If You Thought 2010 was Recovery Summer, Wait until you see 2016!
Cue the Fed Taking a Dump in the Empty Punch Bowl
In May, the civilian labor force participation rate decreased by 0.2 percentage
point to 62.6 percent. The rate has declined by 0.4 percentage point over the
past 2 months, offsetting gains in the first quarter.
But the headline number is “at full employment,” if you are determined to be stupid or the President of the Boston Fed (which did not used to be redundant).
The only thing that could save Janet Yellen’s reputation now would be if she became impaired or died before the 16th.
Meanwhile, the [ETA: major U.S. money-center] banks remain insolvent.
I don’t know if this belongs here or not but saw a FT headline today: “Negative Yield Debt Breaks $10tn level for first time” What the Fing F?
“We’re through the looking glass here people” – Oliver Stone, JFK
But it shot up .7% in 3 months. I am not seeing the big deal here. I have that below 63% due to retirees outpacing new entrants.
Yet still higher than December. That dropping in the 2nd quarter makes sense and should be expected as much as the rise in the 1st quarter.
The BLS is creating a mess for itself with job creation. They have completely overhauled their equation system and it is messing the crap out of the 2nd quarter. I would ignore it and will ignore the fat payrolls of the 3rd quarter.
The “natural rate of unemployment”? There’s a concept that only a really shoddy social scientist could uphold. What exactly is natural about a level of employment, which is a commercial phenomenon? What a dick!!
Worse yet, “My concern is that given these conditions, an interest rate path at the pace embedded in the futures markets could risk an unemployment rate that falls well below the natural rate of unemployment.” How is that for simplifying an incredibly complex set of circumstances? Apparently the author sees some connection between interest rate futures and the level of employment. Note that there is a “risk” that unemployment will fall below the figmental natural rate. So more employed workers is now a bad thing, it’s unnatural. I suspect that the real fear is that once that demand for labor has risen sufficiently there will be a likely increase in wages and that an increase in wages is inflationary. Strange that the very thing seen as being so detrimental to our economy, lagging wages amongst the working class, is now seen as a detriment to the economy. When will economists begin making some sense? When will economists stop making up absurd explanations for complex human activities?
“I suspect that the real fear is that once that demand for labor has risen sufficiently there will be a likely increase in wages and that an increase in wages is inflationary.”
You don’t need to suspect it, that is in fact embedded in the whole concept of NAIRU, i.e. “natural rate of unemployment”. Natural rate = equilibrium
“The non-accelerating inflation rate of unemployment (NAIRU) is the specific level of unemployment that exists in an economy that does not cause inflation to increase. The non-accelerating rate of unemployment (NAIRU) often represents an equilibrium between the state of the economy and the labor market.”http://www.investopedia.com/terms/n/non-accelerating-rate-unemployment.asp
There is nothing “strange” in the concept that good news for workers is bad news for the economy, it is the feature/not bug that drives much of Angry Bear critiques of conventional economic theory and financial reporting.
See Bill Vickrey’s fallacy #6 with regard to NAIRU http://www.columbia.edu/dlc/wp/econ/vickrey.html
When Bill Vickrey wrote his 19 fallacies back in 1996 we had a vastly different economy then than now. Back then it was a growing GDP,employment, expanding economy of “free trade” logic where Clinton had a surplus economy. His NAFTA deal destroyed the middle class along with the repeal of the Glass-Steagal Act.Today we have almost the opposite shrinking economy of huuuge deficits of all kinds to where everything is declining but our debt. Free trade believers like HRC and BS do not realize that supporting “free trade” is a code word for one way trade. Many economic assumptions made back then may not be true today.
A curious mind wants to know. Do rising profits for the business community, the ownership class, not equally lead to inflation? How is it that only labor expense is an inflationary driver? Again, it sure sounds like bullshit bought and paid for. What is the natural rate of unemployment for economists and other propagandists (also: flake, flack, sycophant, bag man, etc.) for the owner class?
My apologies to those professional economists who do not subscribe to the “off the top of the head” conceptualizations that are intended to benefit only the few at the expense of the many.