U.S. data points to firming labor market, inflation tame

Comments (26)
Harry079 wrote:

“Thursday showed consumer prices recorded their largest increase in six months in December as gasoline prices rebounded.”

This should make the Fed happy.

Higher prices for people that can’t afford the lower prices.

Jan 16, 2014 9:10am EST  --  Report as abuse
tmc wrote:

It’s just getting so hard to spin these numbers eh?
I don’t see how less new claims equals job growth. I think it means less people became unemployed.
The Labor Force Participation rate is still falling!

Jan 16, 2014 9:11am EST  --  Report as abuse
Crash866 wrote:

Stripping out the volatile energy and food components, the so-called core CPI rose only 0.1 percent, slowing from a 0.2 percent gain in November.

Yeah no worries. Who buys energy or food anymore?

Jan 16, 2014 9:25am EST  --  Report as abuse
gcf1965 wrote:

Though I still maintain that these numbers are irrelevant (different than inaccurate), the truth is the ups and downs we see each week/month are nothing more than ripples. One report is slightly good while the next is slightly bad. Those obama fans want to cherry pick the good ripples as if it were a sign of the coming of a new Utopia and ignore the reports that contradict them. Reality is that these ripples are taking place at a very low place in our economic standing and even the ups are still very bad. This report is less bad than others we have seen, but should not be confused with a good report. As long as liberal policies and agendas prevail, there will only be ripples and the people will only obtain existance rather than living.

Jan 16, 2014 9:53am EST  --  Report as abuse
Bakhtin wrote:

tmc wrote:
“I don’t see how less new claims equals job growth.”

Really? That’s funny! Have a go at figuring it out… and then maybe I will tell you.

tmc wrote:
“The Labor Force Participation rate is still falling!”

It has been falling since 2001. Didn’t Fox ever tell you that? Lets see you try and blame Obama for the 8 years of falling participation rate under Bush…

gcf1965 wrote:
“the truth is the ups and downs we see each week/month are nothing more than ripples. One report is slightly good while the next is slightly bad. Those Obama fans want to cherry pick the good ripples as if it were a sign of the coming of a new Utopia and ignore the reports that contradict them. Reality is that these ripples are taking place at a very low place in our economic standing and even the ups are still very bad.”

Stop worshiping the idiots on Fox and look at the long term unemployment trend. It was 9.7% in Jan. 2010 and 6.7% in Jan. 2014. That is down. Definitely down. Not a ripple. Not down and then back up, but falling for 4 straight years.

gcf1965 wrote:
“As long as liberal policies and agendas prevail, there will only be ripples and the people will only obtain existance rather than living.”

Explain exactly how rising GDP, rising consumer spending, rising business profits, rising stock market, rising factory output, and falling unemployment is ‘very bad’. I asked 4825 this same question 5 times but he ran away every time. Do you have an answer?

Jan 16, 2014 11:12am EST  --  Report as abuse

Well I see we have the normal rightie/Obama haters/doomsayers posting their drivel not based in reality.

@tmc, Since you cant seem to understand how less job losses either implies or means more jobs, I will try and keep it as simple as possible for you….

Job Growth =Jobs Gained-Jobs Lost

So when the negative component is smaller it means that the left hand component is most likely going to be higher.

@Crash866 in the paragraph immediately before one you quoted…’In another report, the Labor Department said its Consumer Price Index increased 0.3 percent after being flat in November. In the 12 months to December, consumer prices accelerated 1.5

percent after advancing 1.2 percent in November.

The increases were in line with economists’ expectations.’ Then they go on to paragraph you quoted about CORE CPI.

Stop acting like they are not calculating and/or suppressing ‘real’ inflation data, because they are not.

@gcf1965, to quote you ‘One report is slightly good while the next is slightly bad. Those obama fans want to cherry pick the good ripples as if it were a sign of the coming of a new Utopia and ignore the reports that contradict them.’

1. Project much? it is the rightie/Obama haters like yourself that cherrypick the bad data, yet ignore/say it false the good data that would contradict their false narrative that ‘Obama is bad’.

2. You are right there is a mix of good and bad data, but the overall picture is of an economy in MUCH better health then 2007-2009. Can it be in much better health, of course, but for sake of simplicity I am not going to go into how (I have done this repeatedly in other posts). Personally I take the bad with the good and try and find the root cause of why things are the way they are good and bad. It is called objectivity, you should try it some time, instead of assuming a conclusion and then finding data to support your assumptions.

Jan 16, 2014 11:42am EST  --  Report as abuse
whatthe1 wrote:

Unemployment has gone down again? Are the media and our government working together, to lie and hoodwink the American public? By their own numbers, 1,304,000 people lost their jobs, last month with only 74,000 jobs added–with over 1 MILLION more Americans, Unemployed, how did the Unemployment rate go down? Unemployment actually is closer to 16%–Saying people are no longer looking for a job, is an outright lie!

Jan 16, 2014 11:47am EST  --  Report as abuse
tmc wrote:

@USAPragmatist2, The report is only on new claims for unemployment. It does not mean that a job was lost nor that any new jobs were created. It just means that only 326,000 people applied for the first time for claims. Since there was no report of jobs gained, and no report of jobs lost, I still can’t see how this can be spun into job growth. You seem to be making assumptions and implications without real data to back them up. In my book that’s called spin.

@Bakhin, you obviously didn’t look at my comment history. I am not an Obama hater at all, in fact I voted for him. I am also not right wing and rarely watch Fox news. I do on occasion to see what the righties are think about. Also CNBC to see the lefties viewpoint. The truth is usually in-between. I’m no a fool that only uses one source of media information. I am not a republican or democrat. I’m an American and can think for myself.

Jan 16, 2014 12:08pm EST  --  Report as abuse

@whatthe1, Sigh I seem to have to explain this in EVERY weekly new job claims report.

So, for ease of calculations, lets assume 300,000 new jobless claims a week and a 4 week month. That means 1,200,000 people lost a job, but if the job gain for that month was 100,000 that means 1,300,000 people got jobs.

Really is pretty simple if you look at it objectively and what the data is telling you. And you know there are 6 different unemployment rates? u1-U6, I could say unemployment is ~4% (U1 rate) and be more right then your quote of 16%, as (and this is from memory so might be wrong) the U6 rate is about 13-14%.

@tmc, from my post, putting in captials what was important for emphasis. ‘So when the negative component is smaller it means that the left hand component is MOST LIKELY going to be higher.’ Notice the term most likely, I am not saying it an absolute, just like in the article they used ‘suggesting’ once again not an absolute. so yes conceivably no one got a job last week, but the chances of that is extremely small. Any time their are less jobs lost, it increases the chances of the total jobs gained being higher.

Jan 16, 2014 12:35pm EST  --  Report as abuse
tmc wrote:

@USAPragmatist2, Thanks for your comments, they are very informative. I am still inclined to think that the data does not point to a firming labor market as the title states. Even if they did include the other numbers required for job growth formula, as long as the Labor Participation Rate continues to decline, we are not truly gaining jobs. It seems to me that until that number improves, there is no gain. If it stayed flat, we would be matching population growth. Am I off the mark on this?

Jan 16, 2014 1:42pm EST  --  Report as abuse
KirkBruner wrote:

The corporate-owned media can paint all the rosy pictures they want. After having spent forty years, beginning in 1980 under Reagan, exporting a hundred million jobs without exporting a hundred million people along with them, there will be no rapid economic growth except for that shown in the totals, which reflect the huge gains made by millionaires and billionaires. Everyone else has been sold down a very polluted river. What you’ll never ever read in the news reports are the numbers of Americans who have fallen so deeply into despair that they have given up looking for work or are now homeless and officially off the grid. It’s tough for journalists to count people hiding out in the streets. How anyone expected an economy to function after removing all of the money from it is something nobody wants to talk about. It’s the REAL “untold story”.

Jan 16, 2014 2:18pm EST  --  Report as abuse

@tmc, nope. And I agree the labor participation rate is a big deal. I just wish we, as a nation, could have an actual thoughtful discussion on why it is so low and been declining since 2000.

Jan 16, 2014 2:38pm EST  --  Report as abuse
Chige wrote:

tmc – the labor participation will not go up in the foreseeable future – at least not in a meaningful way. Baby boomers are retiring and that is one of the main drivers of the trend which has been going on for a while even in a pre-recession economy. Good economy cannot do much about retiring/aging workforce (actually it influences it in the opposite direction – it is easier to retire early). It is a problem to tackle though – I would agree with that. You should rethink your comment of not truly gaining jobs if the participation rate is going down. These are net new jobs and these ARE gains regardless.

Jan 16, 2014 2:51pm EST  --  Report as abuse

@Chige, I understand what you saying about retirees, but I believe someone that is retired is not considered part of the Labor force.

Personally I believe more people are choosing not to work because the reward just is not there. Wages have been stagnant or dropping since we started the whole ‘trickle-down’ experiment and made ourselves beholden to corporations. And it has gradually gotten to the point that many workers are deciding it not worth the effort to make a crappy wage. Bur this is honestly just speculation on my part.

Jan 16, 2014 3:45pm EST  --  Report as abuse
WeAreLosingIt wrote:

Two observations

1) WOW ! Claims fell by a whole TWO THOUSAND.
2) If these economic data stories are trying to be so upbeat, how come every one of them has an accompanying picture of people at some sad looking job fair….

Jan 16, 2014 5:09pm EST  --  Report as abuse
Chige wrote:

USAPragmatist2 – correct. This would also be correct for anyone who does not look for a job and it is not retired. So the retired and people who do not look for a job do affect the rate (by not being included in the labor force)? From Wiki: The labor force participation rate is the ratio between the labor force and the overall size of their cohort (national population of the same age range). I take it retired are part of the “cohort”.

Jan 16, 2014 5:25pm EST  --  Report as abuse
jambrytay wrote:

careful, you’ll upset the Obama cheerleaders.

Jan 16, 2014 5:42pm EST  --  Report as abuse
nodeficit wrote:

Inflation has only been under 1.5% once since 1964. 50 yrs x 2% = 100%
Our money has been cut in half.

Jan 16, 2014 6:02pm EST  --  Report as abuse

I’ve believed for years that the “economists” are flat-out wrong since before Bernanke. Lower unemployment filings probably mean that companies have reached their minimum staffing levels, and NOT that they are hiring more on whole. Using a formula to say they are is deceptive. The only way to say for sure would be to poll entire industries on a statistically meaningful basis and not ignore any so-called outlying ones and that will never happen.

Forcing more work for less pay on the remaining employed just means declining quality. These guys are playing with outmoded methods and making grand pronouncements based on them. That’s why they’re so puzzled when the facts show something very different.

Reminds me very much of a program on North Korea and their dire situation despite their government’s glowing messages of prosperity. The shakeout isn’t quite done yet. Hang on!

Jan 16, 2014 6:08pm EST  --  Report as abuse

There are two major factor with inflation – price levels and the income used to pay those prices. They can say inflation is tame if they ignore certain necessities. They can also say inflation is tame if prices only climb moderately, but real income drops significantly.

I say the latter is occurring and the real inflation rate is already much greater than is claimed, like 3%- to 5%-plus. Ignoring that means the media can continue the glowing reports.

Jan 16, 2014 6:22pm EST  --  Report as abuse
percy1 wrote:

“I understand what you saying about retirees, but I believe someone that is retired is not considered part of the Labor force.”

… That’s exactly why retiring people reduce the labor force participation rate, Prag. The labor force participation rate is the labor force divided by the total population. A person who retires leaves the labor force but does not leave the population – hence reducing the participation rate. Chige is quite correct that the participation rate will continue to decline because of retirees. In fact, there were more people born per year in the 1950s than are born per year today, so we would expect to see the participation rate drop extremely quickly.

(There is another exacerbating factor here, which is that the participation rate is historically very high because women used to participate at very low rates. As women have moved into the workforce, the male participation rate has fallen off, but not enough to prevent the rate from going up. Ultimately one would expect total participation rates to drop to their historical average of ~50-55%.)

Jan 16, 2014 6:40pm EST  --  Report as abuse
percy1 wrote:

“The only way to say for sure would be to poll entire industries on a statistically meaningful basis and not ignore any so-called outlying ones and that will never happen.”

We poll entire industries on their exact employment every single month – Google “employment situation report table b-1″.

Jan 16, 2014 6:42pm EST  --  Report as abuse
percy1 wrote:

“They can also say inflation is tame if prices only climb moderately, but real income drops significantly.

I say the latter is occurring…”

Except that the latter is not occurring – average earnings have increased. So you’re just openly declaring your allegiance to a fantasy world rather than reality.

Jan 16, 2014 6:46pm EST  --  Report as abuse
unionwv wrote:

USPragmatist2 wrote:

“Well I see we have the normal rightie/Obama haters/doomsayers posting their drivel not based in reality.”

In another discussion here in Reuter’s comments sections re inflation, zevulon wrote:

“former head of the federal reserve bank —paul volcker, the last chairman who actually was responsible for TAMING inflation, has publicly said that true inflation is reported at john williams shadowstats. It is reported at 9% (+/- 1% error margin)

“you have a former fed chairman himself saying the government is lying. of course, you can only tell the truth AFTER you’ve left the game”

USPragmatist2 replied:

@zevulon, after seeing your post I had never heard fo what you talk about. so I went and did my research, apparently this John Williams guy is a hack and his analysis have (sic) been de-bunked many a time.

To which unionwv responded:

“USAPRAG: You say; ‘… I went and did my research, apparently this John Williams guy is a hack and his analysis have been de-bunked many a time.’”

Let’s have the “debunking” citations from your “research”, please.

While you scramble, (good luck); From a PBS interview:

PAUL VOLCKER: “(Harvard) did have other people there, you know. John Williams was the other macroeconomist there, certainly financial-side, and he was a very skeptical practitioner. He didn’t spend all his time professing, and he advised the Federal Reserve back in New York at great lengths.”

http://www.pbs.org/wgbh/commandingheights/shared/minitext/int_paulvolcker.html

Personally, I find Paul Volcker’s commentary a bit more probative than USAPRAG’s invective.

Jan 16, 2014 7:24pm EST  --  Report as abuse
humanoid404 wrote:

Republicans are feeding Obama rope at this point. He will hang.

Jan 16, 2014 9:19pm EST  --  Report as abuse
Bakhtin wrote:

@unionwv

Can you provide a link to prove that Volcker said inflation is 9%?

As for shadowstats, all you need is a functioning brain to see what a load of bull it is. I can give two examples from one page: http://www.shadowstats.com/alternate_data/inflation-charts

Look at the first chart of official versus shadowstats CPI. Can you see how they are exactly the same shape? Does that not ring any alarm bells? If shadowstats is really using an alternate method to calculate CPI, the curves could not be identical. The only way that can happen is if shadowstats are simply taking the official figure, adding some arbitrary constatn John Williams pulled out of his ass to inflate the figures, and then sold it to gullible righties as the ‘real’ inflation figure.

A little bit of google turns up JW admitting that this is what he does:

“I’m not going back and recalculating the CPI. All I’m doing is going back to the government’s estimates of what the effect would be and using that as an ad factor to the reported statistics.”

http://www.econbrowser.com/archives/2008/10/shadowstats_res.html

Now… onto the second chart. See how it has inflation swinging around 10% since 2006? Do an experiment: calculate inflation at 10% for 7 years, find the price of any item in 2006 and add 7 years of inflation at 10%, then go outside and see if the item is being sold for that price.

I can guarantee that you will find the current price is no where close to the price it would be if shadowstats were correct.

In simple terms, shadowstats is wrong because a) they are not recalculating, but simply adding a random number ,and b) real life proves them wrong. We can all see that inflation is not swinging around 10% for year after year.

Jan 16, 2014 10:25pm EST  --  Report as abuse
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