A real picture of the economy

Stagnant. That's the word that best describes our economy over the last 6-7 years from the 2008/2009 recession.

In this post I want to discuss the important aspects of an economy:
1. Wages
2. Job growth/unemployment
3. Retail sales

Too many people point to the stock market as an indicator of economic health. Some of you reading this may still do that, while many others have wised up and realize it's nothing more than gambling - mainly for the rich. This is why I focus on Wages, Jobs, and Sales. These three factors give you a better picture of the millions of Americans that haven't invested much (if any at all) in the stock market.

Wages
According to the most recent September 2015 Census Bureau report 2014 wages have been stagnant and are in fact down from 2007 (pre-recession).
Census Link - Page 13 provides a graph and highlights

You find that for 2014 average wages are not statistically significant from 2013 wages, and 2011 and 2012 saw declines in average wages. So, average wages (for everyone) have declined and now flattened out but are still not where they were prior to the recession - 6.5% lower 2014 vs. 2007.

If you are Asian, good news - your average wages are higher than any other race. If you are white, also good news, you make the 2nd highest average wage. If you are black you make the lowest average wage and hispanics follow right behind. More importantly the average wage for non-whites (asian, hispanic, black) had no statistically significant change from 2013 to 2014. However, the bad news for this same period whites saw a 1.7% decrease in average wages.

Jobs/Unemployment
As an economist, this is one of my most hated statistics reported. Unemployment numbers are only based on people (age 16+) actively looking for jobs (last 4 weeks). People that give up on looking for jobs aren't included in this statistic.

It's important to understand that the BLS (Bureau of Labor statistics) attempts to track people in the "Not in Labor Force" (NILF) and they also have "Marginally Attached Workers" (MAW) and "Discouraged Workers" (DW). Both the MAW and DW groups (age 16+) are NOT included in the unemployment figures because they have not actively looked for work in the last 4 weeks.

To get a better understanding of what has really been happening (because a picture is worth a thousand words) I'm including two recent graphs from the BLS website.

Graph for Unemployment numbers (notice the downward trend):


Graph for Not in Labor Force numbers (notice the upward trend):


For reference: BLS Link to Graph 1 and BLS Link to Graph 2

As you can see the unemployment rate is indeed dropping. But of much more concern are the growing number of people that are NILF because they have given up. This paints a much more bleak picture of our economic conditions than the simple unemployment rate provides.


Retail Sales
In February 2014 the National Retail Federation (NRF) provided a forecast that retail sales were expected to grow by 4.1% over the next year (LINK). However, by July 2015 they had to adjust their forecast downward to 3.5% (LINK).

Graph showing the flattening of retail sales over the last 3-4 years:


Reference for this graph is at the NRF website, LINK.

Final Thoughts:
Now, I'm not intending to present an alarmist picture. However:
1. Lower average wages from pre-recession (2007)
2. flattening retail sales
3. Increases in the Not In Labor Force numbers

Add to that the stock market is moving into a much more volatile time period and there are continued restructuring (layoffs) in many industries around the world to save those companies money (Hewlett Packard, Catepillar, ConAgra, Walmart, Target, Air France, etc.) and we might be missing some signaling of things to come over the next 1-3 years.

Wal-mart stock price plummets and the billionaire heirs lose in the neighborhood of $9-11 billion in one day, Bloomberg. I can tell you this, any restructuring they do is going to preserve their own greedy pockets not those of the average worker.

My quick stock market forecast:
I'm expecting to see dips in the markets Mid-November into Mid-December (approx. Nov. 17 through Dec. 20). And again market dips in the Spring of 2016 Mid-April to Mid-May. The downward trend will continue as we move more toward a new paradigm, yeah I said paradigm because that's the best way to describe it at this point.

What do we do?
It's time to begin imagining and possibly implementing a better system. Complaining and pointing out the faults of the broken system that we have only goes so far, we must begin.

RKRC!

a reply to: WCmutant

Debt saturation. I don't know if that is a real economic term, but it just popped into my head. Individuals are saturated with debt, because debt creates wealth, remember? Fractional reserve banking creates debt for the borrower/wealth for the lender. Businesses are saturated with debt. Banks are saturated with toxic debt (subprime mortgage garbage), countries are saturated with debt. The fractional reserve system is slowly collapsing because it cannot infuse any more debt into the system because no one can pay for it. The ponzi scheme is collapsing.

Why do you think the global warming bullsheet is being hawked so hard? It is yet another scam run by the elites to keep the wealth extraction going. Why do you think everyone is going to war? War creates profits for the MIC. It's not too hard to see if you look at the broad strokes.

a reply to: HighDesertPatriot

So if everyone and everything is in debt....

Who holds all the paper?

Is it real debt, with real money or cyber debt....ones and zeros in some swiss data base.

Bankers have just enough rope to hang themselves. Too bad they are too greedy to realize it.

a reply to: WCmutant

94 million Americans unemployed but I don't know what is included in that number, toddlers? sasquatch?

a reply to: HighDesertPatriot

HighDesertPatriot, I agree with what you have said. However, my focus is primarily on the outlook for average Americans and not the ponzi scheme/pyramid schemes that the TPTB keep pushing. You've mixed several ideas together to make your point.

My focus is on Wages, Jobs/Unemployment, and Retail Sales. It gives you a much more important picture as to the economic health of the average American. Even people that aren't saturated with debt aren't necessarily seeing growth in wages and discretionary income.

But you are correct, debt saturation is a major concern. It's more of a concern because of our fiat currency system. We should be concerned that we see another world war or major conflict as a means to stave off the impending collapse. Right now we are involved in skirmishes at best. But no doubt that we (the USA) might look to start another major conflict in hopes of boosting our economic numbers.

The global warming scam is leading to a desire to control the resources of the world and how we (the average people) get to spend them. Money is involved and the elite will benefit but it's about control.

However, it is why I ended my post by suggesting to anyone reading that we begin to postulate our own ways of fixing this system.

originally posted by: olaru12
a reply to: HighDesertPatriot

So if everyone and everything is in debt....

Who holds all the paper?

Is it real debt, with real money or cyber debt....ones and zeros in some swiss data base.

With regard to federal debt:

Social Security trust funds (16 percent
the Federal Reserve banks (12 percent)
China (8 percent)
Japan (7 percent)
Mutual funds including money-market funds (6 percent)

Personal/business debt is held by banks.

originally posted by: FamCore
a reply to: WCmutant

94 million Americans unemployed but I don't know what is included in that number, toddlers? sasquatch?

94 million Americans that are "Not in the Labor Force" - given up looking for work and yes, jobless.

It's people age 16+ that have given up looking for work. Likewise, the Unemployment rate is 16+ who have been actively seeking work in the last 4 weeks but have not found a job.

a reply to: WCmutant

It is all interrelated. Weges are driven by demand for goods and services, which is driven by discretionary income, which is driven by wages/COL, etc. All related.

a reply to: HighDesertPatriot

When most of the working population makes less than 30k a year they can't buy anything.

originally posted by: HighDesertPatriot
a reply to: WCmutant

It is all interrelated. Weges are driven by demand for goods and services, which is driven by discretionary income, which is driven by wages/COL, etc. All related.

That's an easy way to slough off solving the problem. Yes, it's all interrelated - that's the nature of an economy. Examples exist in the business world how to be competitive, pay your employees well, and be positioned to avoid layoffs. Costco is a very good example.

The root problem is greed. Too many psychopathic executives in corporations running them into the ground for their own gain. There are too few Costco's operating a fairly solid business model. But there are still some decent companies out there that really do look to pay their employees better wages.

I would amend your statement - jobs are driven by demand for goods and services. Wages are driven by the supply/demand for a given job(s) - more people demanding a job means wage competition in favor of the company. Perhaps a reason we've seen a decrease in average wages over the last 7-8 years.

However, you need to understand the fact I pointed out that average wages are down 6.5% from 2007 to 2014. This captures the discretionary income scenario. If average wages are down then discretionary income generally shrinks, which was also my point by examining the Retail Sales trend.

Likewise, the continued increase in "Not in Labor Force" numbers suggest that the jobs we like to believe are being created just aren't.

originally posted by: WCmutant

originally posted by: HighDesertPatriot
a reply to: WCmutant

It is all interrelated. Weges are driven by demand for goods and services, which is driven by discretionary income, which is driven by wages/COL, etc. All related.

That's an easy way to slough off solving the problem. Yes, it's all interrelated - that's the nature of an economy. Examples exist in the business world how to be competitive, pay your employees well, and be positioned to avoid layoffs. Costco is a very good example.

The root problem is greed. Too many psychopathic executives in corporations running them into the ground for their own gain. There are too few Costco's operating a fairly solid business model. But there are still some decent companies out there that really do look to pay their employees better wages.

I would amend your statement - jobs are driven by demand for goods and services. Wages are driven by the supply/demand for a given job(s) - more people demanding a job means wage competition in favor of the company. Perhaps a reason we've seen a decrease in average wages over the last 7-8 years.

However, you need to understand the fact I pointed out that average wages are down 6.5% from 2007 to 2014. This captures the discretionary income scenario. If average wages are down then discretionary income generally shrinks, which was also my point by examining the Retail Sales trend.

Likewise, the continued increase in "Not in Labor Force" numbers suggest that the jobs we like to believe are being created just aren't.

The root of the problem is we are in a global economy which has put pressure on the wages of the low skilled American worker. This is further compounded by the open borders policy of importing even more low skilled immigrants.

Costco is somewhat unique in that they aren't necessarily trying to be the low cost leader. Most of their stores are in well off suburban areas and their customers while cost conscious are not the same customers as say Wal-Mart or even Target. They also pay a membership fee which offsets some of the cost. Costco isn't really an apples to apples comparison in regards to their business model next to a Wal-Mart or even other big retailers.

a reply to: WCmutant

The root problem is greed. Too many psychopathic executives in corporations running them into the ground for their own gain.

So you are saying that greed is something only "psychopathic executives" possess? I don't think so. Look at the consumer credit problem - whose greed drove that problem? Consumers, that's who. Your bias is showing with your characterization of executives, by the way.

Stop with the Bernie Sanders "socialism is good" flawed thinking. I would like to see you do the job of a corporate CEO whose feet are held to the fire by the board of directors and investors, and willingly do it for "a living wage". I doubt you'd last a day before you wanted a big fat raise.

originally posted by: HighDesertPatriot
a reply to: WCmutant

The root problem is greed. Too many psychopathic executives in corporations running them into the ground for their own gain.

So you are saying that greed is something only "psychopathic executives" possess? I don't think so. Look at the consumer credit problem - whose greed drove that problem? Consumers, that's who. Your bias is showing with your characterization of executives, by the way.

Stop with the Bernie Sanders "socialism is good" flawed thinking. I would like to see you do the job of a corporate CEO whose feet are held to the fire by the board of directors and investors, and willingly do it for "a living wage". I doubt you'd last a day before you wanted a big fat raise.

My bias? What bias is that? Please explain the bias you think you see.

Your own lopsided Bernie Sanders socialist reference is laughable. We already have socialism in the USA - it's called corporate socialism. But apparently Sanders is the only socialist we should be afraid of, your own bias is showing way more than mine.

Do you have anything to actually add to the discussion or just your own warped political view of a broken system?

a reply to: WCmutant

Don't forget the what 200 trillion in unfunded liabilities that will be coming due. Gives me warm and fuzzies.

As I've been saying, the parasitic government has darn near killed the economy. We've been in a Depression now for a while, but they've done everything they can to distract us from that.

originally posted by: onequestion
a reply to: HighDesertPatriot

When most of the working population makes less than 30k a year they can't buy anything.

hey, hey, hey.....just play along that the entire problem is lazy poor people...(sarcasm intended)

originally posted by: FamCore
a reply to: WCmutant

94 million Americans unemployed but I don't know what is included in that number, toddlers? sasquatch?

Not toddlers nor Sasquatch but people 16 and over.

"The Bureau of Labor Statistics reports that a record 94,610,000 people (ages 16 and over) were not in the labor force in September. In other words they were neither employed nor had made specific efforts to find work in the prior four weeks".
www.breitbart.com...

In the US, the real picture of the economy is that 50% of the income, which is money that would be invested back into the economy prosperously, instead gets wasted by the government overtly.

95% of the wealth produced over the last century has disappeared into the plutocracy, via the government, covertly.

All of the economic statistics are relative measures of an economy that has been hacked for over 100 years.

originally posted by: jimmyx

originally posted by: onequestion
a reply to: HighDesertPatriot

When most of the working population makes less than 30k a year they can't buy anything.

hey, hey, hey.....just play along that the entire problem is lazy poor people...(sarcasm intended)

But don't worry. I'm sure your fix is to give the same government that is killing the economy the power to just deliver the final coup de grace.