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

[visionary]

 

[gbear]

I hate seeing this: https://www.bizjournals.com/charlotte/news/2020/05/13/tiaa.html

 

TIAA handles so many teacher and non-profit organizations retirement funds.  If they offer the buyouts, the hard part is always who takes such things voluntarily. Usually it is the ones who get the most from them and have opportunities waiting for them.  If I knew the company with whom you invested tried to buyout 75% of its workforce, I would have two questions: 1) Did the person running my account take the money and leave and 2) If (s)he did not was that because (s)he had no options?

 

It would seem likely the cream of the crop would leave, and those remaining would have a ton of extra work.  Alternatively, they might not have work which says nothing good about the company and its direction. 

 

Maybe it is just me reading tea leaves, but this does not seem to bode well for the retirement plans upon which many people in this country are depending.  Those people are the public servant class too, the teachers and non-profit organizations.

 

Am I just imagining this is a really bad sign?

 

 

[PleaseBlitz]

Surprised it was only this much.  

 

https://www.washingtonpost.com/business/2020/05/15/retail-sales-april-coronavirus/?hpid=hp_hp-banner-main_retail-850am%3Ahomepage%2Fstory-ans&itid=hp_rhp__hp-banner-main_retail-850am%3Ahomepage%2Fstory-ans

 

Retail sales plunged 16.4 percent in April as coronavirus pandemic drives record decline

 

Quote

Retail sales plunged 16.4 percent in April, a record drop and another reflection of how severely the coronavirus pandemic continues to stifle the U.S. economy.

 

Data released Friday from the Census Bureau blew past analyst expectations, smashing March’s revised decline of 8.3 percent. Shoppers may continue to hunt for cleaning supplies and other basic pantry items, but consumer spending, which typically drives 70 percent of the nation’s economy, remains largely hollowed out. U.S. stock futures fell off the retail news Friday morning.

 

The April figure reflects the weeks in which most states were still shut down. Last month, 20.5 million people abruptly lost their jobs and the national unemployment rate jumped to 14.7 percent, the highest level since the Great Depression.

 

[Larry]

4 minutes ago, PleaseBlitz said:

Surprised it was only this much.  

 

Well, a lot of retail was still open.  Not just grocery stores, but things like Home Depot and Amazon, for example.  

 

If you want to buy something, you can probably get it.  Unless it's toilet paper, paper towels, or sanitizing wipes.  

 

Heck, if the government had actually propped up individuals, (like every first world country except the US has done), might have been considerably less decline.  The decline isn't because of closed retail establishments, it's because consumers don't have as much money (or are scared to spend it.)  

 

[PleaseBlitz]

6 minutes ago, Larry said:

 

Well, a lot of retail was still open.  Not just grocery stores, but things like Home Depot and Amazon, for example.  

 

If you want to buy something, you can probably get it.  Unless it's toilet paper, paper towels, or sanitizing wipes.  

 

Heck, if the government had actually propped up individuals, (like every first world country except the US has done), might have been considerably less decline.  The decline isn't because of closed retail establishments, it's because consumers don't have as much money (or are scared to spend it.)  

 

 

Oh I know, we are getting Amazon deliveries every day.  I'm not surprise due to availability, I'm surprised due to other economic conditions.  16% doesn't seem like all that much of a drop when 30 million people lost their jobs and a lot of others are probably worried enough about it that they are cutting back on spending.  

[techboy]

9 minutes ago, PleaseBlitz said:

 

Oh I know, we are getting Amazon deliveries every day.  I'm not surprise due to availability, I'm surprised due to other economic conditions.  16% doesn't seem like all that much of a drop when 30 million people lost their jobs and a lot of others are probably worried enough about it that they are cutting back on spending.  

 

I don't have any hard data, but I'd imagine if you're poor, most/all spending is inelastic. I wouldn't be surprised if credit card debt is skyrocketing. I know I've read that credit card companies are furiously de-risking.

 

If you're not poor, there are certain areas spending might even INCREASE. My grocery bill has gone up if for no other reason than I'm using services like Amazon Fresh and Whole Foods, or Costco via Instacart, and there's obviously mark-ups for the service as well as generous tips for the workers*. I'm sure there's also spending to alleviate boredom... Supplies for home projects, games, etc.

 

* This crisis has caused me to reflect once more on how much wealth is relative. My wife and I are currently living on just my teacher salary. Most people wouldn't call us rich. However, a while back someone posted an article where a historian was writing about how the wealthy dealt with the Black Plague. In short, they retreated to their homes out of the city and let their servants take all the risks. That's what we've done. Those people shopping for me and leaving food at my door are just time-shared servants.

 

We're rich.

 

[HOF44]

One thing in all this, I was able to Refi at a pretty great rate without an increase in length.

[PleaseBlitz]

4 minutes ago, techboy said:

 

I don't have any hard data, but I'd imagine if you're poor, most/all spending is inelastic. I wouldn't be surprised if credit card debt is skyrocketing. I know I've read that credit card companies are furiously de-risking.

 

If you're not poor, there are certain areas spending might even INCREASE. My grocery bill has gone up if for no other reason than I'm using services like Amazon Fresh and Whole Foods, or Costco via Instacart, and there's obviously mark-ups for the service as well as generous tips for the workers*. I'm sure there's also spending to alleviate boredom... Supplies for home projects, games, etc.

 

* This crisis has caused me to reflect once more on how much wealth is relative. My wife and I are currently living on just my teacher salary. Most people wouldn't call us rich. However, a while back someone posted an article where a historian was writing about how the wealthy dealt with the Black Plague. In short, they retreated to their homes out of the city and let their servants take all the risks. That's what we've done. Those people shopping for me and leaving food at my door are just time-shared servants.

 

We're rich.

 

 

That probably explains it.  I think most of the consumer spending in this country is driven by the broad middle class, not poor people (or even super rich people).  Personally, our spending has gone down a few thousand per month, but a lot of that is because daycare is only charging us half (for nothing).  Certainly my wife is doing a lot of "retail therapy" and I've been doing a lot of "Maker's Mark therapy."  Aside from that, there has been a drop in my bar tabs, I don't have to buy a $15 lunch every day in DC, and I can't spend money on sports and other events that we do a lot of, none of which count as retail.  

 

Re groceries, I've been doing our regular biweekly Wegmans run.  I can go in the middle of a weekday, so it's empty except for Instacart people, and I feel bad outsourcing the risk, such as it is.  Plus it gets me out of the house.  

11 minutes ago, HOF44 said:

One thing in all this, I was able to Refi at a pretty great rate without an increase in length.

 

I refinanced both my house and student loan in February.  You can see in the student debt thread that I had been paying double the payment on my student loan for years trying to get rid of it.  My rate now is 1.05% so it has become crazy to pay any more than the minimum.  My mortgage rate went down a full % with them paying for all of the closing costs.  

[Larry]

1 hour ago, techboy said:

We're rich.

 

Probably even got a refrigerator.  (That's a reference to a Republican talking point from a while back.)  

[Larry]

Just imagine what retail spending would be, if consumers were getting $1,000 a month, instead of a one-time.  

 

Just gut feeling, but I suspect that a good chunk of the economic impact of this virus wouldn't exist, if it weren't for the GOP reflexively opposing anything that pays money to individuals. 

 

(And now, opposing helping individuals, because they want to force the working class back to work, ready or not.  Remember a quote from Skippy, a week or so ago, saying that there would be another stimulus for individuals "over our dead bodies", precisely because such a stimulus would encourage people to stay home and not spread the virus.)  

[BatteredFanSyndrome]

20 minutes ago, Larry said:

Just gut feeling, but I suspect that a good chunk of the economic impact of this virus wouldn't exist, if it weren't for the GOP reflexively opposing anything that pays money to individuals. 

It seems very few actually understand that more money in the hands of the people = more money to spend at businesses.

[HOF44]

5 minutes ago, BatteredFanSyndrome said:

It seems very few actually understand that more money in the hands of the people = more money to spend at businesses.

Money policy aimed upward just results in larger deposits in the bank.  Money policy aimed down results is cash flowing through the economy.  Trickle down was and always will be BS.

[Larry]

14 minutes ago, BatteredFanSyndrome said:

It seems very few actually understand that more money in the hands of the people = more money to spend at businesses.

 

I think an awful lot of "the capital class" think of "the labor class" simply as expenses, and forget that they're customers, too.  

[Die Hard]

2 hours ago, PleaseBlitz said:

 

Oh I know, we are getting Amazon deliveries every day.  I'm not surprise due to availability, I'm surprised due to other economic conditions.  16% doesn't seem like all that much of a drop when 30 million people lost their jobs and a lot of others are probably worried enough about it that they are cutting back on spending.  

 

I see your perspective.... and I agree.

 

But this could imply that the people with the most money, also spend the most 🙂 They haven’t changed their spending habits.

 

Or it could also imply that..... despite less than ideal circumstances, people are still incredibly conditioned to spend.... that they’re depleting their savings or going into debt. It’s only been 2 months. 

[mistertim]

2 hours ago, BatteredFanSyndrome said:

It seems very few actually understand that more money in the hands of the people = more money to spend at businesses.

 

Oh I think GOP legislators understand it just fine, but that would go against their entire belief system/platform of handing out money to corporations and the ultra-rich while pretending to care about the working class. 

 

And let's be honest...they know "supply side economics" is a total scam. They've known for years. So at this point I'm not sure if them rejecting giving money directly to regular people is an ideologically driven position or if it's just an almost subconscious reflex after so many decades of pissing on the middle/working class and telling them it's raining. 

[Simmsy]

4 hours ago, PleaseBlitz said:

 

That probably explains it.  I think most of the consumer spending in this country is driven by the broad middle class, not poor people (or even super rich people).  Personally, our spending has gone down a few thousand per month, but a lot of that is because daycare is only charging us half (for nothing).  Certainly my wife is doing a lot of "retail therapy" and I've been doing a lot of "Maker's Mark therapy."  Aside from that, there has been a drop in my bar tabs, I don't have to buy a $15 lunch every day in DC, and I can't spend money on sports and other events that we do a lot of, none of which count as retail.  

 

Re groceries, I've been doing our regular biweekly Wegmans run.  I can go in the middle of a weekday, so it's empty except for Instacart people, and I feel bad outsourcing the risk, such as it is.  Plus it gets me out of the house.  

 

I refinanced both my house and student loan in February.  You can see in the student debt thread that I had been paying double the payment on my student loan for years trying to get rid of it.  My rate now is 1.05% so it has become crazy to pay any more than the minimum.  My mortgage rate went down a full % with them paying for all of the closing costs.  

Hold on, why are you being charged for daycare that you're not using?

[RedskinsFan44]

5 hours ago, PleaseBlitz said:

 

Oh I know, we are getting Amazon deliveries every day.  I'm not surprise due to availability, I'm surprised due to other economic conditions.  16% doesn't seem like all that much of a drop when 30 million people lost their jobs and a lot of others are probably worried enough about it that they are cutting back on spending.  

I think there was a surge in spending at the beginning of this with people stocking up on certain things. Paper products and cleaning supplies certainly, probably electronics too. But when you look at the breakdown form today you see that a lot of consumer spending has to do with going out and impressing people - new clothes. etc, or even shopping as entertainment. That stuff is going to have a hard time coming back.

Edited May 15, 2020 by RedskinsFan44

[BatteredFanSyndrome]

8 minutes ago, mistertim said:

 

Oh I think GOP legislators understand it just fine, but that would go against their entire belief system/platform of handing out money to corporations and the ultra-rich while pretending to care about the working class. 

 

And let's be honest...they know "supply side economics" is a total scam. They've known for years. So at this point I'm not sure if them rejecting giving money directly to regular people is an ideologically driven position or if it's just an almost subconscious reflex after so many decades of pissing on the middle/working class and telling them it's raining. 

Oh, I get that.  I was more talking about the people that follow the GOP that could really benefit from it - consumers and business owners.  I've seen a few news articles on social media about the bill the democrats were proposing and was taken aback by the amount of those types of people that say they want nothing to do with getting more money from the government.  Politics are a hell of a drug.

Edited May 15, 2020 by BatteredFanSyndrome

[Hooper]

What happens when things come back even worse in the fall?

 

I mean, why wouldn't they?

 

We had two months to get a real testing strategy in place and we didn't. 

 

Now the plan is seemingly to muddle through and hope for the best. Hell, even in countries who had gotten the number of new cases down to zero, they are now seeing a spike. In some states here, we are opening up even thought the numbers are going UP.

 

Wild times, man. Wild times. I really wish I knew what the answer was. Basically, we blew it.

Edited May 15, 2020 by Hooper

[Larry]

29 minutes ago, Hooper said:

Now the plan is seemingly to muddle through and hope for the best

 

Nope.  

 

The plan is to suppress as much of the data as possible, and hope that we can successfully prevent people from finding out how bad it really is, and hope that people just get used to all the people dying and things.  

 

[TradeTheBeal!]

Pier One is toast.

[Renegade7]

1 hour ago, TryTheBeal! said:

Pier One is toast.

 

Parents used to take me window shopping there when I was little.

[tshile]

On 5/15/2020 at 11:04 AM, PleaseBlitz said:

My rate now is 1.05% so it has become crazy to pay any more than the minimum.

I knew they’d suck you into not paying it off

 

eventually

 

 

[skinsmarydu]

2 hours ago, TryTheBeal! said:

Pier One is toast.

The one closest to me closed 15 years ago. 

[The Sisko]

 

On 4/14/2020 at 1:21 AM, LadySkinsFan said:

Any of you on Social Security or relatives on Social Security, the COLA for 2021 is forecasted by Kiplinger at less than 1%, down from 2020 of 1.6% and 2019 of 2.8%. 

 

Trump's ruining Social Security.

 

https://finance.yahoo.com/news/social-security-cola-2021-020109981.html

 

The Kiplinger Letter is forecasting that the 2021 Social Security cost-of-living adjustment will be below 1%. The COLA, which will be officially set in October 2020, is down from the 1.6% COLA increase retirees and other beneficiaries received at the start of 2020. That was itself a drop from 2019, when the COLA increase was 2.8%.

You’re lucky. You’re already getting your benefits so you won’t have to worry about the upcoming push from the Grand Oligarch’s Party to balance the budget and pay down the debt by cutting SS and Medicare. They know current recipients vote, so as usual, they’ll push the cuts out to when I’ll be looking to get mine. ****ers.😡 They’ve long wanted to get rid of it and they’re going to get their chance to start the incremental process because of this, never mind that their tax cuts for the wealthy are the real problem.

 

On 5/14/2020 at 2:57 PM, gbear said:

I hate seeing this: https://www.bizjournals.com/charlotte/news/2020/05/13/tiaa.html

 

TIAA handles so many teacher and non-profit organizations retirement funds.  If they offer the buyouts, the hard part is always who takes such things voluntarily. Usually it is the ones who get the most from them and have opportunities waiting for them.  If I knew the company with whom you invested tried to buyout 75% of its workforce, I would have two questions: 1) Did the person running my account take the money and leave and 2) If (s)he did not was that because (s)he had no options?

 

It would seem likely the cream of the crop would leave, and those remaining would have a ton of extra work.  Alternatively, they might not have work which says nothing good about the company and its direction. 

 

Maybe it is just me reading tea leaves, but this does not seem to bode well for the retirement plans upon which many people in this country are depending.  Those people are the public servant class too, the teachers and non-profit organizations.

 

Am I just imagining this is a really bad sign?

I feel bad for the employees, but not for the company. I hate TIAA CREF with a passion. I left the employer that I was working for when I put the money in over a decade ago and they still won’t let me transfer my money to my IRA. The last time I called them, I told the rep to just tell me whatever they’ve done with their money whenever they want to do it, just leave me a few bucks on the nightstand.

 

As for layoffs, Mrs. Sisko’s company (a division of a huge mega corp) started with a 5% layoff in April and they got word a couple of weeks ago that another 10% is coming. I’m pretty sure that won’t be the last round either. Keeping my fingers crossed that both of us don’t get the axe. If I get it, I know one of the first calls I’ll make - to TIAA CREF to zero out my account as now allowed under the CARES Act.🙂

Edited May 20, 2020 by The Sisko