American Economics Thread

[Sinnavuuty]

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: Stagflation is an economic cycle characterized by slow

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and a high unemployment rate accompanied by inflation. Economic policymakers find this combination particularly difficult to handle, as attempting to correct one of the factors can exacerbate another.

US rGDP growth; 2.5% (2023)
US inflation rate; MoM 0.4 (Feb) 0.4 (Mar) 0.3 (Apr) 0.0 (May) -0.1 (Jun) 0.2 (Jul)
US Unemployment; 1.6% (U-1) 2.1 % (U-2) 4.3% (U-3) 4.5% (U-4) 5.1% (U-5) 7.8% (U-6)

Where is the high unemployment?

Where is the high inflation?

And is 2.5% rGDP growth really "slow growth"?

Though I know this conversation is pointless because half of the people in this thread don't believe US statistical reporting. Which is pretty hilarious to me, considering this is what ignorant Americans think of Chinese statistics. It's like looking in the mirror.

1st - The word stagflation is the union of the terms "stagnation" (standstill) and "inflation" (general increase in prices).

2nd - Stagflation occurs with the combination of 3 factors:

1 - high inflation

2 - slowdown in economic activity

3 - increase in unemployment

3rd - If you really believe those BLS numbers, the problem is really yours. These job creation numbers have been artificially published since at least 2022, the collection of real data suggests the opposite effect, the contraction of jobs created. It should be obvious to everyone that there are more unemployed Americans today. In fact, most probably know someone personally who is looking for a new job right now.

Want an example of how things are in reality?

According to a recent survey by the New York Federal Reserve, an all-time high of 28.4% of all U.S. adults are currently looking for work:

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The New York Federal Reserve’s latest poll of consumers found 28.4% of respondents were looking for a job — the highest reading since March 2014 and up from 19.4% a year ago. That includes both individuals already out of a job and those currently employed but seeking new roles.

The readings, from the New York Fed’s thrice-annual Survey of Consumer Expectations Labor Market Survey, add to the evidence that the U.S. economic outlook is worsening, even as some economists dial back their odds of a recession.

Do you really think that in a growing economy with low unemployment, 28% of all adults in the country would be looking for a job?

That’s simply impossible and shows how distorted the official statistics are. It would be extremely obvious that US unemployment is much higher than is being claimed. As I said, the "macro" data is all made up and gives the wrong impression of the real US economy. Another example of this distortion is inflation. Real inflation is disguised, it has changed several times over time, the published inflation shows little or no correlation with the reality experienced by American consumers. In 1983, they stopped calculating inflation from mortgages and housing costs and started using rent prices to assess the cost of housing. This change alone was enough to cause the CPI to be 4 percentage points below what it should have been during the peak of inflation in 2022. In 1999, another change in the calculation method was made that ended up reducing the real inflation statistic. And so on. In other words, the way the CPI is calculated is properly geared towards underestimating the real levels of inflation, which are higher than the official level, because in addition to hiding the real purchasing power of the population, it reduces the government's interest payments and social security spending, in addition to inflating the economic growth figures, not only in secondary statistics but also in the GDP quote itself.

Just to give you an idea of how falsified the CPI estimate is, if US inflation were calculated in April 2024 using the 1980 CPI method, with all its parameters established, inflation would be at 8%, while during its inflationary peak, the CPI would have reached 18% in June 2022.

Regarding "ignorant Americans" and Chinese statistics, perhaps Americans think that their government is different from China, which is far from the truth. There is a lot of symmetry in common in all governments and statistical reality is one of the main symmetries. All governments use statistical data to plan the economy. The only difference is that in the US there is still some ability to obtain independent reports to study and analyze official statistics, and this is what several economists/analysts have been doing. A great example is John Williams, who has been talking about this falseness of official

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for decades. Furthermore, I am neither Chinese nor American, and I do not fully trust everything these governments report, including from my own country, so I am outside of that mirror.

Everyone chooses to believe what they want, fortunately I do not choose to believe what I want.

 

[Sinnavuuty]

American Dream!!!

Part 5:

It takes about 150,000 new jobs each month just to keep up with population growth, and the initial number given last month was well below that level:

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Employers added 114,000 jobs last month, which was far below the Dow Jones estimate of 185,000.

The unemployment rate also edged higher to 4.3 percent – the highest level since October 2021.

It should be obvious to everyone that there are more Americans out of work these days. In fact, most of you probably know someone personally who is looking for a new job right now.

I’ve posted this before, but it’s important to reiterate: According to a recent survey by the New York Federal Reserve, an all-time high of 28.4% of all U.S. adults are currently looking for work:

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The New York Federal Reserve’s latest poll of consumers found 28.4% of respondents were looking for a job — the highest reading since March 2014 and up from 19.4% a year ago. That includes both individuals already out of a job and those currently employed but seeking new roles.

The readings, from the New York Fed’s thrice-annual Survey of Consumer Expectations Labor Market Survey, add to evidence that the U.S. economic outlook is worsening, even as some economists dial back their odds of a recession.

For the vast majority of Americans, the “American Way of Life” simply can’t be financed with what they actually earn. So they’re using debt to make up the difference, and that’s been particularly true during the cost-of-living crisis. Total household debt has now reached a total of 17.8 trillion dollars, and continues to accumulate more with no end in sight:

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A quarterly report published this month by the Federal Reserve Bank of New York on household credit and debt found that between the first quarter of 2021 and the second quarter of 2024, credit card debt surges d 48.1% while household debt — which includes mortgages and auto loans — rose by 21.6%.

In dollar terms, credit card debt rose from $770 billion in early 2021 to $1.14 trillion in the most recent quarter, while household debt increased from $14.64 trillion to $17.8 trillion in the same period.

And the fact that delinquency rates are rising only underscores how serious things have become:

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Amid American households’ rising debt burdens, delinquency rates have grown as well. In the last 12 months, about 9.1% of credit card debt balances and 8% of auto loan balances moved into delinquency — the highest levels since early 2011 and the end of 2010, respectively.

According to a new survey that has just been released, 82% of Americans believe that “their money doesn't go as far as it used to”:

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A growing number of Americans are pumping the brakes on spending as they continue to face elevated prices for everyday needs like food, rent and auto insurance.

New findings published by Empower show that 62% of Americans feel their purchasing power and income in relation to prices is decreasing due to persistent inflation. Another 82% said their money does not go as far as it used to. Additionally, 79% of respondents noted that many household goods like cereal and chips are dwindling in terms of serving sizes.

According to a recent survey conducted by CNN, the cost of living crisis is a major issue for approximately two-thirds of the country:

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However, there are still times when the truth seeps out. CNN commissioned a well-constructed poll of about 2,000 random people to find out where they stand on personal finances. The headline number: nearly 40 percent of Americans are struggling to pay their bills. That is up from 28 percent from just three years ago, and a higher number than back in 2008–09, the period known as the Great Recession.
Two-thirds of people say that the number one issue they face is the cost of living and paying their bills. The typical American is spending nearly $1,000 more per month compared to three years ago just to pay living expenses. That is according to Moody’s, but it also fits with the intuition we all have.

The American standard of living is falling. Everyone can see it. That's why household debt levels are rising exponentially. Most people are just trying to find a way to survive from one month to the next. Furthermore, economic conditions are clearly unfavorable for companies that continue their layoffs, especially the Big Companies:
For example, General Motors just announced that more than 1,000 salaried employees will be laid off

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Cisco has announced it will lay off 7% of its employees

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Last but not least, Intel has begun the process of laying off approximately 15,000 workers

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All of this is not a good trend for an economy that is experiencing solid growth an annualized rate base of 2.8%, as this news story here credits:

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[HighGround]

1st - The word stagflation is the union of the terms "stagnation" (standstill) and "inflation" (general increase in prices).

2nd - Stagflation occurs with the combination of 3 factors:

1 - high inflation

2 - slowdown in economic activity

3 - increase in unemployment

3rd - If you really believe those BLS numbers, the problem is really yours. These job creation numbers have been artificially published since at least 2022, the collection of real data suggests the opposite effect, the contraction of jobs created. It should be obvious to everyone that there are more unemployed Americans today. In fact, most probably know someone personally who is looking for a new job right now.

Uh no, it's not my problem, it's yours. Because you're the one positing that these statistics are fake.

Want an example of how things are in reality?

According to a recent survey by the New York Federal Reserve, an all-time high of 28.4% of all U.S. adults are currently looking for work:

Please, Log in or Register to view URLs content!

I'll help you analyze that article by using a quote from that very article.

"The New York Federal Reserve's

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found 28.4% of respondents were looking for a job — the highest reading since March 2014 and up from 19.4% a year ago. That includes both individuals already out of a job and ones currently employed but seeking new roles."

As an anecdote, I'm always looking for a new job, because I like money. I've applied for management positions in my organization 3-5 times in the last two years, because I like money and career growth. What does that have to do with "reality" and actual unemployment?

That’s simply impossible and shows how distorted the official statistics are. It would be extremely obvious that US unemployment is much higher than is being claimed.

No it doesn't. It's not obviouis whatsoever.

As I said, the "macro" data is all made up and gives the wrong impression of the real US economy. Another example of this distortion is inflation. Real inflation is disguised, it has changed several times over time, the published inflation shows little or no correlation with the reality experienced by American consumers. In 1983, they stopped calculating inflation from mortgages and housing costs and started using rent prices to assess the cost of housing. This change alone was enough to cause the CPI to be 4 percentage points below what it should have been during the peak of inflation in 2022. In 1999, another change in the calculation method was made that ended up reducing the real inflation statistic. And so on. In other words, the way the CPI is calculated is properly geared towards underestimating the real levels of inflation, which are higher than the official level, because in addition to hiding the real purchasing power of the population, it reduces the government's interest payments and social security spending, in addition to inflating the economic growth figures, not only in secondary statistics but also in the GDP quote itself.

This quip about housing prices is wrong. The data shows that CPI does in fact generally reflect rises in home prices, it just lags behind it.

Just to give you an idea of how falsified the CPI estimate is, if US inflation were calculated in April 2024 using the 1980 CPI method, with all its parameters established, inflation would be at 8%, while during its inflationary peak, the CPI would have reached 18% in June 2022.

Wow. I wonder if anything changed between 1980 and 2024 in the typical consumer basket. 44 years, I mean the world is basically the same really? No?

But even assuming you had legitimate crticicism, we can all check various price indexes ourselves, and indeed, the CPI itself is a thorough report that reflects price changes in many different categories.

Regarding "ignorant Americans" and Chinese statistics, perhaps Americans think that their government is different from China, which is far from the truth. There is a lot of symmetry in common in all governments and statistical reality is one of the main symmetries. All governments use statistical data to plan the economy. The only difference is that in the US there is still some ability to obtain independent reports to study and analyze official statistics, and this is what several economists/analysts have been doing. A great example is John Williams, who has been talking about this falseness of official

Please, Log in or Register to view URLs content!

for decades. Furthermore, I am neither Chinese nor American, and I do not fully trust everything these governments report, including from my own country, so I am outside of that mirror.

Everyone chooses to believe what they want, fortunately I do not choose to believe what I want.

ShadowStats?

Considering your previous ridiculous diatribe on the gold standard I shouldn't be surprised, but ShadowStats does nothing but literally just adds a flat number to BLS data. That's it. He does zero mathematical work to calculate his own inflation rate.

For people who don't believe me? Just look at his graph.



He's literally adding a flat number to BLS data. That's all he's doing. That's why the graph is identical, but slightly higher.

Now by the way, if you actually did what @Sinnavuuty is complaining about, and used home prices to calculate shelter, the graph would look completely different. And people who aren't complete hacks have done so. And by the way, John Williams is a hack. Like an actual worthless hack, I cannot emphasize this enough. He's a fraud. Here's what a graph where people actually bothered to do some amoung of work looks like,

 

[HereToSeePics]

The y/y increase in federal income tax collections must clearly reflect a deteriorating labor market

https://twitter.com/i/web/status/1827004974791786918

Is that really a surprise that higher income tax receipts came from higher wages driven by the inflation spike from 2022 onwards? Not to say the labor market is/isn't healthy, but income tax collection growth isn't the best indicator for that given other plausible explanations for that growth.

 

[HighGround]

Is that really a surprise that higher income tax receipts came from higher wages driven by the inflation spike from 2022 onwards? Not to say the labor market is/isn't healthy, but income tax collection growth isn't the best indicator for that given other plausible explanations for that growth.

Headlines are saying that JPowell is "lowering rates", but his actual statement was much more cautious.

“The time has come for policy to adjust,” Powell said in his keynote speech at the Fed’s annual economic conference in Jackson Hole, Wyoming. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”

IMO, while rates may be cut, I think a more reasonable interpretation would be to say that the Fed is not going to raise rates for the forseeable future. Rates hikes worked, and the economy is more or less stabilizing. They're gonna keep it ~5% for the forseeable future.

 

[Bellum_Romanum]

Yo!! @chgough34 am posting this link because the person sounds a lot like you and probably went to the same school as well. Excellent insights as always!! Don't let my fellow WUMAOS discourage you from posting the truth about the American economic might because we all know they would wish to be in U.S. position which is first among equals!!

https://twitter.com/i/web/status/1826807147390534038

 

[chgough34]

Delete

 

[manqiangrexue]

Delete

Achievement unlocked: Most Intelligent Post You've Ever Made

 

[Sinnavuuty]

Uh no, it's not my problem, it's yours. Because you're the one positing that these statistics are fake.

As I said, believe what you want.

I'll help you analyze that article by using a quote from that very article.

"The New York Federal Reserve's

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found 28.4% of respondents were looking for a job — the highest reading since March 2014 and up from 19.4% a year ago. That includes both individuals already out of a job and ones currently employed but seeking new roles."

As an anecdote, I'm always looking for a new job, because I like money. I've applied for management positions in my organization 3-5 times in the last two years, because I like money and career growth. What does that have to do with "reality" and actual unemployment?

You need to interpret what is stated correctly and not take things literally.

Why are 28% of all adults looking for new jobs if the unemployment rate is below 5%?

Do you really think that 1/4 of all employed adults would be trying to find another job? This does not work in reality, but it is still a strong indicator that the official data is falsified, creating a much more unstable scenario than the data suggests, which is nothing new.

In fact, a large part of them must also be looking for another job because the chances of layoffs must be quite high, considering the instability of the current job market.

As I said, the unemployment numbers are higher than the official aggregate and this is really the reality of the US labor market.

This quip about housing prices is wrong. The data shows that CPI does in fact generally reflect rises in home prices, it just lags behind it.

View attachment 134653

The CPI has undergone several changes, not just in relation to house prices, which ended up underestimating real inflation levels.

Wow. I wonder if anything changed between 1980 and 2024 in the typical consumer basket. 44 years, I mean the world is basically the same really? No?

That is not an argument. On the contrary, it would be a very bad argument.

But even assuming you had legitimate crticicism, we can all check various price indexes ourselves, and indeed, the CPI itself is a thorough report that reflects price changes in many different categories.

No. CPI does not take into account a variety of prices. I won't explain that again.

ShadowStats?

Considering your previous ridiculous diatribe on the gold standard I shouldn't be surprised, but ShadowStats does nothing but literally just adds a flat number to BLS data. That's it. He does zero mathematical work to calculate his own inflation rate.

Still feeling remorse over the gold standard debate? Argue with economic theory on that subject, I have nothing more to say.

And about him using fixed data, he uses the original CPI data to calculate actual inflation today.

For people who don't believe me? Just look at his graph.

View attachment 134654

He's literally adding a flat number to BLS data. That's all he's doing. That's why the graph is identical, but slightly higher.

A little higher? William's alternative CPI calculation showed the US inflation rate rising to over 16% in spring 2022, or more than double the official CPI numbers. Is that low for you? haha

He uses the original CPI data to calculate inflation today. You seem to be

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fond of Investopedia for a source, if even the source you use cites Williams, I don't know why you're so dismissive of him.

Now by the way, if you actually did what @Sinnavuuty is complaining about, and used home prices to calculate shelter, the graph would look completely different. And people who aren't complete hacks have done so. And by the way, John Williams is a hack. Like an actual worthless hack, I cannot emphasize this enough. He's a fraud. Here's what a graph where people actually bothered to do some amoung of work looks like,



View attachment 134655

John Williams is a hacker? I didn’t know. Tell us more about that. I know he has a degree in economics from Dartmouth College and an MBA, and he’s been a consultant and worked with Fortune 500 companies.

Also, as I said, the CPI has gone through a number of changes that have ended up underestimating the actual inflation rate, and it’s not just in real estate as I’ve said before, so I don’t really know what you’re trying to prove here.

And Williams is just one of many

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of the way the CPI is calculated today, he is just a drop in the ocean of criticism of the current CPI’s falsity.

 

[pbd456]

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