201807.02
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There’s No Income So There Can’t Really Be Shortages

The plural of anecdote is not data. At any given time in any given economy you can find counterexamples. During the Great Depression, for example, millions of Americans were doing very well for themselves. It wasn’t difficult to locate and talk to those who were prospering during what was a legitimate catastrophe. It’s never all…

201806.20
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What Should Be Happening In Housing

The word “should” appears in way too much economic commentary. That’s true of the whole broad range of subjects that are related to the economy, but where “should” really comes up is in relation to the labor market. It’s really no mystery why given that the unemployment rate is at an extreme the rest of…

201806.18 6

The Simple Economics of What Really Matters

The very idea of a labor shortage is supposed to be strictly an economic concept. No longer. It is now wielded almost exclusively in political terms. Anecdotes about how companies are unable to find workers pepper most commentary on the labor market if only because there is no (none) direct statistical evidence that a nationwide…

201806.07
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Recent Concerning Consumer Credit Trends Carry On Into April

US consumers continue to recover from their debt splurge at the end of last year. Combined with still weaker income growth, the Federal Reserve estimates that aggregate revolving credit balances grew only marginally for the fourth straight month in April 2018. To put it in perspective, the total for revolving credit (seasonally adjusted) is up…

201806.06
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Some Things Will Not Change, And That’s Why Nothing Changes

Auto sales improved only slightly in May 2018 from more dismal results over the prior few months. Unit and retail sales were projected to be +3.5% year-over-year last month. Almost immediately, these numbers (really just the plus sign) were celebrated as clear evidence that consumers were spending in true boom fashion. Encouraged by a strong…

201806.06 5

Proving The ‘L’ In Labor

Back in 2011 and 2012, apple growers in the state of Washington got the government there to declare an emergency. They were expecting a record or near-record crop of fruit but they just couldn’t find enough workers to harvest it all. Faced with a potentially devastating labor shortage, Washington’s governor turned to convicts. I wrote…

201805.30
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Profits, Bubbles, And Labor That’s Missing But Not Unexplained

You’ve heard all the ridiculous explanations for the labor market’s big deficiency. When not attempting to characterize payrolls as strong, Economists have tried to explain the participation problem through opioids and Baby Boomers. According to this absurd theory, businesses just can’t find enough willing or able workers to grow in a more normal fashion. That’s…

201805.24
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Laboring Unnecessarily Over Housing Imbalances

There are three major housing related data series published each and every month. The first is on construction of new units, the intersection of real estate and the macro economy compiled by the Census Bureau. The second is the number of newly built single-family homes that have been sold, relating obviously to the level of…

201805.08
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Suggestions of Risk In Consumer Credit

Despite last month’s substantial revisions that wiped out most of “residual seasonality” from the seasonally adjusted revolving consumer credit series, it still remains for this year. The Federal Reserve staff eliminated the large swings in credit card use pivoting around the Christmas holiday. Consumers buy up a lot of stuff in advance of it, and…

201804.30
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Give ‘Em Three Now

Credit where credit is due. In March 2018 for the third time in the last 71 months the PCE Deflator registered 2% or better. The year-over-year change just barely squeaked above that line, working out to about to 2.01%. I’m sure the FOMC will take it regardless. Baby steps. Core rates were slightly less, however….