, given the estimated 10,000 baby boomers that retire every day, around 310k people left the labor force last month via retirements alone. In addition, the BLS's April report shows a participation rate of 72% in the 16-64 group and and 23% for 65+; estimating from the CDC chart linked above that roughly 52k deaths occurred in the 16-64 age group and 146k deaths 65+. This means that about 71k people exited the labor force last month through death (37.5k in the former age group, 33.5k in the latter age group). Therefore, about 381k of the 411k drop can be attributed to deaths and retirements alone.

Furthermore, regarding the gap here with the increase you note in your first point, note that most of the population growth can be attributed to teenagers who turned 16 in last month. Even discounting the fact that teenage participation in the labor force in incredibly low, very few 16 year olds will be looking for a job in April- they'll wait until they're out of school for the summer to start looking for a job and entering the labor force (The BLS notes that this is a very consistent trend among youth). With these newly work-age (and almost entirely non-job seeking) teenagers actually outnumbering the overall work-age population increase by a hundred thousand, and the above explanation for the decline in the total civilian labor force, the disparity you note between your first two points here can't really be construed to mean anything.

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Noting my findings above, the ~310k new retirements and ~280k new 16 year olds who almost universally aren't looking for work pretty much entirely explain this number.


You seem to be suggesting that the Bureau of Labor Statistics is somehow cooking the books to show a reduction in unemployment by reclassifying unemployed job-seekers as discouraged and/or marginally attached workers. If this was true, we'd see increases in U-4 and U-5 that mirror decreases in U-3, the official unemployment rate. However, that demonstrably isn't so. According to the seasonally adjusted numbers, last month's 0.1% decline in the unemployment rate was accompanied by a 0.1% decline in U-5 to 9.5%, while U-4 remained steady at 8.7%. Furthermore, the decline in unemployment since December from 8.5% to 8.1% has been accompanied by a reduction in U-4, from 9.1% to 8.7%, as well as U-5, from 10.0% to 9.5% (for the record, U-6, which also includes underemployment, also declined from 15.2% to 14.5% over those four months). Therefore, there is nobody "reducing the alleged labor force"; unemployment numbers are genuinely improving, even among those not counted in the official unemployment rate. Reductions in labor force participation are mostly due to the fact that the baby boomers have started retiring in massive numbers, and because of this you should expect a slow-but-steady decline in participation over the next decade or two, regardless of how the economy is doing.

Also, since you seem to appreciate prefer using the numbers that aren't seasonally adjusted, I think here at the end I should include for you the BLS's unadjusted unemployment rate changes between March and April

U-3 (Official Unemployment Rate): 8.4% to 7.7%
U-4: 8.9% to 8.3%
U-5: 9.7% to 9.1%
U-6: 14.8% to 14.1%

[Bacon King]

BK,

You are hysterically funny.

I spent literally two hours preparing the post you quoted. I'm honestly a bit perturbed that you ignored pretty much everything I said, cherry-picked a few details to attack and just link a couple of articles to fight for you. Not to mention the fact that you seem insistent on demeaning me, as well.

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Please refrain from hyperbole, as I have done you the courtesy. I'd like to keep this discussion civil and related to the facts as much as possible. If that's asking too much, and I feel that it may, just let me know.

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I said at the beginning of my post that current trends in economic growth are not nearly what they could be. I'm not contesting that. What I am disputing is your misrepresentation of statistics to imply that the Bureau of Labor Statistics is artificially deflating the unemployment numbers by unjustly kicking people out of the labor market. I have demonstrably proven this is not the case, with no response from you, most notably with my comparison of other unemployment measures to the official number.

By the way, I do hope that when the labor force participation shoots up in a month or two (from high school and college kids seeking summer jobs) that this emphasis you place on the labor force participation rate leads you to conclude that the economy is in full recovery

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This article actually, for the most part, proves my point. First, notice the significant spikes in both charts, every single summer? That's the youth, entering the labor force for the summer and leaving when school starts back in the fall. Exactly as I said previously to disprove your assertion that the simultaneous population increase and labor force decrease was somehow relevant.

Second, notice that a fairly consistent pattern of year-to-year decline in labor force participation can be observed starting in 2009. Do you know when the first baby-boomers started reaching retirement age? Exactly.

Third, this is mostly an aside to our current discourse, but I must comment on the article's half-truth claim that "a fifth of all personal income is now transfer payments" with the implication that it has anything to do with Obama. First, it's worth pointing out that by far the two most expensive Federal programs of transfer payments to individuals are Social Security and Medicare- both these entitlements go to.... yes, retired people. And besides, most of the fact that transfer payments have increased as a proportion of personal income over the past few decades is due to the ever-increasing cost of medical coverage in the United States, which is a problem that long predates Obama:


(red line is transfers minus Medicare and Medicaid)

The recent spike is mostly due to increased unemployment benefits, of course- that has a disproportionate impact on this chart because when someone loses their job, their income goes from 0% to 100% transfer payments.

But, I digress.

It occurred to me that you really might believe the nonsense you are spouting.

So, I'll try to explain it to you quite simply.

Again, I'll gladly debate you but please stop the irrelevant remarks.

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This has piqued my curiousity. I'm currently searching for the full article through my university's Journal/Article database but I can't seem to find it. It wasn't in Conference Board's quarterly review for spring or summer 2011. Can you shed any light on how I could find the full article?

It doesn't actually specifically mention anything about people delaying retirement above age 65 (which is what my entire assumption of "the baby boomers are turning 65 and retiring en masse just like John Boehner and the Social Security Administration said"). Regardless, just because a greater proportion of people have been delaying retirement (above age 65 or not, would like to find out though) doesn't mean that my above assertions were necessarily wrong, because a much greater bulk of people are still now entering the age group for retirement.

Besides, regardless of retirements, that doesn't change the fact that I demonstrated fairly strongly that there's no sudden increase in detached workers, which you seem to be suggesting is the case in spite of the evidence.

Also, you never commented on my unadjusted unemployment numbers

[Bacon King]

Bk,

First, making long-winded assertions devoid of either facts or logic does NOT constitute debate.

The two of us vehemently disagree on this subject, certainly. I'm just asking that if you find problems with my sources or reasoning, to attack them instead of me, as I have shown you the same courtesy (although the restraint can be admittedly difficult).

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I never claimed that a reduction in the labor force was only from retirements; that would be ridiculous. I've only pointed out that most of the decrease in labor force participation- especially currently- can be attributed to the indisputable fact that America's population is getting older and tons of Americans are beginning to retire: the baby-boomers are reaching 65.

Some people certainly do leave the labor force for other reasons. Like I noted earlier, many young people exit the work force during the non-summer months. Also, yes, some people get discouraged and stop looking for jobs. But the thing is, the BLS already measures those sorts of people, and the number of discouraged workers haven't been on the increase, but have been decreasing proportionally with the unemployment rate. See chart:



From top to bottom, the lines are U-6, U-5, U-4, and U-3. Since the number of discouraged workers is on the decline, your explanations really don't hold water. How do you explain that?

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Again, this makes no reference to anyone waiting to retire until they're older than 65. Also, a quote from the article:

"More than two-thirds (68 percent) of older workers cite health coverage as a reason to delay retirement... Covering health-care costs is even more important to people in poor health: Of that group, an overwhelming majority (77 percent) say they'll keep working until they're eligible for Medicare benefits."

68% of older workers are delaying retirement because of health coverage, and the United States runs a nationwide program to guarantee health insurance access for everyone on the day they turn 65! This isn't about people who were going to retire at 65 waiting longer, this is about people who were going to retire at a younger age waiting until they turn 65. If anything, that causes my assumptions to be underestimates.

Also, for the record, note that per the SSA's FY 2013 Performance Plan, the number of initial retirement claims increased ~12% between 2008 and 2009, and also increased considerably 20010-2011, with further increases estimated in the future (see p29, chart 2.1b).

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Of course it was greatly exacerbated by discouraged workers who gave up looking for a job from the recession (as the increase in alternative unemployment measures shows) but considering that the measurements also indicate that the level of discouraged workers are at the lowest level since 2009. However, the other trend that started in 2009 (i.e., baby-boomers hitting 65), is only increasing.

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Nobody "told me", it was an obvious conclusion to reach when I saw labor force participation decreased while unemployment and discouraged worker rates both declined. That led me to research the retirement figures and estimates which verified my hypothesis.

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I'm not asking you to agree with me. I'm pointing out that you're making an argument based on inaccurate assumptions, and defending my stance by demonstrating that it remains valid in spite of the evidence you've cited. All I ask is, if you'd like to continue this discussion further, to not act so rudely.

Oh, and here's some more info, courtesy of BLS:

Now, let’s take a look at what the BLS has asserted:

First, the Civilian noninstitutional labor force was projected to be approximately 82,626,000 in 2011, and approximately 83,189,000 in 2012.

Now, those ages 65 and over were estimated to be approximately 7,115,000 in 2011, and 7,667,000 in 2012 (a difference of approximately 552,000).  With a little basic math, that means that the civilian noninstitutional labor force, without any increase in the number of those 65 and over, would still increase!

But wait, there’s more.

In 2011, the civilian noninstitutional population was estimated to be approximately 240,317,000, while in 2012 it is projected to be approximately 242,755,000, an increase of approximately 2,438,000.  However the civilian noninstitutional population age 65 and over is projected to increase in 2012 from 2011 by approximately, 1,442,000. 

So, if its not retirement (as you previously asserted), and the Obama administration is absolutely blameless, then where did those people go?

Don't have much time to respond to this, as I need to get on the road pretty soon, but a few points

-what statistics are you citing here? Please provide sources. I do hope you're not comparing adjusted numbers to unadjusted numbers!
-I also hope you're not doing something silly like comparing year-end average figures to single-month figures
-Where'd you find direct figures on 65+ labor force and non-labor force growth? was looking everywhere for them.

but will look at these numbers in more detail as soon as I get home