Posts Tagged ‘economy’

Glimmer of light

16 August 2012
No, I haven’t suddenly turned into an economic optimist, but this week’s new retail sales report is even better news than the media have noted. What’s they’ve noted is that retail sales in July rose 0.8% relative to June, which was better than expected. They’ve also noted that retail sales fell 0.7% in June, which kind of cancels it out. But the bigger and better news, I think, is in the yearly change: retail sales rose 4.1% compared with July 2011, which is a pretty healthy rate of increase. And retail sales for the three-month period of May-July 2012 were 4.3% above the corresponding period for last year.

Two components that caught my eye:

  • Sales of sporting goods, hobby, book, and music stores rose 10.6%. Perhaps not a very large part of GDP, but notable in that these goods tend not to be necessities. The surge in spending on these goods may point to growing consumer confidence that the consumer-confidence surveys (which tend to be focused on big-ticket purchases) do not pick up.
  • Nonstore retailers’ sales rose 11.8%. I assume this mostly means online sales from places like Amazon.com. Double-edged sword: good for consumers and those companies, probably bad for job creation as a whole, as I’d expect companies like Amazon.com to be a lot less labor-intensive than traditional brick-and-mortar stores. Which may have something to do with why the U.S. economy has been so crap at job creation over the past dozen years.

I should note that these numbers are not adjusted for inflation, but even after the adjustment they are still decent, especially considering that the Eurozone is basically in recession (0% growth in 1st quarter, 0.2% decline in 2nd quarter). The consumer price index rose just 1.4% y/y (July 2011 – July 2012) and not at all in July 2012, so this is a real improvement. Has the American consumer awakened?

Counterparty confidence

7 March 2009

Seen on a church sign in Clay, NY:

SOME TRUST IN JOBS

SOME TRUST IN THE BAILOUT

WE TRUST IN OUR GOD

11 million unemployed, 21 million out of work

9 January 2009

People it’s bad.  And the December 2008 unemployment report was worse.

11.1 million unemployed.  But only if you go by the traditional definition.  Add in the 8 million involuntary part-time workers (who say they’d be working full time if full-time work were available) and the 1.9 million discouraged job-seekers (who say they didn’t look for work in the past month because it looked hopeless), and you get an astonishing 21 million people wanting but not having full-time work.

This measure, sometimes called “underemployment” or “U-6 unemployment,” corresponds to a U-6 unemployment rate of 13.5%. That’s the highest in the short time the Bureau of Labor Statistics (BLS) has been keeping track of that statistic (1994-).

It gets worse.  Back to regular (U-3) unemployment, today’s news articles have said the 2.6 million jobs lost in 2008 were the most in a year since 1945, when the economy shedded 2.8 million jobs.  But but but — most of those 1945 jobs must have been in the active military, as World War II ended that summer and the BLS says civilian employment fell by only 1.1 million that year.  (And, as economic historian Robert Higgs has eloquently pointed out in numerous papers, overall U.S. economic well being was much higher after the war, despite the end of “full employment.”  The returning veterans surely preferred being victorious but temporarily out of work to continued combat.)  So you’d have to go back even farther to find a year with as much U.S. job loss as in 2008.  How far?

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