It’s possible that by the early 2020’s, the boom may be in the dust… but it will be a long time before real interest rates rise again.
The following will be interesting, and highly illuminating: (2) Inflation, which was already dropping before the downturn began - and with it, employment - was not only low during this period, but was still - at least in some respects - at 2.8 percent - the lowest level in over 20 years. And I quote: “The official unemployment rate had ticked back up to 5.2 percent… The labor force participation rate, the percentage of the population working or actively looking for a job, had fallen back under 70 percent, the minimum level seen since 1981.” (3) The jobs market remained soft at best, with median hourly earnings still lower than they were earlier this decade. And: “The jobless rate for Americans 25 and older fell from 8 percent at the end of the 2007-08 recession to 5.7 percent in January 2012, before climbing back to 5.9 percent this month.” (4) The Bureau of Labor Statistics reported in early February that: “The number of nonfarm employers increased by 22,000 in February compared with a year earlier, while the number of employed persons declined by 28,000. The employment change was also slightly better; with the number of employed persons increasing by 26,000 and the unemployment rate dropping to 4.9 percent.”And “During the second quarter of 2013, the number of Americans in the labor force increased by an estimated 235,000. That was the highest number on record in the first half of the year, surpassing the previous record of 221,000 people added in the first quarter of 2008.”
Finally, the employment outlook seems grim on the national level: “The unemployment rate remained unchanged at 4.9 percent in February, while the labor force participation rate increased slightly, to 80.3 percent.” But: “Income has grown little in the past year, with median household incomes remaining flat, and median annual family income has remained flat for nearly two years. In contrast, the consumer price index, which includes food, energy, and other commodities, grew at a robust 12.9 percent pace in October.” And, finally, that this chart from Bloomberg’s “Economic Calendar” is especially important:
I’ll be publishing a series of posts every other Monday summarizing the news of the day. Check back each week for the latest developments. As always, my goal in doing this is not just to be correct. My goal is to be honest and accurate. I hope you’ll listen and take action as we go.