US unemployment drops to 7.5%

[Trollgaard]

http://autos.yahoo.com/blogs/motoramic/ford-revives-2-000-u-factory-jobs-cutting-170953349.html

Fuck yeah, go Ford! Kansas City thanks you!

[United Kingdom of Muffins]

But Mike, what if we, by we I mean Americans, just kept spending almost all our paychecks to stimulate the economy? Won't that save us?!

It depends. I mean if I thought everybody was spending just their paychecks, then yeah, that would be good. But I fear a lot of people (myself included) spend by using credit cards, taking out loans, etc. which is an increasingly growing bubble that may pop very soon.

YOU USE CREDIT CARDS? To be fair to most of the population that uses them heavily. Some people just do not have enough money to make purchases needed (food, bills), it's really hard to blame them for what their doing because they don't have a lot of other opitions for them to make.

[Mike the Progressive]

It depends. I mean if I thought everybody was spending just their paychecks, then yeah, that would be good. But I fear a lot of people (myself included) spend by using credit cards, taking out loans, etc. which is an increasingly growing bubble that may pop very soon.

YOU USE CREDIT CARDS? To be fair to most of the population that uses them heavily. Some people just do not have enough money to make purchases needed (food, bills), it's really hard to blame them for what their doing because they don't have a lot of other opitions for them to make.

Well I have a credit card yeah, but when I use it it's only to get points. No, my contribution to the growing private debt is some money I borrowed for college a year ago.

The problem is this: During a time of economic recession, the last thing you want people to do is have people save. In fact, you want them to spend. That's how an economy recovers, steadily consumer confidence rises as does private consumption and voila, at a certain point you've exited out of a recession. The problem with how it is now is that people are spending, yes, but they are going heavily in debt doing so. Meaning at some point, they are going to have to pay their bills. And when enough of them default, it will be a mess. Because rather than spend their paychecks, they'll be paying off their debts with interest.

[United Kingdom of Muffins]

YOU USE CREDIT CARDS? To be fair to most of the population that uses them heavily. Some people just do not have enough money to make purchases needed (food, bills), it's really hard to blame them for what their doing because they don't have a lot of other opitions for them to make.

Well I have a credit card yeah, but when I use it it's only to get points. No, my contribution to the growing private debt is some money I borrowed for college a year ago.

The problem is this: During a time of economic recession, the last thing you want people to do is have people save. In fact, you want them to spend. That's how an economy recovers, steadily consumer confidence rises as does private consumption and voila, at a certain point you've exited out of a recession. The problem with how it is now is that people are spending, yes, but they are going heavily in debt doing so. Meaning at some point, they are going to have to pay their bills. And when enough of them default, it will be a mess. Because rather than spend their paychecks, they'll be paying off their debts with interest.

Maybe we should just give up and start trading with berries again.

[Ashmoria]

did they refuse to hire you or did they tell you you would have to move to another area where they have jobs?

Just a couple emails saying nothing was available at this time and they'll keep my application in their system for the next few months.

hmmm maybe you should contact walmart headquarters. they seemed quite proud of their promise to hire all veterans.

unemployment sucks.

[Phocidaea]

The problem is this: During a time of economic recession, the last thing you want people to do is have people save. In fact, you want them to spend. That's how an economy recovers, steadily consumer confidence rises as does private consumption and voila, at a certain point you've exited out of a recession.

Yes. And those with the relevant power intentionally want to keep down interest rates (by increasing how much money there is, thus increasing inflation, thus decreasing real interest) so that people are less inclined to save (because they earn less) and more to spend and invest, which is, of course, the "spending" being discussed.

The flip side, though, is that when the economy is expanding they can afford to lower interest rates (by decreasing the amount of money, slowing down inflation, and increasing real interest), so that people - theoretically, it doesn't work perfectly - save more and spend less.

In theory the two balance each other out, but, of course, recessions tend to be worse than expansions (but often shorter), and people will spend a lot of money no matter how good or bad the economy is. Interest rates can influence them, but the effect can be difficult to discern sometimes. In a way I would say all economic theories are normative statements, because they involve what people would do logically (thus judging - incorrectly - that people are logical) and not what people actually do.

[Vetalia]

I was not referring to any of the unemployment rates. I was looking at the total number of workers, the employment-poulation ratio, and the number of people who have dropped out of the labor force but still want jobs.

Better yet, I could have mentioned the labor force participation rate, which has fallen.

(Image)
Source: U.S. Bureau of Labor Statistics

If you want data on the six unemployment rates, I suggest looking here.

http://portalseven.com/employment/unemployment_rate_u6.jsp

I'll do us all a favor and re-run that chart so it's a little less selective.



The secular decline in labor force participation started in the late 1990's, not coincidentally the same time that pe ople in the pre-and early Boomer generation started to retire. It continued to drop during the 2000's and really started to plummet in 2010, not coincidentally the same year the first cohort of Boomers started turning 65. We are losing 10,000 of them per day due to retirement, so a major drop in the participation rate is completely expected; we'll likely return to the same participation rate as seen in 1966 (which not coincidentally was the same year the biggest population of the Boomers started turning 18 and entering the workforce, producing the huge gains over the following decades).

This is mean reversion at its most clear...compensating for the addition of women to the workforce it will likely stabilize in the 60-62 percent range.

[Caninope]

I don't know how relevant drops LFPR can be considered, given the aging nature of the population and the ever popular option of college and grad school.

Does the LFPR include the retired?

I thought the LFPR excluded the retired while the EPR included the retired. See my post above.

LFPR includes every non-institutional civilian over the age of 16 in the US. In some countries, there is an upper age limit, but there is not in the US. Although I'm not immediately familiar with EPR, I'm guessing that it's simply LFPR but with the unemployment rate factored in.

[Caninope]

Less than 60 percent of the population that is older than 16 is working.

About 63 percent of the population that is 16 to 65 is working.

If everybody younger than 16 were included, the percentage would be much lower.

That's a worrying number, seems I better start looking into Canadian immigration requirements.

No, that's not really a discouraging number. According to the BLS, the US has a slight above average LFPR in the West, bested only by Sweden, Australia, Canada, and New Zealand.

[Caninope]

The baby boomer generation is starting to retire: that has nothing to do with Obama, nor with an accurate depiction of the unemployment rate. All dem babies born after WWII have to retire sometime, and for most of them, that time is around now.

I believe the labor force participation rate excludes the retired while the employment-population ratio includes them. Correct me if I'm wrong.

You're wrong, at least in the US.

[Ainin]

Congratulations US.

Still not as low as us.

[The Godly Nations]

I think that we, as Americans, can do better than that. American workers, who have become indolent with all the legal protection they recieve from the Government, should be forced to take even lower wages, deregulate the economy, and thus encourage businesses to create jobs here in America, rather than shipping them off to the Chinese. We should also destroy the labour unions, which is an impediment to National recovery, and encourage women to stay at home as wives, mother, or nurses to open jobs for men.

[Farnhamia]

I think that we, as Americans, can do better than that. American workers, who have become indolent with all the legal protection they recieve from the Government, should be forced to take even lower wages, deregulate the economy, and thus encourage businesses to create jobs here in America, rather than shipping them off to the Chinese. We should also destroy the labour unions, which is an impediment to National recovery, and encourage women to stay at home as wives, mother, or nurses to open jobs for men.

No.

[The Godly Nations]

I think that we, as Americans, can do better than that. American workers, who have become indolent with all the legal protection they recieve from the Government, should be forced to take even lower wages, deregulate the economy, and thus encourage businesses to create jobs here in America, rather than shipping them off to the Chinese. We should also destroy the labour unions, which is an impediment to National recovery, and encourage women to stay at home as wives, mother, or nurses to open jobs for men.

No.

Why not?

If we are to compete with the Chinese, we must beat them at their own game.

[Caninope]

No.

Why not?

If we are to compete with the Chinese, we must beat them at their own game.

1. It's fallacious to try and compare states as economic competitors.
2. American productivity per worker is ridiculously high due to high concentrations of capital, overcoming any high costs associated with American workers.

[The Godly Nations]

1. It's fallacious to try and compare states as economic competitors.

No, I am not comparing states, I am comparing nations, which is more than the state- in fact, I would like the state to stop interfering in our economy.

2. American productivity per worker is ridiculously high due to high concentrations of capital, overcoming any high costs associated with American workers.

The cost of shipping from China to buyers in America is high, must higher than paying Americans a much higher wage and shipping it across the country. There is a reason why companies are going to China- American productivity, whatever it may be, is not enough to justify staying within this nation and creating jobs here, when Chinese are working for much less.

[Gauntleted Fist]

Why not?

If we are to compete with the Chinese, we must beat them at their own game.

US GDP (nominal): 15,650,000 (2012 est.)
Chinese GDP (nominal): 8,260,000 (2012 est.)

We seem to be winning. This doesn't even begin to describe just how much of a problem China is going to have with gross inequality that the US just does not have.

[Caninope]

1. It's fallacious to try and compare states as economic competitors.

No, I am not comparing states, I am comparing nations, which is more than the state- in fact, I would like the state to stop interfering in our economy.

But nations are not competitors. Firms are. Paul Krugman, as much as I disagree with him on so many things, pointed this out very clearly in Pop Internationalism (1996, MIT Press).

The cost of shipping from China to buyers in America is high, must higher than paying Americans a much higher wage and shipping it across the country. There is a reason why companies are going to China- American productivity, whatever it may be, is not enough to justify staying within this nation and creating jobs here, when Chinese are working for much less.

You're making the fundamental assumption that the jobs market is a zero-sum game, when economics can clearly be a positive sum game.

[Caninope]

Why not?

If we are to compete with the Chinese, we must beat them at their own game.

US GDP (nominal): 15,650,000 (2012 est.)
Chinese GDP (nominal): 8,260,000 (2012 est.)

We seem to be winning. This doesn't even begin to describe just how much of a problem China is going to have with gross inequality that the US just does not have.

Nor China's rough transition in the next few years to an economy built on consumption and not on exports.

[Ifreann]

I think that we, as Americans, can do better than that. American workers, who have become indolent with all the legal protection they recieve from the Government, should be forced to take even lower wages, deregulate the economy, and thus encourage businesses to create jobs here in America, rather than shipping them off to the Chinese. We should also destroy the labour unions, which is an impediment to National recovery, and encourage women to stay at home as wives, mother, or nurses to open jobs for men.

No.

But Farn, how will the economy recover if we don't exclude half the adult population from any kind of gainful employment except nursing? Everyone knows that when a woman is earning money, spending money, paying off debts, and paying taxes, that hurts the economy!

[Curiosityness]

Well this is just fantabulous can someone tell me what the original percentage was?

[Xanixi]

No.

But Farn, how will the economy recover if we don't exclude half the adult population from any kind of gainful employment except nursing? Everyone knows that when a woman is earning money, spending money, paying off debts, and paying taxes, that hurts the economy!

Does the same thing happen with gays?
And trans?
And blacks?

Fuck everything, let's go back to the days when the whites were supreme.

[Cosara]

I think that we, as Americans, can do better than that. American workers, who have become indolent with all the legal protection they recieve from the Government, should be forced to take even lower wages, deregulate the economy, and thus encourage businesses to create jobs here in America, rather than shipping them off to the Chinese. We should also destroy the labour unions, which is an impediment to National recovery, and encourage women to stay at home as wives, mother, or nurses to open jobs for men.

[Caninope]

Well this is just fantabulous can someone tell me what the original percentage was?

What "original" percentage do you mean? Last month? Last year? Last decade?

[The New Sea Territory]

Yeah, no. I don't believe media telling me unemployment is improving.