Jobless claims break on through – 1M+ jobs report for April looks likely

As I have said for the past few weeks, new jobless claims are likely to the most important weekly economic data for the next 3 to 6 months. With the number of those vaccinated continuing to increase, I have been expecting a big increase in renewed consumer and social activities, with a concomitant gain in monthly employment gains – as we saw in the March jobs report.Four weeks ago I set a few objective targets: new claims to be under 500,000 by Memorial Day, and below 400,000 by Labor Day. 
This week was a major advance towards those targets.

On a unadjusted basis, new jobless claims declined by 152,833 to 612,919. Seasonally adjusted claims declined by 193,000 to 576,000 (with last week’s number being adjusted upward by 25,000). The 4 week average of claims also declined by 42,250 to 683,000. 

Here is the close up since last August (recall that these numbers were in the range of 5 to 7 million at their worst in April of last year): 

 – by New Deal democrat

Weekly Indicators for April 12 – 16 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.

The big call I made last year is that conditions were setting up for a Boom this year, once the pandemic started to be overcome. Well, almost half of all Americans have received at least one dose of vaccine, and all the signs are that the Boom is well and truly upon us.

So the nowcast and short term forecast is all about chronicling the Boom, while the long term forecast is about what happens as the Boom begins to fade.

As usual, clicking over and reading will bring you up to the virtual moment about the economy, while rewarding me just a little bit for my efforts.

Washington Equitable: Tax evasion at the top of the U.S. income distribution and How To Fight it.

There is another version of the issue starting off with Senior fellow (Urban-Brookings Tax Policy Center of the Urban Institute), Steven M. Rosenthal taking on the issue;

“If Congress Wants the IRS To Collect More Tax from The Rich, It Needs to Pass Better Laws.”

Or you can go to NBER version of the Washington Equitible Working Paper; Tax Evasion at the Top of the Income Distribution: Theory and Evidence, March 2021.

Your Choice.

The question?

“How much tax do high-income Americans evade? And what kinds of evasion tactics do they use?”

Random audits miss two of the more common methods used to minimize taxes. The audits underestimate tax evasion capturing little of the investor tax evasion by those using offshore accounts and pass-through businesses. Both methods present opportunities unlikely to be captured by the audits of income taxes and are significant to the top income brackets or the 1% of household taxpayers making greater that $500,000 annually (TPC).

In a July 2009 NYT article, it was determined Swiss bank UBS helped US citizens hide $20 billion. This is an old article and certainly later administrations did little to stifle tax avoidance.

From Treehuggers; “Spain To Try Nationwide 4-Day Workweek”

A shorter workweek has been suggested s a means of improving work-life balance and reducing greenhouse gas emissions. Freelance Writer, Olivia Rosane. The topics of a shorter work week and climate control was brought up by Sandwichman at Econospeak with the former being touted numerous times by Sandwichman.

Íñigo Errejón, a representative from the new leftwing party Más País, tweeted that the government had agreed to launch a pilot project to trial a four-day workweek.

“We have agreed with the Government to promote a pilot project to reduce working hours. European funds must also serve to reorient the economy towards improving health, caring for the environment and increasing productivity, ”

CPI Rose 0.6% in March on Higher Prices for Energy and Transportation Services, R.J.S, MarketWatch 666

The consumer price index rose 0.6% in March, the largest monthly increase since August 2012, as higher prices for fuel, utilities, transportation services, financial services, and used vehicles were only slightly offset by lower prices for clothing and for communication commodities…the Consumer Price Index Summary from the Bureau of Labor Statistics indicated that seasonally adjusted prices averaged 0.6% higher in March, after rising by 0.4% in February, 0.3% in January, 0.2% in December, 0.2% in November, 0.1% in October, 0.2% in September, 0.4% in August, by 0.5% in July and by 0.5% in June, but after falling by 0.1% last May, by 0.7% last April and by 0.3% in March of last year….the unadjusted CPI-U index, which was set with prices of the 1982 to 1984 period equal to 100, rose from 263.014 in February to 264.877 in March, which left it statistically 2.6198% higher than the 258.678 reading of March of last year, which is reported as a 2.6% year over year increase, up from the 1.7% year over year increase reported a month ago….with higher prices for energy a major factor in the overall index increase, seasonally adjusted core prices, which exclude food and energy, were only up by 0.3% for the month, as the unadjusted core price index rose from 270.696 to 271.713, which left the core index 1.6464% ahead of its year ago reading of 267.268, which is reported as a 1.6% year over year increase, up from the 1.3% year over year core price increase that was reported for February, but still little changed from the 1.6% the year over year core price increase that was reported for December of 2020 . . .

Wealth distribution in the US continues to be a first order economic issue

Tomorrow (Thursday) is one of those days when just about Every Economic Statistic in the World will be released. In the meantime, no new data today.

So, while we wait, let me send you over to this article by Wolf Richter analyzing the distribution of wealth and assets in the US updated by the Fed through the end of last year.

Unsurprisingly, the rich have gotten richer, and their preferred asset classes are the most protected by the tax code.

Just one of many first-order economic problems in the US. Wealth, once entrenched – most particularly when it is unearned and inherited – will never be voluntarily disgorged. The beneficiaries would rather give up democracy, give up the Rule of Law, rather than see their privileged status compromised.

It was a warm October evening, back in 1957, when we heard the news and began looking anew toward the night skies. The Union of Soviet Socialist Republics (USSR) had just launched a satellite that they called Sputnik into orbit; an event that changed the world forever. A whole new concept; actually, a couple, maybe more, new ones. Thenceforth everyone knew what a satellite was; well, most everyone. Took us awhile longer though to wrap our heads around the orbit bit.

That launch into orbit started a space race that pretty much defined the next 12 years. Actually, it was more of a technology race, a how to do and how to do it first race. How to get a rocket with a man onboard into orbit and on into outer space; how to do all sorts of things in a weightless, atmosphereless, environment? One small step for man, lots of giant leaps for technology. Care for some silicone grease on that silicon chip? How about a wafer with your eggs? All in all, not all that much was learned about space itself that we didn’t already know.

Monthly consumer inflation rate increases by most in 10 years; real wages decline, but real aggregate wages increase

 – by New Deal democratSeasonally adjusted consumer prices rose 0.6% in March. This was the biggest single month gain since June 2009, coming out of the Great Recession:

Leaving aside the pandemic, since the 1980s recessions have only happened when CPI less energy costs (red) had risen to close to or over 3%/year, usually driven by increases in the price of oil by more than 40% YoY. Even with this month’s spike, YoY inflation ex-energy is only up 1.9%:

 by New Deal democrat

Weekly Indicators for April 5 – 9 at Seeking Alpha

My Weekly Indicators post is up at Seeking Alpha.

The big news continues to be a bifurcation between the currently unfolding Boom, fueled by the fire hose of monetary and fiscal stimulus, and the fallout in the long leading forecast based on the increase in interest rates as a result.

As usual, clicking over and reading will bring you up to the virtual moment on the economic data, and reward me with a penny or two for my efforts.

“…other enjoyments, of a purer, more lasting, and more exquisite nature.”

A defense of Weber’s Protestant Ethic thesis from the 1940s by Ephraim Fischoff makes the plausible argument that critics — and many supporters — of Weber’s essay attached unwarranted causality to it, as if “Calvinism caused capitalism.” Instead, Fischoff explained:

Weber’s thesis must be construed not according to the usual interpretation, as an effort to trace the causative influence of the Protestant ethic upon the emergence of capitalism, but as an exposition of the rich congruency of such diverse aspects of a culture as religion and economics.

Fair enough. Then along comes Colin Campbell 43 some odd years later talking about the Other Protestant Ethic. It was Campbell’s intention in The Romantic Ethic and the Spirit of Consumerism to update Weber and to fill in what he saw as a significant gap in Weber’s thesis — his failure to account for new consumer attitudes, which Campbell traced back to Sentimentalism and Romanticism, both adaptations of Protestantism.