Economics Roundtable

May 2014 Payroll Employment

After 76 months, we finally got back to the prerecession level of payroll employment.

Click on the image to get a bigger version.


The best summary of the state of our economy is the graph (below) of employment as a fraction of population for people over 16 years old. The decrease is large, but the most troubling feature of the graph is the flat trend .

Click on the image to get a bigger version.

Graph-of-the-Year Candidates

Donald Marron likes European interest rates. Click on the image to get a bigger version. Can you find three distinct subperiods?

Brad DeLong favors the U.S. gdp gap.

Remember M1?

Money Supply M1 growth is now over 20% per year over a 12 month lag. M1 growth has touched 20% before, but not with excess reserves of $1.6 trillion. Where is M1 headed?

Click on the chart for a larger version.


The Economics Roundtable is sponsored by EconModel.

The Classic Economic Models cover micro, macro, and financial markets.

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October 6, 2015, 3:03 am, 1553640

October 6, 2015, 2:04 am, 1553637

1. When it comes to South Carolina, he is a cornball, but a likable one.

2. He played Strato-O-Matic baseball as a kid.  No mention of Jim Bunning in that context.

3. After two years at Harvard, he had taken only Econ 101.  Later Dale Jorgensen became his mentor.

4. He ...

October 6, 2015, 2:04 am, 1553636

After a near-fatal illness, which many suspected was foul play from the Putin regime, Vladimir Kara-Murza has been released from the hospital at a critical time for US-Russia relations. Putin’s assertive foreign policy, marked by military escalation in Syria and continued meddling in Ukraine, challenges US leadership in Europe and ...

October 6, 2015, 12:44 am, 1553628

October 6, 2015, 12:04 am, 1553627
(October 6, 2015 12:26 AM, by Bryan Caplan) Questions non-economists ask when I tell them I'm homeschooling my sons:1. What makes you think you're qualified to teach them?2. Who are you to decide what your kids should study?3. What about socialization?4. How come you're not teaching [insert pet... (1 ...

October 5, 2015, 11:33 pm, 1553626
Reader Dean emailed me today in response to a couple of recent articles I wrote regarding US policy in Syria.

Dean disagreed with the tone of my articles, stating a belief the US needs to "take a stand".

I back his "take a stand" suggestion 100% and offer ...

October 5, 2015, 10:44 pm, 1553615

The housing market is important for many developed economies, not least in the UK. This column presents new research in search and matching modelling suggesting that the quality of a house-buying match is important in understanding not only the time taken to sell a house, but also the length of ...

October 5, 2015, 10:44 pm, 1553614

Most sub-Saharan African countries have adopted minimum wage laws. This column argues that this will become increasingly significant for the economy as a whole as the number of covered workers grows, with possible spillover effects to uncovered sectors. Importantly, sub-Saharan Africa displays a bias towards a more aggressive minimum policy ...

October 5, 2015, 9:33 pm, 1553609

Why can't we create inflation anymore? Maybe it's because money isn't what it used to be.

Money used to be like a car; the market expected it to depreciate every day. When we ...

October 5, 2015, 9:03 pm, 1553592
• At 8:30 AM ET, Trade Balance report for August from the Census Bureau. The consensus is for the U.S. trade deficit to be at $48.6 billion in August from $41.9 billion in July.

From Binyamin Appelbaum at the NY Times: Ben Bernanke, in Book, Blames Congress ...

October 5, 2015, 8:44 pm, 1553591

October 5, 2015, 8:44 pm, 1553590

October 5, 2015, 8:04 pm, 1553589
(October 5, 2015 07:11 PM, by David Henderson) Phooey The other Feature Article on Econlib today is "Phools and Their Money," Arnold Kling's review of Phishing for Phools: The Economics of Manipulation & Deception by George A. Akerlof and Robert J. Shiller. A highlight, after Arnold gives their... (0 ...

October 5, 2015, 7:34 pm, 1553588

"It’s a challenge to keep track of all the dodges and untruths." But Kimberly Strassel helps.

Also helpful is Jonah Goldberg:

But all this misses the point. I’m not normally an ALL CAPS kind of guy. So please forgive me for this: BUT THE SERVER IS ...

October 5, 2015, 6:44 pm, 1553532

October 5, 2015, 6:04 pm, 1553529
(October 5, 2015 05:10 PM, by Scott Sumner) I've made this point before, but it's worth repeating, given all the recent talk about the Fed relying on the Phillips Curve. The Phillips Curve model only works when the business cycle is driven by demand shocks. When we are... (0 ...

October 5, 2015, 6:04 pm, 1553527

Not all important public policy reforms come from Washington. Really lasting reforms can percolate from the bottom up, brewed by citizens with a grievance, pushing state and local governments to act.

Consider the case of Right to Try legislation.These are state laws that allow doctors to prescribe investigational medicines being safely ...

October 5, 2015, 6:04 pm, 1553528

One might get the sense from looking at recent opinion polls that support for The Donald is crumbling. Here is his RCP average, for example:

It makes it seem like Trump, who’s represented by the blue line here to emphasize that he is ...

October 5, 2015, 5:23 pm, 1553525

We have received several requests for an update of our ZPOP ratio statistic to incorporate September's data. We have also been asked whether the ZPOP ratio can be constructed from labor force data from the U.S. Bureau of Labor Statistics (BLS).

The ZPOP ratio is an estimate of ...

October 5, 2015, 5:03 pm, 1553471
The Trans-Pacific Partnership in 11 questions.

October 5, 2015, 5:03 pm, 1553470

October 5, 2015, 4:44 pm, 1553469

October 5, 2015, 4:44 pm, 1553468

October 5, 2015, 4:04 pm, 1553466

Chapter Summary
Information is convex to noise. The paradox is that increase in sample size magnifies the role of noise (or luck); it makes tail values even more extreme. There are some problems associated with big data and the increase of variables available for epidemiological and other “empirical” research.

Here is ...

October 5, 2015, 4:04 pm, 1553465

The Iran Deal and Iran’s Parliament

Iran’s parliament has been fighting with President Hassan Rouhani about its right to approve the nuclear agreement signed on July 14, 2015, mirroring, ironically, the dispute between President Obama and the U.S. Congress over the same issue.  Iran’s parliament moved more determinedly than Congress, however, ...

October 5, 2015, 4:04 pm, 1553463


The Economist looks at the challenge advancing technology like sharing platforms poses to left-wing politicians, using France as an example. Check out the fun fact at the end of the paragraph, which is really the main reason for ...

October 5, 2015, 4:04 pm, 1553464

After five years of negotiations the United States and 11 other Pacific Rim countries have agreed to the largest regional trade agreement in history. AEI scholars are available to comment as more details are made public.

See Resident Scholar Derek Scissors‘ analysis of the treaty negotiations earlier this year here.

See Resident Scholar ...

October 5, 2015, 4:04 pm, 1553461

NATO’s SecGen Jens Stoltenberg today warned the Russians about their violation of Turkish airspace in ongoing Russian air operations over Syria. It was only the latest warning from NATO about Russian violations of various NATO nations’ airspace and assorted other antics. But today’s incursion — which prompted a ...

October 5, 2015, 4:04 pm, 1553462

Here’s a brief preliminary reaction to the news that the Trans-Pacific Partnership Agreement (TPP) negotiations have been successfully concluded.  There will be lots of time to parse the details, but what is striking about what we know from fact sheets and initial commentary is simply that there are no surprises ...

October 5, 2015, 4:04 pm, 1553460

A little late on this: Here is The Economist calling for NGDP targeting:

A target for nominal GDP (or the sum of all money earned in an economy each year, before accounting for inflation) is less radical than it sounds. It was a plausible alternative when inflation targets became common in ...

October 5, 2015, 3:33 pm, 1553453
In previous articles I summed up the immigration problems in Europe and the US as the direct result of an "unlimited demand for free services, free shelter, and free food".

Let's tune into what Economist Milton Friedman has to say about Illegal Immigration.

October 5, 2015, 3:33 pm, 1553452
Here is an amusing video that reader Curt shared with me moments ago. It's about tax plans of Hillary Clinton vs. Donald Trump.

Link if video does not play: Hillary Supporters Like Trump's Tax Plan.

Mike "Mish" Shedlock

October 5, 2015, 3:33 pm, 1553451

From the inbox:

The Volkswagen emissions scandal is putting pressure on many countries to take a closer look at their vehicle emissions testing for cars that run on diesel fuel. It seems thatsuch engines are actually worse for the environment than previously thought, ...

October 5, 2015, 3:23 pm, 1553450

Readers Question: Is the following concept correct or not – Nobody wants a free good?

Firstly, a free good is a good with zero opportunity cost.

Water is usually a free good in the UK.

Examples of a free good include:

Water ...

October 5, 2015, 3:03 pm, 1553389

October 5, 2015, 3:03 pm, 1553388
Black Knight Financial Services (BKFS) released their Mortgage Monitor report for August today. According to BKFS, 4.83% of mortgages were delinquent in August, down from 4.71% in July. BKFS reported that 1.37% of mortgages were in the foreclosure process, down from 1.80% in August 2014.

This gives ...

October 5, 2015, 2:44 pm, 1553387
David Wessel: Three books out in October offer those trying to understand the financial crisis that provoked the Great Recession useful perspectives on where we are and where we might be headed.

October 5, 2015, 2:44 pm, 1553386

October 5, 2015, 2:05 pm, 1553384

October 5, 2015, 2:04 pm, 1553383
(October 5, 2015 02:31 PM, by David Henderson) Many economists who currently support large minimum wage hikes claim that the best research now shows that such an increase would not cause significant drops in employment. However, their conclusion relies on a dubious reading of the literature. Dozens of... (1 ...

October 5, 2015, 2:04 pm, 1553382
(Don Boudreaux)

Here’s a letter to Medium:

Regarding your detailed account of the difficulty of being a ...

October 5, 2015, 1:33 pm, 1553376
Tobias Adrian, Michael Fleming, and Ernst Schaumburg

Market participants and policymakers have raised concerns about the potential adverse effects of financial regulation on market liquidity—the ability to buy and sell securities quickly, at any time, at minimal cost. Market liquidity supports the efficient allocation of capital through financial ...

October 5, 2015, 1:33 pm, 1553375
Tobias Adrian, Michael Fleming, Or Shachar, and Erik Vogt

First in a six-part series Commentators have argued that market liquidity has deteriorated in recent years as regulatory changes have reduced ...

October 5, 2015, 1:33 pm, 1553373

The DOJ announced that the Trustees in the BP Deepwater Horizon NRDA case have proposed to accept the settlement in principle with BP. The numbers appear to be pretty much the same as previously announced, with additional payments of $500 million for unanticipated restoration (in addition ...

October 5, 2015, 1:33 pm, 1553374

Tyler Cowen:

The behavior of Volkswagen has been heinous and the company and probably some of its executives deserve some serious punishments. Yet our reaction to the scandal is as illuminating as the misbehavior itself. We get much more upset when people do wrong out of deliberate fraudulent intent rather than ...

October 5, 2015, 1:03 pm, 1553320

I’m in California for a short vacation but tomorrow, the California Supreme Court will hear oral arguments in Gillette Co. v. Franchise Tax Board so I’ll be going to that. (If I can get in – the Court is also hearing arguments in a case about whether Californians ...

October 5, 2015, 1:03 pm, 1553319
Japanese Prime Minister Shinzo Abe arrives to speak before the U.N. General Assembly in New York last week. MIKE SEGAR/REUTERS

Among the big winners from Monday ...

October 5, 2015, 1:03 pm, 1553318
Reis reported that the vacancy rate for regional malls was unchanged at 7.9% in Q3 2015. This is down from a cycle peak of 9.4% in Q3 2011.

For Neighborhood and Community malls (strip malls), the vacancy rate was unchanged at 10.1% in Q3. For strip malls, ...

October 5, 2015, 12:44 pm, 1553317

October 5, 2015, 12:44 pm, 1553316

October 5, 2015, 12:44 pm, 1553315

October 5, 2015, 12:34 pm, 1553314
Today’s updates on sentiment in the US services sector and the Federal Reserve’s Labor Market Conditions Index (LMCI) offer more evidence for arguing that economic growth is slowing in the third quarter. There’s still a solid pace of output in services, but LMCI confirms the weakening trend that’s conspicuous in ...

October 5, 2015, 12:34 pm, 1553313

All year long, Federal Reserve policymakers have trumpeted plans for “liftoff,” the time when they finally increase their target for the federal funds rate above the range between zero and 25 basis points that has been in place since 2008. To their apparent dismay, that liftoff has been delayed again ...

October 5, 2015, 12:34 pm, 1553312

The ...

October 5, 2015, 12:04 pm, 1553306

FOR IMMEDIATE RELEASE: Washington, DC, October 5, 2015 — American Enterprise Institute (AEI) President Arthur Brooks announced today that the Daniels Fund of Denver, Colorado has made a $4 million investment to AEI in support of AEI Academic Programs — the institute’s initiative to reach students and faculty on college campuses with ...

October 5, 2015, 12:04 pm, 1553305

When Josh Sommer was an undergraduate at Duke, he was diagnosed with a rare cancer called a chordoma; fortunately, the skull base tumor was successfully removed surgically, though these malignancies have a nasty habit of growing back.  To accelerate chordoma research, Sommer set up the Chordoma Foundation.  (I’ve been exceptionally ...

October 5, 2015, 12:04 pm, 1553307

October 5, 2015, 12:04 pm, 1553308

On Friday, Secretary of Education Arne Duncan announced he would be stepping down after nearly seven years on the job. This makes it a good moment to assess Duncan’s legacy, especially since his tenure has been shrouded by more than its fair share of puffery and overheated PR. This was ...

October 5, 2015, 12:04 pm, 1553302

You wouldn’t know it by listening to Donald Trump, but rounding up and deporting — humanely, according to Trump — some 11 million undocumented/unauthorized/illegal immigrants would be pretty pricey. Lots of different estimates, but maybe anywhere from $100 billion to $600 billion, if preventing future illegal entry is also ...

October 5, 2015, 12:04 pm, 1553304

Key Points

Private school choice programs and the organizations that support them could do a much better job deferring the capital, infrastructure, and other fixed costs of participating private schools.If we want school choice programs to transform the educational landscape, they have to be able to spark the creation and expansion ...

October 5, 2015, 12:04 pm, 1553303

This article appears in the October 5, 2015 issue of National Review.

For more than a hundred years, economists and sociologists have studied an empirical regularity: When the population share of Protestants relative to Catholics rises, suicides increase markedly. Two major theories emerged to explain the pattern. The first rests on ...

October 5, 2015, 11:33 am, 1553301

Many people seem to think that – as a new BIS working paper concludes – banks benefit when monetary policy tightens and interest rates rise (especially from a low level). Do they? In some instances, perhaps, but as a general principle, surely not.

A casual glance at recent U.S. ...

October 5, 2015, 11:33 am, 1553300

It’s been a couple of months and time now for my sixth “quarterly” spelling/punctuation/grammar rant of the year (see my last five here, here, here, here and here) on what I think is the most common spelling/punctuation/grammar/orthographic mistake in ...

October 5, 2015, 11:03 am, 1553261
A job seeker fills out an application at a Chicago job fair. It’s now rare, rather that common, for unemployed Americans to get benefit checks. M. SPENCER GREEN/ASSOCIATED PRESS

The ...

October 5, 2015, 11:03 am, 1553260
The September ISM Non-manufacturing index was at 56.9%, down from 59.0% in August. The employment index increased in September to 58.3%, up from 56.0% in August.Note: Above 50 indicates expansion, below 50 contraction.

From the Institute for Supply Management: September 2015 Non-Manufacturing ISM Report On Business®

October 5, 2015, 10:44 am, 1553259

We need a strong and resilient global financial safety net to reduce the systemic implications of sovereign crises and allow nations to cope with shocks in order to reap the economic rewards of an integrated system of trade and finance. This column argues that the current arrangements are suboptimal – ...

October 5, 2015, 10:44 am, 1553256

October 5, 2015, 10:44 am, 1553258

October 5, 2015, 10:44 am, 1553257

October 5, 2015, 10:44 am, 1553255

October 5, 2015, 10:44 am, 1553254

October 5, 2015, 10:44 am, 1553253

October 5, 2015, 10:34 am, 1553252
The expected risk premium for the Global Market Index (GMI) dipped again in September. GMI — an unmanaged, market-value weighted mix of the major asset classes — is projected to earn an annualized 3.2% over the “risk-free” rate in the long term. (For details on the equilibrium-based methodology that’s used ...

October 5, 2015, 10:34 am, 1553251

Deliberation, which those who begin it by prudence, and continue it with subtilty, must, after long expence of thought, conclude by chance.

Looking at the debate about whether to renew Trident reminded me of these words of Samuel Johnson.

October 5, 2015, 10:34 am, 1553250

October 5, 2015, 10:34 am, 1553249

The ...

October 5, 2015, 10:04 am, 1553248

October 5, 2015, 9:33 am, 1553244
The NY Times reports that the Fed had a big macro conference and some very famous economists agreed that they don't know how to stop the next financial crisis. Here, I briefly sketch how to do so at low cost and with minimal moral hazard effects.

Step ...

October 5, 2015, 9:03 am, 1553195

At MoneyWatch

Is Donald Trump right to call NAFTA a "disaster"?: Recently, Donald Trump made a strong claim about the North American Free Trade Agreement (NAFTA) in an interview on CBS 60 Minutes:

"It's a disaster. ... We will either renegotiate it, or we will break it. Because, you ...

October 5, 2015, 8:44 am, 1553194

October 5, 2015, 8:44 am, 1553193

October 5, 2015, 8:34 am, 1553192
DoubleLine Capital’s Jeffrey Gundlach says that it’s too early to start buying junk bonds. Although below-investment-grade fixed-income securities have been sliding for more than a year, the negative momentum may not be over yet, he explains. “I’ll think about buying when it stops going down every single day,” he tells ...

October 5, 2015, 8:34 am, 1553191

The ...

October 5, 2015, 8:04 am, 1553183

The Martian is the most Randian movie in years, perhaps in decades. Ayn Rand is best known for her defense of capitalism but her defense of reason was even more fundamental to her thought. The Martian has no bearing on politics but it reminded me of Rand’s essay on Apollo ...

October 5, 2015, 8:04 am, 1553182
(Don Boudreaux)

… is from page 177 of Volume 1 (2004) – 

October 5, 2015, 7:33 am, 1553180

This is really excellent:

Every major financial reform in U.S. history was enacted in the aftermath of a substantial decline in equity prices. Each, in other words, was crafted during a time of public anger that politicians hoped to deflect from themselves to Wall Street. The congressional ...

October 5, 2015, 7:33 am, 1553178

Charles C. W. Cooke asks a very good question of the gun-control folks.

Cooke then points out again that neither Obama nor Biden offered any specific policy proposals. They did the same thing that Halperin and Brzezinski do here — vent righteous indignation, then look around for ...

October 5, 2015, 7:33 am, 1553179

William M. Briggs posts a fineresponse to some Global Warming Fascists. It starts this way:

If I ever meet NCAR’s Keven Trenberth (again), I’m going to punch him in the mouth. Same thing if I cross paths with Rutgers’ Alan Robock.Pow!Right in the kisser. I’m too much ...

October 5, 2015, 7:33 am, 1553177

"It is a speech so full of truth in an institution permeated with defamation and falsehood and evil that the speech itself represents something like an act of moral heroism."

"Like a biblical prophet, Netanyahu had come to warn, to chastise, and to indict."

October 5, 2015, 7:33 am, 1553176

James Piereson tells the truth:

This is one reason that five of the seven wealthiest counties in the nation are on the outskirts of Washington D.C. and that the average income for theDistrict of Columbia’s top 5 percent of households exceeds $500,000, the highest among major American ...

October 5, 2015, 6:44 am, 1553135

Tim O'Reilly of O'Reilly Media talks with EconTalk host Russ Roberts about his career in technology and media and the challenges facing low-wage workers as technology advances. Topics include the early days of the Internet, the efficacy of regulation ...

October 5, 2015, 6:34 am, 1553134
● US employment growth falls sharply in September | Reuters ● US factory orders slide 1.7% in August–the most in 8 mos. | USN&WR ● US dollar’s rise is weighing on US economy | NY Times ● Rising credit spreads cast a dark shadow over macro outlook | Economist ● ...

October 5, 2015, 5:03 am, 1553116

Not long ago, we ...

October 5, 2015, 5:03 am, 1553115

Why are Republicans hostile to initiatives that promote wind and solar energy?:

Enemies of the Sun, by Paul Krugman, Commentary, NY Times: Does anyone remember the Cheney energy task force? Early in the George W. Bush administration, Vice President Dick Cheney released a report that was widely derided ...

October 5, 2015, 4:44 am, 1553114

Emerging market firms have borrowed in foreign currency to take advantage of low interest rates. This column argues that when the Fed inevitably raises rates, such borrowing will be a threat to emerging economy financial systems. Yet so long as authorities use their existing prudential tools wisely, the risks appear ...

October 5, 2015, 4:04 am, 1553112


This, you might think, qualifies as another in the series “Short Answers to Silly Questions”. But a Brookings Paper study by William G. Gale, Melissa S. Kearney, and Peter R. Orszag reaches the opposite conclusion.

The study looks at increasing the top marginal tax rate (currently 39.6, applicable to incomes ...

October 5, 2015, 3:33 am, 1553109
Here's my theoretical question for the day: Why are mules stubborn, and why can't blind jackasses see?

I ask that question in regards to a few recent news articles. One is on Japan, one the US, and one on emerging markets with various overlaps in between.

Let's ...

October 5, 2015, 3:03 am, 1553094

October 5, 2015, 3:03 am, 1553093

From an interview in USA Today:

The decision about whether to prosecute individuals wasn't up to him, [Bernanke] says."The Fed is not a law-enforcement agency," he says. "The Department of Justice and others are responsible for that, and a lot of their efforts have been to indict or threaten ...

October 5, 2015, 2:44 am, 1553092

October 5, 2015, 2:04 am, 1553091

1. Larissa MacFarquhar, Strangers Drowning: Grappling with Impossible Idealism, Drastic Choices, and the Overpowering Urge to Help.  Profiles of people who are obsessed with helping others.  That is a wonderful premise for a book, somehow for my taste it didn’t run quite deep enough.  Still, many people will ...

October 5, 2015, 2:04 am, 1553090

There are now websites dedicated to “kitlers” (cats that look like Hitler),YouTube videos that remix documentary footage to turn Hitler into a dexterous disco dancer, and innumerable parodic appropriations of Bruno Ganz’s psychotic rants in Oliver Hirschbiegel’s film Downfall that are refashioned to criticize a plethora of contemporary cultural discontents ...

October 5, 2015, 2:04 am, 1553089

Nathan Robinson of Harvard has an opinion:

In this paper, I take the position that a large portion of contemporary academic work is an appalling waste of human intelligence that cannot be justified under any mainstream normative ethics. Part I builds a four-step argument for why this is the ...

October 5, 2015, 2:04 am, 1553088
(October 5, 2015 12:02 AM, by Bryan Caplan) The papers for the Tullock Memorial Conference are now up, including my presentation on "What I Learned from Gordon Tullock." If I had more time, I would have spent it discussing Tullock's undersung analysis of dictatorship.... (0 COMMENTS)

October 5, 2015, 12:34 am, 1553077

For four months, Economic Principals has been writing about how the Panic of 2007-­08 ­has come to be understood. Laying out the argument has taken longer than I expected.

Now it’s Ben Bernanke’s turn. His book, The Courage to Act: A Memoir of the Crisis and its Aftermath ...

October 5, 2015, 12:04 am, 1553075

The way the movie is good is almost the opposite of the way the book is good, so re-gear your expectations.  It is the most convincing portrayal of a planet I have seen in cinema.  (Planets, by the way, create erotic bonds stronger than those of actual marriages.)  I enjoyed ...

October 5, 2015, 12:04 am, 1553074

In 1996, New York Times science columnist John Tierney wrote an article that appeared in the New York Times Magazine about compulsory recycling titled “Recycling is Garbage.” Tierney’s controversial argument in that article can be summarized as follows: Recycling may be the most wasteful activity in modern America. Tierney ...