Yes, I suppose it should be obvious that we’re talking about the participation rate for folks in their working years, but who knows what cites may turn up.
I don’t know if this is adjusted for that or not, but it shows that the participation rate is basically right back to where it was pre-COVID.
I’ve seen the Right handwringing over the participation rate for almost a decade and not once did I see them acknowledge that the number looks that way because a huge cohort is simply reaching retirement age.
Unsurprising, really.
US labor participation rate:
US Labor Force Participation Rate.
Real wages are trending higher now, but they are way down from the peak The peak itself was an artifact of the pandemic, but nonetheless people saw their real wages drop substantially from the 2020 peak.
Real median household income is falling:
It’s been falling since 2019, suggesting that the gains are being experienced mostly at the top of the income range, or that households don’t have as many people in the work force. This is also a household survey rather than an employer survey. This matters because a lot of gains in compensation have come in the form of better benefits. The employer will report that as improved worker income, but the people in the household survey tend to look at their bank accounts, not benefits they’ll get some day.
Here’s a cite for public debt:
Government surplus/deficit:
That’s the one that bothers me most. The U.S. is headed for a 1.6 trillion dollar deficit, during a time of low unemployment and high GDP growth. This is completely unsustainable, and is why central banks aren’t lowering interest rates. They are now fighting the big spending ways of the federal government, which is inflationary.
I hope none of you supporting this are Keynesians, because this is about as anti-Keynesian as you can get. We’re now in the era of anything goes economics, apparently.
In FY 2023, interest payments on the debt were $659 billion. That was with an average interest rate of just over 3%. If interest rates persist (and they likely will for some time), the interest payments on the debt could exceed $1 trillion next year, putting it up there with national defense in terms of cost.
https://www.cnn.com/2023/11/16/politics/interest-payments-federal-government-debt/index.html
There are good reasons people are not thrilled with the state of the economy. Telling them they are wrong is not likely to go over well.
I would be very surprised if most Americans have the slightest understanding of anything you just posted.
Certainly some do, but I suspect most do not. It’s not that they are unable to understand but, rather, they have no interest in trying to understand it.
I’m concerned about the deficit as well. It’s a lot smaller than it was a few years ago, and I have more faith in Democrats to bring it down than in Republicans.
Which central banks aren’t lowering interest rates because of U.S. federal spending, and do you have a cite for that?
So if your main concern is the deficit, you will certainly be voting Democrat. That one’s easy.
Not sure Sam can vote in the US, though I may be wrong.
Sam, thanks for the cites from the St.Louis Fed as they bring data to life! t’s too bad the benefits cost so much dough, even the things I appreciate most like road infrastructure, military, water and energy, police and fire. I get sticker shock reading about even those expenses for sure.
@Sam_Stone, the reason why wages spiked up at the start of the pandemic was that all of the low wage workers stopped working when the economy stopped. I think it’s called composition effects – at the start of 2020, you may recall that all of the restaurants, hotels, movie theaters shut down. But, bankers and lawyers didn’t skip a beat. So, lots of lower-paid hourly workers dropped out of the workforce, and the employed median weekly real earnings spiked. As they came back in, and the composition of the workforce went back to normal, the earnings went back to trend.
Before I even look at the rest of your cites, will you come back and acknowledge that effect? “People saw their real wages drop substantially from the 2020 peak” is just false – lots of people’s wages went to zero at that peak. That is, lawyers saw their wages stay the same or maybe even come down a bit, lots of restaurant workers saw their wages go to zero as they were laid off, and the average wage in the US jumped up because all those laid off workers were gone.
The right response here is, “Oh yeah, that’s right, the compositional effects really skewed that statistic. I withdraw it as an argument for anything.”
Until you acknowledge that basic error, I’m not interested in engaging further.
According to this article, in recent years the lowest-paid workers in the US have seen the most gains. It’s the people at the top end who’ve had a reduction in real income.
The gap between rich and poor has shrunk somewhat.
No wonder certain people have been griping about the economy.
Caused by the GOP and trump.
The new standard practice of Republicans- “Borrow and spend, then blame the deficit on the Democrats”. Do you hear the GOP complaining about the high deficit when they are in the White House? No, its Schrödinger’s BIG ISSUE- being totally ignored during GOP administration, while they cut taxes and borrow, then a HUGE problem when the Dems are in power.
Tell, us Sam, did you post about the huge deficit when trump was cutting taxes for the rich, and handing out Covid relief funds?
Exactly. "Cut taxes for the Rich then depend upon “trickle down” boosts the deficit like crazy.
Why is that?
He is Canadian
Something to remember when considering different segments of the population is that some 25% of households have zero earners. Not all of them are hard up, but I suspect they’re less likely to have had income keep up with prices.
I don’t think the deficits have a lot to do with the economy that is felt in the streets. You’ll never convince me that it has squat to do with inflation, that’s due to supply and demand which got knocked out of balance due to covid. I agree that the current deficits are unsustainable, but the blame falls squarely on Republicans. We aren’t “spending like drunken sailors”, we’re idiots who continually cut the government’s income. Republicans love to show commercials showing a couple sitting at the table trying to figure their budget. If they were honest, they’d have the man say “the first thing we gotta do is cut our income” and have the women knock him cold.
In the short term, deficit spending very much boosts the economy that is felt in the streets. That part is immediate, that’s why it’s so attractive for politicians, and why it’s so hard to get the deficit under contorol.
In the long term, with highly unpredictable timing, the endgame is inflation - something that will also be felt in the streets when it hits. But the numbers aren’t really as bad as the doomsayers make out, certainly not relative to other countries. You need to look at the ratio of debt to GDP, the simple $ value of the debt being at a “record high” is meaningless.
What you are losing in 2023 due to high debt is $659 billion in interest payments that could have been used for other things. And also crowding out of capital markets by government debt drives up interest rates.
For comparison, that’s equivalent to almost 10 Departments of Education. It’s also about $2,000 from every person in America. Every year.
And if there aren’t enough lenders who want to buy government paper at current interest rates, the Fed buys it, which is essentially printing money. That is inflationary. Every new dollar printed steals a bit of wealth from everyone else.
Maybe for some. Milk is still $5.49 for 4L here, an all-time high. Two years ago it was $3.49.
Joe Biden wanted a 5.7 Trillion 'build back better ’ bill. That was nuts. Republicans stopped it.
The formula for low government spending appears to be a Democrat in the White House, with Congress firmly in control of Republicans. That’s when Democrats complain about ‘gridlock’ and start looking for ways to get around ‘Republican obstructionism’.
I already did!
I’m not clear if the wage spike was due to low income workers not being counted, or if the low workers were counted, including their pandemic benefits. Either case would cause a temporary spike in pay. My point is that when the pay came back down due to loss of benefits, it made people feel worse about the state of the economy. And the people who adjusted their spending because of the monthly benefit check are now hurting.
I have complained abiut large deficits consistently since I’ve been on this board, whether Republicans or Democrats do it. That goes especially for Trump.
You seem to be equating deficit reduction with low spending, forgetting that it’s only half of the equation.