Friday, October 20, 2017

Friday, April 07, 2017

March 2017 Employment Situation: Brief analysis

OVERVIEW
  • The unemployment rate declined to 4.5 percent in March while payrolls expanded by 98,000, according to the Bureau of Labor Statistics.
  • The Labor Force Participation (LFP) rate remained at 63.0 percent. 
  • The number of persons working part-time for economic reasons was little changed at 5.6 million. 
  • The number of those individuals “marginally attached to the labor force,” also remained unchanged.
  • Retail jobs lost 30,000 positions in March.  General merchandise stores declined by 35,000. 
  • Following gains of 219,000 in February and 216,000 in January, March employment only edged up by 98,000. 
  • Mining added 11,000 bouncing back from an October 2016 low. 
  • Professional and Business Services led the gains by adding 56,000 jobs. BLS reports the growth in this sector has kept pace with the average monthly gain over the past 12 months.
  • The previous two months’ figures were revised downward. January’s report was revised downward from 238,000 to 216,000 and February’s report was revised downward from 235,000 to 219,000 jobs. 

ANALYSIS

The unexpectedly weak jobs report— along with the downward revisions to January and February numbers —suggest there may be something more at work than last month’s weather. Wall Street expected a gain of 175,000 jobs.
 

Moreover, today’s report stands in stark contrast with the ADP report released this week estimated the addition of 263,000 jobs in March.

Professional and Business Services continued to notch gains on the strength of “services to buildings and dwellings (+17,000) and architectural and engineering services (+7,000). The Health Care sector continues to post jobs gains with 20,000 per month for 2017. Construction employment changed little, however today’s report noted that jobs have “been trending up since late last summer, largely among specialty trade contractors and in residential building.”

The average workweek was unchanged at 34.3 hours. Average hourly earnings for all private sector employees increased by 5 cents to $26.14, following a 7-cent increase in February.

O
ver the past year, these earnings have increased by 2.7 percent.  The retail sector continues to struggle, with major firms announcing job cuts and store closings. Approximately 15.8 million workers have jobs in the retail sector, overall.

Of that number, 3.1 million are in general merchandise stores representing 19.6 percent of the retail workforce. The slowly growing but influential and tech-driven “non-store” retail sector comprises 3.5 percent of the retail workforce.  In March 2016 nonstore retailers employed 521,800 workers compared to 555,700 workers today, a gain of 33,900 workers.

Friday, March 31, 2017

The latest GDP figures for 4th Quarter 2016

Real gross domestic product (GDP) increased at an annual rate of 2.1 percent in the fourth and final quarter of 2016. This latest report is the third estimate of U.S. GDP from the Bureau of Economic Analysis. Real GDP for 2016 grew at a 1.6 percent. 

Here is my commentary on yesterday's report.



Wednesday, March 29, 2017

Christopher Caldwell explains Vladimir Putin

"How to think about Vladimir Putin" by Christopher Caldwell of the Weekly Standard over at Hillsdale College's Imprimis is one of the best summaries of the Russian leader. It's really a must read.
Putin did not come out of nowhere. Russian people not only tolerate him, they revere him.
Read the whole piece.

Tuesday, March 28, 2017

"I took multivitamins every day for a decade. Then I found out they're useless."

Read and weep.
Though the FDA says on its vitamins information page that there "are many good reasons toconsider taking supplements," it indicates vitamins only "may be usefulwhen they fill a specific identified nutrient gap that cannot or is not otherwise being met by the individuals' intake of food." The CDC estimated in 2014 that "nine out of 10 people in the U.S. are indeed getting enough of some important vitamins and nutrients."
So why are so many Americans still taking multivitamins? Steven Salzberg, a medicine professor at Johns Hopkins, told NPR multivitamins are "a great example of how our intuition leads usastray." "It seems reasonable that if a little bit of something is good
for you, then more should be better for you. It's not true," Salzberg said. "Supplementation with extra vitamins or micronutrients doesn't really benefit you if you don't have a deficiency."
Americans' abysmally bad diets also give vitamin companies some marketing ammunition. When the average American is eating just one ortwo servings of fruits and veggies a day (experts recommend as many as 10 servings of fruits and veggies a day for maximum benefits), a little boost of vitamins might seem like a good idea. But popping a pill isn't going to make up for all those lost servings. "Food contains thousands of phyto-chemicals, fiber, and more that work together to promote goodhealth that cannot be duplicated with a pill," said nutritionist Karen Ansel.
I expect people to say that this is all a plot by BigPharma.

Monday, March 27, 2017

Can a carbon tax be progressive?

From Vertical and Horizontal Redistributions from a Carbon Tax and Rebate
by Julie Anne Cronin, Don Fullerton, Steven E. Sexton 

Abstract:

Because electricity is a higher fraction of spending for those with low income, carbon taxes are believed to be regressive. Many argue, however, that their revenues can be used to offset the regressivity. We assess these claims by employing data on 322,000 families in the U.S. Treasury's Distribution Model to study vertical redistributions between rich and poor, as well as horizontal redistributions among families with common incomes but heterogeneous energy intensity of consumption (different home heating and cooling demands). Accounting for the statutory indexing of transfers, and measuring impacts onannual consumption as a proxy for permanent income, we find that the carbon tax burden is progressive, rising across deciles as a fraction of consumption. The rebate of revenue via transfers makes it even more progressive. In every decile, the standard deviation of the change in consumption as a fraction of consumption varies around 1% or 2% and is larger than the average burden (about 0.7%). When existing transfer programs are used to rebate revenue, the tax and rebate together increase that variation to more than 3% within eachdecile. The average family in the poorest decile gets a net tax cut of about 1% of consumption, but 44% of them get a net tax increase. Relative to no rebate, every type of rebate we consider increases this variation within most deciles.

Link: NBER #23250 

Robots and the economy

Robots and Jobs: Evidence from US Labor Markets by Daron Acemoglu, Pascual Restrepo. Abstract:
As robots and other computer-assisted technologies take over tasks previously performed by labor, there is increasing concern about the future of jobs and wages. We analyze the effect of the increase in industrial robot usage between 1990 and 2007 on US local labor markets. Using a model in which robots compete against human labor in the production of different tasks, we show that robots may reduce employment and wages, and that the local labor market effects of robots can be estimated by regressing the change in employment and wages on the exposure to robots in each local labor market—defined from the national penetration of robots into each industry and the local distribution of employment across industries. Using this approach, we estimate large and robust negative effects of robots on employment and wages across commuting zones. We bolster this evidence by showing that the commuting zones most exposed to robots in the post-1990 era do not exhibit any differential trends before 1990. The impact of robots is distinct from the impact of imports from China and Mexico, the decline of routine jobs, offshoring, other types of IT capital, and the total capital stock (in fact, exposure to robots is only weakly correlated with these other variables). According to our estimates, one more robot per thousand workers reduces the employment to population ratio by about 0.18-0.34 percentage points and wages by 0.25-0.5 percent.
Gated version available at the National Bureau of Economic Research.



Wednesday, January 25, 2017

Sunday, November 20, 2016

Allan Holdsworth quartet

Music for a Sunday morning. One of my favorite guitarists: A. Holdsworth. Never plays a tune in his repertoire the same way.

Data hubris?
Every five minutes a satellite captures images of China’s biggest cities from space. Thousands of miles away in California, a computer looks at the shadows of the buildings in the images and draws a conclusion: China’s real estate boom is slowing. Traders at BlackRock, the money management giant, then use the data to help choose whether to buy or sell the stocks of Chinese developers. “The machine is able to deal with some of the very complex decisions,” said Jeff Shen, co-chief investment officer at Scientific Active Equity, BlackRock’s quantitative trading, or quant, arm in San Francisco.

Ten Years After - Good Morning Little School Girl - 8/4/1975 - Winterland

Who digs the late Alvin Lee of TYA these days? Unfortunately not many!

Saturday, November 19, 2016

Led Zeppelin: No Quarter 5/24/1975 HD

I never get bored of this interplay between John Paul Jones and Jimmy Page! Ah to be a teenager in #EastBoston again!

[04] Jeff Beck Band - "A Day in the Life" HD

The masterful Jeff Beck interprets Lennon-McCartney so brilliantly.

Thursday, October 27, 2016

On my reading pile: Peter J. Boettke & Liya Palagashvili: The Comparative Political Economy of a Crisis

From the abstract:

During times of economic crises, the public policy response is to abandon basic economic thinking and engage in ‘emergency economic’ policies. We explore how the current financial crisis was in part caused by previous emergency economic measures. We then investigate the theoretical limitations of emergency economic responses. We argue that these responses fail to take into consideration the practical conditions of politics, and thereby making them unsuitable to remedy the problems of a crisis. Lastly, we provide a preliminary analysis of the consequences resulting from emergency economic policies initiated in response to the 2008 financial crisis.

When Harper's Magazine was interesting

Tom Wolfe "Stalking the Billion-footed Beast: A Literary Manifesto for the New Social Novel"

Why I Am Not an Austrian Economist; Bryan Caplan

I consider this piece by Bryan Caplan a classic.

"I do not deny that Austrian economists have made valuable contributions to economics. Rather, as the sequel will argue, I maintain that:
(a) The effort to rebuild economics along foundations substantially different from those of modern neoclassical economics fails.
(b) Austrian economists have often misunderstood modern neoclassical economics, causing them to overstate their differences with it.
(c) Several of the most important Austrian claims are false, or at least overstated.
(d) Modern neoclassical economics has made a number of important discoveries which Austrian economists for the most part have not appreciated."
Read the whole thing.

More readings in Economics

James M. Buchanan and Viktor J. Vanberg, "The market as a creative process."

Robert Samuelson, "June Journalism 101," September 18, 1996, The Washington Post.

Recent Electricity Market Reforms in Massachusetts;  A Report of Benefits and Costs

James Bullard, The Rise and Fall of Labor Force Participation in the U.S.  St. Louis Federal Reserve Bank February 14, 2016

Weisang & Awazu, Vagaries of the Euro: an Introduction to ARIMA Modeling 

Paul Krugman,  Ricardo's Difficult Idea

David Henderson Artful Dodger "A Review of Paul Krugman's Depression Economics" Reason Magazine October 1999.

Dani Rodrik, The Past, Present, and Future of Economic Growth 

Bluestone & Bourdeaux, Dynamic Revenue Analysis: Experience of the States  More on this topic 

Felix & Watkins. KCFed. "The Impact of an Aging U.S. Population on State Tax Revenues"

Journ-Steff Pischke, The Credibility Revolution in EmpiricalEconomics: How Better Research Design is Taking the Con out of Econometrics 

Paul Pfleiderer,  Chameleons: The Misuse of Theoretical Models in Finance and Economics

Charles Frank, The Net Benefits of Low and No-Carbon Technologies, Brookings