Jump to content
Washington Football Team Logo
Extremeskins

The State of the Economy Thread - GDP Grows, Unemployment Drops as Life Returns to Normal


Recommended Posts

7 minutes ago, CousinsCowgirl84 said:

You wouldn’t expect high consumer demand during high unemployment.  It’s the combination that is weird.


Why? Considering two things:  

 

1. We are coming out of a pandemic, during which consumption went down, leading to pent up demand upon reopening.

 

2. Quite a generous expansion of UI benefits, that kept most people without jobs afloat (poverty actually going down following UI benefit expansions). 

Link to post
Share on other sites

A lot of the increase is actually because of the high unemployment.  Demand is up but also supply is down.  Things like some lumber mills shut down during the pandemic.  Increasing prices will help those businesses reopen.  They will rehire and inflation will drop as supply comes back.

 

(At least that is the way we are hoping it will work.)

  • Like 1
Link to post
Share on other sites
  • 3 weeks later...

Biden Says America Is ‘on the Move Again' as He Touts May Jobs Report

 

U.S. employers added a modest 559,000 jobs in May, an improvement from April’s sluggish gain but still evidence that many companies are struggling to find enough workers as the economy rapidly recovers from the pandemic recession.

 

Last month’s job growth was above April’s revised total of 278,000, the Labor Department said Friday, yet well short of employers' need for labor. The unemployment rate fell to 5.8% from 6.1%.

 

The speed of the rebound from the recession has caught employers off guard and touched off a scramble to hire. The reopening of the economy, fueled by substantial federal aid and rising vaccinations, has released pent-up demand among consumers to eat out, travel, shop, attend public events and visit with friends and relatives.

 

Click on the link for the full article

  • Like 1
Link to post
Share on other sites

The V shaped recovery Is happening. 
 

it’s not going to be all rainbows and butterflies cause there will be negative effects through it but hopefully it nets out well 

  • Like 3
Link to post
Share on other sites
  • PleaseBlitz changed the title to The State of the Economy Thread - GDP Grows, Unemployment Drops as Life Returns to Normal
Posted (edited)

The need for labor vs the need to pay better for the labor.  The next 6-12 months are going to be a good indicator if a new normal is going to be slowly integrated into society or if desperation will force the old normal back.

 

Who will blink first?

Edited by NoCalMike
  • Like 1
Link to post
Share on other sites
6 minutes ago, CousinsCowgirl84 said:

Well, I’m sure wages will increase, along with the cost of things. Real wages stay about the same.

 

Well, excluding the effects of a retroactive capital gains tax increase or a wealth tax.

 

This is the question that fascinates me (because I am a nerd).  Wages will increase, but more so in some sectors than others.  That will shift where labor goes.  Costs of things will also increase, but again, it won't be static across the types of "things" or services that people want.  And that will shift what people buy.  The latter will impact the former.  I don't think there is any way to predict how it will all shake out, unless you work at Goldman or something.  

 

Even more interesting is who will be the winners and losers.  I suspect the winners will be who they always are, the extremely wealthy, and also the better-off people with more discretionary income and the losers will be who they always are, the people without a lot of options and who spend all of their money on food shelter and other necessities.  

  • Like 3
Link to post
Share on other sites

Also any new minimum wage is a huge monkey wrench in it all. 
 

also some survey WTOP covered like 3 weeks ago basically said somewhere around 40-50% of people that kept their job through covid were expecting to look for a new job this year. I think my sector came in around 30%. That will be a big shakeup too because usually it costs more to replace a person you lost, at least in my sector. 
 

there’s also been multiple surveys I read where a significant portion of people out of work during covid have not returned to work yet simply because being out has caused them to reevaluate their prior job/career, and when they do return to work they do not expect it to be in the same field/sector. 
 

there’s a lot of questions about what will happen during the rebound. And the ones I follow that I consider smart on the subject all seem to be very unsure about what to predict. 
 

the v shaped recovery will exist in terms of total economic output. Seems like everything else is up in the air. 

Link to post
Share on other sites

Number of jobs added, per month, in thousands.  (BLS data, seasonally adjusted, total nonfarm.)  

 

Biden:  541

Trump: -60

Trump, first 3 years:  184

Three years prior to Trump:  224

  • Like 1
Link to post
Share on other sites
27 minutes ago, Larry said:

It's almost like the free market can solve this problem. 

Considering it seems to be in response to the pandemic and (in some part, people argue over it, not interested in the argument other than to mention it’s somehow part of it) increased government assistance, I’m not entirely sure this is a good example of a free market?

 

also, since it mentioned increased prices to afford increased wages, inflation is going to be the biggest pain in the ass to discuss over the next few years. Too much room for people to retreat to their preferred arguments. The hyper inflation monsters will get just enough to feel emboldened, the dumb dumb conservatives will blame it all on Biden, and it’ll be hard to even discuss because there will be people that insist it’s all trump/pandemic (which I would guess is most of it, but not all of it, and as someone that relies on discussions to learn about this stuff I’m assuming I’ll just be dead in the water because the discussions will be garbage)

Link to post
Share on other sites
1 hour ago, tshile said:

Considering it seems to be in response to the pandemic and (in some part, people argue over it, not interested in the argument other than to mention it’s somehow part of it) increased government assistance, I’m not entirely sure this is a good example of a free market?

 

You're right.  The free market doesn't exist.  No such thing.  

 

1 hour ago, tshile said:

also, since it mentioned increased prices to afford increased wages, inflation is going to be the biggest pain in the ass to discuss over the next few years. 

 

I absolutely agree.  Raising the wages of American workers, I believe, would be a great thing.  (Hard to argue against it, in fact.  Not with a straight face.)  

 

But, it's guaranteed, it would be inflationary as all heck.  

 

  • Confused 1
Link to post
Share on other sites
14 minutes ago, tshile said:

Yeah that’s what I’m talking about. 
 

gonna be a pain in the ass to watch that nonsense 

 

You're blaming inflation for the fact that Republicans want to try to make people think the economy is worse?  

 

Link to post
Share on other sites
22 minutes ago, Larry said:

 

You're blaming inflation for the fact that Republicans want to try to make people think the economy is worse?  

 

Based on this and your other response, it seems you don’t understand what I’m saying. 

  • Haha 1
Link to post
Share on other sites

New Orleans strip club offering contract bonuses due to exotic dancer shortage

 

Businesses have been facing difficulties filling positions in the hospitality industry since COVID-19 restrictions have loosened, and strip clubs are no exception.

 

At least one gentleman’s club in New Orleans is offering signing bonuses to new and returning entertainers to combat what they call a “national exotic dancer shortage.”

 

“We look forward to reverting back to a seven-day per week operation, just as we were prior to COVID,” said Ann Kesler, General Manager of Larry Flynt’s Hustler Club New Orleans. “In order to do so, we need to ensure that we have an ample number of entertainers to sustain our guests, which is why we are implementing a signing incentive to both local and out of state entertainers.”

 

Larry Flynt’s Hustler Club on Bourbon Street is offering $1,000 incentives to any new or returning entertainer.

 

Click on the link for the full article

Link to post
Share on other sites

If you sell a house these days, the buyer might be a pension fund

 

A bidding war broke out this winter at a new subdivision north of Houston. But the prize this time was the entire subdivision, not just a single suburban house, illustrating the rise of big investors as a potent new force in the U.S. housing market.

 

D.R. Horton Inc. built 124 houses in Conroe, Texas, rented them out and then put the whole community, Amber Pines at Fosters Ridge, on the block. A Who's Who of investors and home-rental firms flocked to the December sale. The winning $32 million bid came from an online property-investing platform, Fundrise LLC, which manages more than $1 billion on behalf of about 150,000 individuals.

 

The country's most prolific home builder booked roughly twice what it typically makes selling houses to the middle class -- an encouraging debut in the business of selling entire neighborhoods to investors.

 

"We certainly wouldn't expect every single-family community we sell to sell at a 50% gross margin," the builder's finance chief, Bill Wheat, said at a recent investor conference.

 

From individuals with smartphones and a few thousand dollars to pensions and private-equity firms with billions, yield-chasing investors are snapping up single-family houses to rent out or flip. They are competing for houses with ordinary Americans, who are armed with the cheapest mortgage financing ever, and driving up home prices.

 

"You now have permanent capital competing with a young couple trying to buy a house," said John Burns, whose eponymous real estate consulting firm estimates that in many of the nation's top markets, roughly one in every five houses sold is bought by someone who never moves in. "That's going to make U.S. housing permanently more expensive," he said.

 

Click on the link for the full article

Link to post
Share on other sites

And not just pension funds, but lots of large investment funds.

 

I saw a thing the other day, that the number of single family homes available to rent (not Air B&B) is up 200% over the last 10 years or so.

 

(I forget the exact numbers.)

 

Here's a longer story from the Atlantic that also give some explanation as to how it has happened.

 

https://www.theatlantic.com/technology/archive/2019/02/single-family-landlords-wall-street/582394/

 

(I actually wonder if a lot of of it isn't money from China.  A lot of the MBS that caused the 2008 crisis were being bought by China.

 

https://www.nytimes.com/2007/08/24/business/worldbusiness/24wire-china.html

 

and then a lot of the Fed bailout was possibly (some believe) a back channel repayment of money to China.  To keep the dollar inflated, maintain the trade imbalance, and keep our economy in relatively good shape, the dollars we spend on Chinese goods must come back into the US somehow.

 

In the 1980s, the Japanese did this largely by buying big US entities.  That came with an anti-Japanese/xenophobic pushback and also made them vulnerable when the economy changed and the value of particularly those high value things fell.  A lot of big things that the Japanese bought a few years later were worth less than the Japanese bought them for.

 

https://www.businessinsider.com/japans-eighties-america-buying-spree-2013-1#american-children-got-used-to-seeing-japanese-names-during-the-closing-credits-of-their-favorite-cartoons-19

 

I think the Chinese might be trying to avoid that same situation.  Investing broadly in the US market through investment firms would be a way to do that.

 

 

Edited by PeterMP
Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • Recently Browsing   0 members

    No registered users viewing this page.

×
×
  • Create New...