The State of the Economy Thread - “Falling inflation, rising growth give U.S. the world’s best recovery”

[The Evil Genius]

Americans feel the ssme about the economy as they do about crime. 

 

Their perception is 180° off.

[hail2skins]

Seems like the Fed's strategy revolves around how out of control housing prices have gotten.

 

Of course, now we have a situation where nobody wants to abandon their 3 percent rates and thus there's no inventory.

6 minutes ago, The Evil Genius said:

Americans feel the ssme about the economy as they do about crime. 

 

Their perception is 180° off.

It always depend on how you ask the question. Most people will say crime is an issue nationwide and the economy sucks, but when you ask them you they themselves are impacted, most will tell you they feel safe and are well off financially.

[PleaseBlitz]

32 minutes ago, hail2skins said:

Seems like the Fed's strategy revolves around how out of control housing prices have gotten.

 

Of course, now we have a situation where nobody wants to abandon their 3 percent rates and thus there's no inventory.

 

The second part is definitely true, but the first part doesn't seem right to me.  People don't buy homes based on the sales price, they buy them based on the monthly payment, which is a function of both the sales price and the rate on the loan.  So the Fed raising rates will depress sales prices, but not make homes more affordable in reality.  

 

Raising rates also makes building new housing, which the country desperately needs, less likely. 

Edited July 7, 2023 by PleaseBlitz

[@DCGoldPants]

1 hour ago, PleaseBlitz said:

 

I think the point is that people's opinions of the state of the economy are unrelated to the actual state of the economy based on data.  Or, even more accurately, what people tell pollsters is unrelated to the actual state of the economy.  So they may know and care, or they may not, but they'll answer a certain way based on their politics, not their actual views on the economy.  Which makes the polling worthless:  why ask people for their views on the economy when they are just going to give you their political views?

 

agreed, that is the point. I should have been more clear that polling groups who want to stand out should evolve what they ask and how they ask it, if they care about get better information back. Sure, subjective questions are valuable too. Especially since that's how too many will vote.

[gbear]

I find it interesting how many people seem to think a jobs report showing 3.6% unemployment is a good thing.  When the rates get that low, there are fewer and fewer people to hire when a new business wants to expand.  As the numbers get too low, the good ideas get stymied by lack of available labor.  

 

Yes, that may push wages up because businesses have to bid against other businesses.  This wage increase will increase the costs businesses have to pay which will be passed along to the consumers in the form of higher prices (inflation).  So the Fed raises rates, it's only arrow to fight inflation.  In theory, this should slow business growth which will the lower the demand for employees which will keep wages and inflation in check. 

 

However, we are also fighting a demographics  situation where there will be fewer and fewer workers in the U.S, barring a change in our immigration policies (that I have advocated in favor of for more than a decade).  Fewer workers for more jobs needed for an expanding economy will mean higher wages and inflation.  The sad part is that presumes a best case scenario.  In a less favorable scenario, the economy tanks.  Then there are less people and companies paying into our social safety net programs.

[Renegade7]

Being unemployed sucks, especially if you have a family.

 

Issues raised by it being that low should be addressed by other policies.

 

Lower unemployment should be a good thing, rising wages should reduce government spending on welfare.

 

Treating anything potentially good as potentially bad feeds into the perception problem many have on something as complex as the economy.

[Hersh]

4 hours ago, PleaseBlitz said:

 

That's interesting.  I was actually curious to see if it was still an issue so I Googled it and most of what I saw was about a "soft landing."  I haven't seen nonstop talk of a recession.  I looked at it yesterday, so possibly the narrative has already changed?

 

 

I'm not surprised to see this from the NY Times. 

 

[The Evil Genius]

28 minutes ago, gbear said:

I find it interesting how many people seem to think a jobs report showing 3.6% unemployment is a good thing.  When the rates get that low, there are fewer and fewer people to hire when a new business wants to expand.  As the numbers get too low, the good ideas get stymied by lack of available labor.  

 

 

 

This assumes new businesses can't hire already employed people. But they can, and do. 

[gbear]

Yes, they can hire already employed people, but this means the other company is now short staffed.  The point remains.  The economy needs more workers than it currently has.

 

Renegade, 

I am not saying unemployment doesn't suck for those mired in it.  I am saying a healthy economy needs some to allow for growth.  When I was in college, many many moons ago, they preached 5-6 % unemployment was about optimal.  This allows for frictional unemployment as employees move from one job to another.  With that rate, businesses can generally find workers, but still have to compete for the ones with the most marketable skillsets.  When I speak of 3.6% unemployment causing problems, I am talking about from a system wide perspective.  We have nursing homes and doctors' offices without staff.  We have schools that can not hire enough teachers.  We have sectors of the our economy not growing as they should because the workers aren't there to do the work.  Some of this may be a pay issue of just needing to pay more, but a lot of it is not having enough potential employees.

 

 

Edited July 7, 2023 by gbear

[PleaseBlitz]

2 hours ago, Hersh said:

I'm not surprised to see this from the NY Times. 

Jennifer Rubin wrote an article on this (the relentless pessimism in the media) in the Post today. 
 

https://www.washingtonpost.com/opinions/2023/07/07/supreme-court-legitimacy-restoration/
 

 

[Renegade7]

@gbear

 

I hear what you sayin, it jus comes across as a problem where the solution isn't to raise unemployment numbers in general will fix, as your examples have persisted even with higher unemployment numbers.

 

Nursing and Teacher shortage crisis have been known issues in this country for so long, it's hard for me to speak to when it wasn't, as I kept hearing about from happenstance and since I first started on extremeskins as a teenager.  Ill be 35 this month.

 

Several of these industries have overlapping sector specific issues hurting their pool of potential employees to hire from, in context that not all sectors are experiencing this equally. This opens the door for specific policies that could help multiple sectors at the same time in a way rising unemployment numbers won't.

 

If we're going to address specific problems I'd rather we implement specific solutions, like offering to pay for the college education required for sectors in crisis like nursing, teaching, soon to be air traffic controllers. 

 

Some of these sectors I mentioned need to be better protected from being overworked and an honest conversation about why if there is such a shortage in these sectors the wages for them aren't going up in any meaningful manner to encourage more people to join them.

[gbear]

Renegade, 

I used nurses and doctors out of laziness. Sorry. I could just as easily use truck drivers, waiters, child care, translators or any one of hundreds of other jobs we currently understaff as an economy.

 

In general, I agree on the need for more specific fixes. The problem is we are plugging holes by taking stones from elsewhere in the wall. At some point, we need more stones. From an unemployment stance, this means more people capable of working and desiring to do so. That means immigration and education along with a recognition there is no instant fix. We can only hope to set up future generations to have easier/more choices.

 

Even the poor immigrant who doesn't speak English will have kids and grandkids who will. 

 

[Renegade7]

21 minutes ago, gbear said:

Renegade, 

I used nurses and doctors out of laziness. Sorry. I could just as easily use truck drivers, waiters, child care, translators or any one of hundreds of other jobs we currently understaff as an economy.

 

I can dig it.

 

21 minutes ago, gbear said:

In general, I agree on the need for more specific fixes. The problem is we are plugging holes by taking stones from elsewhere in the wall. At some point, we need more stones. From an unemployment stance, this means more people capable of working and desiring to do so. That means immigration and education along with a recognition there is no instant fix. We can only hope to set up future generations to have easier/more choices.

 

Even the poor immigrant who doesn't speak English will have kids and grandkids who will. 

 

 

No argument here regarding immigration, it's probably only thing saving us from the shrinking demographic disaster other world powers are experiencing or about to.

 

If I'm not mistaken, Department of Labor puts out unemployment numbers as part of an algorithm with respect to folks looking for work that can't find anyway.  It's not a true count of the number of people that could be in the workforce (and of reasonable age and health) but choosing not (such as given up).

 

Is there a different statistic that fully shows that or specific to that so we're on same page how bad this actually is with respect to what we need to do about (as I think we agree on some of the things we need to do about it).

Edited July 8, 2023 by Renegade7

[China]

Florida is now America’s inflation hotspot

 

Florida is America’s inflation hotspot because of a persistent problem with sky-high housing costs.

 

The Miami-Fort Lauderdale-West Palm Beach area has the highest inflation rate of metro areas with more than 2.5 million residents, with a 9% inflation rate for the 12 months ended in April.

 

That’s more than double the national average of 4%, according to data from the Consumer Price Index. The Tampa-St. Petersburg-Clearwater metro had the third-highest inflation rate in the country, at 7.3% for the year ended in May.

 

Other metro areas, however, have seen some welcome progress. Minneapolis had an inflation rate of 1.8% in May from a year earlier, the lowest of the 23 metro areas for which the Labor Department publishes inflation data. Urban Hawaii had the second lowest inflation rate at 2% — mirroring the Federal Reserve’s target for its preferred inflation gauge, the Personal Consumption Expenditures index.

 

Here are some notable inflation trends for the biggest metros in the US and the dynamics behind those shifts.

 

Click on the link for the full article

[PleaseBlitz]

FWIW, CPI for DC is 3.1%, which is solid. 

[TradeTheBeal!]

Good thread.

 

 

[PleaseBlitz]

https://www.politico.com/news/2023/07/12/inflation-rate-united-states-00105848
 

U.S. inflation falls to 3%, lowest level in more than 2 years, as price pressures ease
 

Quote

WASHINGTON — After two years of painfully high prices, inflation in the United States has reached its lowest point in more than two years — 3% in June compared with 12 months earlier — a sign that the Federal Reserve’s interest rate hikes have steadily slowed price increases across the economy.

 

The inflation figure the government reported Wednesday was down sharply from a 4% annual rate in May, though still above the Fed’s 2% target rate. Over the past 12 months, gas prices have dropped, grocery costs have risen more slowly and used cars have become less expensive.

 

[Larry]

Coming soon:  "The President has nothing to do with the rate of inflation".  

 

[tshile]

18 minutes ago, Larry said:

Coming soon:  "The President has nothing to do with the rate of inflation".  

 

The way people discuss economics is so nauseating. 
 

the republicans will absolutely do that. At the very least they’ll drop the topic all together. 
 

it’s like how Biden runs around claiming awesome economic numbers that are mostly just getting out of the Covid hole. 

[TheGreatBuzz]

2 hours ago, tshile said:

The way people discuss economics is so nauseating. 
 

the republicans will absolutely do that. At the very least they’ll drop the topic all together. 
 

it’s like how Biden runs around claiming awesome economic numbers that are mostly just getting out of the Covid hole. 

 

Luckily we can all ignore these bull**** issues and just vote democracy vs fascism.  They've made it easy for us.

[Captain Wiggles]

28 minutes ago, TheGreatBuzz said:

 

Luckily we can all ignore these bull**** issues and just vote democracy vs fascism.  They've made it easy for us.

 

You gonna be a card carrying member of the ACLU in no time. 🤭

 

[TheGreatBuzz]

7 minutes ago, Captain Wiggles said:

 

You gonna be a card carrying member of the ACLU in no time. 🤭

 

 

Nah.  Y'all gonna hate me when we can get back to talking about actual policy.  

[Captain Wiggles]

7 minutes ago, TheGreatBuzz said:

 

Nah.  Y'all gonna hate me when we can get back to talking about actual policy.  

 

There's that nonconformist contrarian spirit. 👍

[TheGreatBuzz]

31 minutes ago, Captain Wiggles said:

 

You gonna be a card carrying member of the ACLU in no time. 🤭

 

 

And the ACLU supported me when I was kicked out of scouts.  I don't always agree with them but I haven't forgotten that.

[Corcaigh]

14 minutes ago, TheGreatBuzz said:

 

And the ACLU supported me when I was kicked out of scouts.  

Your knots were that bad?