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Money, Banking and the Economy
RayR Offline
#101 Posted:
Joined: 07-20-2020
Posts: 3,912
Basic economic common sense explains how da gubment, and the FED continues to screw up America.

Matt Walsh Interviews Peter Schiff on Inflation, Bitcoin, and the Future

https://youtu.be/zsiw_LMO-p0
rfenst Offline
#102 Posted:
Joined: 06-23-2007
Posts: 35,301
WAPO
Overall, prices grew 6.1% in the past two years. In the past year alone, prices grew 5.4%, albeit from an unusually low mid-pandemic base. But workers’ purchasing power increased even faster. Average hourly earnings for nonmanagerial employees grew 9.4 percent over that same period.

The Federal Reserve expects prices to rise 3.4 percent in 2021, but says that growth will slow to 2.1 percent in the following year and settle near its 2.0 percent target in the longer term.

But forecasting inflation is difficult, and nobody, including the Fed, has a great track record. If this year’s price surge persuades people like you to change their buying and investing behavior, that could force the Fed to take aggressive action to slow the economy and ratchet down our expectations.
ZRX1200 Offline
#103 Posted:
Joined: 07-08-2007
Posts: 56,033
https://wtfhappenedin1971.com/?fbclid=IwAR25YYWoyoDSGXhhC1HwYon9mh37DszEGcShZIq_wiBqMCJPgGwlJVBllgk
rfenst Offline
#104 Posted:
Joined: 06-23-2007
Posts: 35,301
ZRX1200 wrote:
https://wtfhappenedin1971.com/?fbclid=IwAR25YYWoyoDSGXhhC1HwYon9mh37DszEGcShZIq_wiBqMCJPgGwlJVBllgk

What did happen? Too many graphs to discern your point.
RayR Offline
#105 Posted:
Joined: 07-20-2020
Posts: 3,912
Nixon’s Gold Treachery Made Me a Cynic

James Bovard
August 13, 2021

Quote:
Fifty years ago, on August 15, 1971, President Richard Nixon announced that the U.S. government would cease honoring its pledge to pay gold to redeem the dollars held by foreign central banks. Nixon declared he was taking “action necessary to defend the dollar against the speculators.” But there was no way to defend the dollar against politicians. Nixon touted his default as therapy for his tormented fellow citizens, promising it would “help us snap out of the self-doubt, the self-disparagement that saps our energy and erodes our confidence in ourselves.” Nixon wrapped his decree with lofty political rhetoric, appealing to the nation’s “greatest ideals” and promising a “new prosperity” that “befits a great people.”

The dollar thus became a fiat currency – something which possessed value solely because politicians said so. Nixon spurred the Federal Reserve to create an artificial boom to boost his reelection campaign. To suppress the damage from a flood of new money, he imposed wage and price controls, making it a crime to raise prices without government permission.

More...

https://www.aier.org/article/nixons-gold-treachery-made-me-a-cynic/
rfenst Offline
#106 Posted:
Joined: 06-23-2007
Posts: 35,301
Fiat U.S. currency's value is not based on politicians. It's value is based upon the rest of the world trades and sells in dollars (for now).
HockeyDad Offline
#107 Posted:
Joined: 09-20-2000
Posts: 41,829
rfenst wrote:
Fiat U.S. currency's value is not based on politicians. It's value is based upon the rest of the world trades and sells in dollars (for now).


The US currency value is based on the US military.
rfenst Offline
#108 Posted:
Joined: 06-23-2007
Posts: 35,301
WAPO
The covid-19 pandemic dramatically altered the way both employees and employers are considering benefits. As employees return to the workplace, there are calls for increased flexibility, family-friendly policies, and additional health and wellness options packages. The pandemic also affected many Americans’ concerns and plans for retirement....
rfenst Offline
#109 Posted:
Joined: 06-23-2007
Posts: 35,301
RayR wrote:
So when do you predict the next housing bubble will burst?



Orlando home prices rise by $5K in July, but cooldown in sight

Orlando Sentinel

Home prices in Orlando continued to rise last month but experts see early signs of a market cooldown, according to the July real estate market report from the Orlando Regional Realtor Association.

The median home price in metro Orlando set another record when it rose to $320,000 in July, an increase of $50,000 from the same time last year, an 18.5% jump, according to the report. Homes spent an average of just 26 days on the market before selling, a record low for the area.

Yet inventory rose in July for the third straight month to 3,524 homes for sale, and new listings increased for the fifth month in a row. Sales fell 5.2% from the previous month.

And while the median July price reflects a $5,000 increase over June, it was significantly smaller than the $15,000 jump in median price from May to June.

“We are seeing the housing market start to level off from its peak, but that doesn’t mean it’s less competitive,” said ORRA president Natalie Arrowsmith in a statement. “Sellers are continuing to see the benefits of record-high prices, even as more homes are listed for sale. The demand is still strong, both from out-of-state buyers and from buyers who already live here in Central Florida.”

The monthly report includes home sales in Lake, Orange, Osceola, Seminole and Volusia counties.

The increased inventory has been noticeable to real estate agents such as Ingrid Dodd of Investor’s Real Estate.

“Especially on the lower end,” the Sanford-based agent said, noting a client looking in the $200,000 range. “There’s more stuff coming up for that every day.”

For the past few months, Dodd said agents have been getting notifications of homes raising their prices after being put on the market, which in previous years was a rare occurrence.

But in July, “I have seen more notifications of price decreases,” Dodd said.


With mortgage interest rates still below 3%, Dodd said there hasn’t been much change in demand, with plenty of buyers still on the hunt. Most of the difference is coming from the sellers’ side, with not only more houses on the market, but sellers starting to make compromises on prices and fees with buyers.

“Sometimes sellers are adamant about what they want, but then they realize what they really want is to sell the property,” she said.

Dodd thinks some sellers are still holding out for the big paydays that have become the norm in 2021.

“I think sellers are going to be slower to understand that they can’t push the buyers around as much as they could four or five months ago,” she said. “It’s nice to have more listings to choose from.”
rfenst Offline
#110 Posted:
Joined: 06-23-2007
Posts: 35,301
The U.S. could be on the verge of a productivity boom, a game-changer for the economy

Rapid adoption of robots and artificial intelligence during the pandemic combined with a rebound in government investment is making some economists optimistic about a return of a 1990s economy with widespread benefits

WAPO

The United States is currently experiencing a surge in worker productivity that could rival that of the tech boom 20 years ago — if it lasts.

As companies and customers embrace new technologies, making it easier for Americans to produce more with fewer workers, a growing number of economists say this is not a blip and could turn into a boom — or, at least, a “mini boom” ― with wide-ranging benefits for years to come.

Higher productivity is the economy’s special sauce. Productivity refers to how much output a worker can do in an hour. When workers have better tools or the help of robots and artificial intelligence, they can make cars or process data much faster. Higher productivity typically leads to more goods and services available at a lower cost and increases in wages. Without it, economic growth is sluggish.

For first time, average pay for supermarket and restaurant workers tops $15 an hour

The early data in this recovery is promising. Worker productivity grew 4.3 percent in the first quarter, one of the highest rates in years, according to the Labor Department. Second quarter productivity slowed to 2.3 percent growth, but that’s still nearly double the anemic productivity the nation experienced in the decade after the financial crisis — an average of just 1.2 percent.

After the Great Recession, tech experts and economists struggled to understand why seeming breakthroughs with robotics and artificial intelligence were not translating into strong and sustained productivity during the rebound.

The optimism this time derives partly from Congress and the White House taking steps to make significant investments in physical and digital infrastructure, and partly from the coronavirus pandemic forcing rapid and widespread adoption of the digital economy, robots and artificial intelligence.

Technology Meet the scientist teaching AI to police human speech

Conditions are ripe for productivity to remain elevated for years to come, according to analysts from Goldman Sachs and the McKinsey Global Institute. As policymakers run the economy hot, there’s heavy demand for products and services. There is also a worker shortage, which is forcing companies to innovate even more as they struggle to find enough employees to fill a record 10 million job openings. If a robot can do someone’s job, companies are trying it.

Some economists even say the United States could be on verge of a productivity boom not seen since the late 1990s.

“America used to do a lot more public investment and it used to grow faster. I don’t think that’s a coincidence. It seems like we are reentering an era of public investment,” said professor Erik Brynjolfsson, director of Stanford University’s Digital Economy Lab. He forecasts “a productivity surge that will match or surpass the boom times of the 1990s.”

It’s not a ‘labor shortage.’ It’s a great reassessment of work in America.

Worker productivity averaged 3.1 percent from 1996 to 2004, according to Labor Department data, largely due to the personal computing revolution.

Economists have learned that new technological breakthroughs usually don’t cause a jump in productivity right away. The technology needs time to marinate so companies can test how best to deploy it in their industry. Brynjolfsson argues artificial intelligence and machine learning have now simmered long enough to make a dramatic difference. Others are not as convinced.

“AI is nothing new, and for more than a decade has replaced human customer service representatives by annoying voice-recognition systems without reviving growth,” argues Northwestern University economist Robert Gordon, author of “The Rise and Fall of American Growth.”

Uber and Lyft have been reshaped by the pandemic economy

Most economists interviewed for this article predict a mini boom. They don’t see productivity rising as high as the late 1990s, but they think it could easily be higher than what occurred in the recovery after the Great Recession.

It’s common to see a bounce in productivity at the end of recessions largely because companies have laid off so many workers that those who remain work harder to pick up extra tasks and impress bosses enough to stay employed in a scary situation. Take for example 2009, when productivity averaged 3.6 percent. That bounce tends to fade. That’s why the real test will likely be in 2022 and 2023.

“So far it’s a mini boom, but it could turn out to be a bigger boom,” said James Manyika, chair and director of the McKinsey Global Institute, which forecasts productivity could be over 2 percent a year through 2024.

The pandemic forced many businesses to dramatically shift the ways they operate as it was unsafe to have workers in proximity to each other — or near customers. Businesses sped up their plans for automation and digitalization of routine tasks, sometimes 20 to 25 times faster than they had previously thought possible, McKinsey found. Even industries like meat processing that many thought would be one of the last to adopt robots began using them during the pandemic.

“I do think we are in a productivity boom,” said Diane Swonk, chief economist at Grant Thornton. “The pandemic forced us all to learn to use technologies at a rapid pace. It was tech adaptation on steroids.”

The economy isn’t going back to February 2020. Fundamental shifts have occurred.

One example of technology improving productivity is in the shift in how quickly Americans embraced online ordering for food and groceries. In recent months, roughly half of Chipotle’s sales have come from digital orders through its own platform or other services like DoorDash, easing the company’s reliance on cashiers at a time when restaurant workers are tougher to find. Even as in-person sales have bounced back at lunch, digital orders are not declining, said chief executive Brian Niccol, enabling workers to process more orders.

“I think [digital ordering] is here to stay,” said Niccol in a Washington PostLive interview on last week. He predicted the revenue coming in from digital platform orders “will hold and will just keep growing from here.”

In warehouses and factories, there was more widespread use of robots during the pandemic, a trend that appears likely to continue. Pennsylvania’s Lehigh Valley, a warehouse hub, is seeing a surge in applications from companies wanting to build “high cube” warehouses that are much taller so robots can travel up and down to retrieve items from high shelves, similar to a giant vending machine. It is much faster than having people walk around a large warehouse to collect items.

Some companies are also finding ways to harness machine learning. Even pre-pandemic, companies were automating scheduling and various administrative tasks. Now more sophisticated work is being done increasingly by machines. Last month, California software company Cadence Design Systems unveiled a new software they dubbed Cerebrus, a homage to the largest part of the human brain. It’s used to make microchip engineers more productive. On a recent call with Wall Street analysts, Cadence executives said Cerebrus makes chip engineers 10 times more productive, the kind of gain that could ultimately lower chip costs, not to mention getting faster turnaround for new products.

“I believe Cerebrus is a fundamental breakthrough,” said Anirudh Devgan, president of Cadence Design Systems, on a recent earnings call.

Then there is the work-from-home trend. New research finds teleworking could add a 5 percent boost to productivity, largely because workers save time from not commuting to the office. They can use that time to work or recharge. While some workers are returning to the office, it looks increasingly likely that more people will be able to keep working remotely or in a hybrid plan with some days at home and some in the office. In July, 13 percent of Americans with jobs worked from home, down from 26 percent a year ago, Labor Department data show.

Senate Democrats adopt sweeping $3.5 trillion budget that opens the door to health, education and tax reforms

While it’s easy to point to recent innovations in workplaces, it’s more difficult to say how much of this will show up in the official worker-productivity data. The study on work-from-home productivity cautions that only a fifth of higher productivity from teleworking is likely to show up in the productivity data because the usual government measurement doesn’t take into account commute times.

“It looks like we’re on the cusp of a productivity boom, but you have to see it to believe it,” said David Beckworth, a senior fellow at the Mercatus Center at George Mason University. “The statistics coming out so far in this recovery show a productivity surge. Will that continue? It’s too early to know for sure.”

Another key dynamic is increased government investment in the economy. The $1.2 trillion bipartisan infrastructure bill that recently passed the Senate has received widespread praise among business leaders and economists. The decision to stimulate the economy has also created a lot more demand than normal coming out of a recession, which is helping drive continued productivity and business investment.

“Infrastructure investment certainly has the potential to improve our productivity,” said Julia Coronado, founder of MacroPolicy Perspectives and a former Federal Reserve economist.

The nation hasn’t seen this kind of public investment in years. Improvements in roads and bridges are much needed, but economists are most excited about the money in the bill to expand and enhance broadband, and research and development. Democrats are also working on a $3.5 trillion spending package that is more controversial, though some economists praise parts of that bill that would expand child care and paid leave to make it easier for more U.S. parents, especially mothers, to work.

“It won’t be a game changer to just fix roads and bridges. It will help at the margin, but it’s not transformational,” Coronado said. Instead, she noted that “creating more child-care infrastructure could cause the labor market to be more dynamic and drive stronger workforce participation from women.”

Higher productivity could also alleviate many of the nation’s top economic concerns. Inflation is currently running at a 13-year high, with many Americans citing it as a big worry. As prices for so many goods and services rise, workers can’t afford to buy as much. Productivity gains typically lead to lower prices since factories and offices can produce more, and it tends to bring higher pay as workers are seen as more valuable and effective.

In the medium-term, the biggest concern for the U.S. economy is the shrinking workforce. As baby boomers retire and population growth slows, there are simply fewer workers. Immigration helps with that burden, as do productivity increases that yield a higher output per worker.

“We are going to be short of young people. So all the tasks that were being done with the prior amount of the labor will have to be automated quite a bit,” said Rajeev Dhawan, director of the Economic Forecasting Center at Georgia State University. “There won’t be that many drivers available for Uber and garbage trucks and all that. It’s very clear. Something will have to give.”

A key argument from the White House economic team is that investments in “care infrastructure” such as paid leave, preschool for all, and more affordable eldercare and child care could help more people work. That could boost the number of women in the workforce, though not necessarily productivity.

“Now is the moment to put in place a long-term plan to build back America better,” President Biden said this week. “It starts with making investments that we know will make the economy more productive and lead to more growth over the long run.”

For many economists, it’s too early to buy into the really optimistic case that some technologists and politicians are making, but they say a mini productivity boom is a real possibility.
HockeyDad Offline
#111 Posted:
Joined: 09-20-2000
Posts: 41,829
“Now is the moment to put in place a long-term plan to build back America better,” President Biden said this week. “It starts with making investments that we know will make the economy more productive and lead to more growth over the long run.”


Biden said that this week? Seems like WAPO dusted off an old article.

Either way…Science, Technology, Engineering, Mathematics: that’s where the money is to be made
tonygraz Offline
#112 Posted:
Joined: 08-11-2008
Posts: 17,468
Fireproof trees could be a real money maker.
HockeyDad Offline
#113 Posted:
Joined: 09-20-2000
Posts: 41,829
We are still burning down all the trees so we have room to plant the new fireproof trees. Skies are orangish and smokey today.

They fireproof trees will be developed by defense contractors and cost $3 million per tree and be funded by the green new deal.
RayR Offline
#114 Posted:
Joined: 07-20-2020
Posts: 3,912
HockeyDad wrote:
We are still burning down all the trees so we have room to plant the new fireproof trees. Skies are orangish and smokey today.

They fireproof trees will be developed by defense contractors and cost $3 million per tree and be funded by the green new deal.


That's pretty much what happens when government makes "investments".
The Soviet Union made investments too, and we know how that ultimately turned out.
There are always dangerous morons at the top that think they know exactly how to run the economy.
God help us.
delta1 Offline
#115 Posted:
Joined: 11-23-2011
Posts: 26,410
HockeyDad wrote:
We are still burning down all the trees so we have room to plant the new fireproof trees. Skies are orangish and smokey today.

They fireproof trees will be developed by defense contractors and cost $3 million per tree and be funded by the green new deal.


if the fires close in and you need a safe harbor, come on over...nothing's burning...and I have a spare room
HockeyDad Offline
#116 Posted:
Joined: 09-20-2000
Posts: 41,829
delta1 wrote:
if the fires close in and you need a safe harbor, come on over...nothing's burning...and I have a spare room


We’re red flag tonight. We’re getting smoke from 200 miles away.
delta1 Offline
#117 Posted:
Joined: 11-23-2011
Posts: 26,410
stay safe, Bro
RayR Offline
#118 Posted:
Joined: 07-20-2020
Posts: 3,912
HockeyDad wrote:
We’re red flag tonight. We’re getting smoke from 200 miles away.


I bet if you wear a face diaper, it'll protect you from the toxic smoke as well as it works protecting you from the virus.RollEyes
HockeyDad Offline
#119 Posted:
Joined: 09-20-2000
Posts: 41,829
They said you have to wear N95s for smoke but for ‘Rona just something made from an old tshirt will do.
delta1 Offline
#120 Posted:
Joined: 11-23-2011
Posts: 26,410
double layered T-shirt, minimum
RayR Offline
#121 Posted:
Joined: 07-20-2020
Posts: 3,912
Preferably a wet T-Shirt
frankj1 Offline
#122 Posted:
Joined: 02-08-2007
Posts: 39,696
RayR wrote:
Preferably from a wet T-Shirt contest winner


where's mine?
RayR Offline
#123 Posted:
Joined: 07-20-2020
Posts: 3,912
Wet your own T-Shirt, you pervert.
frankj1 Offline
#124 Posted:
Joined: 02-08-2007
Posts: 39,696
it moved!
rfenst Offline
#125 Posted:
Joined: 06-23-2007
Posts: 35,301
RayR wrote:
So when do you predict the next housing bubble will burst?


Fed mulls retreat on bond buying

Orlando Sentinel

WASHINGTON — Federal Reserve officials last month discussed the timing for beginning to dial back their extraordinary support for the U.S. economy, which has been steadily recovering from the pandemic recession.

The minutes of the Fed’s July meeting, released Wednesday, said it would be appropriate to acknowledge that the economy was making progress in achieving the Fed’s goals on inflation and employment.

As a result, the Fed is edging toward an announcement that it will soon begin paring the pace of its Treasury and mortgage bond buying, which now amounts to $120 billion a month. These purchases have been intended to lower longer-term interest rates and encourage borrowing and spending.

“No decisions regarding future adjustments to asset purchases were made at this meeting,” the minutes said. But it added that most of the Fed officials “noted that, provided that the economy were to evolve broadly as they anticipated, they judged that it could be appropriate to start reducing the pace of asset purchases this year.”
DrMaddVibe Offline
#126 Posted:
Joined: 10-21-2000
Posts: 51,120
Oh yeah...you should totally buy in on T-bills...mortgage the farm and the house...go big or stay home. You can't afford not to ride this wave Big Kahuna.

Sarcasm
rfenst Offline
#127 Posted:
Joined: 06-23-2007
Posts: 35,301
U.S. Expansion Slowed in August, Survey Shows
Factories and service providers report sharply slower growth due to the Delta variant and troubles in hiring, shipping

WSJ

The U.S. economic expansion is losing momentum.

Softening demand at a time of rising Covid-19 cases, labor shortages and persistent knots in shipping networks are restraining businesses in the U.S. and across the globe, according to private-sector surveys released Monday.


The biggest shifts are occurring in the U.S., which has helped drive the global economic expansion since last year’s severe recession. U.S. factories and service providers reported sharply slower growth in August, the forecasting firm IHS Markit said Monday in its surveys of purchasing managers. Its index of service-sector activity, the broadest segment of the economy, fell to 55.2 in August from 59.9 in July, hitting an eight-month low. An index of factory activity dropped to 61.2, a four-month low, from 63.4 in July. A reading above 50 suggests activity—as measured by sales, output, prices and other factors—is growing.

But the surveys show that the Delta variant of the Covid-19 virus, which has led to a new wave of infections and hospitalizations and has spooked consumers, is harming the economy.

“The expansion slowed sharply again in August as the spread of the Delta variant led to a weakening of demand growth, especially for consumer-facing services, and further frustrated firms’ efforts to meet existing sales,” Chris Williamson, chief business economist at IHS Markit, said.


Recent cancellations or postponements of activities in various industries, including concerts and colleges, are likely to hinder consumer spending and economic growth. Country singer Garth Brooks became the latest big-ticket artist to cancel shows. Rice University in Houston moved the first two weeks of the coming semester online.

Apple Inc. told corporate employees last week that its planned return to U.S. offices would be delayed until at least January. Companies such as Chevron Corp. and Wells Fargo & Co. have postponed September returns, while tech companies such as Amazon.com Inc. and Facebook Inc. have pushed them to early next year.

Americans cut spending at retailers in July, the Commerce Department said last week. Consumer spending is the biggest source of economic demand in the U.S.

The U.S. housing market remained strong in July, with sales of previously owned homes rising at a faster pace than the prior month as high prices prompted owners to put more properties on the market.

Sales rose 2% in July from the prior month to a seasonally adjusted annual rate of 5.99 million, up from a revised 1.6% gain in June, the National Association of Realtors said Monday. July sales were up 1.5% from a year earlier.

The inventory of homes for sale at the end of July was 1.32 million, up 7.3% from the prior month and at the highest level since last October. At the current sales pace, there was a 2.6-month supply of homes on the market at the end of July.

With more homes on the market, the median existing-home price in July eased to $359,900 from a revised record of $362,800 the prior month, the NAR said. Robust demand and limited supply had sent home prices skyrocketing in recent months.

“It is still a very swift, fast-moving market, but there is some indication that the market is less intensely heated now than before,” said Lawrence Yun, NAR’s chief economist.


The European economy also slowed during August, but less than the U.S., surveys of purchasing managers indicated. With much of the adult population already vaccinated, governments haven’t rushed to reimpose the tight restrictions on activity that pushed the eurozone’s economy back into recession around the turn of the year. Instead, many Europeans are being asked to show proof of vaccination or a negative test for Covid-19 before gaining access to restaurants, aircraft and other places where the risk of transmission is relatively high.

The composite Purchasing Managers Index for the eurozone fell to 59.5 in August from 60.2 in July. And for the first month since the pandemic struck, the services sector grew faster than the manufacturing sector, a sign that the Delta variant is having less of an impact on growth than the supply shortages that continue to hamper factories.

“Southern economies have benefited from the return of tourists, even if the summer holiday season is nothing like those seen before the pandemic,” said Jack Allen-Reynolds, an economist at Capital Economics.

Notably, businesses said they were continuing to hire at the fastest pace in more than two decades, an indication they are confident that the spread of the Delta variant won’t send the eurozone economy back into contraction.

By contrast, surveys of purchasing managers in Japan and Australia pointed to declines in economic activity during August, largely the result of tightening restrictions imposed by their respective governments in response to the Delta variant. Both countries lag behind the U.S. and Europe in vaccinations. The PMI for Japan hit its lowest level for a year, while the Australian measure fell to its lowest level in 15 months.

Other economies across Asia are also seeing a rapid rise in infections across thinly vaccinated populations, and that is likely to slow growth in one of the world’s main manufacturing centers. Largely in response to that development, Oxford Economics on Monday lowered its 2021 global growth forecast to 5.9% from 6.4%.

“We don’t see Delta as a cause for major panic,” wrote Ben May, Oxford’s director of research, in a note to clients. “Rather than pushing economies back into recession, the most likely outcome is that it pushes back the recovery in the shorter term.”
rfenst Offline
#128 Posted:
Joined: 06-23-2007
Posts: 35,301
Orlando Sentinel
FRANKFURT, Germany — Members of the OPEC oil producing cartel and allied countries led by Russia signed off Wednesday on gradually increasing production as the global economy and demand for fuel continue to recover from the worst of the coronavirus pandemic.

The group, known as OPEC+, agreed at an online meeting to stick with earlier plans to add back 400,000 barrels per day from Oct. 1. The cartel and its allies are gingerly restoring deep cuts made last year, when lockdowns and travel restrictions caused demand for fuel and prices to crater.

The OPEC+ decision tracks with a plan forged in July to add back 400,000 barrels a day each month until last year’s cuts are restored next year.
rfenst Offline
#129 Posted:
Joined: 06-23-2007
Posts: 35,301
Manufacturing up; supply sags

Orlando Sentinel.

WASHINGTON — Growth in U.S. manufacturing accelerated in August even as companies were still struggling with supply chain problems.

The Institute for Supply Management, a trade group of purchasing managers, said Wednesday that its index of manufacturing activity rose 0.4 percentage points in August to 59.9.

Any reading above 50 indicates growth in the sector. August marked the 15th consecutive month that manufacturing has grown after contracting in April 2020 amid the pandemic. Tom Fiore, chair of the ISM manufacturing survey committee, said the report showed manufacturers continued to struggle to meet surging demand while dealing with supply chain disruptions.
rfenst Offline
#130 Posted:
Joined: 06-23-2007
Posts: 35,301
Chip shortage picking up speed in ‘wrong direction’
GM, Ford to temporarily close auto plants despite strong demand for vehicles

Associated Press

DETROIT — The global shortage of computer chips is getting worse, forcing automakers to temporarily close factories including those that build popular pickups.

General Motors announced Thursday that it would pause production at eight North American plants during the next two weeks, including two that make the company’s top-selling Chevrolet Silverado pickup.

Ford will stop making pickups at its Kansas City Assembly Plant for the next two weeks. Shifts will be cut at two more truck plants in Dearborn, Michigan, and Louisville, Kentucky.

The cuts will compound an already short supply of cars, trucks and SUVs on dealer lots nationwide that have pushed prices to record levels. Automakers reported that U.S. dealers had just under 1 million new vehicles on their lots in August, 72% lower than the 3.58 million in August 2019.


“It now appears to be accelerating in the wrong direction,” said Jeff Schuster, president of global vehicle forecasting for LMC Automotive, a consulting firm.

Industry analysts say the delta variant of the coronavirus has hit workers at chip factories in southeast Asia hard, forcing some plants to close. That’s worsened a chip shortage that was starting to improve.

“Now the prospects for new sales for the rest of the year continue to dim with the reality that tight inventory will last well into 2022,” said Kevin Roberts, director of industry insights for Cargurus.com.


Demand for trucks, SUVs and other autos is strong, but buyers are growing frustrated due to lack of inventory and high prices. U.S. light vehicle sales fell nearly 18% in August compared with a year ago, while the average vehicle sale price hit over $41,000, a record, according to J.D. Power.

The August sales dip and inventory shortages prompted Schuster to cut his U.S. sales forecast for the year to 15.7 million. Until the pandemic hit, sales had been running around 17 million per year.

GM is shutting down pickup truck plants in Fort Wayne, Indiana, and Silao, Mexico, for a week starting Monday. A plant in Wentzville, Missouri, that builds midsize pickups and big vans will close for two weeks. Other plants that make small and midsize SUVs will be idled for two weeks or longer.

The GM and Ford cuts come on top of temporary plant closures announced previously by Toyota, Nissan and Stellantis, formerly Fiat Chrysler.

Stellantis shut down its Ram truck assembly plant in Sterling Heights, Michigan this week due to the chip shortage. The company’s Belvidere, Illinois, small-SUV plant and a minivan plant in Windsor, Ontario are down for two weeks.
Toyota said it would slash production by at least 40% in Japan and North America for the next two months, cutting production by 360,000 vehicles worldwide in September alone.

Nissan, which announced in mid-August that chip shortages would force it to close its huge factory in Smyrna, Tennessee, for two weeks until Aug. 30, now says the closure will last four weeks, until Sept. 13.

This is a MAJOR component of our current inflationary cycle.
HockeyDad Offline
#131 Posted:
Joined: 09-20-2000
Posts: 41,829
What current inflationary cycle?
frankj1 Offline
#132 Posted:
Joined: 02-08-2007
Posts: 39,696
things unrelated to Trump or Biden will shake themselves out.
rfenst Offline
#133 Posted:
Joined: 06-23-2007
Posts: 35,301
HockeyDad wrote:
What current inflationary cycle?
LOL. You know, the short, "transitory" one that isn't going to be short or transitory at all.
rfenst Offline
#134 Posted:
Joined: 06-23-2007
Posts: 35,301
Why America has 8.4 million unemployed when there are 10 million job openings

The economy is undergoing massive changes. There’s a big mismatch at the moment between the jobs available and what workers want.

WAPO

A mystery sits at the heart of the economic recovery: There are 10 million job openings, yet more than 8.4 million unemployed are still actively looking for work.

The job market looks, in some ways, like a boom-time situation. Business owners complain they can’t find enough workers, pay is rising rapidly, and customers are greeted with “please be patient, we’re short-staffed” signs at many stores and restaurants.


Welcome to September and the ‘I don’t know’ economy

But the nation remains in the midst of a deadly pandemic with covid-19 hospitalizations back at their highest rates since January. The surge is weighing on the labor market again, with a mere 235,000 jobs added in August. There are still 5 million fewer jobs compared to before the pandemic, reflecting ongoing problems, including child care as some schools and day cares shut down again from outbreaks.

From the White House to the local Waffle House, there’s a struggle to understand what is going on — and what’s likely ahead.

President Biden on Sept. 3 said he hoped to see a higher number of new jobs added this month, and noted the job growth since taking office. This weekend, the employment crisis will hit an inflection point as many of the unemployed lose $300 in federal weekly benefits and millions of gig workers and self-employed lose unemployment aid entirely. Some anticipate a surge in job seekers, though in 22 states that already phased out those benefits, workers didn’t flood back to jobs.

At heart, there is a massive reallocation underway in the economy that’s triggering a “Great Reassessment” of work in America from both the employer and employee perspectives. Workers are shifting where they want to work — and how. For some, this is a personal choice. The pandemic and all of the anxieties, lockdowns and time at home have changed people. Some want to work remotely forever. Others want to spend more time with family. And others want a more flexible or more meaningful career path. It’s the “you only live once” mentality on steroids. Meanwhile, companies are beefing up automation and redoing entire supply chains and office setups.

Remote work has created one of the biggest shifts ever in daily commutes

The reassessment is playing out in all facets of the labor market this year, as people make very different decisions about work than they did pre-pandemic. Resignations are the highest on record — up 13 percent over pre-pandemic levels. There are 4.9 million more people who aren’t working or looking for work than there were before the pandemic. There’s a surge in retirements with 3.6 million people retiring during the pandemic, or more than 2 million more than expected. And there’s been a boost in entrepreneurship that has caused the biggest jump in years in new business applications.

“The economy is going through a big shift overall and that has ramifications,” said Ben Bernanke, the Federal Reserve chair from 2006 to 2014. “We are reallocating where we want to work and how we want to work. People are trying to figure out what their best options are and where they want to be.”

It doesn’t help that the abundance of job openings right now are not in the same occupations — or same locations — where people worked pre-pandemic.

Booming business at dollar stores shows the widening gulf between haves and have-nots during pandemic

There is a fundamental mismatch between what industries have the most job openings now and how many unemployed people used to work in that industry pre-pandemic. For example, there are nearly 3.5 million job openings in the hospitality sector and fewer than 1.5 million unemployed people whose most recent job was in hospitality.

Similar mismatches have arisen in education and health services, where there are nearly twice as many job openings as there are people whose last job was in that sector.

In recent months, heath care workers and educators have quit their jobs at the highest rate on record, stretching back to 2002, Labor Department data show.

“This is typically the time of year we recruit for the upcoming school year, but we literally can’t get enough candidates, and we’re seeing tenured people leave,” said Cindy Lehnhoff, a 36-year veteran of the child care industry who currently heads the National Child Care Association. “If you get one good candidate, there are 10 others contacting that same person. It’s a crisis. People can’t work without child care.”

Lehnhoff has been helping a child care center in northern Virginia recruit more staff. Their infant room remains closed, because they don’t have enough people, and one of their veteran workers was just poached by a nearby elementary school. As she spoke with The Washington Post, Lehnhoff pored over the Indeed.com job portal. It showed more than 2,000 job posts in the Fairfax County, Va., area for child care teaching assistants. Most paid $12 to $13 an hour, a bit less than many nearby fast food restaurants and retail stores.

For first time, average pay for supermarket and restaurant workers tops $15 an hour

Nationwide, most industries have more job openings than people with prior experience in that sector, Labor Department data show. That’s a very different situation than after the Great Recession, when the number of unemployed far outstripped jobs available in every sector for years. To find enough workers, companies may need to train workers and entice people to switch careers, a process which generally takes longer, especially in fields that require special licenses.

While companies say they are struggling to find workers, many unemployed say they are having trouble getting hired, especially if they haven’t worked for a year.

Forklift driver Brandon Harvey and his wife used to work in a warehouse outside Atlanta that closed during the pandemic and never reopened. Harvey, 33, searched for a job for months, looking online and driving around South Fulton. He submitted countless applications but rarely got calls back.

“I fear that employers are pretty hesitant to give you an opportunity right now if you haven’t worked in a while,” Harvey said over the summer, when his search seemed especially frustrating.

U.S. economy added a lackluster 235,000 jobs in August, a disappointing month as virus surged

Harvey and his wife fell behind on rent. Their landlord wanted to evict them. They struggled to stay positive in front of their two kids, a toddler and 13-year-old. Harvey saw plenty of $10 and $12 an hour jobs all spring and summer, but it wouldn’t be enough for his family to survive. He made $17 before the pandemic.

“I definitely wasn’t going to work for $10 or $12 an hour. That wasn’t going to do anything,” Harvey said.

After months of job hunting, in late August, he finally received a job offer for $21 an hour in a major retailer’s warehouse. He expects to start Sept. 4.

Companies across the economy are raising pay at a rapid pace in an effort to entice more people back to work. It’s helped, but the pandemic and reallocation pains are still significant barriers.

Average pay for rank-and-file workers is up 2.8 percent in the past five months, outside the pandemic that’s the fastest rate of increase since 1981.

There has been especially fierce wage competition for lower-paid positions, especially since many former service sector workers say they won’t return at any price due to long hours, grueling work and increased exposure to the virus.

Pay is up 8.8 percent for nonmanagerial workers in the restaurant-and-hospitality sector and 6.1 percent for warehouse workers in the past five months. It appears to be helping lure some workers back. Of the 3.1 million jobs gained since March, almost half are in hospitality, though hiring in the sector stalled in August as the delta variant surged.

Some Americans are being forced to shift careers whether they want to or not. The pandemic has lingered longer than anyone initially anticipated and the ranks of long-term unemployed have swelled. About 40 percent of the currently unemployed — 3.2 million — have been out of work for six months or longer.

Years of research, especially after the Great Recession, show these people have a much harder time getting back to work. Hiring managers are skeptical that their skills are still fresh, and these workers’ prior jobs and employers are often gone, forcing job seekers to rely on sending out resumes online without any personal connections.

“One of the most well-known facts in labor economics is people unemployed for a short time get jobs really quickly. People unemployed a long time have a harder time getting a job,” said Peter Ganong, assistant professor of economics at the University of Chicago’s Harris School of Public Policy.

Some of the long-term unemployed have become so discouraged that they retired earlier than planned.

With evictions expected to mount, access to rental aid remains uneven

Annie Farley of Hutchinson, Kan., said she hadn’t intended to retire early, but she nonetheless recently applied for Social Security at age 63, because she no longer had any unemployment benefits coming in. She has struggled to pay for the basics. She can’t afford to repair her car so she can commute to a retail job.

Farley worked for years at an embroidery business, helping to run the machines and manage orders, but she was laid off at the start of the pandemic. She had hoped to return this summer but found the company had replaced her with a younger, cheaper worker.

“It’s been pretty rough. I’ve missed credit card payments and I’ll probably have to do a pay agreement with the electric company,” said Farley, who takes care of her two grandchildren. “It feels like there’s a million people applying for two positions around here.”

Economists point out that overall jobs are actually rebounding at a remarkable pace. Over 75 percent of the jobs lost during the pandemic are back, a much faster recovery than almost anyone anticipated a year ago. Private forecasters anticipate all the jobs lost could be back by mid to late 2022 — a rebound of about two years compared to the six-plus years it took for the labor market to recover from the Great Recession.

But, as Federal Reserve Chair Jerome H. Powell put it recently, it’s been a “vigorous but uneven recovery.” Job losses remain steepest for Black and Hispanic women, as well as Americans without college degrees.

The uneven recovery is evident in how different states are faring. In some areas of the country, the labor market is booming. All the slack has vanished in Idaho and Utah, where employment recovered months ago and the unemployment rates were nearing their all-time lows at 2.6 percent and 3 percent respectively. But other states are still reeling: Hawaii is still missing 12 percent of its jobs, New York is still missing 9 percent, and Nevada and Alaska are more than 7 percent behind, as tourism-dependent economies struggle amid fast-spreading covid-19 variants.

Similarly, urban downtowns in San Francisco and Washington D.C. have struggled to rebound as more office workers remain at home. The shops and restaurants that supported these office workers aren’t coming back yet, especially as bellwether employers such as Google, Amazon, Apple and Facebook push back openings to January. (Amazon founder Jeff Bezos owns The Washington Post). Meanwhile, the most urgent need for workers is often in suburban areas, where housing costs have skyrocketed, making it difficult for low-wage workers to live there.

As the recovery proceeds, the holes in the labor force have shifted. Half of all jobs are still missing in high-contact industries such as buffets and movie theaters, but other industries that were hit harder in the early days of the crisis, such as RV dealers, carwashes, breweries and appliance stores, have staged a full comeback, buoyed by record consumer spending on goods.

Some lucky industries, such as delivery services, mortgage lenders, and breakfast-cereal manufacturers seemed to have sailed through the entire crisis without shedding jobs. They now have 10 or even 20 percent more employees than they did in February of 2020.

The White House and many business leaders hope a combination of rising vaccination rates, reduced unemployment benefits and more time will lead more unemployed Americans to find new careers — and to be excited about them.

Sarah Henrie, 39, from the San Francisco Bay area, lost her corporate job at Bloomingdale’s in June of 2020 and struggled to find any job openings in her area of expertise: International marketing and tourism. Initially, she was shocked to find herself unemployed for the first time in her career.

But after her daughter was born, she decided she wanted a more flexible career. She’s about to take the real estate exam in California. If all goes well, she will start as a Realtor early next year working with her brother.

“It’s been a crazy year and we’re still kind of navigating,” Henrie said. “The nice thing about real estate is it’s flexible and you’re not commuting and going into an office. I think it will allow me to work and also be able to have more time with my daughter than I would have if I had been in my old role.”

The key to this great reallocation will be ensuring some workers aren’t left behind.
rfenst Offline
#135 Posted:
Joined: 06-23-2007
Posts: 35,301
Labor shortage could be boost for union workers
Workforce may be gaining leverage as companies scramble to fill openings

Associated Press

NORFOLK, Va. — When negotiations failed to produce a new contract at a Volvo plant in Virginia in the spring, its 2,900 workers went on strike.

The company soon dangled what looked like a tempting offer — at least to the United Auto Workers local leaders who recommended it to their members: Pay raises. Signing bonuses. Lower-priced health care. Yet the workers rejected the proposal. And then a second one too. Finally, they approved a third offer that provided even higher raises, plus lump-
sum bonuses.

For the union, it was a breakthrough that wouldn’t likely have happened as recently as last year. That was before the pandemic spawned a worker shortage that’s left some of America’s union members feeling more confident this Labor Day than they have in years.

With Help Wanted signs at factories and businesses spreading across the nation, union workers like those at the Volvo site are seizing the opportunity to try to recover some of the bargaining power they feel they lost in recent decades as unions shrank in size and influence.

“We were extremely emboldened by the labor shortage,” said Travis Wells, a forklift driver at the Volvo plant in Dublin, Virginia, near Roanoke. “The cost of recruiting and training a new workforce would’ve cost Volvo 10 times what a good contract would have.”

In addition to 12% pay raises over the six-year contract, the Volvo deal provided other sweeteners: Many of the union workers will be phased out of an unpopular two-tier pay scale that had left less- senior workers with much lower wages than longer-tenured employees. All current workers will now earn the top hourly wage of $30.92 after six years. And by holding out as long as they did, the workers achieved a six-year price freeze on health care premiums.

Volvo conceded that it’s had difficulty finding workers for the Virginia plant but says it offers a strong pay and benefits package “that also safeguards our competitiveness in the market.”

[h]The improvements achieved by the Volvo workers in Virginia provided a case study of how union workers may be gaining leverage
as companies scramble to find enough workers to meet customer demand in an economy that’s been recovering from the pandemic.

The demand for labor has also benefited lower-paid workers at restaurants, bars and retailers. But the financial gains for union workers mean that a category of jobs that have long been seen as supportive of a middle-class lifestyle may now be moving closer to that reality.

Unions may also be benefiting from frustration among working-class Americans over wages that, adjusted for inflation, have been stagnant for decades.

“They simply have not benefited from the economy over the last three decades,” Susan J. Schurman, who teaches labor studies at Rutgers University, said of many workers. “If I were a union organizer right now, I’d be really excited.”
rfenst Offline
#136 Posted:
Joined: 06-23-2007
Posts: 35,301
Short-Lasting Inflation Depends on Long-Lasting Goods
The Fed blames rising inflation on an unusual jump in the price of durable products like cars and electronics, which it says won’t last

WSJ

For decades, Americans have enjoyed falling prices for cars, electronics and furniture.

Until the Covid-19 pandemic, that is. For the past year, prices for durable goods have been rising—and not just by a little. Whether those prices come back down is a key part of the puzzle facing the Federal Reserve as it plots how to handle an unexpectedly strong burst of inflation.

Federal Reserve Chairman Jerome Powell has argued for a while that the higher inflation is largely driven by temporary factors unique to the pandemic.
In a speech hosted by the Federal Reserve Bank of Kansas City in late August, Mr. Powell offered more details on his thinking. He singled out the sudden rise in durable goods prices—in contrast to the more modest rise in services prices—as evidence that inflation is bound to fall back to the Fed’s 2% goal.

First, a bit of history. Overall consumer prices—which combine services and goods—climbed by an average of 1.8% a year in the past 25 years leading up to the pandemic. That rise was driven by faster-rising costs for services, which grew an average 2.6% a year over that time. Prices for durable goods—items designed to last at least three years—have done the opposite—falling an average of 1.9% a year between early 1995 and early 2020, according to the Fed’s preferred inflation gauge, the Commerce Department’s price index for personal-consumption expenditures.

Mr. Powell cited several forces driving down prices for durable goods. One is globalization: Competition from other countries, in particular emerging markets with lots of low-wage workers like China and India, has stoked competition for American producers and led some to outsource production. As a result, costs for parts and products have fallen.

Another is technology. New software and more advanced machinery have enabled factories to make products in fewer hours with fewer people, reducing their own costs and ultimately translating into lower prices for consumers. More efficient shipping has also cut costs.

By contrast, prices have persistently risen for services—the bulk of consumer purchases, including haircuts, doctor’s visits and tax preparation. Because they are by default labor intensive—a barber can still only cut one person’s hair at a time—those industries haven’t raised productivity as much as factories.

The pandemic has flipped this dynamic, with durable goods becoming a big driver of inflation. In July, overall consumer prices rose 4.2% from a year earlier, according to the Commerce Department. Prices for durable goods rose 7%. That was twice as fast as the 3.5% gain in prices for services.

Durable goods prices accounted for 1 percentage point of the latest inflation rate, Mr. Powell said. The overall effect of rising durable-goods prices was even larger on “core” inflation, which excludes food and energy prices. Excluding durable goods, core inflation in the 18 months through June, which smooths out a temporary dip and rebound in some prices during the pandemic, was 2.2%, not far from its 12-year average of 2%, according to the Fed.


What happened? According to Mr. Powell, it’s no mystery: Unique forces caused demand for durable goods to rise far more quickly than supply.

Demand rose for two reasons: The government put a lot of money in the hands of consumers, through multiple stimulus packages. And households, stuck at home and with fewer opportunities to travel, dine out and visit museums, shifted spending toward durable goods, many of which could be delivered with no human contact. Researchers at the Cleveland Fed found that these two factors—the stimulus and the shift away from services caused by lockdowns—contributed equally to the rise in spending on durable goods.

Households have boosted spending on sofas, cars and kitchen appliances. Businesses, short of workers and caught off guard by the surge in demand, have struggled to ship supplies and make products fast enough. A global chip shortage disrupted shipments of laptops and printers, along with cars. Labor and equipment shortages caused delays of furniture deliveries.


Other figures show the pandemic’s effect on prices that had long experienced deflation. Consider used cars, which are the bulk of all car purchases. Their prices peaked in 2001, then declined. By February 2020, they had fallen 14% from their all-time high, according to the Labor Department’s consumer-price index, a separate inflation gauge.

Then in the summer of 2020, used-car prices started rising, sharply. In the year through July, they were up a staggering 42%. Of the dozens of major product prices tracked by the Labor Department, only gasoline rose faster.

Computers followed a similar trajectory. Before the pandemic, prices had fallen rapidly for two decades. Then, during the pandemic, they started rising. In June 2020, they rose on an annual basis for the first time ever. In July, they shot up 3.7% from a year earlier.

Or look at furniture. Between January 2000 and January 2020, prices fell 16%. Since February 2020, they have risen 7%.

Mr. Powell argued that once shortages, supply bottlenecks and demand ease, prices will drop, or at least stop rising so steeply. That may already be happening. Durable goods prices rose just 0.3% in July from a month earlier, down from 1% growth in June and 2% in May. Used-car prices also grew much more modestly, and furniture prices fell for the first time since January.

“As supply problems have begun to resolve, inflation in durable goods other than autos has now slowed and may be starting to fall,” Mr. Powell said in his Kansas City Fed speech. “It seems unlikely that durables inflation will continue to contribute importantly over time to overall inflation.”


He added that he believes the secular forces that had driven down prices for durable goods in the past—globalization and technology—won’t go away.

There are risks that inflationary pressures will be deeper and longer-lasting than Mr. Powell suggests. Gasoline prices—a nondurable good—rose just as fast as used-car prices in the year through July. Food price growth around the globe is accelerating and could persist, JPMorgan Chase said in a note last week.

Services inflation may also pick up. Home prices and rents, one of the largest components of consumption, are rising quickly. Employers in labor-intensive service businesses are facing higher labor costs that they may have to pass along in prices. Also, shipping networks could shift. Companies could decide to buy parts from other countries, or within the U.S., where labor costs are higher, which could lead to higher prices in the long run.


Mr. Powell’s outlook on durable goods—and, thus, on inflation—is a bet that the world after the pandemic will look largely the same as the world before it.
rfenst Offline
#137 Posted:
Joined: 06-23-2007
Posts: 35,301
Poverty fell overall in 2020 as result of massive stimulus checks and unemployment aid, Census Bureau says

The official rate rose slightly to 11.4%, but the agency says that after accounting for pandemic relief aid, the poverty rate fell to 9.1%. The uninsured population also rose slightly.

WAPO

U.S. poverty fell overall in 2020, a surprising decline largely due to the swift and substantial federal relief that Congress enacted at the start of the pandemic to try to prevent widespread financial hardship as the nation experienced the worst economic crisis since the Great Depression.

The U.S. Census Bureau reported poverty fell to 9.1 percent in 2020 after accounting for all the government aid — the lowest rate on record and a significant decline from 11.8 percent in 2019.

Nearly 8.5 million people were lifted out of poverty last year, an unprecedented change in a single year that was largely attributed to the stimulus payments. Poverty in the United States is defined as a family of four living on less than about $26,250 a year.

“This is a really phenomenal result‚” said Elaine Waxman, a senior fellow at the Urban Institute. “But a lot of the aid that made a difference, including for families with children, won’t be extended.”

As the economy recovers from the depths of the coronavirus pandemic, White House officials are hoping that more Americans will be able to find good-paying jobs that keep them out of poverty. But deep inequalities remain, and there are troubling signs the recovery could stall. Black and Hispanic women continue to lag behind in the recovery, along with Americans without college degrees. Meanwhile, strong job gains earlier in the summer have faded as surging coronavirus cases, mostly among the unvaccinated, weigh on spending and hiring.

President Biden is urging Congress to enact more programs to help the poor and working class as part of a $3.5 trillion package that would make significant investments in many parts of the economy. Top White House aides point to the success of the pandemic aid as an example of how additional resources can make a dramatic difference in decreasing poverty and hardship. But conservatives argue that safety-net programs exacerbate worker shortages and add to already skyrocketing levels of federal debt unnecessarily.

The extensive federal relief money enacted during the coronavirus pandemic is widely credited by economists and policy experts with preventing another Great Depression. When looking at individual programs, the stimulus payments, alone, without taking into consideration expenses and other factors, would have lifted 11.7 million out of poverty, census officials estimate. And they said enhanced unemployed aid prevented 5.5 million people from falling into poverty. A separate report last week showed that, because of the aid, hunger did not rise in 2020.

“This really highlights the importance of our social safety net,” said Liana Fox, chief of the Census Bureau’s Poverty Statistics Branch.

The annual census findings also underscored the deep impact of so many job losses last year. Median income declined sharply, 2.9 percent, to $67,521, and the number of people lacking health insurance throughout 2020 grew to 28 million, nearly 2 million more than in 2019. It was the fourth year in a row that the ranks of the uninsured swelled.

Still, after accounting for the government aid, poverty declined in every age group, racial and ethnic group and educational level. Some of the largest declines in poverty were reported for families headed by single mothers, African Americans, Hispanic Americans and adults without a high school degree.

“The federal government responded quickly and significantly. And it’s very clear that those efforts prevented a sharp rise in poverty,” said James Sullivan, an economics professor at the University of Notre Dame. “The concern is that we would see poverty rise again because we’ve now seen these relief packages expire.”

Allison Mertz of Kansas City, Mo., was one of many whose standard of living drastically changed after the pandemic struck and employers slashed jobs as much of the economy shut down. Before the pandemic, Mertz worked part time so she could finish her bachelor’s degree. Her fiance planned to support them financially, but his 80-hour-a-week job in the oil industry was reduced to 20 hours. They struggled to pay rent and buy groceries and lacked money for a major car repair.

Mertz and her fiance grew up in poverty and had tried hard to climb out of it, Mertz said. They credit the stimulus payments and food assistance with preventing them from falling below the poverty line.

“Getting those stimulus checks was a game-changing moment,” Mertz said. “It just made such a big difference. It seems like such a small amount of money, but it was so much money when you have next to nothing.”

Mertz, 30, now has a full-time job in the insurance industry after finishing her bachelor’s degree, and her fiance’s hours have rebounded. They just signed the lease on a nicer apartment.

Poverty would have jumped to 12.7 percent without the stimulus payments last year, the Census Bureau said, noting that the majority of job losses were among workers earning less than $34,000 who had little to no savings. By a second measure, which leaves out much of the federal stimulus payments, poverty rose to 11.4 percent from 10.5 percent, but experts said that figure does not capture the real-world effect of the government aid.


Biden’s “Build Back Better” proposal does not include stimulus checks. But it does include extensive financial support for lower-income Americans, including universal pre-K for 3- and 4-year-olds, enhanced child-care subsidies, more subsidies to help low-income Americans buy health insurance and more tax credits for the working poor. It would also continue the expanded child tax credit that is currently providing most American families $300 a month per child under 6 and $250 a month per child ages 6 to 17. The expanded credit has the potential to cut child poverty in half, experts say.

“The whole point of the child tax credit is, if a family is working at all, it pushes the family above the poverty line so their children aren’t suffering,” said Trina Shanks, a professor of social work at the University of Michigan.

On health insurance coverage, the impact of the public health crisis was not as dire as some public policy experts had anticipated early on in the pandemic. The increase of 2 million people without health coverage throughout last year was twice as large as in 2019. Still, the 8.6 percent of U.S. residents who lacked coverage throughout 2020 was close to 2018 levels, census officials said.

The main effect on coverage was that the pandemic lowered the number of Americans with private insurance while expanding the numbers who had some form of public coverage. The proportion of Americans with job-based coverage was 54.5 percent, a full percentage-point drop from the year before. Meanwhile, the proportion covered under Medicaid increased slightly from 17.2 percent in 2019 to 17.8 percent last year.

The insurance findings also highlight long-standing disparities in insurance coverage among racial and ethnic groups that in some cases widened.

While the proportion of White residents who lacked health insurance rose slightly (from 7.8 percent in 2019 to 8.3 percent last year), a far larger share of Hispanics were uninsured — 18.3 percent in 2020, compared with 16.7 percent the previous year. Among Blacks, the uninsured rate increased to 10.4 percent last year, up from 9.6 percent in 2019. People living below the poverty line were far less likely to have health coverage, with fully one-quarter of the poor without any insurance last year.

The census data shows that the rate of uninsured was especially high in a dozen states that have chosen not to expand Medicaid eligibility under the Affordable Care Act — nearly double the rest of the country. Unlike his predecessor, Biden has been pressing to expand Medicaid in the dozen holdout states, and Congressional Democrats are considering proposals that would allow people frozen out of the program by their state governments to buy private ACA health plans inexpensively.

The insurance trends highlight an emerging pattern in which “the government’s role is just growing every year,” said Dan Mendelson, chief executive of Morgan Health, a company focused on health-care innovation in employer markets.

Beyond the pandemic, the findings demonstrate how employer-sponsored insurance is shrinking, especially as small and medium-size companies find the cost of providing health benefits to their workers beyond their reach, Mendelson said. As fewer workers have benefits through their jobs, growing numbers will face a hard choice of whether to buy health plans through ACA marketplaces or become uninsured.


It remains unclear whether the reduction in poverty will endure beyond 2020. Sullivan, the economist from Notre Dame, and economist Bruce Meyer of the University of Chicago have been attempting to track poverty during the pandemic in “real time.” Their analysis shows a slight uptick in poverty in 2021 that worsened slightly in August as coronavirus cases surged again.

While poverty has declined across the board, racial disparities continue to exist. The percentage of Black Americans in poverty is 14.6 percent. compared with 8.1 percent for White Americans, according to supplemental census poverty measures.

What happens next to family incomes and poverty will depend largely on how many Americans are able to return to work in the coming months and whether the U.S. government extends some aid to low-income Americans.
rfenst Offline
#138 Posted:
Joined: 06-23-2007
Posts: 35,301
Why renting a car will be a pain until at least 2022

Los Angeles Times

LOS ANGELES — On a trip to visit Disneyland with his children, John Jimenez of San Jose, Calif., reserved a compact car from Dollar Rent a Car at Los Angeles International Airport. What he got when he landed was a headache.

Due to a vehicle shortage, the car rental agency offered him a van that he said reeked of cigarettes and marijuana instead of a compact car. Jimenez refused the malodorous van, and after a more than two-hour wait he settled for another van with more than 60,000 miles, visible body damage and a "musty odor" that seemed to come from the air conditioning system.

"The area where the compact cars were was empty," he said, adding that he has demanded a full refund.

A global microchip shortage that has cut production of new cars continues to deal a heavy blow to car rental companies, but most of the pain is being felt by travelers such as Jimenez who find themselves waiting in long lines, paying nearly double the rates of earlier this year, getting denied the vehicle they reserved or ending up driving away in a car with lots of extra wear and tear.

The bad news is that the car shortage — and the headaches for car renters — won't ease until 2022 or later, according to car rental industry experts.

"The supply of new vehicles remains very tight," said Gregory Scott, a spokesperson for the American Car Rental Assn.
Because of the shortage, car rental companies are keeping their cars longer before selling them and replacing them with new vehicles. In the past, rental firms sold their cars when they reached 25,000 to 50,000 miles, but they are now keeping them until they reach nearly 90,000 miles, Scott and other industry experts said. Rental companies are also trying to restock their aging fleet by buying back cars that had been previously sold off at auction to used-car dealerships.
Challenges filling open jobs have exacerbated the situation, making it difficult for rental companies to staff the rental counters and hire workers to move cars from low-demand locations to high-demand outlets, industry insiders say.


As a result, car rental prices jumped to an average high of $120 a day this summer, compared with about $45 at the beginning of the year, according to a study by the travel booking site Hopper.com. Prices have since dropped to about $80 a day and continue to trend downward as demand declines with the end of the summer travel season, the study found.
But prices are expected to climb again as travel picks up during the upcoming holiday season, said Steve Sintra, vice president and general manager of North America at the travel website Kayak.com.


"The increase in demand around rental cars is something we've been seeing all summer, and Kayak's data is showing that demand isn't going to slow any time soon, especially as we enter the holiday season," he said.

The problems for the car rental industry began when the pandemic forced the closure of factories around the world, interrupting the production of microchips needed for electronic devices, laptops and cars. The pandemic also closed down ports in Asia, which disrupted the microchip supply chain. Automobile manufacturers canceled chip orders, assuming demand for new cars would dry up during the pandemic.

But once demand for vehicles and electronic devices for homebound workers bounced back, chip manufacturers struggled to keep up with the new orders. Japanese carmaker Nissan said it is planning to make 500,000 fewer vehicles in 2021 because of the chip shortage. Other auto manufacturers, such as General Motors, have been making vehicles and storing them by the thousands in giant parking lots, waiting for the microchips they need to operate.

Because of the shortage, the U.S. car rental industry was able to purchase only about 800,000 new cars in 2020 to restock its aging fleet, less than half of what the industry bought in 2019, Scott said.

Microchip manufacturers say it may be a year or two before supplies can start to meet the growing demand. That means the shortage of cars won't ease until 2022 or later, industry experts say.


"It continues to be a lot of uncertainty," Will Withington, senior vice president at Enterprise Holdings Inc., said at a recent rental car industry convention in Las Vegas.

In a statement, Enterprise said the company is able to meet current customer demand by extending the "normal cycle of our fleet" with rigorous safety and maintenance standards.

Industry rival Hertz Corp. said it is "working closely with our automotive partners to add new vehicles to our fleet as quickly as possible, purchasing low-mileage, pre-owned vehicles, and moving vehicles to the areas with highest demand."
Such assurances are little comfort for Kimmy Katz of Titusville, Fla., who described her recent car-renting experience as "very frustrating."

She rented a Nissan SUV for a two-week business trip in Florida from Dollar Rent a Car. But one of the tires had a slow leak that required her to fill it every two days, Katz said. When the tire finally went flat, she said, the car rental agency denied her request for a new car or a new tire.

I "am thanking whatever god or science is out there that I did not break down on I-75 or I-10 where there is no cell service," she said.

Asked to respond to the problems cited by Jimenez and Katz, Hertz, the parent company of Dollar, said the company "would need to look into those specific situations to be able to comment further."

"When customers raise a concern, we look into it and try to make it right," Hertz said.

Industry experts say travelers who want to avoid such headaches should book cars as early as possible and try to choose car rental outlets in small or midsize airports where demand is lower.

"I've never seen anything like this," said Eben Peck, executive vice president for advocacy at the American Society of Travel Advisors. "COVID has put so many stresses on the system, and this is just one of them."
HockeyDad Offline
#139 Posted:
Joined: 09-20-2000
Posts: 41,829
If we print more money to give to the poor we will get more rental cars.

(I dunno. There was just so much yellow highlighting there.)

rfenst Offline
#140 Posted:
Joined: 06-23-2007
Posts: 35,301
When it comes to inflation, I’m on team transitory

Paul Krugman NYT

Consumer prices have risen 4.4% over the past six months; that’s an annualized inflation rate of almost 9%, which puts us almost back into 1970s territory. And there are plenty of people out there proclaiming the return of stagflation.
But the people in a position to do something about it — above all, Jerome Powell, the chair of the Federal Reserve — are fairly serene. They insist that we’re looking at only a transitory blip driven by the disruptions associated with America’s emergence from the pandemic. But are they right? How can we tell?


To answer those questions, we need to back up and ask what it means to say that inflation is transitory, anyway. And to do that, it helps to take a long view.

My sense is that many people believe that inflation wasn’t something that happened in America before the 1970s. But that isn’t true. Consumer price data go back more than a century, and there were several episodes of high inflation over that period. The ’70s weren’t even the peak.

What was the difference between the ’70s inflation and the inflationary spikes associated with World War I, the end of World War II or the Korean War?

The answer is that those earlier bursts of inflation were easy come, easy go: The economy didn’t exactly return to price stability painlessly, but the recessions associated with disinflation were fairly brief. Ending the inflation of the ’70s, by contrast, involved a prolonged period of really high unemployment.

But what explained that difference? In the 1970s, inflation became “embedded” in the economy. The people who were setting wages and prices did so with the expectation that there would be lots of inflation in the future. For example, companies were relatively willing to give their workers wage increases because they thought that their competitors would end up doing the same, so it wouldn’t put them at a competitive disadvantage.

The question is whether inflation is similarly becoming embedded now.

We used to have a fairly easy, rough-and-ready way to answer that question: the concept of core inflation.

Back in the 1970s, economist Robert Gordon suggested that we make a distinction between the price of commodities like oil and soybeans that fluctuate all the time and other prices that are adjusted less frequently. An inflation measure that excluded food and energy, he argued, would give us a much better indicator of underlying — i.e., embedded — inflation than the headline number.


The concept of core inflation has been one of the huge success stories of data-driven economic policy. Over the past 15 years, we’ve seen several surges in consumer prices, driven mainly by commodity prices, and much hyperventilating, mainly on the political right, about the return of stagflation or even imminent hyperinflation.

Remember when Paul Ryan, the Republican representative of Wisconsin at the time, accused Ben Bernanke, the former Fed chair, of “debasing the dollar”?

The Fed, however, refused to back off from its easy-money policy, pointing to quiescent core inflation as a reason not to worry. And it was right.

Unfortunately, at this point the traditional measure of core inflation doesn’t help much, because the pandemic has led to price spikes in unusual sectors like used cars and hotel rooms. So how can we find guidance?

The White House Council of Economic Advisers has been using a sort of “supercore” measure that excludes not just food and energy but also pandemic-affected sectors.

This makes sense; in fact, I was arguing for such a measure months ago. But I’m aware that as one excludes more stuff from the Consumer Price Index, one exposes oneself to the charge that you’re saying that there’s no inflation if you ignore the prices that are rising.

Powell has pointed to a different measure: wage increases, which have been substantial in some of the pandemic-hit sectors but overall still seem moderate according to measures like the Atlanta Fed’s wage growth tracker.
Lately, however, I’ve been wondering whether the best way to figure out whether inflation is getting embedded is to ask the people who would be doing the embedding. That is, are companies acting as if they expect sustained inflation in the future?

The answer, so far, seems to be no. Many companies are facing labor shortages, and they’re trying to attract workers with things like signing bonuses. But at least according to the Fed’s Beige Book — an informal survey that is often useful for getting a read on business psychology — they’re reluctant to raise overall wages.

Just to be clear, I’m not celebrating corporate unwillingness to increase wages. The point, instead, is that companies aren’t acting as if they expect lots of future inflation, where they can hike wages without losing competitive advantage. They’re acting, instead, as if they see current inflation as a blip.

So far, then, I’m still on Team Transitory: I think things are looking more like 1951, when inflation briefly hit 9.3%, than 1979. And if we finally get this pandemic under control, the inflation of 2021 will soon fade from memory.
DrMaddVibe Offline
#141 Posted:
Joined: 10-21-2000
Posts: 51,120
Paul Krugman?


Frying pan Frying pan Frying pan

https://mises.org/wire/rebutting-paul-krugman-austrian-pandemic

whip
RayR Offline
#142 Posted:
Joined: 07-20-2020
Posts: 3,912
Economist Bob Murphy who wrote that article challenged Krugman to a public debate some years ago. Krugman ignored the challenge, even though a considerable amount of cash was pledged to go to charity if he accepted. Clearly, Krugman is an elitist who hates poor people anyway.

In 2012 economist Gary North wrote a piece on Why Paul Krugman Should Not Debate Robert Murphy
A good rundown of why Krugman avoided answering the challenge.

https://www.garynorth.com/public/10130.cfm
Brewha Offline
#143 Posted:
Joined: 01-25-2010
Posts: 10,195
I thought inflation was designed in to our monetary system. The Fed gets like 6% return on our money because we “barrow” it from them.

A sweet deal for a private banking cartel.
rfenst Offline
#144 Posted:
Joined: 06-23-2007
Posts: 35,301

EU plans to step up chipmaking
Orlando Sentinel

LONDON — The European Union’s top official outlined ambitious plans to help beef up the bloc’s chipmaking capability in the face of intensifying global competition for semiconductors.

European Commission President Ursula von der Leyen unveiled the European Chips Act on Wednesday to provide official support for the bloc’s “chip ecosystem” so that the continent can stand on its own when it comes to producing the vital technology.

Semiconductors are the tiny microchips that act as the brains for everything from smartphones to cars, and an extended shortage has highlighted the importance of chipmakers, most of which are based in Asia, to global supply chains. The U.S. has also been stepping up efforts to bolster the industry.



These will be MAJOR factors in reducing the rate of inflation as soon as they get online.
HockeyDad Offline
#145 Posted:
Joined: 09-20-2000
Posts: 41,829
The British are talking about fish and chips. You can’t trust the British.
HockeyDad Offline
#146 Posted:
Joined: 09-20-2000
Posts: 41,829
Rfenst is trying desperately to talk down inflation but it is an uphill battle against the government taxing or printing 4.5 trillion dollars!

BuckyB93 Offline
#147 Posted:
Joined: 07-16-2004
Posts: 11,192
Yeah, that's nice and all... too bad the EU doesn't have any major chip manufacturers.

Might as well have the EU step up their citrus fruit growing industry.
rfenst Offline
#148 Posted:
Joined: 06-23-2007
Posts: 35,301
HockeyDad wrote:
Rfenst is trying desperately to talk down inflation but it is an uphill battle against the government taxing or printing 4.5 trillion dollars!

I am not trying to talk it down, although I wish I could as I certainly don't want it. I am on a fixed income. What I post on this thread is what I have read, not necessarily what I believe, unless I have favorably commented. What's highlighted is the guts of the article focusing on synopsis and both sides of a debate and such.
Abrignac Offline
#149 Posted:
Joined: 02-24-2012
Posts: 16,016
We also need to step up manufacturing. It’s asinine to be dependent on so many critical products being supplied by a country that seems to be hell bent on wrecking our economy on its way to world domination. One should be a student of history. The South lost the civil war mainly because it had little manufacturing capability.
RayR Offline
#150 Posted:
Joined: 07-20-2020
Posts: 3,912
Brewha wrote:
I thought inflation was designed in to our monetary system. The Fed gets like 6% return on our money because we “barrow” it from them.

A sweet deal for a private banking cartel.


That's exactly the issue with inflation, with a monetary system based on a central bank cartel and especially one that has made the monetary system completely fiat, the scam relies on inflating the money supply and artificially manipulating interest rates. It becomes an endless supply of bailouts for the government and its cronies so they can keep spending and amassing debt without restraint
They've sold the public that inflation is normal, which it is not in an honest monetary system. They try to keep their inflation targets low enough that the proles won't recognize they are getting slowly cooked as the elites are getting richer. They have even convinced people, even people that should know better, that the FED is essential to a capitalist economic system. No con can go on forever, sooner or later it's going to end badly.
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