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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May 3, 2016, 9:33 am, 1632470

And they could be large:

In January, the Department of Housing and Urban Development announced grants totaling $1 billion in 13 states to help communities adapt to

May 3, 2016, 9:03 am, 1632438

At CBS MoneyWatch:

When Markets Aren't Perfect, Government Can Help, by Mark Thoma: In response to a question about economic theory and its role in the financial crisis, Nobel Prize-winning economistJoseph Stiglitz said:

"The strange thing about the economics profession over the last 35 year is that there has ...

May 3, 2016, 8:44 am, 1632436

May 3, 2016, 8:44 am, 1632437

May 3, 2016, 8:35 am, 1632435
Private nonfarm payrolls in the US are projected to increase by 196,000 (seasonally adjusted) in April over the previous month in tomorrow’s update of the ADP Employment Report, based on The Capital Spectator’s average point forecast for several econometric estimates. The average projection reflects a fractionally lower gain vs. the ...

May 3, 2016, 8:04 am, 1632431

May 3, 2016, 8:04 am, 1632430
(Don Boudreaux)

… is from page 543 of the just-published final volume – Bourgeois Equality – of Deirdre McCloskey’s soaring trilogy ...

May 3, 2016, 8:04 am, 1632429

May 3, 2016, 7:34 am, 1632426

"We can’t hold it against these people, evolving technology can be hard to understand."

Yes, indeed.

May 3, 2016, 7:34 am, 1632425

In absolute numbers, there's littlesurprise:Mexicans, Indians, Koreans, Cubans, and Chinese. But can you guesswhich nationality has the highest per capita number?

May 3, 2016, 7:34 am, 1632424

Seems like a calm and reasonable summary to me. Conclusion:

The ACA’s advocates and opponents are fully within their rights to highlight what they respectively regard to be the positive and negative aspects of the law. Anyone seeking to simply understand the ACA’s effects, however, will need to ...

May 3, 2016, 7:33 am, 1632423
Jacob Adenbaum, David Hubbs, Antoine Martin, and Ira Selig

May 3, 2016, 6:44 am, 1632401

May 3, 2016, 6:35 am, 1632400
● US ISM Mfg Index stays positive, but just barely in Apr | Reuters ● PMI: US mfg output close to stagnation in Apr | Markit ● US construction spending +0.3% in Mar–highest level in over 8 years | AP ● US Consumer Spending Increases in Apr, according to survey ...

May 3, 2016, 6:35 am, 1632399
The expected risk premium for the Global Market Index (GMI) increased for the second straight month in April, rising to the highest level since last November. GMI—an unmanaged market-value weighted mix of the major asset classes—is projected to earn an annualized 3.3% over the “risk free” rate in the long ...

May 3, 2016, 6:04 am, 1632398

Key Points

The Louisiana House is currently debating the Senate Bill 432 (SB 432), which would unify New Orleans charter schools under a single authorizer, the local Orleans Parish School Board (OPSB).The Recovery School District and the OPSB have been a model of cooperation since Hurricane Katrina, and SB 432 ...

May 3, 2016, 6:04 am, 1632397

Before his big foreign policy speech, Donald Trump let us know that “it won’t be the Trump Doctrine because in life you have to be flexible. You have to have flexibility. You have to change. You may say one thing, and then the following year you want to change it ...

May 3, 2016, 5:34 am, 1632393

Scott Sumner uses economics to take down an article in The Atlantic.

I had to read this twice, before realizing that it was utter gibberish.

May 3, 2016, 5:03 am, 1632372

We have some good news! For the first time since October 2015, the number of U.S. firms that announced dividend cuts during a calendar month dropped below the level where we can be reasonably certain that at least part of the U.S. economy is experiencing ...

May 3, 2016, 5:03 am, 1632371

May 3, 2016, 4:44 am, 1632370

May 3, 2016, 4:05 am, 1632369

This is often forgotten:

One traditional way of measuring nations’ power relative to each other is to compare their gross domestic product. By this measure, Russia gained economically on all of its competitors as well as on the world as a whole in 1999-2015.

And this:

The GINC measures national power as ...

May 3, 2016, 2:44 am, 1632353

May 3, 2016, 2:04 am, 1632352

JR, a loyal MR reader, writes to me:

Your loyal readers, such as myself, know of your love for mormons. This made me curious whether you think the tithing requirement in mormonism have have the same incentive effects as a tax.

On one view, people will only bother giving if they ...

May 3, 2016, 2:04 am, 1632351

Could the Army command structure become more efficient without sacrificing combat effectiveness? Organizational bloat within the Army is expensive and inhibits decision making. Today, by some accounts, there are 28 layers of authority between an action officer and the secretary of defense.

The Army should lead the military in finding ways ...

May 3, 2016, 1:33 am, 1632349

Here’s a minimum wage thought experiment.

1. Suppose that a $15 an hour minimum wage is imposed on employers by government mandate.

2. In response to the $15 an hour minimum wage legislation, suppose that most employers then impose a 2-year minimum work experience requirement for new employees, to more closely ...

May 3, 2016, 12:04 am, 1632332
(May 3, 2016 12:32 AM, by Bryan Caplan) Clemens, Montenegro, and Pritchett continue to expand the frontiers of human knowledge about migration. Their latest working paper, "Bounding the Price Equivalent of Migration Barriers," mostly measures the total wage effect of globally relocating identical workers. But it closes by... (0 ...

May 2, 2016, 10:44 pm, 1632306

May 2, 2016, 9:03 pm, 1632290
• All day, Light vehicle sales for April. The consensus is for light vehicle sales to increase to 17.3 million SAAR in April from 16.6 million in March (Seasonally Adjusted Annual Rate).

A few excerpts from a research piece by Goldman Sachs economist Jan Hatzius: Does the Fed ...

May 2, 2016, 8:04 pm, 1632281
(Don Boudreaux)

… is from page 5 of comedian Penn Jillette’s featured essay, “How I Became a Libertarian,” in the Spring ...

May 2, 2016, 8:04 pm, 1632280
(Don Boudreaux)

I thought that the last book – Phishing for Phools – that I reviewed for Barron’s ...

May 2, 2016, 7:33 pm, 1632278
The UC Energy Institute has an excellent blog. On this blog, Jim Lazar claims that for every mile of driving that this causes $2 in social costs. He credits Todd Litman with this estimate. In this blog post, I will use this estimate to show how this ...

May 2, 2016, 6:44 pm, 1632247

May 2, 2016, 6:04 pm, 1632245
(May 2, 2016 05:30 PM, by Emily Skarbek) Yesterday Ilya Somin reminded readers of the Washington Post of his ongoing support for changing May 1st from a celebration of communists, socialists, and labor unions - to a holiday that commemorates the millions who have died because of communist... (1 ...

May 2, 2016, 6:04 pm, 1632244

Not surprisingly, given the typically vapid, incoherent, and isolationist-leaning policy pronouncements made by Donald Trump on foreign affairs, any number of respected, conservative national security figures have signaled they would vote for Hillary Clinton rather than Donald Trump next November.

They are encouraged by Mrs. Clinton’s record while serving as a ...

May 2, 2016, 6:04 pm, 1632243

Libyan armed forces are now preparing to launch an offensive on the base of the Islamic State of Iraq and al Sham (ISIS) in Sirte, a major Mediterranean Sea coastal town in Libya. If and when that offensive drives ISIS from the city, world leaders will undoubtedly trumpet the development as a major victory.

Regaining ...

May 2, 2016, 5:03 pm, 1632209

Illinois Rep. Lou Lang, Rep. Christian Mitchell, and Emily Miller of Voices for Illinois Children just held a press conference to respond to criticism of their proposed graduated income tax proposal. The proposal, which Lang terms the Fair Tax, consists of (1) a proposed constitutional amendment removing the ...

May 2, 2016, 4:04 pm, 1632204

Last week, Bernie Sanders was asked why he wasn’t doing better in states with high income inequality. He said it was because poor people do not vote. And he’s somewhat correct. According to US Census data (Table 7), 51.3% of likely eligible voters with family incomes below $30,000 ...

May 2, 2016, 3:03 pm, 1632169

This spring’s college seniors are about to set another record for student debt. But they’re also likely to find a job and make a decent starting salary.

About seven in 10 seniors set to graduate this spring borrowed for their educations. Along with their diplomas, they’ll carry an average $37,172 of student ...

May 2, 2016, 3:03 pm, 1632168

From the NBER:

Growth of income and welfare in the U.S, 1979-2011, by John Komlos, NBER Working Paper No. 22211 Issued in April 2016: We estimate growth rates of real incomes in the U.S. by quintiles using the Congressional Budget Office’s (CBO) post-tax, post-transfer data as basis for the period ...

May 2, 2016, 3:03 pm, 1632167
From the Federal Reserve: The April 2016 Senior Loan Officer Opinion Survey on Bank Lending Practices

Regarding loans to businesses, the April survey results indicated that, on balance, banks tightened their standards on commercial and industrial (C&I) and commercial real estate (CRE) loans over the first quarter of 2016.3 ...

May 2, 2016, 2:04 pm, 1632166

Having been named as Mr Nakamoto once, unconvincingly, Mr Wright has a steep hill to climb to convince the world that he is indeed bitcoin’s founder. Evaluating his claim involves the application of a multi-step paternity test. First comes the factual evidence: can Mr Wright prove that he is ...

May 2, 2016, 2:04 pm, 1632165
(May 2, 2016 02:30 PM, by David Henderson) But the standard rendition of the B&B [Bootleggers and Baptists] story leaves out something that bootleggers and Baptists need to achieve their goals: emotion. One of the common emotions is anger, and the group whose anger is most important is... (0 ...

May 2, 2016, 2:04 pm, 1632164

Well, I read Donald Trump’s foreign-policy speech from last Wednesday.

I tried to be impartial in reading it; I’m a Cruz supporter, but I’m also a senior fellow at the American Enterprise Institute, and reading and responding to speeches like this is my job.

Mr. Trump sounded a lot of the same ...

May 2, 2016, 2:04 pm, 1632163

The potential for a contested GOP convention has drawn comparisons to the 1976 Republican presidential campaign, when insurgent Gov. Ronald Reagan took on his party’s establishment. Today, it is Donald Trump who is leading a populist insurgency against the GOP establishment. But when it comes to foreign policy, the Reagan ...

May 2, 2016, 1:33 pm, 1632160
The content of this post will be available shortly.

May 2, 2016, 1:33 pm, 1632159
Andrew Ross Sorkin revisits a classic Keynesian counter-factual. Would the Great Recession have been less painful if the stimulus plan had been larger? Here is a direct quote from his NY Times Magazine cover interview with President Obama.


"Many argue today that Obama’s $800 ...

May 2, 2016, 1:03 pm, 1632128

This is by Barkley Rosser (I left quite a bit out, including the connections to the Sander's campaign):

The Legacy of Joan Robinson: ... Joan Violet Maurice Robinson (1903-1983) was without doubt the most important woman economist born before 1930 and maybe still the most important woman economist ever. ...

May 2, 2016, 1:03 pm, 1632127
Earlier today, the Census Bureau reported that overall construction spending increased 0.3% in March compared to February:

The U.S. Census Bureau of the Department of Commerce announced today that construction spending during March 2016 was estimated at a seasonally adjusted annual rate of $1,137.5 billion, 0.3 percent above the ...

May 2, 2016, 12:04 pm, 1632120

May 2, 2016, 12:04 pm, 1632119
(May 2, 2016 10:29 AM, by Scott Sumner) Back on March 7, 2011, Japan was hit by the worst national disaster to strike a developed country in modern times. Last week, Japan was hit by a human made disaster with a comparable effect on the economy (albeit obviously... (2 ...

May 2, 2016, 12:04 pm, 1632118

May 2, 2016, 12:04 pm, 1632116

My Eurosceptic bona fides run deep. I wrote my first diatribe against the EU in my teenage years. When I was in university, I interned for the office of the President of the Czech Republic, Václav Klaus – yes, the one who famously compared the EU to the former Soviet ...

May 2, 2016, 12:04 pm, 1632117
Defense scholars

May 2, 2016, 12:04 pm, 1632115

Recent debates over Europe’s future are permeated by a sense of impending doom. The eurozone is an economic basket case, we’re told. The Continent is flooded with Muslim asylum-seekers, and inept political elites are about to be replaced by political extremists.

There are good reasons to be concerned about the Continent’s ...

May 2, 2016, 12:04 pm, 1632114

Conservatism in America is often associated with a strong preference for spending restraint and low taxation. That’s as it should be. Sound fiscal policy is essential for sound governance. History shows that powerful nations that engage in reckless spending and borrowing eventually fall into periods of decline. It would be ...

May 2, 2016, 12:04 pm, 1632112

The unexpected success, forecast by almost no one 12 months ago, of Donald Trump and Bernie Sanders in winning 40 percent and 42 percent in Republican and Democratic primaries and caucuses is widely taken as evidence of raging discontent among American voters.

May 2, 2016, 12:04 pm, 1632113

In the wake of the political protests in Baghdad, Barham Salih, a senior Patriotic Union of Kurdistan (PUK) official who has held a variety of positions in both the central Iraqi government and in Iraqi Kurdistan, tweeted, “Chaos in Baghdad; definitive end to 2003 polity. It is no longer ...

May 2, 2016, 12:04 pm, 1632111

The Economist presents a mystery in the decline of global fertility rates (seen in the above chart) since the Great Recession and ...

May 2, 2016, 12:04 pm, 1632110

Some interesting light is shed on the immigration issue by a Pew Research Center report issued this month.

Democratic and Republican voters tended to be in agreement on immigration issues from 1994 (the beginning of Pew’s time series) to 2006. When given the choice of a positive view (immigrants “strengthen ...

May 2, 2016, 11:34 am, 1632108

|Peter Boettke|

May 2, 2016, 11:33 am, 1632107
The Smithsonian has published an excellent piecethat reports on an academic study which examined the productivity of 6 people working in a climate controlled building who were exposed to different levels of VOC and carbon dioxide emissions. Yes, this is a very small sample of observations and I ...

May 2, 2016, 11:33 am, 1632106

Today’s WSJ “Notable and Quotable“:

From economist Mark J. Perry’s Carpe Diem blog for the American Enterprise Institute, “Prediction: No commencement ...

May 2, 2016, 11:03 am, 1632078

Today is May 2, the anniversary of the first scheduled commercial flight of a jet aircraft in 1952. Not many taxes on commercial air flights then; today, a few more. Here are some interesting links I came across:

Puerto Rico Will Default on Government Development Bank Debt: The island has ...

May 2, 2016, 11:03 am, 1632077

"How should we think about these incredibly low interest rates?":

The Diabetic Economy, by Paul Krugman, Commentary, NY Times: Things are terrible here in Portugal, but not quite as terrible as they were a couple of years ago. The same thing can be said about the European ...

May 2, 2016, 11:03 am, 1632076
Black Knight Financial Services (BKFS) released their Mortgage Monitor report for March today. According to BKFS, 4.08% of mortgages were delinquent in March, down from 4.66% in March 2015, and the lowest since March 2007. BKFS also reported that 1.25% of mortgages were in the foreclosure process, down ...

May 2, 2016, 11:03 am, 1632075
The ISM manufacturing index indicated expansion for the second consecutive month in April, following five months of contraction. The PMI was at 50.8% in April, down from 51.8% in March. The employment index was at 49.2%, up from 48.1% in March, and the new orders index was at 55.8%, ...

May 2, 2016, 10:44 am, 1632074

May 2, 2016, 10:04 am, 1632071
(Don Boudreaux)

Here’s a letter to a correspondent who asks a frequently asked question:

Mr. Gordy Robicheaux

Dear Mr. Robicheaux:

Thanks for your e-mail.

You ask ...

May 2, 2016, 10:04 am, 1632070
by Linda Beale Defending the IRS Against Right-Wing Attacks The IRS is a government agency that endures all kinds of hostile attacks.  Most people don’t really like to pay taxes.  Even I don’t really “like” paying taxes, though I do recognize the importance of paying taxes and supporting the societal ...

May 2, 2016, 10:04 am, 1632069

Just as government-subsidized easy money fueled a real-estate bubble in the 1990s and 2000s, boosting house prices while promoting unwise borrowing and lending, today government-subsidized easy money is fueling an education bubble — boosting tuition rates and reducing students’ incentives to choose education options smartly.

The progressive approach for addressing the ...

May 2, 2016, 9:34 am, 1632065

|Peter Boettke|

Labels are useful shorthands, but labels can also confuse and distort. Labels are tricky. Consider discussions of economists and their various views about the way the world works. In the grand scheme of the economics profession it used to be commonplace to describe various thinkers as "freshwater" ...

May 2, 2016, 9:33 am, 1632064

A highly leveraged financial system is one prone to collapse. This notion underlies modern financial regulation: the control of systemic risk requires controlling leverage. And, it is what drives proposals for high capital requirements and to tax leverage. But, as is always the case with regulation, ...

May 2, 2016, 8:44 am, 1632038

May 2, 2016, 8:44 am, 1632037

May 2, 2016, 8:35 am, 1632036
Global markets continued to rebound in April. Other than US REITs, which fell modestly in the kick-off to the second quarter, all the major asset classes posted gains last month, building on March’s strong rally. Leading the way: commodities broadly defined. The Bloomberg Commodity Index surged 8.5% in April, dispensing ...

May 2, 2016, 8:05 am, 1632035

Guru, a 2007 movie from India starring Abhishek Bachchan and Aishwarya Rai and directed by Mani Ratnam, is one of the most pro-free market movies ever made and perhaps the best.

Guru follows Gurukant “Guru” Desai from his small village in India to Turkey where in a series of evocative scenes he shows ...

May 2, 2016, 8:04 am, 1632034
(Don Boudreaux)

… is from page 50 of UCLA economist William Allen’s marvelous 1989 collection of the transcripts of his radio addresses, ...

May 2, 2016, 8:04 am, 1632033

America’s economic recovery since the recession ended in 2009 has been the weakest in decades, principally because the 2010 Dodd-Frank financial law suppresses risk-taking. Now another Dodd-Frank rule—proposed restrictions on incentive pay in the financial industry—could be the coup de grace for U.S. growth.

May 2, 2016, 7:34 am, 1632027

More than I'd expected.

But since this is the federal government we're talking about maybe I should have expected that.

May 2, 2016, 7:34 am, 1632028

Professor Peter Gordon offers a concise and powerful reply to the folks who bemoan our "lack" of infrastructure investment.

May 2, 2016, 7:34 am, 1632026
Jacob Adenbaum, David Hubbs, Antoine Martin, and Ira Selig

In a recent Important Notice, the Fixed Income Clearing ...

May 2, 2016, 7:23 am, 1632025

My latest Macro Musings Podcast is with Cardiff Garcia, U.S. senior editor of FT Alphavilleand host of the podcast FT Alphachat.After ...

May 2, 2016, 6:44 am, 1631996

Arnold Kling, economist and author, speaks with EconTalk host Russ Roberts about his latest book, Specialization and Trade: A Reintroduction to Economics. Kling argues that macroeconomics ignores the challenges of buyers and sellers working together in the real world ...

May 2, 2016, 6:35 am, 1631995
● US Personal Income Rises Slightly More Than Expected In Mar | RTT ● US consumer spending growth slows in Mar despite higher income | LA Times ● Consumer sentiment for US edges lower in Apr | CNBC ● US labor costs rise modestly in first quarter | Reuters ● ...

May 2, 2016, 5:34 am, 1631992

David Andolfatto has a very good post on "Monetary Policy Implications of Blockchain Technology". In passing (it's not a central point of his post), David says:

"However, it's worth pointing out thatthe leading economic theory of bank sector fragility, the

May 2, 2016, 5:34 am, 1631991

"On the academy’s latest folly."

There's no way I'm going to summarize this. If you have a few minutes, you just have to read it.

But--credit where credit is due--Professor Carey says a very smart thing about climate change models:

Carey is hardly skeptical about climate change or its ...

May 2, 2016, 5:34 am, 1631990

"But ignoring the problem won’t make it go away. In 2015, Illinois’ state pension debt reached a record $111 billion. Government-worker pensions already consume one-fourth of the state’s budget. And every day Illinois goes without a solution to its pension crisis, the state’s pension debt grows by over $20 ...

May 2, 2016, 5:34 am, 1631989

So true:

Because the island is a U.S. territory, what happens there will not stay there: America needs to prevent, or minimize, a humanitarian crisis, some of which would be exported to America. But ameliorative measures must be made conditional on fiscal, labor and other reforms on the ...

May 2, 2016, 5:34 am, 1631988

"More than a quarter of a million active and retired truckers and their families could soon see their pension benefits severely cut —even though their pension fund is still years away from running out of money."

More: "'This Is Going To Be A National Crisis' - One Of The ...

May 2, 2016, 5:03 am, 1631977

"As expected", is the answer to the question "How did the S&P 500 behave during Week 4 of April 2016?"

But for that to be expected, you would have to have known the following:

Investors entered the week mainly focused on the distant future ...

May 2, 2016, 5:03 am, 1631976

May 2, 2016, 4:04 am, 1631975

There are many, but they include:

J.M. Keynes,  he was the first person to think about how to really manage an information system. E.M. Forster for The Machine Stops, written in 1907, which foresees our error with a very critical eye. Alan Turing, who stayed a kind person even as he was ...

May 2, 2016, 2:04 am, 1631956

For music, at least:

The simultaneous advent of streaming music and the vinyl renaissance has led to some very interesting recording industry statistics over the past few months. Last month, the RIAA reported that vinyl revenues outpaced sales from streaming services, despite actual streams vastly outnumbering ...

May 2, 2016, 1:03 am, 1631947

The 2016Q1 advance release, discussed at length by Jim, provides additional evidence in favor extreme caution in tightening monetary policy — maybe even a reconsideration of the June rate hike that seems, according to conventional wisdom, a done deal.

First, the output gap increased slightly in 2016Q1. Even taking ...

May 2, 2016, 12:04 am, 1631943
(May 2, 2016 12:00 AM, by Bryan Caplan) Donald Trump has wildly exceeded electoral expectations at every stage of the election. But betting markets still say he has but a 20% chance of winning the presidency. Isn't Trump's record of success after success strong evidence that he's far... (0 ...

May 2, 2016, 12:04 am, 1631942

The Federal Reserve has recently cited global economic conditions as an important determinant in its monetary policy decisions. The Fed’s monthly outlook of the domestic economy obviously affects its decisions about tapering quantitative easing and raising interest rates. What role should global economic conditions play?

This seminar will discuss the degree ...

May 2, 2016, 12:04 am, 1631941

Ten years ago, imagining how people use mobile devices today might have been impossible. From banking to transportation to streaming TV, our phones and their networks do it all. What will the next 10 years bring? And what kind of broadband networks will we need to support the “killer apps” ...