Exactly how bad is the U.S. economy?

Great Debates
41

While I’m not sure about CT, things in this state are pretty stark for all industries, not just computers. I’ve been looking for a job since August, and there’s not much out there. August is usually the biggest month that job openings for what I do (working with children) but there were less than a dozen aide positions within fifty or so miles from here offered all summer. The biggest local paper was down to 28 want-ads on weekdays this week, and that’s including work-at-home scams and selling Avon. I’m hoping that this is only because they’re updating the site, but there are no ads right now on the webpage http://fosters.abracat.com/c2/employment/results/index.xml I’ve never seen it with no ads before, even this time on a Sunday night, so it’s worrisome.

I got an apologetic call this past week from a potential employer, who said he would have offered me the job had the other branch of their program folded suddenly, because of this they wouldn’t be hiring anyone new. I guess the market is as rough for non-profits as it is businesses.

The unemployment rate should look better in NH soon: several thousand people are going to exhaust their benefits on the 31st, and won’t be figuring into the number of “unemployed” after that. Do all states calculate the unemployment rate solely by the number of people collecting unemployment?

42

Why? It makes no sense to see which economies are healthier based on exchange rates. Exchange rates are affected by the monetary policies of countries. Under a tight monetary policy, the value of the dollar will usually go up relative to other countries, which results in more exports. Under a loose monetary policy, exactly the opposite. Exchange rates can be completely based on monetary policy… sometimes you want inflation (and low unemployment) and sometimes you don’t.

43

—Nobody aspires to get eviction notices because they can’t make rent—

Uh, yeah… but I already covered that.
There are, of course, lots of bad things correlated with unemployment: but unemployment is not, in itself, always bad. That, indeed, is WHY we make the distinction between voluntary and involuntary unemployment. In practice, however, it’s very difficult to tell which is which.

My point is that unemployment should never be thought of as a simple measure of “badness” in the economy: though it’s short term changes are often a very good guide to short term hardships, it’s not always the case that lower is better when comparing things to history.

44

—I guess the market is as rough for non-profits as it is businesses.—

It’s not just a demand thing though, it’s also a supply thing. The number of people wanting to work in the non-profit sector is steadily growing, perhaps faster than the sector itself.

45

This is pretty scary stuff, so in New Hampshire you’re no longer ‘unemployed’ if you no longer receive the unemployment benefit? What do they call such people? Doesn’t this skew the figures so much that they’re meaningless?

How do people in this situation survive?

46

I believe that the unemployment rate is based on the Current Population Survey taken by the Dept. of Labor.

As long as someone is still seeking work, that respondant is counted as unemployed.

However, there is a nugget of truth in what elfkin477 wrote. Some people who have been out of work may give up on seeking work. These “discouraged workers” are not counted amoung the unemployed, aothough the CPS does measure their number.

How do unemployed people survive when they run out of unemployment benefits? Savings, other sources of income, loans, help from friends and relatives, charities, food stamps, welfare,…

47

I’ve been unemployed for better than two years now. I am most certainly a “discouraged worker” and, at my age, an almost unemployable worker as well. I am living on Social Security and a paltry income from a part-time job while I develop a service business I hope to operate from my home. From my point of view, unemployment statistics are meaningless—for me, the economy is totally tanked and I don’t see much in the way of improvement. I’m grateful that I can draw SS, even though I had to sign up several years ahead of schedule—many of the unemployed do not have that option.

48

HennaDancer, now we’re gettin’ somewhere! First off, I want to spend a bit more time looking at what is going on in Connecticut’s economy… I haven’t the faintest clue right now. But, here’s a helpful site in the meantime:

http://www.ctdol.state.ct.us/lmi/research.htm

A cursory glance at the Hartford Labor Market Area seems to show fairly minimal unemployment rates, but of course there’s lies, damn lies and statistics so I’d rather spend some more time looking at the rest of the picture before I say anything. Rates alone can hide a great deal of important info about what’s going on in your area.

Here’s a question regarding your husband’s skills: what’s the local housing market like? If there are lots of homes coming out of the ground, I would like to think someone with such skills ought to be able to find some local contractor who needs those kind of skills. In my part of the world (Oklahoma) those sorts of guys are making a fortune right now, because we’ve got new subdivisions popping up left and right. Usually the complaint is of a lack of people with those sort of abilities.

As far as the prices you’re quoting, I haven’t noticed anything of that sort around here. Partly this is due to the fact that I mainly eat either stuff I cook myself (my groceries typically consist of staples like ground beef and fresh vegetables) or at non-fast food restaurants. What fast-food I do eat (Wendy’s is one, plus a few other local franchises like Sonic) the prices have been rock steady for the past four years as best as I can tell. Although, at McD’s, last I noticed a Big Mac Meal cost $3.34, and I believe that’s been the price for at least five years. Of course, there is regional variance between prices at national chains… I’d love to look at some data regarding prices at national chains broken into regions, because it could very well be that prices are increasing in some parts of the country but not in others!

Incidentally, I apologize if my previous post came across as rather harsh… I just get tired of the old “well, if that’s the case, why can’t I get a job?” argument that I keep hearing elsewhere… plus Susanann’s posts just really pissed me off :wink:

49

Isn’t the number of available jobs a good indication? If a schmo off the street can go into a company and say “I wanna learn what you do” and they need people because they’re growing so they hire him and he makes a wage to support a family, isn’t that good for everyone? This is how I’ve seen low unemployment rates work.

With the current rates, companies are not growing, but cutting back, and even the highly skilled go wanting for jobs.

I realize that the unemployment rate does not measure number of jobs available or level of experience needed, but it does imply it, and whether companies are growing enough to need more workers. I don’t know if there’s anyplace to get actual statistics on the last, but it’s very clear to me that’s what’s going on.

50

>> plus Susanann’s posts just really pissed me off

Don’t worry, that is the normal reaction of a normal person _

51

I can’t speak for the rest of the U.S., but in my area, the economy is a bit grim. Western North Carolina traditionally had a number of manufacturing jobs. Many of these plants are closing down and moving out, throwing thousands of people out of work. Overall, unemployment in NC is right at six percent, but it’s higher in mountain counties that have lost factories.

In Asheville, unemployment is much lower–about three percent. However, that doesn’t tell the whole story. It’s easy to get a low-paying tourist industry job here. It’s much harder to get a job with a decent salary and benefits. I’m employed and damn glad of it, but I’m making $8 an hour with no benefits. I have a couple of degrees and years of experience in my field. My story is not atypical.

52

here it is. Back in the Dot com boom, economists couldnt figure out why the economy was so hot. We were producing more and buying more so everyone expected inflation (the normal result of production and high demand) but inflation never reared its ugly head. Why? Because people were investing. They were into the stocks. They wanted to make money off the stocks and that money was kept in the stock market. They bought stuff in excess. But everything was over-priced. Too many investors and not enuf real value. In election year 2000, that all ended.

People lost confidence, prices started to adjust back to their REAL value which is way lower than where it was. People lost tons of money others took their money and kept it. Ordinarily, investeors poke their heads out after a brief period of hiding but then 9-11 happened, ENRON, WorldCom, this and that. Investors kept hiding.

Result:

*Dot coms died away. Their armies of programmers, IT people, managers, entrepeneurs are out on the streets. Over-employment became unemployment. Thats why programmers have a hard time getting jobs. Too much competition.

  • No investments means companies cannot expand. Bad accounting and depending on investment capital so company downsizes to meet tighter budget. Layoffs are the first order usually. Division shut downs and selloffs are next. Trim off the fat created in the dot-come era.

*No flashy investment recovery perpetuates poor consumer confidence. There is a perception of decline, even tho the economy is steadily rising. Media showcases it as “not rising fast enuf” to put a negative spin on it and give it its doom and gloom look. Think about that not rising fast enuf …is that really bad?

*Poor consumer confidence shows on the retail market. No one buys the high end stuff (anymore) no more computers, no more flashy digital cameras, no more sports cars, giant houses, jewelry and luxury items. Its bargain hunting.

*Bad retail, means lower production. all doom and gloom

Reality. Economy isnt bad. Its just not as hot as the dot-com era. Compared to Jimmy carter’s double digit inflation and unemployement. We are A-OK. Compared to the eighties, were not so well off. we are about average,and America hates being mediocre. we gotta be in one extreme or the other. Give it a couple years. Something significant will happen between now and election year.

53

Burundi brings up an important point: underemployment. Unfortunately, there’s no good way to quantify it short of taking surveys and deriving statistics from the sample. I know that such statistics appear occassionaly through state departments of labor (or equivalent agencies) but I don’t know of any good national figures, and certainly not at any frequency approaching monthly. At the same time, though, I’m not sure current rates of underemployment are any worse than they were in the recessions of '91, '82, the stagflation of the 70’s and so on.

Well, here’s the deal: I can wave my hands around all I want discussing personal anecdotes. After all, there are currently over six million people (or significantly more, I forget off-hand what the total U.S. labor force is nowadays) unemployed. In 1999, half of all households in the United States earned less than $41,994 among all income earners according to the 2000 Census. SO, here’s my thesis: I posit that the current economic situation is better than it was in 1991. I base this on two of the most widely used economic indices: the unemployment rate and per capita GDP growth. I believe that my thesis adequately answers the OP. Now, gimme some proof or evidence that I’m wrong :cool:

54

There are a few other things that might come into play. Consumer debt. While this doesn’t show up as the bogieman that unemployment might, it is a factor that may come into play if the economy gets worse. While I don’t have a statistic about consumer debt 2002/1991, I daresay it’s worse today. And the housing market is probably more overvalued currently than it was in 1991. It is the last bastion of an overheated economy from the late 1990’s. Some areas of the US have already seen prices fall. It’s not hard to believe that others will follow suit.

Consumers can only spend so much. At some point they run out of credit.

55

Consumer debt! Now we’re getting somewhere! What follows is my back-of-the-napkin look at consumer debt in the United States. Bear in mind that the vast majority of my background is not in macroeconomics, and it’s been several years since I’ve done anything at all even remotely related to it. But, here’s the ol’ college try:

This website:

http://www.federalreserve.gov/releases/G19/hist/cc_hist_sa.txt

Gives a nice history of total outstanding consumer credit (seasonally, but not inflation adjusted). Of course, consumer credit increases pretty much continually… I just now stuck that data into Excel to generate a quick graph, and it almost looks logarithmic. I adjust it first by expressing it in per capita terms, and then adjusting for real instead of current dollars. I nearly forgot, I also need to let everyone know which data points I’m using: for 2002, I’m using October of this year, and for 1991 I’m using July 1991. The reason for picking July will become clear in a moment… the respective data points, for the lazy, are $1,723,983,350,000 and $783,291,290,000 (we’ve got over a trillion dollars more debt!)

To get per capita figures, for 2002 I’m just using whatever the little population clock on the home page of the U.S. Census Bureau says (it says 288,712,981 right now). This website:

http://eire.census.gov/popest/data/national/tables/intercensal/US-EST90INT-01.php

Also courtesy of the Census Bureau, shows me that their estimate of the U.S. population, as of July 1, 1991, is 252,980,941 people.

Dividing by population gives me per capita figures of $5971.27 for 2002, and $3096.25 for 1991. Not quite as bad as the total debt figures suggested, but we still owe twice as much money for every man, woman and child in the nation.

BUT, inflation rears its ugly head as always. I’m tired and lazy, so I’m going to abuse the BLS’s handy little inflation calculator (look towards the upper left-hand corner of bls.gov), plug in my per capita debt estimate for 1991, adjust it into 2002 dollars, and I get $4121.51 in 2002 dollars.

So, realizing that I’ve tortured these numbers silly, I conclude that we owe 44.9% more than we did during the last recession. Pretty solid evidence that we’re worse off now than then, I’d say. But then, there are probably journal articles that discuss this a lot better (and accurately) than I have… I’m sure I’m forgetting all kinds of important stuff, but at least it’s a start.

As far as real estate, I couldn’t agree more… I work in commercial real estate myself, and in the past several months I’ve seen cap rates that would have made me laugh and chortle only a year ago.

Still, are we better off today than 11 years ago? I still think so, on the whole, but of course we all know what economists say about the effects of the French Revolution… too early to tell.