U.S. Economy, Budget, and Bills

[indy]

Jul 9, 2021 17:40:38 GMT goldenvalley said:

I expect hearing aid prices to plummet as companies like Apple and Samsung enter the market.

That would be nice.  My husband's little  hearing aid was over $3000 3 years ago. That was for just one ear. There's an even more super duper one available now that's far more.

My Sister-In-Law got a pair just a couple of weeks ago after needing them for awhile and they were $7000. How many people out there are doing without them altogether because of the artificially high price on them?

[goldenvalley]

Jul 9, 2021 18:01:15 GMT indy said:

Jul 9, 2021 17:40:38 GMT goldenvalley said:

That would be nice.  My husband's little  hearing aid was over $3000 3 years ago. That was for just one ear. There's an even more super duper one available now that's far more.

My Sister-In-Law got a pair just a couple of weeks ago after needing them for awhile and they were $7000. How many people out there are doing without them altogether because of the artificially high price on them?

I'm not sure but I think Medicare pays for the old clunky ones still. The price is much lower and I suspect they don't work nearly as well.

[indy]

Jul 9, 2021 18:11:54 GMT goldenvalley said:

Jul 9, 2021 18:01:15 GMT indy said:

My Sister-In-Law got a pair just a couple of weeks ago after needing them for awhile and they were $7000. How many people out there are doing without them altogether because of the artificially high price on them?

I'm not sure but I think Medicare pays for the old clunky ones still. The price is much lower and I suspect they don't work nearly as well.

Nope. Original Medicare won't pay for aids or even the hearing exams. There are some Medicare Advantage plans that pay for them but I presume you just cost-share via premiums.

[LFC]

We know that Trump, with the help of Congressional Republicans, racked up massive amount of debt. This is from January.

One of President Donald Trump’s lesser known but profoundly damaging legacies will be the explosive rise in the national debt that occurred on his watch. The financial burden that he’s inflicted on our government will wreak havoc for decades, saddling our kids and grandkids with debt.

The national debt has risen by almost $7.8 trillion during Trump’s time in office. That’s nearly twice as much as what Americans owe on student loans, car loans, credit cards and every other type of debt other than mortgages, combined, according to data from the Federal Reserve Bank of New York. It amounts to about $23,500 in new federal debt for every person in the country.

The growth in the annual deficit under Trump ranks as the third-biggest increase, relative to the size of the economy, of any U.S. presidential administration, according to a calculation by a leading Washington budget maven, Eugene Steuerle, co-founder of the Urban-Brookings Tax Policy Center. And unlike George W. Bush and Abraham Lincoln, who oversaw the larger relative increases in deficits, Trump did not launch two foreign conflicts or have to pay for a civil war.

Now revised economic figures have come out and we can see just what that debt bought us in increased GDP. The answer is, not a f*** of a lot. Actually close to nothing.

But now a new report from the U.S. Commerce Department's Bureau of Economic Analysis yet again confirms that Trump's purported success on the economy is overblown.

The Department recently released revisions to reports on the United States' Gross Domestic Product (GDP) dating back to 1999—revisions which found that Trump's administration saw the least economic growth since Herbert Hoover's—the President who oversaw the Great Depression.

To his credit, Trump is a distant second to Hoover—whose GDP was actually -7.4 percent. Under Trump the GDP saw a growth of 1.6 percent.

Though not nearly as catastrophic as Hoover, Trump's GDP growth—according to the revisions—pales in comparison to every President since the Hoover administration.

[LFC]

Some slippage on the job creation front. Josh Marshall points out that we're still in the midst of the pandemic, not in the midst of a recovery and getting back to normal.

There’s a fairly anemic jobs report out today. The economy added 235,000 jobs in August. That’s just okay in normal times and pretty disappointing compared to recent months when closer to a million jobs were created. Commentary I’m seeing is pointing to a weaker than expected recovery. And that’s true as far as it goes. But what jumps out to me is that the dialog about the economy, the robustness and consistency of the recovery, hasn’t really caught up to the fact that COVID isn’t actually over.

Everything’s relative. We’re in a much better position than we were a year ago. Getting gravely ill from COVID is now mostly voluntary. But over 1500 people died in the US from COVID yesterday. Schools are opening but with various kinds of in-person mitigation. Most people I know are still not dining out or socializing or traveling in just the same way they did before the pandemic. More than a year ago, definitely. But not the same as two years ago. I’m not telling you anything more than we all know. My point is that we still appear to be operating in – or at least economics and politics talk seems to be operating in – this model of how quickly we’re bouncing back even though we’re still in it. So it’s not a huge surprise that we’re not bouncing back that quickly. Or that the bounce back is partial and limited.

[LFC]

Add debt ceiling to the list and you've got them all happening right this very moment along with 100% Republican obstruction. TPM is following multiple topics in the link.

[LFC]

From the NYT: Nobody Really Knows How the Economy Works. A Fed Paper Is the Latest Sign.

It has long been a central tenet of mainstream economic theory that public fears of inflation tend to be self-fulfilling.

Now though, a cheeky and even gleeful takedown of this idea has emerged from an unlikely source, a senior adviser at the Federal Reserve named Jeremy B. Rudd. His 27-page paper, published as part of the Fed’s Finance and Economics Discussion Series, has become what passes for a viral sensation among economists.

The paper disputes the idea that people’s expectations for future inflation matter much for the level of inflation experienced today. That is especially important right now, in trying to figure out whether the current inflation surge is temporary or not.

But the Rudd paper is part of something bigger still. It reflects a broader rethinking of core ideas about how the economy works and how policymakers, especially at central banks, try to manage things. This shift has also included debates about the relationship between unemployment and inflation, how deficit spending affects the economy, and much more.

In effect, many of the key ideas underlying economic policy during the Great Moderation — the period of relatively steady growth and low inflation from the mid-1980s to 2007 that also seems to be a high-water mark for economists’ overconfidence — increasingly look to be at best incomplete, and at worst wrong.

It is vivid evidence that macroeconomics, despite the thousands of highly intelligent people over centuries who have tried to figure it out, remains, to an uncomfortable degree, a black box. The ways that millions of people bounce off one another — buying and selling, lending and borrowing, intersecting with governments and central banks and businesses and everything else around us — amount to a system so complex that no human fully comprehends it.

“Macroeconomics behaves like we’re doing physics after the quantum revolution, that we really understand at a fundamental level the forces around us,” said Adam Posen, president of the Peterson Institute for International Economics, in an interview. “We’re really at the level of Galileo and Copernicus,” just figuring out the basics of how the universe works.

[LFC]

A lot of people quit their jobs in August. (So much for the Republican talking point about COVID relief.) A big percentage were from the restaurant and hospitality sectors. One theory that seems to have strong evidence is that workers are sick and tired of dealing with the increased number of assholes and their f***ing COVID-related (i.e. denying) entitlement. Paywalled so in full. Bold is mine.

TPM has been covering the way in which the pandemic and the public health measures necessary to tamp it down have resulted in periodic eruptions of anger, often egged on by opportunistic, MAGA-aligned politicians. It’s become a theme for us: the specter of violence in politics that’s simmered for the last few years, predating the pandemic but inflamed by it.

But of course, the current level of public outrage is not limited to the political sphere of life. Anecdotal reporting — and, increasingly, data — suggest there might be an economic corollary to this trend as well.

The Washington Post reported today on jobs numbers as we see an uptick in employees quitting their jobs post-pandemic, for a number of reasons. The Post suggests the workforce shortage is primarily attached to the burnout COVID-19 placed, and continues to place, on essential workers who have determined in recent months that the challenges and low wages in the restaurant and service industry are outweighing the drive for a steady paycheck. The newspaper points out that some businesses have attempted to remedy this spike in resignations by offering higher pay and benefits (which, 👏🏻 👏🏻 👏🏻).

As the Post reported, about 4.3 million people left their jobs in the month of August alone. Those workers make up about 2.9 percent of the U.S. workforce, the Post reported, citing new data out today from the Department of Labor. The Post focused its reporting on the spike in people leaving their jobs — the U.S. had 10.4 million vacant job positions as of the end of August — as an ongoing leverage point for low-wage workers. This is all makes sense on its face — the pandemic shifted everyone’s work mindset, but it has particularly jolted the work-life balance among essential workers, as multiple economists have noted in the last 19 months.

Axios also reported on the phenomenon today, but offered an interesting take: workers are leaving restaurant, tourism and service industry positions due to fatigue over the uptick in outrageous and sometimes violent acts carried out by customers over individual businesses’ COVID-19 mitigation measures, like mask requirements. We’ve seen this play out in politics most starkly — from the school board meeting room to the halls of Congress.

But it’s also a good lens for understanding the trend in people quitting jobs at record rates in everything from the fast food industry to the hotel business. Axios points out that the restaurant industry is still one million workers short of where it was before COVID hit the U.S. last March. The publication cited a report from a trade publication, Nation’s Restaurant News, that found two-thirds of current and ex- restaurant workers are leaving their jobs over “disrespect” from customers, with some of that disrespect tied to reactionary behavior from patrons over businesses’ public health measures to stop the spread. While some businesses have taken steps to protect workers from such confrontations, it’s not always enough. Per Axios: “Aggressive and violent clashes between customers and service workers over COVID safety protocols over the past nearly two years have led to prison sentences, fines and deaths.”

It’s a good theory. We’ll keep an eye on further data points in this trend as the research becomes available.

[LFC]

I don't understand. We were told that the economy would tank if Biden was elected. Of course now Republicans are bitching about tight labor markets. I probably could shorten that to "Of course now Republicans are bitching..."

Fewer Americans made unemployment benefit filings last week than at any other point since the pandemic, government data said Thursday, underscoring the labor market is bouncing back from the downturn.

The Labor Department reported 281,000 new seasonally adjusted jobless benefit claims filed in the week ended October 23, 10,000 less than the prior week's upwardly revised total and fewer than analysts had forecast.

It was the fourth straight week the closely watched indicator of labor market health had decreased and the third in which it had set a new low since Covid-19 broke out in March 2020, causing weekly claims to spike into the millions before receding but remaining high for the rest of the year.

[goldenvalley]

Oct 29, 2021 20:03:59 GMT LFC said:

I don't understand. We were told that the economy would tank if Biden was elected. Of course now Republicans are bitching about tight labor markets. I probably could shorten that to "Of course now Republicans are bitching..."

Fewer Americans made unemployment benefit filings last week than at any other point since the pandemic, government data said Thursday, underscoring the labor market is bouncing back from the downturn.

The Labor Department reported 281,000 new seasonally adjusted jobless benefit claims filed in the week ended October 23, 10,000 less than the prior week's upwardly revised total and fewer than analysts had forecast.

It was the fourth straight week the closely watched indicator of labor market health had decreased and the third in which it had set a new low since Covid-19 broke out in March 2020, causing weekly claims to spike into the millions before receding but remaining high for the rest of the year.

The complaints will now be about inflation.  

[LFC]

Here’s a new phrase: skimpflation. We seeing it constantly.

www.npr.org/sections/money/2021/10/26/1048892388/meet-skimpflation-a-reason-inflation-is-worse-than-the-government-says-it-is?utm_source=pocket-newtab

[goldenvalley]

Oct 31, 2021 1:59:34 GMT LFC said:

Here’s a new phrase: skimpflation. We seeing it constantly.

www.npr.org/sections/money/2021/10/26/1048892388/meet-skimpflation-a-reason-inflation-is-worse-than-the-government-says-it-is?utm_source=pocket-newtab

Skimpflation has been going on a long time.  Self check out lanes in supermarkets and other stores; online booking for everything; printing your own checked bag tags on airlines; even carrying food to your own table in fast food restaurants is a form of that.  The latter has been going on a long time.

[AnBr]

This fits in with what I have been suspecting for some time about the inflation and "labor shortages". In spite of all the whining about not being able to find workers I personally know of people looking for work that are having trouble finding anything. I think I linked here to an article about a journalist that spent the entire month of Sept. looking for work, but got very few replies and only one interview. Many employers simply want workers, but are unwilling to pay what it takes to get employees given the best are moving on to better paying jobs.

Attachments:

[andydp]

Oct 29, 2021 20:03:59 GMT LFC said:

I don't understand. We were told that the economy would tank if Biden was elected. Of course now Republicans are bitching about tight labor markets. I probably could shorten that to "Of course now Republicans are bitching..."

With the Dow hitting 36K I thought I'd look at my TSP account.  Even with money I'm taking out I gained. So much for "tanking"

[goldenvalley]

So Americans are worried about inflation but have increased spending for retail.  The increased prices haven't stopped them from buying some things.  

Retail sales jumped 1.7 percent in October, marking a significant acceleration in spending from September, the Commerce Department reported Tuesday. And despite new data showing that consumer confidence is at a 10-year low, they seem to be shrugging off the higher prices on gas, groceries and other everyday goods. Walmart and Home Depot, two of the nation’s largest retailers, benefited from the surge, with both reporting robust third-quarter earnings.

“Consumers are very concerned about inflation, but that has not held back spending,” said Jack Kleinhenz, chief economist for the National Retail Federation, an industry trade group. “People have the ability to spend — not only from the savings cushion they built up over the last year and half, but because we’ve added new jobs, which means new income and new spending.”

Purchases of Halloween items and early holiday gifts also boosted sales, he said. Retailers have been encouraging consumers to shop earlier than ever this year, amid fears of shortages and delays caused by supply chain disruptions. Walmart, Target and Amazon all kicked off holiday discounts in October. Nearly half of Americans planned to start their holiday shopping before November this year, compared with 39 percent two years ago, according to the National Retail Federation.

It might be that shopping early is the real reason this has happened.  I guess we'll find out when the November December figures come out.

[AnBr]

[goldenvalley]

Nov 17, 2021 1:50:37 GMT AnBr said:

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Sadly I can answer that question.  There are many people in this country that believe the only reason for the existence of a federal government is to maintain a military.  Plus military spending isn't as visible.  The money goes to contractors for hardware and such so no one notices except for wimpy anti war types.  

People also don't seem to notice that military family members end up at food banks because they are not well paid.  

[LFC]

Is it just my misperception or have the new jobs numbers been more wildly restated this past year than before? I know there have always been revisions, sometimes up and sometimes down, but this seems like a real trend of badly undercounting. Marshall wonders if it's just the nature of the COVID economy. (paywalled)

Shouldn’t We Have Learned This About the BLS Numbers?
We have a mere 210,000 new jobs created in November, according to statistics released this morning by the Bureau of Labor statistics. It’s another “disappointing” number, well below Wall Street estimates. But as we noted a couple weeks ago and Philip Bump reminds us this morning, we should expect that the number is actually much higher, probably dramatically higher. So far this year every month but one has been revised higher after the fact, often by magnitudes far greater than in the history of counting this number. September was initially 194,000. Now it’s revised to 379,000. August was initially 235,000. Now it’s revised to 483,000. A number of other months have been upward revised by 100,000 or more.

Cumulatively there are now just shy of one million new jobs created this year that were not reported in the initial first Friday reporting. These unprecedented discrepancies must derive from a combination of the unique nature of the comeback from the COVID induced recession and the way COVID has impacted how the data is collected. It’s not like the BLS suddenly got really bad at what it does.

From one perspective the record keeping is fine as long as its accurate. It’s not a big deal if it takes a month or so longer to get the numbers just right. But it certainly has a big impact on perceptions of the economy. That is the case with the public at large, as well as political and economic debates in the country. And what we’ve seen is that the later revisions barely seep into the public dialogue. So it’s a big problem politically for Democrats and the public mood generally.

[LFC]

Thanks, Joe.

Economic forecasters are downgrading predictions for the United States’ GDP growth in 2022 following news that Sen. Joe Manchin (D-WV) will oppose the Build Back Better reconciliation bill in its current form.

“BBB enactment had already looked like a close call and in light of Manchin’s comments we are adjusting our forecast to remove the assumption that BBB will become law,” said a team at Goldman Sachs led by chief U.S. economist Jan Hatzius, according to MarketWatch.

Without programs like the enhanced child tax credit guaranteed, Goldman moved the GDP forecast for the first quarter of 2022 from 3 percent to 2 percent, from 3.5 to to 3 in the second quarter and from 3 to 2.75 in the third quarter.

“While BBB in its current form looks unlikely, there is still a good chance that Congress enacts a much smaller set of fiscal proposals dealing with manufacturing incentives and supply-chain issues,” the team wrote. “There is also still a chance that Congress retroactively extends the expanded child tax credit, with some modifications, though we think the odds of this occurring are less than even.”

Mark Zandi of the Moody’s Analytics economic team took to Twitter with a similarly bleak forecast.

[goldenvalley]

Dec 22, 2021 16:50:57 GMT LFC said:

Thanks, Joe.

Economic forecasters are downgrading predictions for the United States’ GDP growth in 2022 following news that Sen. Joe Manchin (D-WV) will oppose the Build Back Better reconciliation bill in its current form.

“BBB enactment had already looked like a close call and in light of Manchin’s comments we are adjusting our forecast to remove the assumption that BBB will become law,” said a team at Goldman Sachs led by chief U.S. economist Jan Hatzius, according to MarketWatch.

Without programs like the enhanced child tax credit guaranteed, Goldman moved the GDP forecast for the first quarter of 2022 from 3 percent to 2 percent, from 3.5 to to 3 in the second quarter and from 3 to 2.75 in the third quarter.

“While BBB in its current form looks unlikely, there is still a good chance that Congress enacts a much smaller set of fiscal proposals dealing with manufacturing incentives and supply-chain issues,” the team wrote. “There is also still a chance that Congress retroactively extends the expanded child tax credit, with some modifications, though we think the odds of this occurring are less than even.”

Mark Zandi of the Moody’s Analytics economic team took to Twitter with a similarly bleak forecast.

So from this I gather that the GDP is higher if more people have more money to spend. 

[AnBr]

Dec 23, 2021 16:48:23 GMT goldenvalley said:

So from this I gather that the GDP is higher if more people have more money to spend. 

Ya think?

[LFC]

Dec 23, 2021 16:48:23 GMT goldenvalley said:

So from this I gather that the GDP is higher if more people have more money to spend. 

Yes, which they got from the wealthy through the magic of tinkle down economics.

[LFC]

Inflation is up.

The U.S. Consumer Price Index continued its historic rise last month. According to The New York Times, the inflation-tracking index climbed by 7 percent in the year through December, making it the steepest increase recorded in the U.S. since 1982. Much of the rise can be blamed on the increased cost of used cars, housing, and food. The Times reports that the price of full-service restaurant meals shot up by 6.6 percent over the year, and food at home became more expensive, too. Federal Reserve Chairman Jerome Powell said Tuesday: “If we see inflation persisting at high levels longer than expected, if we have to raise interest rates more over time, we will.”

[LFC]

Jobs up in January despite Omicron.

The U.S. faced a massive surge in COVID-19 infections in January driven by the highly infectious Omicron variant—but the jobs market got through the tricky month much, much better than expected. CNBC reports that non-farm payrolls shot up by 467,000 for the month, which is far higher than analysts’ estimates for payroll growth, which stood at just 150,000. The numbers were expected to be so low that the White House even preemptively warned Americans last week that the Omicron spike would be to blame. On top the stunning numbers for January, the figure for December was massively revised upward: According to CNBC, December’s payroll gains leaped to 510,000, up from the initially reported 199,000.

Josh Marshall notes that there's been a lot of upward restatements of past months and that, while the MSM trumpets poor reports, they fail to follow up on the restatements with the same vigor. The result is a skewed impression of just how the U.S. economy has been doing.

I think public opinion, which is currently sour on the direction of the country and thus on the Democrats as well, isn’t mostly driven by jobs numbers or other government statistics. It’s more fundamentally driven by lived experience. And a lot sucks right now, even though there’s been a lot of positive economic news. Having said that, there’s really no question the consistently flawed jobs tabulations have hurt Joe Biden significantly. Again and again we’ve found out that a slackening recovery was actually a series of counting errors. The reports are “revised” later. But those revisions, in the nature of things, don’t get a fraction of the attention that the monthly reports do. I’m basically certain there’s no funny business going on. At least in broad outlines the cause seems pretty clear: the chaos of the pandemic has at least temporarily broken our system of tabulating jobs numbers.

Journalists have taken way too long to absorb this fact.

[LFC]

MarketWatch also covers the abnormally large jobs revisions though it notes that they aren't all revised upwards. Still overall things are better than initially reported.

The surprisingly bullish U.S. jobs report in January tells us two things. The labor market is not as feeble as it looked. And it’s all but impossible to figure out how many jobs the economy is adding each month in the middle of a pandemic.

The U.S. added a robust 467,000 new jobs in January, the government said Friday, triple the Wall Street DJIA, 0.15% forecast. Hiring gains in the final two months of 2021 were also much stronger than originally reported.

The increase in employment in December was bumped all the way up to 510,000 from 199,000. And November’s gain was boosted to 647,000 from 249,000.

In short, the U.S. economy created 1.16 million new jobs at the end of last year — not a lackluster 498,000.

Yet even though the increase in hiring at the end of 2021 looks great, the annual revisions did not actually show much change in employment growth last year. Job gains, it turns out, were not quite as impressive in the middle of the year.

Take July and June. The increase in new jobs was 807,000 smaller than previously reported. (See the accompanying chart.)