Global Competitive Devaluation, Rules, Discretionary Authorities and Slow Productivity Growth, Twenty Seven Million Unemployed or Underemployed, Stagnating Real Wages, Stagnating Real Disposable Income, Financial Repression, World Cyclical Slow Growth and Global Recession Risk
Carlos M. Pelaez
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015
I Twenty Seven Million Unemployed or Underemployed
IA1 Summary of the Employment Situation
IA2 Number of People in Job Stress
IA3 Long-term and Cyclical Comparison of Employment
IA4 Job Creation
IB Stagnating Real Wages
II Stagnating Real Disposable Income and Consumption Expenditures
IB1 Stagnating Real Disposable Income and Consumption Expenditures
IB2 Financial Repression
IIA Rules, Discretionary Authorities and Slow Productivity Growth
III World Financial Turbulence
IIIA Financial Risks
IIIE Appendix Euro Zone Survival Risk
IIIF Appendix on Sovereign Bond Valuation
IV Global Inflation
V World Economic Slowdown
VA United States
VB Japan
VC China
VD Euro Area
VE Germany
VF France
VG Italy
VH United Kingdom
VI Valuation of Risk Financial Assets
VII Economic Indicators
VIII Interest Rates
IX Conclusion
References
Appendixes
Appendix I The Great Inflation
IIIB Appendix on Safe Haven Currencies
IIIC Appendix on Fiscal Compact
IIID Appendix on European Central Bank Large Scale Lender of Last Resort
IIIG Appendix on Deficit Financing of Growth and the Debt Crisis
IIIGA Monetary Policy with Deficit Financing of Economic Growth
IIIGB Adjustment during the Debt Crisis of the 1980s
I Twenty Seven Million Unemployed or Underemployed. This section analyzes the employment situation report of the United States of the Bureau of Labor Statistics (BLS). There are four subsections: IA1 Summary of the Employment Situation; IA2 Number of People in Job Stress; IA3 Long-term and Cyclical Comparison of Employment; and IA4 Job Creation.
IA1 Summary of the Employment Situation. Table I-1 provides summary statistics of the employment situation report of the BLS. The first four rows provide the data from the establishment report of creation of nonfarm payroll jobs and remuneration of workers (for analysis of the differences in employment between the establishment report and the household survey see Abraham, Haltiwanger, Sandusky and Spletzer 2009). Total nonfarm payroll employment seasonally adjusted (SA) increased 295,000 in Feb 2015 and private payroll employment increased 288,000. The average monthly number of nonfarm jobs created from Feb 2013 to Feb 2014 was 185,250 using seasonally adjusted data, while the average number of nonfarm jobs created from Feb 2014 to Feb 2015 was 274,667, or increase by 48.3 percent. The average number of private jobs created in the US from Feb 2013 to Feb 2014 was 191,083, using seasonally adjusted data, while the average from Feb 2014 to Feb 2015 was 267,417, or increase by 39.9 percent. This blog calculates the effective labor force of the US at 163.570 million in Feb 2014 and 165.433 million in Feb 2015 (Table I-4), for growth of 1.863 million at average 155.250 per month. The difference between the average increase of 267,417 new private nonfarm jobs per month in the US from Feb 2014 to Feb 2015 and the 155.250 average monthly increase in the labor force from Feb 2014 to Feb 2015 is 112,167 monthly new jobs net of absorption of new entrants in the labor force. There are 27.246 million in job stress in the US currently. Creation of 112,167 new jobs per month net of absorption of new entrants in the labor force would require 243 months to provide jobs for the unemployed and underemployed (27.246 million divided by 112,167) or 20 years (214 divided by 12). The civilian labor force of the US in Feb 2015 not seasonally adjusted stood at 156.213 million with 9.095 million unemployed or effectively 18.315 million unemployed in this blog’s calculation by inferring those who are not searching because they believe there is no job for them for effective labor force of 165.433 million. Reduction of one million unemployed at the current rate of job creation without adding more unemployment requires 0.7 years (1 million divided by product of 112,167 by 12, which is 1,346,004). Reduction of the rate of unemployment to 5 percent of the labor force would be equivalent to unemployment of only 7.811 million (0.05 times labor force of 156.213 million). New net job creation would be 1.284 million (9.095 million unemployed minus 7.811 million unemployed at rate of 5 percent) that at the current rate would take 0.95 years (1.284 million divided by 1.346). Under the calculation in this blog, there are 18.315 million unemployed by including those who ceased searching because they believe there is no job for them and effective labor force of 165.433 million. Reduction of the rate of unemployment to 5 percent of the labor force would require creating 10.043 million jobs net of labor force growth that at the current rate would take 7.5 years (18.315 million minus 0.05(165.433 million) = 10.043 million divided by 1.346, using LF PART 66.2% and Total UEM in Table I-4). These calculations assume that there are no more recessions, defying United States economic history with periodic contractions of economic activity when unemployment increases sharply. The number employed in Feb 2015 was 147.118 million (NSA) or 0.197 million fewer people with jobs relative to the peak of 147.315 million in Jul 2007 while the civilian noninstitutional population of ages 16 years and over increased from 231.958 million in Jul 2007 to 249.899 million in Feb 2015 or by 17.941 million. The number employed decreased 0.1 percent from Jul 2007 to Feb 2015 while the noninstitutional civilian population of ages of 16 years and over, or those available for work, increased 7.7 percent. The ratio of employment to population in Jul 2007 was 63.5 percent (147.315 million employment as percent of population of 231.958 million). The same ratio in Feb 2015 would result in 158.686 million jobs (0.635 multiplied by noninstitutional civilian population of 249.899 million). There are effectively 11.568 million fewer jobs in Feb 2015 than in Jul 2007, or 158.686 million minus 147.118 million. There is actually not sufficient job creation in merely absorbing new entrants in the labor force because of those dropping from job searches, worsening the stock of unemployed or underemployed in involuntary part-time jobs.
There is current interest in past theories of “secular stagnation.” Alvin H. Hansen (1939, 4, 7; see Hansen 1938, 1941; for an early critique see Simons 1942) argues:
“Not until the problem of full employment of our productive resources from the long-run, secular standpoint was upon us, were we compelled to give serious consideration to those factors and forces in our economy which tend to make business recoveries weak and anaemic (sic) and which tend to prolong and deepen the course of depressions. This is the essence of secular stagnation-sick recoveries which die in their infancy and depressions which feed on them-selves and leave a hard and seemingly immovable core of unemployment. Now the rate of population growth must necessarily play an important role in determining the character of the output; in other words, the com-position of the flow of final goods. Thus a rapidly growing population will demand a much larger per capita volume of new residential building construction than will a stationary population. A stationary population with its larger proportion of old people may perhaps demand more personal services; and the composition of consumer demand will have an important influence on the quantity of capital required. The demand for housing calls for large capital outlays, while the demand for personal services can be met without making large investment expenditures. It is therefore not unlikely that a shift from a rapidly growing population to a stationary or declining one may so alter the composition of the final flow of consumption goods that the ratio of capital to output as a whole will tend to decline.”
The argument that anemic population growth causes “secular stagnation” in the US (Hansen 1938, 1939, 1941) is as misplaced currently as in the late 1930s (for early dissent see Simons 1942). There is currently population growth in the ages of 16 to 24 years but not enough job creation and discouragement of job searches for all ages (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html). The proper explanation is not in secular stagnation but in cyclically slow growth. Secular stagnation is merely another case of theory without reality with dubious policy proposals. Subsection IA4 Job Creation analyzes the types of jobs created, which are lower paying than earlier. Average hourly earnings in Feb 2015 were $24.78 seasonally adjusted (SA), increasing 2.0 percent not seasonally adjusted (NSA) relative to Feb 2014 and increasing 0.1 percent relative to Jan 2015 seasonally adjusted. In Jan 2015, average hourly earnings seasonally adjusted were $24.75, increasing 2.2 percent relative to Jan 2014 not seasonally adjusted and increasing 0.5 percent seasonally adjusted relative to Dec 2014. These are nominal changes in workers’ wages. The following row “average hourly earnings in constant dollars” provides hourly wages in constant dollars calculated by the BLS or what is called “real wages” adjusted for inflation. Data are not available for Feb 2015 because the prices indexes of the BLS for Nov 2014 will only be released on Mar 24, 2015 (http://www.bls.gov/cpi/), which will be covered in this blog’s comment on Mar 30, 2015, together with world inflation. The second column provides changes in real wages for Jan 2015. Average hourly earnings adjusted for inflation or in constant dollars increased 2.3 percent in Jan 2015 relative to Jan 2014 but have been decreasing during multiple months. World inflation waves in bouts of risk aversion (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html) mask declining trend of real wages. The fractured labor market of the US is characterized by high levels of unemployment and underemployment together with falling real wages or wages adjusted for inflation (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html). The following section IB Stagnating Real Wages provides more detailed analysis. Average weekly hours of US workers seasonally adjusted remained virtually unchanged around 34.6. Another headline number widely followed is the unemployment rate or number of people unemployed as percent of the labor force. The unemployment rate calculated in the household survey decreased from 5.7 percent in Jan 2015 to 5.5 percent in Feb 2015, seasonally adjusted. This blog provides with every employment situation report the number of people in the US in job stress or unemployed plus underemployed calculated without seasonal adjustment (NSA) at 27.2 million in Feb 2015 and 28.3 million in Jan 2015. The final row in Table I-1 provides the number in job stress as percent of the actual labor force calculated at 16.5 percent in Feb 2015 and 17.1 percent in Jan 2015. Almost one in every five workers in the US is unemployed or underemployed.
There is socio-economic stress in the combination of adverse events and cyclical performance:
- Mediocre economic growth below potential and long-term trend, resulting in idle productive resources with GDP two trillion dollars below trend (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html). US GDP grew at the average rate of 3.3 percent per year from 1929 to 2014 with similar performance in whole cycles of contractions and expansions but only at 1.1 percent per year on average from 2007 to 2014. GDP in IVQ2014 is 11.6 percent lower than what it would have been had it grown at trend of 3.0 percent.
- Private fixed investment stagnating at increase of 3.3 percent in the entire cycle from IVQ2007 to IVQ2014 (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html)
- Twenty seven million or 16.5 percent of the effective labor force unemployed or underemployed in involuntary part-time jobs with stagnating or declining real wages (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-risk.html)
- Stagnating real disposable income per person or income per person after inflation and taxes (Section II and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html)
- Depressed hiring that does not afford an opportunity for reducing unemployment/underemployment and moving to better-paid jobs (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html)
- Productivity growth fell from 2.2 percent per year on average from 1947 to 2014 and average 2.e percent per year from 1947 to 2014 to 1.4 percent per year on average from 2007 to 2014, deteriorating future growth and prosperity (Section II and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/rules-discretionary-authorities-and.html)
- Output of manufacturing in Jan 2015 at 20.0 percent below long-term trend since 1919 and at 4.9 percent below trend since 1986 (http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/imf-view-squeeze-of-economic-activity.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html)
- Unsustainable government deficit/debt and balance of payments deficit (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/02/theory-and-reality-of-cyclical-slow.html http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html and earlier http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html)
- Worldwide waves of inflation (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/financial-oscillations-world-inflation.html http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html)
- Deteriorating terms of trade and net revenue margins of production across countries in squeeze of economic activity by carry trades induced by zero interest rates (http://cmpassocregulationblog.blogspot.com/2015/02/world-financial-turbulence-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/imf-view-squeeze-of-economic-activity.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html)
- Financial repression of interest rates and credit affecting the most people without means and access to sophisticated financial investments with likely adverse effects on income distribution and wealth disparity (Section II and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier (http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/11/growth-uncertainties-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/10/world-financial-turbulence-twenty-seven.html)
- 45 million in poverty and 41 million without health insurance with family income adjusted for inflation regressing to 1995 levels (http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2013/09/duration-dumping-and-peaking-valuations.html)
- Net worth of households and nonprofits organizations increasing by 7.5 percent after adjusting for inflation in the entire cycle from IVQ2007 to IIIQ2014 when it would have grown over 22.0 percent at trend of 3.1 percent per year in real terms from 1945 to 2013 (http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/financial-volatility-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/global-financial-risks-recovery-without.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.html). Financial assets increased $14.3 trillion while nonfinancial assets increased $477.8 billion with likely concentration of wealth in those with access to sophisticated financial investments. Real estate assets adjusted for inflation fell 16.4 percent from 2007 to IIIQ2014
Table I-1, US, Summary of the Employment Situation Report SA
| Feb 2015 | Jan 2015 | |
| New Nonfarm Payroll Jobs | 295,000 | 239,000 |
| New Private Payroll Jobs | 288,000 | 237,000 |
| Average Hourly Earnings | Feb 15 $24.78 SA ∆% Feb 15/ Feb 14 NSA: 2.0 ∆% Feb 15/Jan 15 SA: 0.1 | Jan 15 $24.75 SA ∆% Jan 15/Jan 14 NSA: 2.2 ∆% Jan 15/Dec 14 SA: 0.5 |
| Average Hourly Earnings in Constant Dollars | ∆% Jan 2015/Jan 2014 NSA: 2.3 | |
| Average Weekly Hours | 34.6 SA 34.6 NSA | 34.6 SA 34.2 NSA |
| Unemployment Rate Household Survey % of Labor Force SA | 5.6 | 5.7 |
| Number in Job Stress Unemployed and Underemployed Blog Calculation | 27.2 million NSA | 28.3 million NSA |
| In Job Stress as % Labor Force | 16.5 NSA | 17.1 NSA |
Source: US Bureau of Labor Statistics
The Bureau of Labor Statistics (BLS) of the US Department of Labor provides both seasonally adjusted (SA) and not-seasonally adjusted (NSA) or unadjusted data with important uses (Bureau of Labor Statistics 2012Feb3; 2011Feb11):
“Most series published by the Current Employment Statistics program reflect a regularly recurring seasonal movement that can be measured from past experience. By eliminating that part of the change attributable to the normal seasonal variation, it is possible to observe the cyclical and other nonseasonal movements in these series. Seasonally adjusted series are published monthly for selected employment, hours, and earnings estimates.”
Requirements of using best available information and updating seasonality factors affect the comparability over time of United States employment data. In the first month of the year, the BLS revises data for several years by adjusting benchmarks and seasonal factors (page 4 at http://www.bls.gov/news.release/pdf/empsit.pdf release of Jan 2015 at http://www.bls.gov/schedule/archives/empsit_nr.htm#2015), which is the case of the data for Jan 2015 released on Feb 6, 2015:
“In accordance with annual practice, the establishment survey data released today have been benchmarked to reflect comprehensive counts of payroll jobs for March 2014. These counts are derived principally from the Quarterly Census of Employment and Wages (QCEW), which enumerates jobs covered by the unemployment insurance tax system. The benchmark process results in revisions to not seasonally adjusted data from April 2013 forward.
Seasonally adjusted data from January 2010 forward are subject to revision. In addition, data for some series prior to 2010, both seasonally adjusted and unadjusted, incorporate revisions. The total nonfarm employment level for March 2014 was revised upward by 91,000 (+67,000 on a not seasonally adjusted basis, or less than 0.05 percent). The average benchmark revision over the past 10 years was plus or minus 0.3 percent. Table A presents revised total nonfarm employment data on a seasonally adjusted basis for January through
December 2014.
An article that discusses the benchmark and post-benchmark revisions and other technical issues can be accessed through the BLS website at www.bls.gov/web/empsit/cesbmart.pdf.
Information on the data released today also may be obtained by calling (202) 691-6555.”
There are also adjustments of population that affect comparability of labor statistics over time (page 5 at http://www.bls.gov/news.release/pdf/empsit.pdf release of Jan 2015 at http://www.bls.gov/schedule/archives/empsit_nr.htm#2015):
“Effective with data for January 2015, updated population estimates have been used in the household survey. Population estimates for the household survey are developed by the U.S. Census Bureau. Each year, the Census Bureau updates the estimates to reflect new information and assumptions about the growth of the population since the previous decennial census. The change in population reflected in the new estimates results from adjustments for net international migration, updated vital statistics and other information, and some methodological changes in the estimation process. In accordance with usual practice, BLS will not revise the official household survey estimates for December 2014 and earlier months. To show the impact of the population adjustments, however, differences in selected December 2014 labor force series based on the old and new population estimates are shown in table B.”
There are also adjustments of benchmarks and seasonality factors for establishment data that affect comparability over time (page 4 at http://www.bls.gov/news.release/pdf/empsit.pdf release of Jan 2015 at http://www.bls.gov/schedule/archives/empsit_nr.htm#2015):
“In accordance with annual practice, the establishment survey data released today [Feb 6, 2015] have been benchmarked to reflect comprehensive counts of payroll jobs for March 2014. These counts are derived principally from the Quarterly Census of Employment and Wages (QCEW), which enumerates jobs covered by the unemployment insurance tax system. The benchmark process results in revisions to not seasonally adjusted data from April 2013 forward. Seasonally adjusted data from January 2010 forward are subject to revision. In addition, data for some series prior to 2010, both seasonally adjusted and unadjusted, incorporate revisions.”
All comparisons over time are affected by yearly adjustments of benchmarks and seasonality factors. All data in this blog comment use revised data released by the BLS on Mar 6, 2015 (http://www.bls.gov/).
IA2 Number of People in Job Stress. There are two approaches to calculating the number of people in job stress. The first approach consists of calculating the number of people in job stress unemployed or underemployed with the raw data of the employment situation report as in Table I-2. The data are seasonally adjusted (SA). The first three rows provide the labor force and unemployed in millions and the unemployment rate of unemployed as percent of the labor force. There is increase in the number unemployed from 8.688 million in Dec 2014 to 8.979 million in Jan 2015 and decrease to 8.705 million in Feb 2015. The rate of unemployment increased from 5.6 percent in Dec 2014 to 5.7 percent in Jan 2015 and decreased to 5.5 percent in Feb 2015. An important aspect of unemployment is its persistence for more than 27 weeks with 2.709 million in Feb 2015, corresponding to 31.1 percent of the unemployed. The longer the period of unemployment the lower are the chances of finding another job with many long-term unemployed ceasing to search for a job. Another key characteristic of the current labor market is the high number of people trying to subsist with part-time jobs because they cannot find full-time employment or part-time for economic reasons. The BLS explains as follows: “these individuals were working part time because their hours had been cut back or because they were unable to find full-time work” (http://www.bls.gov/news.release/pdf/empsit.pdf 2). The number of part-time for economic reasons increased from 6.790 million in Dec 2014 to 6.810 million in Jan 2015 and decreased to 6.635 million in Feb 2015. Another important fact is the marginally attached to the labor force. The BLS explains as follows: “these individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey” (http://www.bls.gov/news.release/pdf/empsit.pdf 2). The number in job stress unemployed or underemployed of 17.499 million in Feb 2015 is composed of:
· 8.705 million unemployed (of whom 2.709 million, or 31.1 percent, unemployed for 27 weeks or more) compared with 8.979 million unemployed in Jan 2014 (of whom 2.800 million, or 31.2 percent, unemployed for 27 weeks or more),
· 6.635 million employed part-time for economic reasons in Feb 2015 (who suffered reductions in their work hours or could not find full-time employment) compared with 6.810 million in Jan 2015
· 2.159 million who were marginally attached to the labor force in Feb 2015 (who were not in the labor force but wanted and were available for work) compared with 2.234 million in Jan 2015
Table I-2, US, People in Job Stress, Millions and % SA
| 2014 | Feb 2015 | Jan 2015 | Dec 2014 |
| Labor Force Millions | 157.002 | 157.180 | 156.129 |
| Unemployed | 8.705 | 8.979 | 8.688 |
| Unemployment Rate (unemployed as % labor force) | 5.5 | 5.7 | 5.6 |
| Unemployed ≥27 weeks | 2.709 | 2.800 | 2.785 |
| Unemployed ≥27 weeks % | 31.1 | 31.2 | 32.1 |
| Part Time for Economic Reasons | 6.635 | 6.810 | 6.790 |
| Marginally | 2.159 | 2.234 | 2.260 |
| Job Stress | 17.499 | 18.023 | 17,738 |
| In Job Stress as % Labor Force | 11.1 | 11.5 | 11.4 |
Job Stress = Unemployed + Part Time Economic Reasons + Marginally Attached Labor Force
Source: US Bureau of Labor Statistics
Table I-3 repeats the data in Table I-2 but including Nov and additional data. What really matters is the number of people with jobs or the total employed, representing the opportunity for exit from unemployment. The final row of Table I-3 provides people employed as percent of the population or employment to population ratio. The number has remained relatively constant around 59 percent, reaching 59.2 in Nov 2014, 59.2 in Dec 2014, 59.3 in Jan 2015 and 59.3 in Feb 2015. The employment to population ratio fell from an annual level of 63.1 percent in 2006 to 58.6 percent in 2012, 58.6 percent in 2013 and 59.0 in 2014 with the lowest level at 58.4 percent in 2011.
Table I-3, US, Unemployment and Underemployment, SA, Millions and Percent
| Feb 2015 | Jan 2015 | Dec 2014 | Nov 2014 | |
| Labor Force | 157.002 | 157.180 | 156.129 | 156.402 |
| Participation Rate | 62.8 | 62.9 | 62.7 | 62.9 |
| Unemployed | 8.705 | 8.979 | 8.688 | 9.071 |
| UNE Rate % | 5.5 | 5.7 | 5.6 | 5.8 |
| Part Time Economic Reasons | 6.635 | 6.810 | 6.790 | 6.851 |
| Marginally Attached to Labor Force | 2.159 | 2.234 | 2.260 | 2.109 |
| In Job Stress | 17.499 | 18.023 | 17.738 | 18.031 |
| In Job Stress % Labor Force | 11.1 | 11.5 | 11.4 | 11.5 |
| Employed | 148.297 | 148.201 | 147.442 | 147.331 |
| Employment % Population | 59.3 | 59.3 | 59.2 | 59.2 |
Job Stress = Unemployed + Part Time Economic Reasons + Marginally Attached Labor Force
Source: US Bureau of Labor Statistics
The balance of this section considers the second approach. Charts I-1 to I-12 explain the reasons for considering another approach to calculating job stress in the US. Chart I-1 of the Bureau of Labor Statistics provides the level of employment in the US from 2001 to 2015. There was a big drop of the number of people employed from 147.315 million at the peak in Jul 2007 (NSA) to 136.809 million at the trough in Jan 2010 (NSA) with 10.506 million fewer people employed. Recovery has been anemic compared with the shallow recession of 2001 that was followed by nearly vertical growth in jobs. The number employed in Feb 2015 was 147.118 million (NSA) or 0.197 million fewer people with jobs relative to the peak of 147.315 million in Jul 2007 while the civilian noninstitutional population of ages 16 years and over increased from 231.958 million in Jul 2007 to 249.899 million in Feb 2015 or by 17.941 million. The number employed decreased 0.1 percent from Jul 2007 to Feb 2015 while the noninstitutional civilian population of ages of 16 years and over, or those available for work,increased 7.7 percent. The ratio of employment to population in Jul 2007 was 63.5 percent (147.315 million employment as percent of population of 231.958 million). The same ratio in Feb 2015 would result in 158.686 million jobs (0.635 multiplied by noninstitutional civilian population of 249.899 million). There are effectively 11.568 million fewer jobs in Feb 2015 than in Jul 2007, or 158.686 million minus 147.118 million. There is actually not sufficient job creation in merely absorbing new entrants in the labor force because of those dropping from job searches, worsening the stock of unemployed or underemployed in involuntary part-time jobs.
Chart I-1, US, Employed, Thousands, SA, 2001-2015
Source: Bureau of Labor Statistics
Chart I-2 of the Bureau of Labor Statistics provides 12-month percentage changes of the number of people employed in the US from 2001 to 2015. There was recovery since 2010 but not sufficient to recover lost jobs. Many people in the US who had jobs before the global recession are not working now and many who entered the labor force cannot find employment.
Chart I-2, US, Employed, 12-Month Percentage Change NSA, 2001-2015
Source: Bureau of Labor Statistics
The foundation of the second approach derives from Chart II-3 of the Bureau of Labor Statistics providing the level of the civilian labor force in the US. The civilian labor force consists of people who are available and willing to work and who have searched for employment recently. The labor force of the US grew 9.4 percent from 142.828 million in Jan 2001 to 156.255 million in Jul 2009 but is 0.03 percent lower at 156.213 million in Jan 2015, all numbers not seasonally adjusted. Chart I-3 shows the flattening of the curve of expansion of the labor force and its decline in 2010 and 2011. The ratio of the labor force of 154.871 million in Jul 2007 to the noninstitutional population of 231.958 million in Jul 2007 was 66.8 percent while the ratio of the labor force of 156.213 million in Feb 2015 to the noninstitutional population of 249.989 million in Feb 2015 was 62.5 percent. The labor force of the US in Feb 2015 corresponding to 66.8 percent of participation in the population would be 166.933 million (0.668 x 249.899). The difference between the measured labor force in Jan 2015 of 156.213 million and the labor force in Feb 2015 with participation rate of 66.8 percent (as in Jul 2007) of 166.933 million is 10.720 million. The level of the labor force in the US has stagnated and is 10.720 million lower than what it would have been had the same participation rate been maintained. Millions of people have abandoned their search for employment because they believe there are no jobs available for them. The key issue is whether the decline in participation of the population in the labor force is the result of people giving up on finding another job.
Chart I-3, US, Civilian Labor Force, Thousands, SA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-4 of the Bureau of Labor Statistics provides 12-month percentage changes of the level of the labor force in the US. The rate of growth fell almost instantaneously with the global recession and became negative from 2009 to 2011. The labor force of the US collapsed and did not recover. Growth in the beginning of the summer originates in younger people looking for jobs in the summer after graduation or during school recess.
Chart I-4, US, Civilian Labor Force, Thousands, NSA, 12-month Percentage Change, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-5 of the Bureau of Labor Statistics provides the labor force participation rate in the US or labor force as percent of the population. The labor force participation rate of the US fell from 66.8 percent in Jan 2001 to 62.5 percent NSA in Feb 2015, all numbers not seasonally adjusted. The annual labor force participation rate for 1979 was 63.7 percent and also 63.7 percent in Nov 1980 during sharp economic contraction. This comparison is further elaborated below. Chart I-5 shows an evident downward trend beginning with the global recession that has continued throughout the recovery beginning in IIIQ2009. The critical issue is whether people left the workforce of the US because they believe there is no longer a job for them.
Chart I-5, Civilian Labor Force Participation Rate, Percent of Population in Labor Force SA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-6 of the Bureau of Labor Statistics provides the level of unemployed in the US. The number unemployed rose from the trough of 6.272 million NSA in Oct 2006 to the peak of 16.147 million in Jan 2010, declining to 13.400 million in Jul 2012, 12.696 million in Aug 2012 and 11.741 million in Sep 2012. The level unemployed fell to 11.741 million in Oct 2012, 11.404 million in Nov 2012, 11.844 million in Dec 2012, 13.181 million in Jan 2013, 12.500 million in Feb 2013 and 9.984 million in Dec 2013. The level of unemployment reached 9.095 million in Feb 2015, all numbers not seasonally adjusted.
Chart I-6, US, Unemployed, Thousands, SA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-7 of the Bureau of Labor Statistics provides the rate of unemployment in the US or unemployed as percent of the labor force. The rate of unemployment of the US rose from 4.7 percent in Jan 2001 to 6.5 percent in Jun 2003, declining to 4.1 percent in Oct 2006. The rate of unemployment jumped to 10.6 percent in Jan 2010 and declined to 7.6 percent in Dec 2012 but increased to 8.5 percent in Jan 2013 and 8.1 percent in Feb 2013, falling back to 7.3 percent in May 2013 and 7.8 percent in Jun 2013, all numbers not seasonally adjusted. The rate of unemployment not seasonally adjusted stabilized at 7.7 percent in Jul 2013 and fell to 6.5 percent in Dec 2013 and 5.4 percent in Dec 2014. The rate of unemployment NSA increased to 5.8 percent in Feb 2015.
Chart I-7, US, Unemployment Rate, SA, 2001-2015
Source: Bureau of Labor Statistics
Chart I-8 of the Bureau of Labor Statistics provides 12-month percentage changes of the level of unemployed. There was a jump of 81.8 percent in Apr 2009 with subsequent decline and negative rates since 2010. On an annual basis, the level of unemployed rose 59.8 percent in 2009 and 26.1 percent in 2008 with increase of 3.9 percent in 2010, decline of 7.3 percent in 2011 and decrease of 9.0 percent in 2012. The annual level of unemployment decreased 8.4 percent in 2013 and fell 16.1 percent in 2014. The level of unemployment fell 16.5 percent in Feb 2015 relative to a year earlier.
Chart I-8, US, Unemployed, 12-month Percentage Change, NSA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-9 of the Bureau of Labor Statistics provides the number of people in part-time occupations because of economic reasons, that is, because they cannot find full-time employment. The number underemployed in part-time occupations not seasonally adjusted rose from 3.732 million in Jan 2001 to 5.270 million in Jan 2004, falling to 3.787 million in Apr 2006. The number underemployed seasonally adjusted jumped to 9.114 million in Nov 2009, falling to 8.174 million in Dec 2011 but increasing to 8.291 million in Jan 2012 and 8.193 million in Feb 2012 but then falling to 7.926 million in Dec 2012 and increasing to 8.087 million in Jul 2013. The number employed part-time for economic reasons seasonally adjusted reached 7.766 million in Dec 2013 and 6.790 million in Dec 2014. The number employed part-time for economic reasons seasonally adjusted reached 6.635 million in Feb 2015. Without seasonal adjustment, the number employed part-time for economic reasons reached 9.354 million in Dec 2009, declining to 8.918 million in Jan 2012 and 8.166 million in Dec 2012 but increasing to 8.324 million in Jul 2013. The number employed part-time for economic reasons NSA stood at 7.990 million in Dec 2013 and 6.970 million in Dec 2014. The number employed part-time for economic reasons stood at 6.772 million in Feb 2015. The longer the period in part-time jobs the lower are the chances of finding another full-time job.
Chart I-9, US, Part-Time for Economic Reasons, Thousands, SA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-10 of the Bureau of Labor Statistics repeats the behavior of unemployment. The 12-month percentage change of the level of people at work part-time for economic reasons jumped 84.7 percent in Mar 2009 and declined subsequently. The declines have been insufficient to reduce significantly the number of people who cannot shift from part-time to full-time employment. On an annual basis, the number of part-time for economic reasons increased 33.5 percent in 2008 and 51.7 percent in 2009, declining 0.4 percent in 2010, 3.5 percent in 2011 and 5.1 percent in 2012. The annual number of part-time for economic reasons decreased 2.3 percent in 2013 and fell 9.1 percent in 2014. The number of part-time for economic reasons fell 8.4 percent in Feb 2015 relative to a year earlier.
![clip_image009[1]](file:///C:\Users\cmpelaez\AppData\Local\Temp\WindowsLiveWriter-429641856\supfiles339390A\image43.png "clip_image009[1]")
Chart I-10, US, Part-Time for Economic Reasons NSA 12-Month Percentage Change, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-11 of the Bureau of Labor Statistics provides the same pattern of the number marginally attached to the labor force jumping to significantly higher levels during the global recession and remaining at historically high levels. The number marginally attached to the labor force not seasonally adjusted increased from 1.295 million in Jan 2001 to 1.691 million in Feb 2004. The number of marginally attached to the labor force fell to 1.299 million in Sep 2006 and increased to 2.609 million in Dec 2010 and 2.800 million in Jan 2011. The number marginally attached to the labor force was 2.540 million in Dec 2011, increasing to 2.809 million in Jan 2012, falling to 2.608 million in Feb 2012. The number marginally attached to the labor force fell to 2.352 million in Mar 2012, 2.363 million in Apr 2012, 2.423 million in May 2012, 2.483 million in Jun 2012, 2.529 million in Jul 2012 and 2.561 million in Aug 2012. The number marginally attached to the labor force fell to 2.517 million in Sep 2012, 2.433 million in Oct 2012, 2.505 million in Nov 2012 and 2.427 million in in Dec 2013. The number marginally attached to the labor force reached 2.260 million in Dec 2014. The number marginally attached to the labor force fell to 2.2159 million in Feb 2015.
Chart I-1 US, Marginally Attached to the Labor Force, Thousands, NSA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Chart I-12 provides 12-month percentage changes of the marginally attached to the labor force from 2001 to 2015. There was a jump of 56.1 percent in May 2009 during the global recession followed by declines in percentage changes but insufficient negative changes. On an annual basis, the number of marginally attached to the labor force increased in four consecutive years: 15.7 percent in 2008, 37.9 percent in 2009, 11.7 percent in 2010 and 3.5 percent in 2011. The number marginally attached to the labor force fell 2.2 percent on annual basis in 2012 but increased 2.9 percent in the 12 months ending in Dec 2012, fell 13.0 percent in the 12 months ending in Jan 2013, falling 10.7 percent in the 12 months ending in May 2013. The number marginally attached to the labor force increased 4.0 percent in the 12 months ending in Jun 2013 and fell 4.5 percent in the 12 months ending in Jul 2013 and 8.6 percent in the 12 months ending in Aug 2013. The annual number of marginally attached to the labor force fell 6.2 percent in 2013 and fell 6.5 percent in 2014. The number marginally attached to the labor force fell 7.2 percent in the 12 months ending in Dec 2013 and 6.9 percent in the 12 months ending in Dec 2014. The number marginally attached to the labor force fell 6.3 percent in the 12 months ending in Feb 2015.
Chart I-12, US, Marginally Attached to the Labor Force 12-Month Percentage Change, NSA, 2001-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/data/
Table I-4 consists of data and additional calculations using the BLS household survey, illustrating the possibility that the actual rate of unemployment could be 11.1 percent and the number of people in job stress could be around 27.2 million, which is 16.5 percent of the effective labor force. The first column provides for 2006 the yearly average population (POP), labor force (LF), participation rate or labor force as percent of population (PART %), employment (EMP), employment population ratio (EMP/POP %), unemployment (UEM), the unemployment rate as percent of labor force (UEM/LF Rate %) and the number of people not in the labor force (NLF). All data are unadjusted or not-seasonally-adjusted (NSA). The numbers in column 2006 are averages in millions while the monthly numbers for Feb 2014, Jan 2015 and Feb 2015 are in thousands, not seasonally adjusted. The average yearly participation rate of the population in the labor force was in the range of 66.0 percent minimum to 67.1 percent maximum between 2000 and 2006 with the average of 66.4 percent (http://www.bls.gov/data/). Table I-4b provides the yearly labor force participation rate from 1979 to 2015. The objective of Table I-4 is to assess how many people could have left the labor force because they do not think they can find another job. Row “LF PART 66.2 %” applies the participation rate of 2006, almost equal to the rates for 2000 to 2006, to the noninstitutional civilian population in Feb 2014, Jan 2015 and Feb 2015 to obtain what would be the labor force of the US if the participation rate had not changed. In fact, the participation rate fell to 62.7 percent by Feb 2014 and was 62.5 percent in Jan 2014 and 62.5 percent in Feb 2015, suggesting that many people simply gave up on finding another job. Row “∆ NLF UEM” calculates the number of people not counted in the labor force because they could have given up on finding another job by subtracting from the labor force with participation rate of 66.2 percent (row “LF PART 66.2%”) the labor force estimated in the household survey (row “LF”). Total unemployed (row “Total UEM”) is obtained by adding unemployed in row “∆NLF UEM” to the unemployed of the household survey in row “UEM.” The row “Total UEM%” is the effective total unemployed “Total UEM” as percent of the effective labor force in row “LF PART 66.2%.” The results are that:
- there are an estimated 9.220 million unemployed in Feb 2015 who are not counted because they left the labor force on their belief they could not find another job (∆NLF UEM), that is, they dropped out of their job searches
- the total number of unemployed is effectively 18.315 million (Total UEM) and not 9.095 million (UEM) of whom many have been unemployed long term
- the rate of unemployment is 11.1 percent (Total UEM%) and not 5.5 percent, not seasonally adjusted, or 5.5 percent seasonally adjusted
- the number of people in job stress is close to 27.2 million by adding the 9.220 million leaving the labor force because they believe they could not find another job.
The row “In Job Stress” in Table I-4 provides the number of people in job stress not seasonally adjusted at 28.268 million in Jan 2015, adding the total number of unemployed (“Total UEM”), plus those involuntarily in part-time jobs because they cannot find anything else (“Part Time Economic Reasons”) and the marginally attached to the labor force (“Marginally attached to LF”). The final row of Table I-4 shows that the number of people in job stress is equivalent to 16.5 percent of the labor force in Feb 2015. The employment population ratio “EMP/POP %” dropped from 62.9 percent on average in 2006 to 58.1 percent in Jan 2014, 59.1 percent in Dec 2014 and 58.9 percent in Feb 2015. The number employed in Feb 2015 was 147.118 million (NSA) or 0.197 million fewer people with jobs relative to the peak of 147.315 million in Jul 2007 while the civilian noninstitutional population of ages 16 years and over increased from 231.958 million in Jul 2007 to 249.899 million in Feb 2015 or by 17.941 million. The number employed decreased 0.1 percent from Jul 2007 to Feb 2015 while the noninstitutional civilian population of ages of 16 years and over, or those available for work, increased 7.7 percent. The ratio of employment to population in Jul 2007 was 63.5 percent (147.315 million employment as percent of population of 231.958 million). The same ratio in Feb 2015 would result in 158.686 million jobs (0.635 multiplied by noninstitutional civilian population of 249.899 million). There are effectively 11.568 million fewer jobs in Feb 2015 than in Jul 2007, or 158.686 million minus 147.118 million. There is actually not sufficient job creation in merely absorbing new entrants in the labor force because of those dropping from job searches, worsening the stock of unemployed or underemployed in involuntary part-time jobs.
The argument that anemic population growth causes “secular stagnation” in the US (Hansen 1938, 1939, 1941) is as misplaced currently as in the late 1930s (for early dissent see Simons 1942). There is currently population growth in the ages of 16 to 24 years but not enough job creation and discouragement of job searches for all ages (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html). This is merely another case of theory without reality with dubious policy proposals. The number of hiring relative to the number unemployed measures the chances of becoming employed. The number of hiring in the US economy has declined by 10 million and does not show signs of increasing in an unusual recovery without hiring (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html). The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IVQ2014 would have accumulated to 23.0 percent. GDP in IVQ2014 would be $18,438.0 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,144.3 billion than actual $16,293.7 billion. There are about two trillion dollars of GDP less than at trend, explaining the 27.2 million unemployed or underemployed equivalent to actual unemployment of 16.5 percent of the effective labor force (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-risk.html). US GDP in IVQ2014 is 11.6 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,293.7 billion in IVQ2014 or 8.7 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Jan 1919 to Jan 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 124.8993 in Jan 2015. The actual index NSA in Jan 2015 is 99.8883, which is 20.0 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014, raising the index at trend to 117.3927 in Jan 2015. The output of manufacturing at 99.8883 in Jan 2015 is 14.9 percent below trend under this alternative calculation.
Table I-4, US, Population, Labor Force and Unemployment, NSA
| 2006 | Feb 2014 | Jan 2015 | Feb 2015 | |
| POP | 229 | 247,085 | 249,723 | 249,899 |
| LF | 151 | 155,027 | 156,050 | 156,213 |
| PART% | 66.2 | 62.7 | 62.5 | 62.5 |
| EMP | 144 | 144,134 | 146,552 | 147,118 |
| EMP/POP% | 62.9 | 58.3 | 58.7 | 58.9 |
| UEM | 7 | 10,893 | 9,498 | 9,095 |
| UEM/LF Rate% | 4.6 | 7.0 | 6.1 | 5.8 |
| NLF | 77 | 92,058 | 93,674 | 93,686 |
| LF PART 66.2% | 163,570 | 165,317 | 165,433 | |
| ∆NLF UEM | 8,543 | 9,267 | 9,220 | |
| Total UEM | 19,436 | 18,765 | 18,315 | |
| Total UEM% | 11.9 | 11.4 | 11.1 | |
| Part Time Economic Reasons | 7,397 | 7,269 | 6,772 | |
| Marginally Attached to LF | 2,303 | 2,234 | 2,159 | |
| In Job Stress | 29,136 | 28,268 | 27,246 | |
| People in Job Stress as % Labor Force | 17.8 | 17.1 | 16.5 |
Pop: population; LF: labor force; PART: participation; EMP: employed; UEM: unemployed; NLF: not in labor force; ∆NLF UEM: additional unemployed; Total UEM is UEM + ∆NLF UEM; Total UEM% is Total UEM as percent of LF PART 66.2%; In Job Stress = Total UEM + Part Time Economic Reasons + Marginally Attached to LF
Note: the first column for 2006 is in average millions; the remaining columns are in thousands; NSA: not seasonally adjusted
The labor force participation rate of 66.2% in 2006 is applied to current population to obtain LF PART 66.2%; ∆NLF UEM is obtained by subtracting the labor force with participation of 66.2 percent from the household survey labor force LF; Total UEM is household data unemployment plus ∆NLF UEM; and total UEM% is total UEM divided by LF PART 66.2%
Source: US Bureau of Labor Statistics
In the analysis of Hansen (1939, 3) of secular stagnation, economic progress consists of growth of real income per person driven by growth of productivity. The “constituent elements” of economic progress are “(a) inventions, (b) the discovery and development of new territory and new resources, and (c) the growth of population” (Hansen 1939, 3). Secular stagnation originates in decline of population growth and discouragement of inventions. According to Hansen (1939, 2), US population grew by 16 million in the 1920s but grew by one half or about 8 million in the 1930s with forecasts at the time of Hansen’s writing in 1938 of growth of around 5.3 million in the 1940s. Hansen (1939, 2) characterized demography in the US as “a drastic decline in the rate of population growth. Hansen’s plea was to adapt economic policy to stagnation of population in ensuring full employment. In the analysis of Hansen (1939, 8), population caused half of the growth of US GDP per year. Growth of output per person in the US and Europe was caused by “changes in techniques and to the exploitation of new natural resources.” In this analysis, population caused 60 percent of the growth of capital formation in the US. Declining population growth would reduce growth of capital formation. Residential construction provided an important share of growth of capital formation. Hansen (1939, 12) argues that market power of imperfect competition discourages innovation with prolonged use of obsolete capital equipment. Trade unions would oppose labor-savings innovations. The combination of stagnating and aging population with reduced innovation caused secular stagnation. Hansen (1939, 12) concludes that there is role for public investments to compensate for lack of dynamism of private investment but with tough tax/debt issues.
The current application of Hansen’s (1938, 1939, 1941) proposition argues that secular stagnation occurs because full employment equilibrium can be attained only with negative real interest rates between minus 2 and minus 3 percent. Professor Lawrence H. Summers (2013Nov8) finds that “a set of older ideas that went under the phrase secular stagnation are not profoundly important in understanding Japan’s experience in the 1990s and may not be without relevance to America’s experience today” (emphasis added). Summers (2013Nov8) argues there could be an explanation in “that the short-term real interest rate that was consistent with full employment had fallen to -2% or -3% sometime in the middle of the last decade. Then, even with artificial stimulus to demand coming from all this financial imprudence, you wouldn’t see any excess demand. And even with a relative resumption of normal credit conditions, you’d have a lot of difficulty getting back to full employment.” The US economy could be in a situation where negative real rates of interest with fed funds rates close to zero as determined by the Federal Open Market Committee (FOMC) do not move the economy to full employment or full utilization of productive resources. Summers (2013Oct8) finds need of new thinking on “how we manage an economy in which the zero nominal interest rates is a chronic and systemic inhibitor of economy activity holding our economies back to their potential.”
Former US Treasury Secretary Robert Rubin (2014Jan8) finds three major risks in prolonged unconventional monetary policy of zero interest rates and quantitative easing: (1) incentive of delaying action by political leaders; (2) “financial moral hazard” in inducing excessive exposures pursuing higher yields of risker credit classes; and (3) major risks in exiting unconventional policy. Rubin (2014Jan8) proposes reduction of deficits by structural reforms that could promote recovery by improving confidence of business attained with sound fiscal discipline.
Professor John B. Taylor (2014Jan01, 2014Jan3) provides clear thought on the lack of relevance of Hansen’s contention of secular stagnation to current economic conditions. The application of secular stagnation argues that the economy of the US has attained full-employment equilibrium since around 2000 only with negative real rates of interest of minus 2 to minus 3 percent. At low levels of inflation, the so-called full-employment equilibrium of negative interest rates of minus 2 to minus 3 percent cannot be attained and the economy stagnates. Taylor (2014Jan01) analyzes multiple contradictions with current reality in this application of the theory of secular stagnation:
- Secular stagnation would predict idle capacity, in particular in residential investment when fed fund rates were fixed at 1 percent from Jun 2003 to Jun 2004. Taylor (2014Jan01) finds unemployment at 4.4 percent with house prices jumping 7 percent from 2002 to 2003 and 14 percent from 2004 to 2005 before dropping from 2006 to 2007. GDP prices doubled from 1.7 percent to 3.4 percent when interest rates were low from 2003 to 2005.
- Taylor (2014Jan01, 2014Jan3) finds another contradiction in the application of secular stagnation based on low interest rates because of savings glut and lack of investment opportunities. Taylor (2009) shows that there was no savings glut. The savings rate of the US in the past decade is significantly lower than in the 1980s.
- Taylor (2014Jan01, 2014Jan3) finds another contradiction in the low ratio of investment to GDP currently and reduced investment and hiring by US business firms.
- Taylor (2014Jan01, 2014Jan3) argues that the financial crisis and global recession were caused by weak implementation of existing regulation and departure from rules-based policies.
- Taylor (2014Jan01, 2014Jan3) argues that the recovery from the global recession was constrained by a change in the regime of regulation and fiscal/monetary policies.
In revealing research, Edward P. Lazear and James R. Spletzer (2012JHJul22) use the wealth of data in the valuable database and resources of the Bureau of Labor Statistics (http://www.bls.gov/data/) in providing clear thought on the nature of the current labor market of the United States. The critical issue of analysis and policy currently is whether unemployment is structural or cyclical. Structural unemployment could occur because of (1) industrial and demographic shifts and (2) mismatches of skills and job vacancies in industries and locations. Consider the aggregate unemployment rate, Y, expressed in terms of share si of a demographic group in an industry i and unemployment rate yi of that demographic group (Lazear and Spletzer 2012JHJul22, 5-6):
Y = ∑isiyi (1)
This equation can be decomposed for analysis as (Lazear and Spletzer 2012JHJul22, 6):
∆Y = ∑i∆siy*i + ∑i∆yis*i (2)
The first term in (2) captures changes in the demographic and industrial composition of the economy ∆si multiplied by the average rate of unemployment y*i , or structural factors. The second term in (2) captures changes in the unemployment rate specific to a group, or ∆yi, multiplied by the average share of the group s*i, or cyclical factors. There are also mismatches in skills and locations relative to available job vacancies. A simple observation by Lazear and Spletzer (2012JHJul22) casts intuitive doubt on structural factors: the rate of unemployment jumped from 4.4 percent in the spring of 2007 to 10 percent in October 2009. By nature, structural factors should be permanent or occur over relative long periods. The revealing result of the exhaustive research of Lazear and Spletzer (2012JHJul22) is:
“The analysis in this paper and in others that we review do not provide any compelling evidence that there have been changes in the structure of the labor market that are capable of explaining the pattern of persistently high unemployment rates. The evidence points to primarily cyclic factors.”
Table I-4b and Chart I-12-b provide the US labor force participation rate or percentage of the labor force in population. It is not likely that simple demographic trends caused the sharp decline during the global recession and failure to recover earlier levels. The civilian labor force participation rate dropped from the peak of 66.9 percent in Jul 2006 to 62.6 percent in Dec 2013, 62.5 percent in Dec 2014 and 62.5 percent in Feb 2015. The civilian labor force participation rate was 63.7 percent on an annual basis in 1979 and 63.4 percent in Dec 1980 and Dec 1981, reaching even 62.9 percent in both Apr and May 1979. The civilian labor force participation rate jumped with the recovery to 64.8 percent on an annual basis in 1985 and 65.9 percent in Jul 1985. Structural factors cannot explain these sudden changes vividly shown visually in the final segment of Chart I-12b. Seniors would like to delay their retiring especially because of the adversities of financial repression on their savings. Labor force statistics are capturing the disillusion of potential workers with their chances in finding a job in what Lazear and Spletzer (2012JHJul22) characterize as accentuated cyclical factors. The argument that anemic population growth causes “secular stagnation” in the US (Hansen 1938, 1939, 1941) is as misplaced currently as in the late 1930s (for early dissent see Simons 1942). There is currently population growth in the ages of 16 to 24 years but not enough job creation and discouragement of job searches for all ages (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html). “Secular stagnation” would be a process over many years and not from one year to another. This is merely another case of theory without reality with dubious policy proposals.
Table I-4b, US, Labor Force Participation Rate, Percent of Labor Force in Population, NSA, 1979-2015
| Year | Jan | Feb | Aug | Sep | Oct | Nov | Dec | Annual |
| 1979 | 62.9 | 63.0 | 64.5 | 63.8 | 64.0 | 63.8 | 63.8 | 63.7 |
| 1980 | 63.3 | 63.2 | 64.5 | 63.6 | 63.9 | 63.7 | 63.4 | 63.8 |
| 1981 | 63.2 | 63.2 | 64.6 | 63.5 | 64.0 | 63.8 | 63.4 | 63.9 |
| 1982 | 63.0 | 63.2 | 64.9 | 64.0 | 64.1 | 64.1 | 63.8 | 64.0 |
| 1983 | 63.3 | 63.2 | 65.1 | 64.3 | 64.1 | 64.1 | 63.8 | 64.0 |
| 1984 | 63.3 | 63.4 | 65.2 | 64.4 | 64.6 | 64.4 | 64.3 | 64.4 |
| 1985 | 64.0 | 64.0 | 65.4 | 64.9 | 65.1 | 64.9 | 64.6 | 64.8 |
| 1986 | 64.2 | 64.4 | 66.1 | 65.3 | 65.5 | 65.4 | 65.0 | 65.3 |
| 1987 | 64.7 | 64.8 | 66.5 | 65.5 | 65.9 | 65.7 | 65.5 | 65.6 |
| 1988 | 65.1 | 65.2 | 66.8 | 65.9 | 66.1 | 66.2 | 65.9 | 65.9 |
| 1989 | 65.8 | 65.6 | 67.2 | 66.3 | 66.6 | 66.7 | 66.3 | 66.5 |
| 1990 | 66.0 | 66.0 | 67.1 | 66.4 | 66.5 | 66.3 | 66.1 | 66.5 |
| 1991 | 65.5 | 65.7 | 66.6 | 66.1 | 66.1 | 66.0 | 65.8 | 66.2 |
| 1992 | 65.7 | 65.8 | 67.2 | 66.3 | 66.2 | 66.2 | 66.1 | 66.4 |
| 1993 | 65.6 | 65.8 | 67.0 | 66.1 | 66.4 | 66.3 | 66.2 | 66.3 |
| 1994 | 66.0 | 66.2 | 67.2 | 66.5 | 66.8 | 66.7 | 66.5 | 66.6 |
| 1995 | 66.1 | 66.2 | 67.1 | 66.5 | 66.7 | 66.5 | 66.2 | 66.6 |
| 1996 | 65.8 | 66.1 | 67.2 | 66.8 | 67.1 | 67.0 | 66.7 | 66.8 |
| 1997 | 66.4 | 66.5 | 67.6 | 67.0 | 67.1 | 67.1 | 67.0 | 67.1 |
| 1998 | 66.6 | 66.7 | 67.3 | 67.0 | 67.1 | 67.1 | 67.0 | 67.1 |
| 1999 | 66.7 | 66.8 | 67.3 | 66.8 | 67.0 | 67.0 | 67.0 | 67.1 |
| 2000 | 66.8 | 67.0 | 67.2 | 66.7 | 66.9 | 66.9 | 67.0 | 67.1 |
| 2001 | 66.8 | 66.8 | 66.8 | 66.6 | 66.7 | 66.6 | 66.6 | 66.8 |
| 2002 | 66.2 | 66.6 | 66.8 | 66.6 | 66.6 | 66.3 | 66.2 | 66.6 |
| 2003 | 66.1 | 66.2 | 66.3 | 65.9 | 66.1 | 66.1 | 65.8 | 66.2 |
| 2004 | 65.7 | 65.7 | 66.2 | 65.7 | 66.0 | 66.1 | 65.8 | 66.0 |
| 2005 | 65.4 | 65.6 | 66.5 | 66.1 | 66.2 | 66.1 | 65.9 | 66.0 |
| 2006 | 65.5 | 65.7 | 66.5 | 66.1 | 66.4 | 66.4 | 66.3 | 66.2 |
| 2007 | 65.9 | 65.8 | 66.1 | 66.0 | 66.0 | 66.1 | 65.9 | 66.0 |
| 2008 | 65.7 | 65.5 | 66.4 | 65.9 | 66.1 | 65.8 | 65.7 | 66.0 |
| 2009 | 65.4 | 65.5 | 65.6 | 65.0 | 64.9 | 64.9 | 64.4 | 65.4 |
| 2010 | 64.6 | 64.6 | 65.0 | 64.6 | 64.4 | 64.4 | 64.1 | 64.7 |
| 2011 | 63.9 | 63.9 | 64.3 | 64.2 | 64.1 | 63.9 | 63.8 | 64.1 |
| 2012 | 63.4 | 63.6 | 63.7 | 63.6 | 63.8 | 63.5 | 63.4 | 63.7 |
| 2013 | 63.3 | 63.2 | 63.4 | 63.2 | 62.9 | 62.9 | 62.6 | 63.2 |
| 2014 | 62.5 | 62.7 | 63.0 | 62.8 | 63.0 | 62.8 | 62.5 | 62.9 |
| 2015 | 62.5 | 62.5 |
Source: US Bureau of Labor Statistics
Chart I-12b, US, Labor Force Participation Rate, Percent of Labor Force in Population, NSA, 1979-2015
Source: Bureau of Labor Statistics
Broader perspective is provided by Chart I-12c of the US Bureau of Labor Statistics. The United States civilian noninstitutional population has increased along a consistent trend since 1948 that continued through earlier recessions and the global recession from IVQ2007 to IIQ2009 and the cyclical expansion after IIIQ2009.
Chart I-12c, US, Civilian Noninstitutional Population, Thousands, NSA, 1948-2015
Sources: US Bureau of Labor Statistics
The labor force of the United States in Chart I-12d has increased along a trend similar to that of the civilian noninstitutional population in Chart I-12c. There is an evident stagnation of the civilian labor force in the final segment of Chart I-12d during the current economic cycle. This stagnation is explained by cyclical factors similar to those analyzed by Lazear and Spletzer (2012JHJul22) that motivated an increasing population to drop out of the labor force instead of structural factors. Large segments of the potential labor force are not observed, constituting unobserved unemployment and of more permanent nature because those afflicted have been seriously discouraged from working by the lack of opportunities.
Chart I-12d, US, Labor Force, Thousands, NSA, 1948-2015
Sources: US Bureau of Labor Statistics
The rate of labor force participation of the US is in Chart I-12E from 1948 to 2015. There is sudden decline during the global recession after 2007 without recovery explained by cyclic factors (Lazear and Spletzer 2012JHJul22) as many potential workers stopped their job searches disillusioned that there could be an opportunity for them in sharply contracted labor markets.
Chart I-12E, US, Labor Force Participation Rate, Percent of Labor Force in Population, NSA, 1948-2015
Sources: US Bureau of Labor Statistics
IA3 Long-term and Cyclical Comparison of Employment. There is initial discussion here of long-term employment trends followed by cyclical comparison. Growth and employment creation have been mediocre in the expansion beginning in Jul IIIQ2009 from the contraction between Dec IVQ2007 and Jun IIQ2009 (http://www.nber.org/cycles.html). A series of charts from the database of the Bureau of Labor Statistics (BLS) provides significant insight. Chart I-13 provides the monthly employment level of the US from 1948 to 2015. The number of people employed has trebled. There are multiple contractions throughout the more than six decades but followed by resumption of the strong upward trend. The contraction of employment after 2007 is sharp and followed by a flatter curve of job creation. The United States missed this opportunity of high growth in the initial phase of recovery that historically eliminated unemployment and underemployment created during the contraction. Inferior performance of the US economy and labor markets is the critical current issue of analysis and policy design. Long-term economic performance in the United States consisted of trend growth of GDP at 3 percent per year and of per capita GDP at 2 percent per year as measured for 1870 to 2010 by Robert E Lucas (2011May). The economy returned to trend growth after adverse events such as wars and recessions. The key characteristic of adversities such as recessions was much higher rates of growth in expansion periods that permitted the economy to recover output, income and employment losses that occurred during the contractions. Over the business cycle, the economy compensated the losses of contractions with higher growth in expansions to maintain trend growth of GDP of 3 percent and of GDP per capita of 2 percent. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. US economic growth has been at only 2.3 percent on average in the cyclical expansion in the 22 quarters from IIIQ2009 to IVQ2014. Boskin (2010Sep) measures that the US economy grew at 6.2 percent in the first four quarters and 4.5 percent in the first 12 quarters after the trough in the second quarter of 1975; and at 7.7 percent in the first four quarters and 5.8 percent in the first 12 quarters after the trough in the first quarter of 1983 (Professor Michael J. Boskin, Summer of Discontent, Wall Street Journal, Sep 2, 2010 http://professional.wsj.com/article/SB10001424052748703882304575465462926649950.html). There are new calculations using the revision of US GDP and personal income data since 1929 by the Bureau of Economic Analysis (BEA) (http://bea.gov/iTable/index_nipa.cfm) and the second estimate of GDP for IVQ2014 (http://www.bea.gov/newsreleases/national/gdp/2015/pdf/gdp4q14_2nd.pdf). The average of 7.7 percent in the first four quarters of major cyclical expansions is in contrast with the rate of growth in the first four quarters of the expansion from IIIQ2009 to IIQ2010 of only 2.7 percent obtained by diving GDP of $14,745.9 billion in IIQ2010 by GDP of $14,355.6 billion in IIQ2009 {[$14,745.9/$14,355.6 -1]100 = 2.7%], or accumulating the quarter on quarter growth rates (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html). The expansion from IQ1983 to IVQ1985 was at the average annual growth rate of 5.9 percent, 5.4 percent from IQ1983 to IIIQ1986, 5.2 percent from IQ1983 to IVQ1986, 5.0 percent from IQ1983 to IQ1987, 5.0 percent from IQ1983 to IIQ1987, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to IIQ1988 and at 7.8 percent from IQ1983 to IVQ1983 (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/02/financial-and-international.html). The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IVQ2014 would have accumulated to 23.0 percent. GDP in IVQ2014 would be $18,438.0 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,144.3 billion than actual $16,293.7 billion. There are about two trillion dollars of GDP less than at trend, explaining the 27.2 million unemployed or underemployed equivalent to actual unemployment of 16.5 percent of the effective labor force (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-risk.html). US GDP in IVQ2014 is 11.6 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,293.7 billion in IVQ2014 or 8.7 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Jan 1919 to Jan 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 124.8993 in Jan 2015. The actual index NSA in Jan 2015 is 99.8883, which is 20.0 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014, raising the index at trend to 117.3927 in Jan 2015. The output of manufacturing at 99.8883 in Jan 2015 is 14.9 percent below trend under this alternative calculation.
Chart I-13, US, Employment Level, Thousands, SA, 1948-2015
Source: US Bureau of Labor Statistics
The steep and consistent curve of growth of the US labor force is shown in Chart I-14. The contraction beginning in Dec 2007 flattened the path of the US civilian labor force and with flatter curve during the current expansion.
Chart I-14, US, Civilian Labor Force, SA, 1948-2015, Thousands
Source: US Bureau of Labor Statistics
Chart I-15 for the period from 1948 to 2015. The labor force participation rate is influenced by numerous factors such as the age of the population. There is no comparable episode in the postwar economy to the sharp collapse of the labor force participation rate in Chart I-15 during the contraction and subsequent expansion after 2007. Aging can reduce the labor force participation rate as many people retire but many may have decided to work longer as their wealth and savings have been significantly reduced. There is an important effect of many people just exiting the labor force because they believe there is no job available for them.
Chart I-15, US, Civilian Labor Force Participation Rate, SA, 1948-2015, %
Source: US Bureau of Labor Statistics
The number of unemployed in the US jumped seasonally adjusted from 5.8 million in May 1979 to 12.1 million in Dec 1982, by 6.3 million, or 108.6 percent. The jump not seasonally adjusted was from 5.4 million in May 1979 to 12.5 million in Jan 1983, by 7.1 million or 131.5 percent. The number of unemployed seasonally adjusted jumped from 6.7 million in Mar 2007 to 15.4 million in Oct 2009, by 8.7 million, or 129.9 percent. The number of unemployed not seasonally adjusted jumped from 6.5 million in Apr 2007 to 16.1 million in Jan 2010, by 9.6 million or 147.7 percent. These are the two episodes with steepest increase in the level of unemployment in Chart I-16.
Chart I-16, US, Unemployed, SA, 1948-2015, Thousands
Source: US Bureau of Labor Statistics
Chart I-17 provides the rate of unemployment of the US from 1948 to 2015. The peak of the series is 10.8 percent in both Nov and Dec 1982. The second highest rates are 10.0 percent in Oct 2009 and 9.9 percent in both Nov and Dec 2009. The unadjusted rate of unemployment reached 5.8 percent in Feb 2010.
Chart I-17, US, Unemployment Rate, SA, 1948-2015
Source: US Bureau of Labor Statistics
Chart I-18 provides the number unemployed for 27 weeks and over from 1948 to 2015. The number unemployed for 27 weeks and over jumped from 510,000 in Dec 1978 to 2.885 million in Jun 1983, by 2.4 million, or 465.7 percent. The number of unemployed 27 weeks or over SA jumped from 1.132 million in May 2007 to 6.623 million in Jun 2010, by 5.491 million, or 485.1 percent.
Chart I-18, US, Unemployed for 27 Weeks or More, SA, 1948-2015, Thousands
Source: US Bureau of Labor Statistics
The employment-population ratio in Chart I-19 is an important indicator of wellbeing in labor markets, measuring the number of people with jobs. The US employment-population ratio fell from 63.5 in Dec 2006 to 58.6 in Jul 2011 and stands at 58.9 NSA in Feb 2015. There is no comparable decline followed by stabilization during a cyclical expansion in Chart I-19.
Chart I-19, US, Employment-Population Ratio, 1948-2015
Source: US Bureau of Labor Statistics
The number employed part-time for economic reasons in Chart I-20 increased in the recessions and declined during the expansions. In the current cycle, the number employed part-time for economic reasons increased sharply and has not returned to normal levels. Lower growth of economic activity in the expansion after IIIQ2009 failed to reduce the number desiring to work full time but finding only part-time occupations. The lack of full-time jobs is evidently cyclical and not secular.
Chart I-20, US, Part-Time for Economic Reasons, NSA, 1955-2015, Thousands
Source: US Bureau of Labor Statistics
Table I-5 provides percentage change of real GDP in the United States in the 1930s, 1980s and 2000s. The recession in 1981-1982 is quite similar on its own to the 2007-2009 recession. In contrast, during the Great Depression in the four years of 1930 to 1933, GDP in constant dollars fell 26.4 percent cumulatively and fell 45.3 percent in current dollars (Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 150-2, Pelaez and Pelaez, Globalization and the State, Vol. II (2009b), 205-7 and revisions in http://bea.gov/iTable/index_nipa.cfm). Data are available for the 1930s only on a yearly basis. US GDP fell 4.7 percent in the two recessions (1) from IQ1980 to IIIQ1980 and (2) from III1981 to IVQ1981 to IVQ1982 and 4.2 percent cumulatively in the recession from IVQ2007 to IIQ2009. It is instructive to compare the first years of the expansions in the 1980s and the current expansion. GDP grew at 4.6 percent in 1983, 7.3 percent in 1984, 4.2 percent in 1985, 3.5 percent in 1986, 3.5 percent in 1987 and 4.2 percent in 2014. In contrast, GDP grew 2.5 percent in 2010, 1.6 percent in 2011, 2.3 percent in 2012, 2.2 percent in 2013 and 2.4 percent in 2014. Actual annual equivalent GDP growth in the four quarters of 2012, and eight quarters from IQ2013 to IVQ2014 is 2.4 percent and 2.4 percent in the four quarters ending in IVQ2014. GDP grew at 4.2 percent in 1985, 3.5 percent in 1986, 3.5 percent in 1987 and 4.2 percent in 1988. The forecasts of the central tendency of participants of the Federal Open Market Committee (FOMC) are in the range of 2.6 to 3.0 percent in 2015 (http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20141217.pdf) with less reliable forecast of 2.5 to 3.0 percent in 2016 (http://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20141217.pdf). Growth of GDP in the expansion from IIIQ2009 to IVQ2014 has been at average 2.4 percent in annual equivalent.
Table I-5, US, Percentage Change of GDP in the 1930s, 1980s and 2000s, ∆%
| Year | GDP ∆% | Year | GDP ∆% | Year | GDP ∆% |
| 1930 | -8.5 | 1980 | -0.2 | 2000 | 4.1 |
| 1931 | -6.4 | 1981 | 2.6 | 2001 | 1.0 |
| 1932 | -12.9 | 1982 | -1.9 | 2002 | 1.8 |
| 1933 | -1.3 | 1983 | 4.6 | 2003 | 2.8 |
| 1934 | 10.8 | 1984 | 7.3 | 2004 | 3.8 |
| 1935 | 8.9 | 1985 | 4.2 | 2005 | 3.3 |
| 1936 | 12.9 | 1986 | 3.5 | 2006 | 2.7 |
| 1937 | 5.1 | 1987 | 3.5 | 2007 | 1.8 |
| 1938 | -3.3 | 1988 | 4.2 | 2008 | -0.3 |
| 1930 | 8.0 | 1989 | 3.7 | 2009 | -2.8 |
| 1940 | 8.8 | 1990 | 1.9 | 2010 | 2.5 |
| 1941 | 17.7 | 1991 | -0.1 | 2011 | 1.6 |
| 1942 | 18.9 | 1992 | 3.6 | 2012 | 2.3 |
| 1943 | 17.0 | 1993 | 2.7 | 2013 | 2.2 |
| 1944 | 8.0 | 1994 | 4.0 | 2014 | 2.4 |
Source: US Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm
Characteristics of the four cyclical contractions are provided in Table I-6 with the first column showing the number of quarters of contraction; the second column the cumulative percentage contraction; and the final column the average quarterly rate of contraction. There were two contractions from IQ1980 to IIIQ1980 and from IIIQ1981 to IVQ1982 separated by three quarters of expansion. The drop of output combining the declines in these two contractions is 4.7 percent, which is almost equal to the decline of 4.2 percent in the contraction from IVQ2007 to IIQ2009. In contrast, during the Great Depression in the four years of 1930 to 1933, GDP in constant dollars fell 26.4 percent cumulatively and fell 45.3 percent in current dollars (Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 150-2, Pelaez and Pelaez, Globalization and the State, Vol. II (2009b), 205-7 and revisions in http://bea.gov/iTable/index_nipa.cfm). The comparison of the global recession after 2007 with the Great Depression is entirely misleading.
Table I-6, US, Number of Quarters, GDP Cumulative Percentage Contraction and Average Percentage Annual Equivalent Rate in Cyclical Contractions
| Number of Quarters | Cumulative Percentage Contraction | Average Percentage Rate | |
| IIQ1953 to IIQ1954 | 3 | -2.4 | -0.8 |
| IIIQ1957 to IIQ1958 | 3 | -3.0 | -1.0 |
| IVQ1973 to IQ1975 | 5 | -3.1 | -0.6 |
| IQ1980 to IIIQ1980 | 2 | -2.2 | -1.1 |
| IIIQ1981 to IVQ1982 | 4 | -2.5 | -0.64 |
| IVQ2007 to IIQ2009 | 6 | -4.2 | -0.72 |
Sources: Source: Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm
Table I-7 shows the mediocre average annual equivalent growth rate of 2.3 percent of the US economy in the twenty-two quarters of the current cyclical expansion from IIIQ2009 to IVQ2014. In sharp contrast, the average growth rate of GDP was:
- 5.7 percent in the first thirteen quarters of expansion from IQ1983 to IQ1986
- 5.4 percent in the first fifteen quarters of expansion from IQ1983 to IIIQ1986
- 5.2 percent in the first sixteen quarters of expansion from IQ1983 to IVQ1986
- 5.0 percent in the first seventeen quarters of expansion from IQ1983 to IQ1987
- 5.0 percent in the first eighteen quarters of expansion from IQ1983 to IIQ1987
- 4.9 percent in the first nineteen quarters of expansion from IQ1983 to IIIQ1987
- 5.0 percent in the first twenty quarters of expansion from IQ1983 to IVQ1987
- 4.9 percent in the first twenty-first quarters of expansion from IQ1983 to IQ1988
- 4.9 percent in the first twenty-two quarters of expansion from IQ1983 to IIQ1988
The line “average first four quarters in four expansions” provides the average growth rate of 7.7 percent with 7.8 percent from IIIQ1954 to IIQ1955, 9.2 percent from IIIQ1958 to IIQ1959, 6.1 percent from IIIQ1975 to IIQ1976 and 7.8 percent from IQ1983 to IVQ1983. The United States missed this opportunity of high growth in the initial phase of recovery. BEA data show the US economy in standstill with annual growth of 2.5 percent in 2010 decelerating to 1.6 percent annual growth in 2011, 2.3 percent in 2012, 2.2 percent in 2013 and 2.4 percent in 2014 (http://www.bea.gov/iTable/index_nipa.cfm) The expansion from IQ1983 to IQ1986 was at the average annual growth rate of 5.7 percent, 5.2 percent from IQ1983 to IVQ1986, 4.9 percent from IQ1983 to IIIQ1987, 5.0 percent from IQ1983 to IVQ1987, 4.9 percent from IQ1983 to IQ1988, 4.9 percent from IQ1983 to IIQ1988 and at 7.8 percent from IQ1983 to IVQ1983. GDP growth in the four quarters of IVQ2013 to IVQ2014 accumulated to 2.4 percent that is equivalent to 2.4 percent in a year. This is obtained by dividing GDP in IVQ2014 of $16,293.7 billion by GDP in IVQ2013 of $15,016.2 billion and compounding by 4/4: {[($16,293.7 /$15,916.2)4/4 -1]100 = 2.4 %}. The US economy grew 2.4 percent in IVQ2014 relative to the same quarter a year earlier in IVQ2013. Another important revelation of the revisions and enhancements is that GDP was flat in IVQ2012, which is in the borderline of contraction, and negative in IQ2014. US GDP fell 0.5 percent in IQ2014. The rate of growth of GDP in the revision of IIIQ2013 is 4.5 percent in seasonally adjusted annual rate (SAAR). Inventory accumulation contributed 1.49 percentage points to this rate of growth. The actual rate without this impulse of unsold inventories would have been 3.0 percent, or 0.74 percent in IIIQ2013, such that annual equivalent growth in 2013 is closer to 2.9 percent {[(1.007)(1.004)(1.0074)(1.010)4/4-1]100 = 2.9%}, compounding the quarterly rates and converting into annual equivalent. Inventory divestment deducted 1.16 percentage points from GDP growth in IQ2014. Without this deduction of inventory divestment, GDP growth would have been minus 0.9 percent in IQ2014, such that the actual growth rates in the four quarters ending in IQ2014 is closer to 2.2 percent {[(1.004)(1.011)(1.009)(0.9977)]4/4 -1]100 = 2.2%}.
Table I-7, US, Number of Quarters, Cumulative Growth and Average Annual Equivalent Growth Rate in Cyclical Expansions
| Number | Cumulative Growth ∆% | Average Annual Equivalent Growth Rate | |
| IIIQ 1954 to IQ1957 | 11 | 12.8 | 4.5 |
| First Four Quarters IIIQ1954 to IIQ1955 | 4 | 7.8 | |
| IIQ1958 to IIQ1959 | 5 | 10.0 | 7.9 |
| First Four Quarters IIIQ1958 to IIQ1959 | 4 | 9.2 | |
| IIQ1975 to IVQ1976 | 8 | 8.3 | 4.1 |
| First Four Quarters IIIQ1975 to IIQ1976 | 4 | 6.1 | |
| IQ1983-IQ1986 IQ1983-IIIQ1986 IQ1983-IVQ1986 IQ1983-IQ1987 IQ1983-IIQ1987 IQ1983 to IIIQ1987 IQ1983 to IVQ1987 IQ1983 to IQ1988 IQ1983 to IIQ1988 | 13 15 16 17 18 19 20 21 22 | 19.9 21.6 22.3 23.1 24.5 25.6 27.7 28.4 30.1 | 5.7 5.4 5.2 5.0 5.0 4.9 5.0 4.9 4.9 |
| First Four Quarters IQ1983 to IVQ1983 | 4 | 7.8 | |
| Average First Four Quarters in Four Expansions* | 7.7 | ||
| IIIQ2009 to IVQ2014 | 22 | 13.5 | 2.3 |
| First Four Quarters IIIQ2009 to IIQ2010 | 2.7 |
*First Four Quarters: 7.8% IIIQ1954-IIQ1955; 9.2% IIIQ1958-IIQ1959; 6.1% IIIQ1975-IQ1976; 7.8% IQ1983-IVQ1983
Source: Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm
A group of charts from the database of the Bureau of Labor Statistics facilitates the comparison of employment in the 1980s and 2000s. The long-term charts and tables from I-5 to I-7 in the discussion above confirm the view that the comparison of the current expansion should be with that in the 1980s because of similar dimensions. Chart I-21 provides the level of employment in the US between 1979 and 1989. Employment surged after the contraction and grew rapidly during the decade.
Chart I-21, US, Employed, Thousands, 1979-1989
Source: US Bureau of Labor Statistics
Chart I-22 provides the level of employment in the US from 2001 to 2015. There is actually not sufficient job creation in merely absorbing new entrants in the labor force because of those dropping from job searches, worsening the stock of unemployed or underemployed in involuntary part-time jobs. Recovery has been anemic compared with the shallow recession of 2001 that was followed by nearly vertical growth in jobs. The number employed in Feb 2015 was 147.118 million (NSA) or 0.197 million fewer people with jobs relative to the peak of 147.315 million in Jul 2007 while the civilian noninstitutional population of ages 16 years and over increased from 231.958 million in Jul 2007 to 249.899 million in Feb 2015 or by 17.941 million. The number employed decreased 0.1 percent from Jul 2007 to Feb 2015 while the noninstitutional civilian population of ages of 16 years and over, or those available for work, increased 7.7 percent. The ratio of employment to population in Jul 2007 was 63.5 percent (147.315 million employment as percent of population of 231.958 million). The same ratio in Feb 2015 would result in 158.686 million jobs (0.635 multiplied by noninstitutional civilian population of 249.899 million). There are effectively 11.568 million fewer jobs in Feb 2015 than in Jul 2007, or 158.686 million minus 147.118 million. There is actually not sufficient job creation in merely absorbing new entrants in the labor force because of those dropping from job searches, worsening the stock of unemployed or underemployed in involuntary part-time jobs.
![clip_image001[1]](file:///C:\Users\cmpelaez\AppData\Local\Temp\WindowsLiveWriter-429641856\supfiles339390A\image139.png "clip_image001[1]")
Chart I-22, US, Employed, Thousands, 2001-2015
Source: US Bureau of Labor Statistics
There was a steady upward trend in growth of the civilian labor force between 1979 and 1989 as shown in Chart I-23. There were fluctuations but strong long-term dynamism over an entire decade.
Chart I-23, US, Civilian Labor Force, Thousands, 1979-1989
Source: US Bureau of Labor Statistics
The civilian labor force in Chart I-24 grew steadily on an upward trend in the 2000s until it contracted together with the economy after 2007. There has not been recovery during the expansion but rather decline and marginal turn of the year 2011 into expansion in 2012 followed by stability and oscillation into 2013-2015.
![clip_image003[1]](file:///C:\Users\cmpelaez\AppData\Local\Temp\WindowsLiveWriter-429641856\supfiles339390A\image143.png "clip_image003[1]")
Chart I-24, US, Civilian Labor Force, Thousands, 2001-2015
Source: US Bureau of Labor Statistics
The rate of participation of the labor force in population stagnated during the stagflation and conquest of inflation in the late 1970s and early 1980s, as shown in Chart I-25. Recovery was vigorous during the expansion and lasted through the remainder of the decade.
Chart I-25, US, Civilian Labor Force Participation Rate, 1979-1989, %
Source: US Bureau of Labor Statistics
The rate of participation in the labor force declined after the recession of 2001 followed by stability until 2007, as shown in Chart I-26. The rate of participation in the labor force continued to decline both during the contraction after 2007 and the expansion after 2009 with marginal expansion at the turn of the year into 2012 followed by trend of decline and stability. Sharp decline occurred during the cycle and not secularly.
![clip_image005[1]](file:///C:\Users\cmpelaez\AppData\Local\Temp\WindowsLiveWriter-429641856\supfiles339390A\image147.png "clip_image005[1]")
Chart I-26, US, Civilian Labor Force Participation Rate, 2001-2015, %
Source: US Bureau of Labor Statistics
Chart I-27 provides the number unemployed during the 1980s. The number unemployed peaked at 12.051 million in Dec 1982 seasonally adjusted and 12.517 in Jan 1983 million not seasonally adjusted, declining to 8.358 million in Dec 1984 seasonally adjusted and 7.978 in Dec 1984 million not seasonally adjusted during the first two years of expansion from the contraction. The number unemployed then fell to 6.667 million in Dec 1989 seasonally adjusted and 6.300 million not seasonally adjusted.
Chart I-27, US, Unemployed Thousands 1979-1989
Source: US Bureau of Labor Statistics
Chart I-28 provides the number unemployed from 2001 to 2015. Using seasonally adjusted data, the number unemployed rose from 6.727 million in Oct 2006 to 15.352 million in Oct 2009, declining to 13.071 million in Dec 2011 and to 8.688 million in Dec 2014 and 8.705 million in Feb 2015. Using data not seasonally adjusted, the number unemployed rose from 6.272 million in Oct 2006 to 16.147 million in Jan 2010, declining to 11.844 million in Dec 2012, increasing to 13.181 million in Jan 20013 and declining to 9.984 million in Dec 2013. The level of unemployment fell from 10.855 million in Jan 2014 to 8.331 million in Dec 2014. The level of unemployment was 9.095 million in Feb 2015.
![clip_image006[1]](file:///C:\Users\cmpelaez\AppData\Local\Temp\WindowsLiveWriter-429641856\supfiles339390A\image151.png "clip_image006[1]")
Chart I-28, US, Unemployed Thousands 2001-2015
Source: US Bureau of Labor Statistics
The rate of unemployment peaked at 10.8 percent in both Nov and Dec 1982 seasonally adjusted, as shown in Chart I-29. The rate of unemployment dropped sharply during the expansion after 1984 and continued to decline during the rest of the decade to 5.4 percent in Dec 1989. Using not seasonally adjusted data, the rate of unemployment peaked at 11.4 percent in Jan 1983, declining to 7.0 percent in Dec 1984 and 5.1 percent in Dec 1989.
Chart I-29, US, Unemployment Rate, 1979-1989, %
Source: US Bureau of Labor Statistics
The rate of unemployment in the US seasonally adjusted jumped from 4.4 percent in May 2007 to 10.0 percent in Oct 2009 and 9.9 percent in both Nov and Dec 2009, as shown in Chart I-30. The rate of unemployment fluctuated at around 9.0 percent in 2011, declining to 7.9 percent in Dec 2012 and 6.7 percent in Dec 2013. The rate of unemployed eased to 5.6 percent in Dec 2014 and 5.5 percent in Feb 2015.
![clip_image007[1]](file:///C:\Users\cmpelaez\AppData\Local\Temp\WindowsLiveWriter-429641856\supfiles339390A\image155.png "clip_image007[1]")
Chart I-30, US, Unemployment Rate, 2001-2015, %
Source: US Bureau of Labor Statistics
The employment population ratio seasonally adjusted fell from around 60.1 in Dec 1979 to 57.1 in both Feb and Mar 1983, as shown in Chart I-31. The employment population ratio seasonally adjusted rose back to 59.9 in Dec 1984 and reached 63.0 later in the decade in Dec 1989. Using not seasonally adjusted data, the employment population ratio dropped from 60.4 percent in Oct 1979 to 56.1 percent in Jan 1983, increasing to 59.8 in Dec 1984 and to 62.9 percent in Dec 1989.
Chart I-31, US, Employment Population Ratio, 1979-1989, %
Source: US Bureau of Labor Statistics
The US employment-population ratio seasonally adjusted has fallen from 63.4 in Dec 2006 to 58.6 in Dec 2011, 58.6 in Dec 2012, 58.6 in Dec 2013 and 59.2 in Dec 2014, as shown in Chart I-32. The employment-population ratio reached 59.3 in Feb 2015. The employment population-ratio has stagnated during the expansion. Using not seasonally adjusted data, the employment population ratio fell from 63.6 percent in Jul 2006 to 57.6 percent in Jan 2011, 58.5 percent in Dec 2012, 58.5 percent in Dec 2013 and 59.1 in Dec 2014. The employment population ratio eased to 58.9 in Feb 2015.
Chart I-32, US, Employment Population Ratio, 2001-2015, %
Source: US Bureau of Labor Statistics
The number unemployed 27 weeks or more rose in Chart I-33 rose from 492,000 NSA in Oct 1979 to 2.978 million in Mar 1983. The level unemployed 27 weeks or more NSA fell to 566,000 in Aug 1989.
Chart I-33, US, Number Unemployed for 27 Weeks or More 1979-1989, SA, Thousands
Source: US Bureau of Labor Statistics
The number unemployed for 27 weeks or over, seasonally adjusted, increased sharply during the contraction as shown in Chart I-34 from 1.131 million in Nov 2006 to 6.800 million in Apr 2010 seasonally adjusted. The number of unemployed for 27 weeks remained at around 6 million during the expansion compared with somewhat above 1 million before the contraction, falling to 2.709 million in Feb 2015 seasonally adjusted and 2.763 million not seasonally adjusted.
Chart I-34, US, Number Unemployed for 27 Weeks or More, 2001-2015, SA, Thousands
Source: US Bureau of Labor Statistics
The number of persons working part-time for economic reasons because they cannot find full-time work peaked during the contraction at 6.857 million SA in Oct 1982, as shown in Chart I-35. The number of persons at work part-time for economic reasons fell sharply during the expansion to 5.797 million in Dec 1984 and continued to fall throughout the decade to 4.817 million in Dec 1989 SA and 4.709 million NSA.
Chart I-35, US, Part-Time for Economic Reasons, 1979-1989, Thousands
Source: US Bureau of Labor Statistics
The number of people working part-time because they cannot find full-time employment, not seasonally adjusted, increased sharply during the contraction from 3.787 million in Apr 2006, not seasonally adjusted, to 9.354 million in Dec 2009, as shown in Chart I-36. The number of people working part-time because of failure to find an alternative occupation stagnated at a very high level during the expansion, declining to 6.772 million not seasonally adjusted in Feb 2015.
![clip_image009[2]](file:///C:\Users\cmpelaez\AppData\Local\Temp\WindowsLiveWriter-429641856\supfiles339390A\image177.png "clip_image009[2]")
Chart I-36, US, Part-Time for Economic Reasons, 2001-2015, Thousands
Source: US Bureau of Labor Statistics
The number marginally attached to the labor force in Chart I-37 jumped from 1.252 million in Dec 2006 to 2.800 million in Jan 2011, remaining at a high level of 2.540 million in Dec 2011, 2.809 million in Jan 2012 and 2.614 million in Dec 2012. The number marginally attached to the labor force eased to 2.427 million in Dec 2013 and 2.260 million in Dec 2014. The level of marginally attached to the labor force reached 2.159 million in Feb 2015.
![clip_image010[1]](file:///C:\Users\cmpelaez\AppData\Local\Temp\WindowsLiveWriter-429641856\supfiles339390A\image181.png "clip_image010[1]")
Chart I-37, US, Marginally Attached to the Labor Force, 2001-2015
Source: US Bureau of Labor Statistics
IA4 Job Creation. What is striking about the data in Table I-8 is that the numbers of monthly increases in jobs in 1983 and 1984 are several times higher than in 2010 to 2014. The civilian noninstitutional population grew by 42.3 percent from 174.215 million in 1983 to 247.947 million in 2014 and labor force higher by 39.8 percent, growing from 111.550 million in 1983 to 155.922 million in 2014. Total nonfarm payroll employment seasonally adjusted (SA) increased 295,000 in Feb 2015 and private payroll employment increased 288,000. The average monthly number of nonfarm jobs created from Feb 2013 to Feb 2014 was 185,250 using seasonally adjusted data, while the average number of nonfarm jobs created from Feb 2014 to Feb 2015 was 274,667, or increase by 48.3 percent. The average number of private jobs created in the US from Feb 2013 to Feb 2014 was 191,083, using seasonally adjusted data, while the average from Feb 2014 to Feb 2015 was 267,417, or increase by 39.9 percent. This blog calculates the effective labor force of the US at 163.570 million in Feb 2014 and 165.433 million in Feb 2015 (Table I-4), for growth of 1.863 million at average 155.250 per month. The difference between the average increase of 267,417 new private nonfarm jobs per month in the US from Feb 2014 to Feb 2015 and the 155.250 average monthly increase in the labor force from Feb 2014 to Feb 2015 is 112,167 monthly new jobs net of absorption of new entrants in the labor force. There are 27.246 million in job stress in the US currently. Creation of 112,167 new jobs per month net of absorption of new entrants in the labor force would require 243 months to provide jobs for the unemployed and underemployed (27.246 million divided by 112,167) or 20 years (214 divided by 12). The civilian labor force of the US in Feb 2015 not seasonally adjusted stood at 156.213 million with 9.095 million unemployed or effectively 18.315 million unemployed in this blog’s calculation by inferring those who are not searching because they believe there is no job for them for effective labor force of 165.433 million. Reduction of one million unemployed at the current rate of job creation without adding more unemployment requires 0.7 years (1 million divided by product of 112,167 by 12, which is 1,346,004). Reduction of the rate of unemployment to 5 percent of the labor force would be equivalent to unemployment of only 7.811 million (0.05 times labor force of 156.213 million). New net job creation would be 1.284 million (9.095 million unemployed minus 7.811 million unemployed at rate of 5 percent) that at the current rate would take 0.95 years (1.284 million divided by 1.346). Under the calculation in this blog, there are 18.315 million unemployed by including those who ceased searching because they believe there is no job for them and effective labor force of 165.433 million. Reduction of the rate of unemployment to 5 percent of the labor force would require creating 10.043 million jobs net of labor force growth that at the current rate would take 7.5 years (18.315 million minus 0.05(165.433 million) = 10.043 million divided by 1.346, using LF PART 66.2% and Total UEM in Table I-4). These calculations assume that there are no more recessions, defying United States economic history with periodic contractions of economic activity when unemployment increases sharply. The number employed in Feb 2015 was 147.118 million (NSA) or 0.197 million fewer people with jobs relative to the peak of 147.315 million in Jul 2007 while the civilian noninstitutional population of ages 16 years and over increased from 231.958 million in Jul 2007 to 249.899 million in Feb 2015 or by 17.941 million. The number employed decreased 0.1 percent from Jul 2007 to Feb 2015 while the noninstitutional civilian population of ages of 16 years and over, or those available for work, increased 7.7 percent. The ratio of employment to population in Jul 2007 was 63.5 percent (147.315 million employment as percent of population of 231.958 million). The same ratio in Feb 2015 would result in 158.686 million jobs (0.635 multiplied by noninstitutional civilian population of 249.899 million). There are effectively 11.568 million fewer jobs in Feb 2015 than in Jul 2007, or 158.686 million minus 147.118 million. There is actually not sufficient job creation in merely absorbing new entrants in the labor force because of those dropping from job searches, worsening the stock of unemployed or underemployed in involuntary part-time jobs.
There is current interest in past theories of “secular stagnation.” Alvin H. Hansen (1939, 4, 7; see Hansen 1938, 1941; for an early critique see Simons 1942) argues:
“Not until the problem of full employment of our productive resources from the long-run, secular standpoint was upon us, were we compelled to give serious consideration to those factors and forces in our economy which tend to make business recoveries weak and anaemic (sic) and which tend to prolong and deepen the course of depressions. This is the essence of secular stagnation-sick recoveries which die in their infancy and depressions which feed on them-selves and leave a hard and seemingly immovable core of unemployment. Now the rate of population growth must necessarily play an important role in determining the character of the output; in other words, the com-position of the flow of final goods. Thus a rapidly growing population will demand a much larger per capita volume of new residential building construction than will a stationary population. A stationary population with its larger proportion of old people may perhaps demand more personal services; and the composition of consumer demand will have an important influence on the quantity of capital required. The demand for housing calls for large capital outlays, while the demand for personal services can be met without making large investment expenditures. It is therefore not unlikely that a shift from a rapidly growing population to a stationary or declining one may so alter the composition of the final flow of consumption goods that the ratio of capital to output as a whole will tend to decline.”
The argument that anemic population growth causes “secular stagnation” in the US (Hansen 1938, 1939, 1941) is as misplaced currently as in the late 1930s (for early dissent see Simons 1942). There is currently population growth in the ages of 16 to 24 years but not enough job creation and discouragement of job searches for all ages (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html). The proper explanation is not in secular stagnation but in cyclically slow growth. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IVQ2014 would have accumulated to 23.0 percent. GDP in IVQ2014 would be $18,438.0 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,144.3 billion than actual $16,293.7 billion. There are about two trillion dollars of GDP less than at trend, explaining the 27.2 million unemployed or underemployed equivalent to actual unemployment of 16.5 percent of the effective labor force (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-risk.html). US GDP in IVQ2014 is 11.6 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,293.7 billion in IVQ2014 or 8.7 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Jan 1919 to Jan 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 124.8993 in Jan 2015. The actual index NSA in Jan 2015 is 99.8883, which is 20.0 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014, raising the index at trend to 117.3927 in Jan 2015. The output of manufacturing at 99.8883 in Jan 2015 is 14.9 percent below trend under this alternative calculation.
Table I-8, US, Monthly Change in Jobs, Number SA
| Month | 1981 | 1982 | 1983 | 2008 | 2009 | 2010 | Private |
| Jan | 94 | -326 | 224 | 15 | -796 | 32 | 23 |
| Feb | 68 | -5 | -75 | -87 | -703 | -68 | -53 |
| Mar | 105 | -130 | 172 | -79 | -824 | 161 | 119 |
| Apr | 73 | -280 | 276 | -213 | -684 | 247 | 196 |
| May | 10 | -45 | 277 | -183 | -355 | 518 | 91 |
| Jun | 197 | -243 | 379 | -172 | -467 | -130 | 126 |
| Jul | 112 | -342 | 418 | -210 | -325 | -64 | 107 |
| Aug | -36 | -158 | -308 | -259 | -217 | -39 | 110 |
| Sep | -87 | -181 | 1115 | -452 | -227 | -49 | 124 |
| Oct | -99 | -277 | 271 | -476 | -201 | 248 | 198 |
| Nov | -209 | -123 | 353 | -765 | -6 | 121 | 131 |
| Dec | -278 | -14 | 356 | -696 | -283 | 89 | 110 |
| 1984 | 2011 | Private | |||||
| Jan | 446 | 75 | 77 | ||||
| Feb | 481 | 167 | 218 | ||||
| Mar | 275 | 206 | 225 | ||||
| Apr | 363 | 321 | 330 | ||||
| May | 308 | 103 | 160 | ||||
| Jun | 379 | 185 | 186 | ||||
| Jul | 313 | 117 | 190 | ||||
| Aug | 242 | 128 | 137 | ||||
| Sep | 310 | 223 | 287 | ||||
| Oct | 286 | 183 | 166 | ||||
| Nov | 349 | 146 | 174 | ||||
| Dec | 128 | 226 | 246 | ||||
| 1985 | 2012 | Private | |||||
| Jan | 266 | 380 | 381 | ||||
| Feb | 124 | 247 | 249 | ||||
| Mar | 346 | 216 | 218 | ||||
| Apr | 196 | 87 | 110 | ||||
| May | 274 | 113 | 122 | ||||
| Jun | 146 | 35 | 56 | ||||
| Jul | 190 | 177 | 154 | ||||
| Aug | 193 | 188 | 160 | ||||
| Sep | 203 | 144 | 164 | ||||
| Oct | 188 | 213 | 240 | ||||
| Nov | 209 | 164 | 186 | ||||
| Dec | 167 | 293 | 275 | ||||
| 1986 | 2013 | Private | |||||
| Jan | 125 | 205 | 220 | ||||
| Feb | 107 | 314 | 297 | ||||
| Mar | 94 | 115 | 139 | ||||
| Apr | 187 | 187 | 194 | ||||
| May | 127 | 219 | 225 | ||||
| Jun | -94 | 127 | 172 | ||||
| Jul | 318 | 164 | 162 | ||||
| Aug | 114 | 256 | 213 | ||||
| Sep | 347 | 150 | 168 | ||||
| Oct | 186 | 225 | 235 | ||||
| Nov | 186 | 317 | 303 | ||||
| Dec | 205 | 109 | 124 | ||||
| 1987 | 2014 | Private | |||||
| Jan | 172 | 166 | 183 | ||||
| Feb | 232 | 188 | 175 | ||||
| Mar | 249 | 225 | 223 | ||||
| Apr | 338 | 330 | 313 | ||||
| May | 226 | 236 | 238 | ||||
| Jun | 172 | 286 | 272 | ||||
| Jul | 347 | 249 | 243 | ||||
| Aug | 171 | 213 | 209 | ||||
| Sep | 228 | 250 | 235 | ||||
| Oct | 492 | 221 | 218 | ||||
| Nov | 232 | 423 | 414 | ||||
| Dec | 294 | 329 | 319 | ||||
| 1988 | 2015 | Private | |||||
| Jan | 94 | 239 | 237 | ||||
| Feb | 453 | 295 | 288 | ||||
| Mar | 276 | ||||||
| Apr | 245 | ||||||
| May | 229 | ||||||
| Jun | 363 | ||||||
| Jul | 222 | ||||||
| Aug | 124 | ||||||
| Sep | 339 | ||||||
| Oct | 268 | ||||||
| Nov | 339 | ||||||
| Dec | 290 |
Source: US Bureau of Labor Statistics
Charts numbered from I-38 to I-41 from the database of the Bureau of Labor Statistics provide a comparison of payroll survey data for the contractions and expansions in the 1980s and after 2007. Chart I-38 provides total nonfarm payroll jobs from 2001 to 2013. The sharp decline in total nonfarm jobs during the contraction after 2007 has been followed by initial stagnation and then inadequate growth in 2012 and 2013-2015 while population growth continued.
Chart I-38, US, Total Nonfarm Payroll Jobs SA 2001-2015
Source: US Bureau of Labor Statistics
Chart I-39 provides total nonfarm jobs SA from 1979 to 1989. Recovery is strong throughout the decade with the economy growing at trend over the entire economic cycle.
Chart I-39, US, Total Nonfarm Payroll Jobs SA 1979-1989
Source: US Bureau of Labor Statistics
Most job creation in the US is by the private sector. Chart I-40 shows the sharp destruction of private payroll jobs during the contraction after 2007. There has been growth after 2010 but insufficient to recover higher levels of employment prevailing before the contraction. At current rates, recovery of employment may spread over several years in contrast with past expansions of the business cycle in the US.
Chart I-40, US, Total Private Payroll Jobs SA 2001-2015
Source: US Bureau of Labor Statistics
In contrast, growth of private payroll jobs in the US recovered vigorously during the expansion in 1983 through 1985, as shown in Chart I-41. Rapid growth of creation of private jobs continued throughout the 1980s.
Chart I-41, US, Total Private Payroll Jobs SA 1979-1989
Source: US Bureau of Labor Statistics
Types of jobs created, and not only the pace of job creation, may be important. Aspects of growth of payroll jobs from Feb 2014 to Feb 2015, not seasonally adjusted (NSA), are in Table I-9. Total nonfarm employment increased by 3,309,000 (row A, column Change), consisting of growth of total private employment by 3,218,000 (row B, column Change) and increase by 91,000 of government employment (row C, column Change). Monthly average growth of private payroll employment has been 268,167, which is mediocre relative to 24 to 30 million in job stress, while total nonfarm employment has grown on average by only 267,667 per month, which does not significantly reduce job stress with 155,250 new entrants per month in the labor force. These monthly rates of job creation net of the demands of new entrants in the labor force perpetuate unemployment and underemployment. Manufacturing employment increased by 216,000, at the monthly rate of 18,000 while private service providing employment grew by 2,659,000, at the monthly rate of 221,853. An important feature in Table I-9 is that jobs in professional and business services increased by 666,000 with temporary help services increasing by 147,000. This episode of jobless recovery is characterized by part-time jobs and creation of jobs that are inferior to those that have been lost. Monetary and fiscal stimuli fail to increase consumption in a fractured job market. The segment leisure and hospitality added 507,000 jobs in 12 months. An important characteristic is that the loss of government jobs has stabilized in federal government with increase of 4,000 jobs while states added 29,000 jobs and local government added 58,000 jobs. Local government provides the bulk of government jobs, 14.274 million, while federal government provides 2.716 million and states government 5.211 million.
Table I-9, US, Employees in Nonfarm Payrolls Not Seasonally Adjusted, in Thousands
| Feb 2014 | Feb 2015 | Change | |
| A Total Nonfarm | 136,257 | 139,566 | 3,309 |
| B Total Private | 114,147 | 117,365 | 3,218 |
| B1 Goods Producing | 18,491 | 19,050 | 559 |
| B1a Manufacturing | 12,019 | 12,235 | 216 |
| B2 Private service providing | 95,656 | 98,315 | 2,659 |
| B2a Wholesale Trade | 5,739 | 5,854 | 115 |
| B2b Retail Trade | 14,946 | 15,260 | 314 |
| B2c Transportation & Warehousing | 4,512 | 4,714 | 202 |
| B2d Financial Activities | 7,879 | 8,029 | 150 |
| B2e Professional and Business Services | 18,562 | 19,228 | 666 |
| B2e1 Temporary help services | 2,580 | 2,727 | 147 |
| B2f Health Care & Social Assistance | 17,845 | 18,321 | 476 |
| B2g Leisure & Hospitality | 13,908 | 14,415 | 507 |
| C Government | 22,110 | 22,201 | 91 |
| C1 Federal | 2,712 | 2,716 | 4 |
| C2 State | 5,182 | 5,211 | 29 |
| C3 Local | 14,216 | 14,274 | 58 |
Note: A = B+C, B = B1 + B2, C=C1 + C2 + C3
Source: US Bureau of Labor Statistics
Greater detail on the types of jobs created is provided in Table I-10 with data for Jan 2015 and
Feb 2015. Strong seasonal effects are shown by the significant difference between seasonally adjusted (SA) and not-seasonally-adjusted (NSA) data. The purpose of adjusting for seasonality is to isolate nonseasonal effects. The 295,000 SA total nonfarm jobs created in Feb 2015 relative to Jan 2015 actually correspond to increase of 903,000 jobs NSA, as shown in row A. Most of this difference in Jan 2015 is due to the necessary benchmark and seasonal adjustments in the beginning of every year. The 288,000 total private payroll jobs SA created in Feb 2015 relative to Jan 2015 actually correspond to increase of 467,000 jobs NSA. The analysis of NSA job creation in the prior Table I-9 does show improvement over the 12 months ending in Feb 2015 that is not clouded by seasonal variations but is inadequate number of jobs created. In fact, the 12-month rate of job creation without seasonal adjustment is stronger indication of marginal improvement in the US job market but that is insufficient in even making a dent in about 30 million people unemployed or underemployed. Benchmark and seasonal adjustments affect comparability of data over time.
Table I-10, US, Employees on Nonfarm Payrolls and Selected Industry Detail, Thousands, SA and NSA
| Jan 2015 SA | Feb 2015 SA | ∆ | Jan 2015 NSA | Feb 2015 NSA | ∆ | |
| A Total Nonfarm | 140,831 | 141,126 | 295 | 138,663 | 139,566 | 903 |
| B Total Private | 118,927 | 119,215 | 288 | 116,898 | 117,365 | 467 |
| B1 Goods Producing | 19,553 | 19,582 | 29 | 19,033 | 19,050 | 17 |
| B1a Constr. | 6,324 | 6,353 | 29 | 5,926 | 5,935 | 9 |
| B Mfg | 12,322 | 12,330 | 22 | 12,214 | 12,235 | 21 |
| B2 Private Service Providing | 99,374 | 99,633 | 259 | 97,865 | 98,315 | 450 |
| B2a Wholesale Trade | 5,889 | 5,901 | 12 | 5,838 | 5,854 | 16 |
| B2b Retail Trade | 15,525 | 15,557 | 32 | 15,429 | 15,260 | -168 |
| B2c Couriers & Mess. | 613 | 625 | 12 | 628 | 626 | -2 |
| B2d Health-care & Social Assistance | 18,330 | 18,363 | 33 | 18,291 | 18,321 | 30 |
| B2De Profess. & Business Services | 19,449 | 19,500 | 51 | 19,112 | 19,228 | 116 |
| B2De1 Temp Help Services | 2,850 | 2,842 | -8 | 2,731 | 2,727 | -4 |
| B2f Leisure & Hospit. | 14,987 | 15,053 | 66 | 14,274 | 14,415 | 141 |
Notes: ∆: Absolute Change; Constr.: Construction; Mess.: Messengers; Temp: Temporary; Hospit.: Hospitality. SA aggregates do not add because of seasonal adjustment.
Source: US Bureau of Labor Statistics
Chart I-42, US, Output of Durable Manufacturing, 1972-2015
Source: Board of Governors of the Federal Reserve
http://www.federalreserve.gov/releases/g17/Current/default.htm
Manufacturing jobs not seasonally adjusted increased 216,000 from Feb 2014 to
Feb 2015 or at the average monthly rate of 18,000. There are effects of the weaker economy and international trade together with the yearly adjustment of labor statistics. Industrial production increased 0.2 percent in Jan 2015 and decreased 0.3 percent in Dec 2014 after increasing 1.1 percent in Nov 2014, with all data seasonally adjusted. The Federal Reserve completed its annual revision of industrial production and capacity utilization on Mar 28, 2014 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm). The report of the Board of Governors of the Federal Reserve System states (http://www.federalreserve.gov/releases/g17/Current/default.htm):
“Industrial production increased 0.2 percent in January after decreasing 0.3 percent in December. The rates of change in output for September through December are all slightly lower than previously published; even so, production is estimated to have advanced at an annual rate of 4.3 percent in the fourth quarter of last year. In January, manufacturing output moved up 0.2 percent and was 5.6 percent above its year-earlier level. The index for mining decreased 1.0 percent, with the decline more than accounted for by a substantial drop in the index for oil and gas well drilling and related support activities. The output of utilities increased 2.3 percent. At 106.2 percent of its 2007 average, total industrial production in January was 4.8 percent above its level of a year earlier. Capacity utilization for the industrial sector was unchanged in January at 79.4 percent, a rate that is 0.7 percentage point below its long-run (1972–2014) average.”
In the six months ending in Jan 2015, United States national industrial production accumulated increase of 1.6 percent at the annual equivalent rate of 3.2 percent, which is lower than growth of 4.8 percent in the 12 months ending in Jan 2015. Excluding growth of 1.1 percent in Nov 2014, growth in the remaining five months from Aug 2014 to Jan 2015 accumulated to 0.5 percent or 1.2 percent annual equivalent. Industrial production declined in two of the past six months. Industrial production expanded at annual equivalent 4.1 percent in the most recent quarter from Nov 2014 to Jan 2015 and at 2.4 percent in the prior quarter Aug to Oct 2014. Business equipment accumulated growth of 1.4 percent in the six months from Aug 2014 to Jan 2015 at the annual equivalent rate of 2.8 percent, which is lower than growth of 7.3 percent in the 12 months ending in Jan 2015. The Fed analyzes capacity utilization of total industry in its report (http://www.federalreserve.gov/releases/g17/Current/default.htm): “Capacity utilization for the industrial sector was unchanged in January at 79.4 percent, a rate that is 0.7 percentage point below its long-run (1972–2014) average.” United States industry apparently decelerated to a lower growth rate followed by possible acceleration and oscillating growth in past months.
Manufacturing fell 21.9 from the peak in Jun 2007 to the trough in Apr 2009 and increased by 25.2 percent from the trough in Apr 2009 to Dec 2014. Manufacturing grew 24.2 percent from the trough in Apr 2009 to Jan 2015. Manufacturing output in Jan 2015 is 3.1 percent below the peak in Jun 2007. Growth at trend in the entire cycle from IVQ2007 to IVQ2014 would have accumulated to 23.0 percent. GDP in IVQ2014 would be $18,438.0 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,144.3 billion than actual $16,293.7 billion. There are about two trillion dollars of GDP less than at trend, explaining the 27.2 million unemployed or underemployed equivalent to actual unemployment of 16.5 percent of the effective labor force (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/financial-risks-twenty-six-million.html). US GDP in IVQ2014 is 11.6 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,311.6 billion in IVQ2014 or 8.8 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Jan 1919 to Jan 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 124.8993 in Jan 2015. The actual index NSA in Jan 2015 is 99.8883, which is 20.0 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014, raising the index at trend to 117.3927 in Jan 2015. The output of manufacturing at 99.8883 in Jan 2015 is 14.9 percent below trend under this alternative calculation.
Table I-13 provides national income by industry without capital consumption adjustment (WCCA). “Private industries” or economic activities have share of 87.4 percent in IIIQ2014. Most of US national income is in the form of services. In Feb 2015, there were 139.566 million nonfarm jobs NSA in the US, according to estimates of the establishment survey of the Bureau of Labor Statistics (BLS) (http://www.bls.gov/news.release/empsit.nr0.htm Table B-1). Total private jobs of 117.365 million NSA in Feb 2015 accounted for 84.1 percent of total nonfarm jobs of 139.566 million, of which 12.235 million, or 10.4 percent of total private jobs and 8.8 percent of total nonfarm jobs, were in manufacturing. Private service-providing jobs were 98.315 million NSA in Feb 2015, or 70.4 percent of total nonfarm jobs and 83.8 percent of total private-sector jobs. Manufacturing has share of 11.2 percent in US national income in IIIQ2014 and durable goods 6.5 percent, as shown in Table I-13. Most income in the US originates in services. Subsidies and similar measures designed to increase manufacturing jobs will not increase economic growth and employment and may actually reduce growth by diverting resources away from currently employment-creating activities because of the drain of taxation.
Table I-13, US, National Income without Capital Consumption Adjustment by Industry, Seasonally Adjusted Annual Rates, Billions of Dollars, % of Total
| SAAR | % Total | SAAR IIIQ2014 | % Total | |
| National Income WCCA | 15,222.0 | 100.0 | 15,494.0 | 100.0 |
| Domestic Industries | 15,008.6 | 98.6 | 15,264.1 | 98.5 |
| Private Industries | 13,287.8 | 87.3 | 13,538.5 | 87.4 |
| Agriculture | 179.0 | 1.2 | 167.6 | 1.1 |
| Mining | 261.4 | 1.7 | 273.9 | 1.8 |
| Utilities | 215.6 | 1.4 | 221.8 | 1.4 |
| Construction | 670.3 | 4.4 | 681.7 | 4.4 |
| Manufacturing | 1712.8 | 11.3 | 1743.0 | 11.2 |
| Durable Goods | 975.4 | 6.4 | 1,002.2 | 6.5 |
| Nondurable Goods | 737.4 | 4.8 | 740.8 | 4.8 |
| Wholesale Trade | 917.7 | 6.0 | 944.4 | 6.1 |
| Retail Trade | 1048.0 | 6.9 | 1055.1 | 6.8 |
| Transportation & WH | 478.1 | 3.1 | 479.8 | 3.1 |
| Information | 580.3 | 3.8 | 574.9 | 3.7 |
| Finance, Insurance, RE | 2642.8 | 17.4 | 2794.1 | 18.0 |
| Professional & Business Services | 2064.5 | 13.6 | 2066.4 | 13.3 |
| Education, Health Care | 1484.3 | 9.8 | 1494.6 | 9.6 |
| Arts, Entertainment | 605.0 | 4.0 | 609.4 | 3.9 |
| Other Services | 428.0 | 2.8 | 431.9 | 2.8 |
| Government | 1720.8 | 11.3 | 1725.6 | 11.1 |
| Rest of the World | 213.5 | 1.4 | 229.9 | 1.5 |
Notes: SSAR: Seasonally-Adjusted Annual Rate; WCCA: Without Capital Consumption Adjustment by Industry; WH: Warehousing; RE, includes rental and leasing: Real Estate; Art, Entertainment includes recreation, accommodation and food services; BS: business services
Source: US Bureau of Economic Analysis
http://www.bea.gov/iTable/index_nipa.cfm
http://www.bea.gov/iTable/index_nipa.cfm
The NBER dates recessions in the US from peaks to troughs as: IQ80 to IIIQ80, IIIQ81 to IV82 and IVQ07 to IIQ09 (http://www.nber.org/cycles/cyclesmain.html). Table I-12 provides total annual level nonfarm employment in the US for the 1980s and the 2000s, which is different from 12-month comparisons. Nonfarm jobs rose by 4.859 million from 1982 to 1984, or 5.4 percent, and continued rapid growth in the rest of the decade. In contrast, nonfarm jobs are down by 7.661 million in 2010 relative to 2007 and fell by 958,000 in 2010 relative to 2009 even after six quarters of GDP growth. Monetary and fiscal stimuli have failed in increasing growth to rates required for mitigating job stress. The initial growth impulse reflects a flatter growth curve in the current expansion. Nonfarm jobs declined from 137.936 million in 2007 to 136.393 million in 2013, by 1.543 million or 1.1 percent. Nonfarm jobs increased from 137.936 million in 2007 to 139.042 million in 2014, by 1.106 million or 0.8 percent. The US noninstitutional population or in condition to work increased from 231.867 million in 2007 to 247.947 million in 2014, by 16.080 million or 6.9 percent. The ratio of nonfarm jobs of 137.936 million in 2007 to the noninstitutional population of 231.867 was 59.5. Nonfarm jobs in 2014 corresponding to the ratio of 59.5 of nonfarm jobs/noninstitutional population would be 147.528 million (0.595x247.947). The difference between actual nonfarm jobs of 139.042 million in 2014 and nonfarm jobs of 147.528 million that are equivalent to 59.5 percent of the noninstitutional population as in 2007 is 8.486 million. The proper explanation for this loss of work opportunities is not in secular stagnation but in cyclically slow growth. The US maintained growth at 3.0 percent on average over entire cycles with expansions at higher rates compensating for contractions. Growth at trend in the entire cycle from IVQ2007 to IVQ2014 would have accumulated to 23.0 percent. GDP in IVQ2014 would be $18,438.0 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2,144.3 billion than actual $16,293.7 billion. There are about two trillion dollars of GDP less than at trend, explaining the 27.2 million unemployed or underemployed equivalent to actual unemployment of 16.5 percent of the effective labor force (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2015/01/fluctuating-valuations-of-risk.html). US GDP in IVQ2014 is 11.6 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,293.7 billion in IVQ2014 or 8.7 percent at the average annual equivalent rate of 1.2 percent. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. The US missed the opportunity to grow at higher rates during the expansion and it is difficult to catch up because growth rates in the final periods of expansions tend to decline. The US missed the opportunity for recovery of output and employment always afforded in the first four quarters of expansion from recessions. Zero interest rates and quantitative easing were not required or present in successful cyclical expansions and in secular economic growth at 3.0 percent per year and 2.0 percent per capita as measured by Lucas (2011May). There is cyclical uncommonly slow growth in the US instead of allegations of secular stagnation. There is similar behavior in manufacturing. There is classic research on analyzing deviations of output from trend (see for example Schumpeter 1939, Hicks 1950, Lucas 1975, Sargent and Sims 1977). The long-term trend is growth at average 3.3 percent per year from Jan 1919 to Jan 2015. Growth at 3.3 percent per year would raise the NSA index of manufacturing output from 99.2392 in Dec 2007 to 124.8993 in Jan 2015. The actual index NSA in Jan 2015 is 99.8883, which is 20.0 percent below trend. Manufacturing output grew at average 2.4 percent between Dec 1986 and Dec 2014, raising the index at trend to 117.3927 in Jan 2015. The output of manufacturing at 99.8883 in Jan 2015 is 14.9 percent.
Table I-12, US, Total Nonfarm Employment in Thousands
| Year | Total Nonfarm | Year | Total Nonfarm |
| 1980 | 90,533 | 2000 | 132,019 |
| 1981 | 91,297 | 2001 | 132,074 |
| 1982 | 89,689 | 2002 | 130,628 |
| 1983 | 90,295 | 2003 | 130,318 |
| 1984 | 94,548 | 2004 | 131,749 |
| 1985 | 97,532 | 2005 | 134,005 |
| 1986 | 99,500 | 2006 | 136,398 |
| 1987 | 102,116 | 2007 | 137,936 |
| 1988 | 105,378 | 2008 | 137,170 |
| 1989 | 108,051 | 2009 | 131,233 |
| 1990 | 109,527 | 2010 | 130,275 |
| 1991 | 108,427 | 2011 | 131,842 |
| 1992 | 108,802 | 2012 | 134,104 |
| 1993 | 110,935 | 2013 | 136,393 |
| 1994 | 114,398 | 2014 | 139,042 |
Source: US Bureau of Labor Statistics http://www.bls.gov/
Chart I-43 provides annual nonfarm jobs in the US not seasonally adjusted from 2000 to 2014. Cyclically slow growth in the expansion since IIIQ2009 has not been sufficient to recover nonfarm jobs. Because of population growth, there are 8.486 million fewer nonfarm jobs in the US in 2014 than in 2007.
Chart I-43, US, Annual Nonfarm Jobs, NSA, Thousands, 2000-2014
Source: US Bureau of Labor Statistics http://www.bls.gov/
Chart I-44 provides annual nonfarm jobs in the US not seasonally adjusted from 1980 to 1993. Much more rapid cyclical growth as in other expansions historically allowed steady and rapid growth of nonfarm job opportunities even with similarly dynamic population growth.
Chart I-44, US, Annual Nonfarm Jobs, NSA, Thousands, 1980-1994
Source: US Bureau of Labor Statistics http://www.bls.gov
The highest average yearly percentage of unemployed to the labor force since 1940 was 14.6 percent in 1940 followed by 9.9 percent in 1941, 8.5 percent in 1975, 9.7 percent in 1982 and 9.6 percent in 1983 (ftp://ftp.bls.gov/pub/special.requests/lf/aa2006/pdf/cpsaat1.pdf). The rate of unemployment remained at high levels in the 1930s, rising from 3.2 percent in 1929 to 22.9 percent in 1932 in one estimate and 23.6 percent in another with real wages increasing by 16.4 percent (Margo 1993, 43; see Pelaez and Pelaez, Regulation of Banks and Finance (2009b), 214-5). There are alternative estimates of 17.2 percent or 9.5 percent for 1940 with real wages increasing by 44 percent. Employment declined sharply during the 1930s. The number of hours worked remained in 1939 at 29 percent below the level of 1929 (Cole and Ohanian 1999). Private hours worked fell in 1939 to 25 percent of the level in 1929. The policy of encouraging collusion through the National Industrial Recovery Act (NIRA), to maintain high prices, together with the National Labor Relations Act (NLRA), to maintain high wages, prevented the US economy from recovering employment levels until Roosevelt abandoned these policies toward the end of the 1930s (for review of the literature analyzing the Great Depression see Pelaez and Pelaez, Regulation of Banks and Finance (2009b), 198-217).
The Bureau of Labor Statistics (BLS) makes yearly revisions of its establishment survey (Harris 2011BA):
“With the release of data for January 2011, the Bureau of Labor Statistics (BLS) introduced its annual revision of national estimates of employment, hours, and earnings from the Current Employment Statistics (CES) monthly survey of nonfarm establishments. Each year, the CES survey realigns its sample-based estimates to incorporate universe counts of employment—a process known as benchmarking. Comprehensive counts of employment, or benchmarks, are derived primarily from unemployment insurance (UI) tax reports that nearly all employers are required to file with State Workforce Agencies.”
The number of not seasonally adjusted total private jobs in the US in Dec 2010 is 108.464 million, declining to 106.079 million in Jan 2011, or by 2.385 million, because of the adjustment of a different benchmark and not actual job losses. The not seasonally adjusted number of total private jobs in Dec 1984 is 80.250 million, declining to 78.704 million in Jan 1985, or by 1.546 million for the similar adjustment. Table I-13 attempts to measure job losses and gains in the recessions and expansions of 1981-1985 and 2007-2011. The final ten rows provide job creation from May 1983 to May 1984 and from May 2010 to May 2011, that is, at equivalent stages of the recovery from two comparable strong recessions. The row “Change ∆%” for May 1983 to May 1984 shows an increase of total nonfarm jobs by 4.9 percent and of 5.9 percent for total private jobs. The row “Change ∆%” for May 2010 to May 2011 shows an increase of total nonfarm jobs by 0.7 percent and of 1.7 percent for total private jobs. The last two rows of Table 7 provide a calculation of the number of jobs that would have been created from May 2010 to May 2011 if the rate of job creation had been the same as from May 1983 to May 1984. If total nonfarm jobs had grown between May 2010 and May 2011 by 4.9 percent, as between May 1983 and May 1984, 6.409 million jobs would have been created in the past 12 months for a difference of 5.457 million more total nonfarm jobs relative to 0.952 million jobs actually created. If total private jobs had grown between May 2010 and May 2011 by 5.9 percent as between May 1983 and May 1984, 6.337 million private jobs would have been created for a difference of 4.539 million more total private jobs relative to 1.798 million jobs actually created.
Table I-13, US, Total Nonfarm and Total Private Jobs Destroyed and Subsequently Created in Two Recessions IIIQ1981-IVQ1982 and IVQ2007-IIQ2009, Thousands and Percent
| Total Nonfarm Jobs | Total Private Jobs | |
| 06/1981 # | 92,288 | 75,969 |
| 11/1982 # | 89,482 | 73,260 |
| Change # | -2,806 | -2,709 |
| Change ∆% | -3.0 | -3.6 |
| 12/1982 # | 89,383 | 73,185 |
| 05/1984 # | 94,471 | 78,049 |
| Change # | 5,088 | 4,864 |
| Change ∆% | 5.7 | 6.6 |
| 11/2007 # | 139,090 | 116,291 |
| 05/2009 # | 131,626 | 108,601 |
| Change % | -7,464 | -7,690 |
| Change ∆% | -5.4 | -6.6 |
| 12/2009 # | 130,178 | 107,338 |
| 05/2011 # | 131,753 | 108,494 |
| Change # | 1,575 | 1,156 |
| Change ∆% | 1.2 | 1.1 |
| 05/1983 # | 90,005 | 73,667 |
| 05/1984 # | 94,471 | 78,049 |
| Change # | 4,466 | 4,382 |
| Change ∆% | 4.9 | 5.9 |
| 05/2010 # | 130,801 | 107,405 |
| 05/2011 # | 131,753 | 109,203 |
| Change # | 952 | 1,798 |
| Change ∆% | 0.7 | 1.7 |
| Change # by ∆% as in 05/1984 to 05/1985 | 6,409* | 6,337** |
| Difference in Jobs that Would Have Been Created | 5,457 = | 4,539 = |
*[(130,801x1.049)-130,801] = 6,409 thousand
**[(107,405)x1.059 – 107,405] = 6,337 thousand
Source: http://www.bls.gov/data/
IB Stagnating Real Wages. The wage bill is the product of average weekly hours times the earnings per hour. Table IB-1 provides the estimates by the Bureau of Labor Statistics (BLS) of earnings per hour seasonally adjusted, increasing from $24.30/hour in Feb 2014 to $24.78/hour in Feb 2015, or by 2.0 percent. There has been disappointment about the pace of wage increases because of rising food and energy costs that inhibit consumption and thus sales and similar concern about growth of consumption that accounts for about 68.4 percent of GDP (Table I-10 at http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html). Growth of consumption by decreasing savings by means of controlling interest rates in what is called financial repression may not be lasting and sound for personal finances (See Pelaez and Pelaez, Globalization and the State, Vol. II (2008c), 81-6, Pelaez (1975), http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html and earlier http://cmpassocregulationblog.blogspot.com/2014/12/valuations-of-risk-financial-assets.html http://cmpassocregulationblog.blogspot.com/2014/11/valuations-of-risk-financial-assets.html http://cmpassocregulationblog.blogspot.com/2014/11/growth-uncertainties-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/09/geopolitical-and-financial-risks.html and earlier http://cmpassocregulationblog.blogspot.com/2014/08/fluctuating-financial-valuations.html http://cmpassocregulationblog.blogspot.com/2014/06/financial-indecision-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/06/financial-instability-mediocre-cyclical.html and earlier http://cmpassocregulationblog.blogspot.com/2014/03/financial-uncertainty-mediocre-cyclical.html
http://cmpassocregulationblog.blogspot.com/2014/02/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2013/12/collapse-of-united-states-dynamism-of.html http://cmpassocregulationblog.blogspot.com/2013/11/global-financial-risk-mediocre-united.html http://cmpassocregulationblog.blogspot.com/2013/09/mediocre-and-decelerating-united-states.html
http://cmpassocregulationblog.blogspot.com/2013/09/increasing-interest-rate-risk.html http://cmpassocregulationblog.blogspot.com/2013/08/risks-of-steepening-yield-curve-and.html http://cmpassocregulationblog.blogspot.com/2013/06/tapering-quantitative-easing-policy-and.html
http://cmpassocregulationblog.blogspot.com/2013/06/mediocre-united-states-economic-growth.html
http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states.html http://cmpassocregulationblog.blogspot.com/2013/03/mediocre-gdp-growth-at-16-to-20-percent.html http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states_24.html http://cmpassocregulationblog.blogspot.com/2012/12/mediocre-and-decelerating-united-states.html http://cmpassocregulationblog.blogspot.com/2012/09/historically-sharper-recoveries-from.html http://cmpassocregulationblog.blogspot.com/2012/09/collapse-of-united-states-dynamism-of.html http://cmpassocregulationblog.blogspot.com/2012/07/recovery-without-jobs-stagnating-real.html http://cmpassocregulationblog.blogspot.com/2012/06/mediocre-recovery-without-jobs.html http://cmpassocregulationblog.blogspot.com/2012/04/mediocre-growth-with-high-unemployment.html http://cmpassocregulationblog.blogspot.com/2012/04/mediocre-economic-growth-falling-real.html http://cmpassocregulationblog.blogspot.com/2012/03/mediocre-economic-growth-flattening.html http://cmpassocregulationblog.blogspot.com/2012/01/mediocre-economic-growth-financial.html http://cmpassocregulationblog.blogspot.com/2011/12/slow-growth-falling-real-disposable.html http://cmpassocregulationblog.blogspot.com/2011/11/us-growth-standstill-falling-real.html http://cmpassocregulationblog.blogspot.com/2011/10/slow-growth-driven-by-reducing-savings.html). Average hourly earnings seasonally adjusted increased 0.1 percent from $24.75 in Jan 2015 to $24.78 in Feb 2015. Average private weekly earnings increased $21.47 from $835.92 in Feb 2015 to $857.39 in Feb 2015 or 2.6 percent and increased from $856.35 in Jan 2015 to $857.39 in Feb 2015 or 0.1 percent. The inflation-adjusted wage bill can only be calculated for Jan, which is the most recent month for which there are estimates of the consumer price index. Earnings per hour (not-seasonally-adjusted (NSA)) rose from $24.35 in Jan 2014 to $24.89 in Jan 2015 or by 2.2 percent (http://www.bls.gov/data/; see Table IB-3 below). Data NSA are more suitable for comparison over a year. Average weekly hours NSA were 34.0 in Jan 2014 and 34.2 in Jan 2015 (http://www.bls.gov/data/; see Table IB-2 below). The wage bill increased 2.8 percent in the 12 months ending in Jan 2015:
{[(wage bill in Jan 2015)/(wage bill in Jan 2014)]-1}100 =
{[($24.89x34.2)/($24.35x34.0)]-1]}100
= {[($851.24)/($827.90]-1}100 = 2.8%
CPI inflation was minus 0.1 percent in the 12 months ending in Jan 2015 (http://www.bls.gov/cpi/) for an inflation-adjusted wage-bill change of 0.1 percent :{[(1.028/0.999)-1]100 = 2.9 %} (see Table IB-5 below for Dec 2014 with minor rounding difference). The wage bill for Feb 2015 before inflation adjustment increased 2.6 percent relative to the wage bill for Feb 2014:
{[(wage bill in Feb 2015)/(wage bill in Feb 2014)]-1}100 =
{[($25.08x34.6)/($24.58x34.4)]-1]}100
= {[$867.77)/($845.55]-1}100 = 2.6%
Average hourly earnings increased 2.0 percent from Feb 2014 to Feb 2015 {[($25.08/$24.58) – 1]100 = 2.2%} while hours worked increased 0.3 percent {[(34.6/34.4) – 1]100 = 0.6%}. The increase of the wage bill is the product of the increase of hourly earnings of 2.0 percent and increase of hours worked of 0.6 percent {[(1.020x1.006) -1]100 = 2.5%}.
Energy and food price increases are similar to a “silent tax” that is highly regressive, harming the most those with lowest incomes. There are concerns that the wage bill would deteriorate in purchasing power because of renewed raw materials shocks in the form of increases in prices of commodities such as the 31.1 percent steady increase in the DJ-UBS Commodity Index from Jul 2, 2010 to Sep 2, 2011. The charts of four commodity price indexes by Bloomberg show steady increase since Jul 2, 2010 that was interrupted briefly only in Nov 2010 with the sovereign issues in Europe triggered by Ireland; in Mar 2011 by the earthquake and tsunami in Japan; and in the beginning of May 2011 by the decline in oil prices and sovereign risk difficulties in Europe (http://www.bloomberg.com/markets/commodities/futures/). Renewed risk aversion because of the sovereign risks in Europe had reduced the rate of increase of the DJ UBS commodity index to 10.2 percent on May 2, 2014, relative to Jul 2, 2010 (see Table VI-4) but there has been a shift in investor preferences into equities. Inflation has been rising in waves with carry trades driven by zero interest rates to commodity futures during periods of risk appetite with interruptions during risk aversion (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html). Inflation-adjusted wages fall sharply during carry trades from zero interest rates to long positions in commodity futures during periods of risk appetite.
Table IB-1, US, Earnings per Hour and Average Weekly Hours SA
| Earnings per Hour | Feb 2014 | Dec 2014 | Jan 2015 | Feb 2015 |
| Total Private | $24.30 | $24.62 | $24.75 | $24.78 |
| Goods Producing | $25.57 | $25.77 | $25.88 | $25.90 |
| Service Providing | $23.99 | $24.34 | $24.48 | $24.52 |
| Average Weekly Earnings | ||||
| Total Private | $835.92 | $851.85 | $856.35 | $857.39 |
| Goods Producing | $1,030.47 | $1,046.26 | $1,048.14 | $1,054.13 |
| Service Providing | $796.47 | $812.96 | $817.63 | $818.97 |
| Average Weekly Hours | ||||
| Total Private | 34.4 | 34.6 | 34.6 | 34.6 |
| Goods Producing | 40.3 | 40.6 | 40.5 | 40.7 |
| Service Providing | 33.2 | 33.4 | 33.4 | 33.4 |
Source: US Bureau of Labor Statistics
Average weekly hours in Table IB-2 fell from 34.9 in Dec 2007 at the beginning of the contraction to 33.8 in Jun 2009, which was the last month of the contraction. Average weekly hours rose to 34.4 in Dec 2011 and oscillated to 34.9 in Dec 2012 and 34.7 in Dec 2013. Average weekly hours of all employees decreased to 34.6 in Dec 2014 and 34.6 in Feb 2015.
Table IB-2, US, Average Weekly Hours of All Employees, NSA 2006-2014
| Year | Jan | Feb | Mar | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Annual |
| 2006 | 34.2 | 34.6 | 34.3 | 34.6 | 34.9 | 34.6 | 34.5 | 34.9 | 34.4 | 34.6 | |||
| 2007 | 34.1 | 34.1 | 34.3 | 34.7 | 34.4 | 34.7 | 34.9 | 34.7 | 35.0 | 34.5 | 34.5 | 34.9 | 34.6 |
| 2008 | 34.1 | 34.2 | 34.7 | 34.4 | 34.4 | 34.9 | 34.5 | 34.6 | 34.4 | 34.4 | 34.6 | 34.1 | 34.4 |
| 2009 | 33.8 | 34.2 | 33.9 | 33.6 | 33.7 | 33.8 | 33.8 | 34.3 | 33.7 | 33.8 | 34.2 | 33.9 | 33.9 |
| 2010 | 33.7 | 33.6 | 33.8 | 34.0 | 34.4 | 34.1 | 34.2 | 34.7 | 34.1 | 34.3 | 34.2 | 34.2 | 34.1 |
| 2011 | 34.2 | 34.0 | 34.1 | 34.2 | 34.6 | 34.4 | 34.4 | 34.4 | 34.4 | 34.8 | 34.3 | 34.4 | 34.4 |
| 2012 | 34.5 | 34.2 | 34.2 | 34.6 | 34.2 | 34.4 | 34.8 | 34.5 | 34.9 | 34.3 | 34.3 | 34.9 | 34.5 |
| 2013 | 34.0 | 34.2 | 34.3 | 34.3 | 34.3 | 34.9 | 34.3 | 34.5 | 34.9 | 34.4 | 34.4 | 34.7 | 34.4 |
| 2014 | 34.0 | 34.4 | 34.7 | 34.4 | 34.4 | 34.9 | 34.5 | 34.6 | 34.5 | 34.5 | 34.9 | 34.6 | 34.5 |
| 2015 | 34.2 | 34.6 |
Source: US Bureau of Labor Statistics
Chart IB-1 provides average weekly hours monthly from Mar 2006 to May 2014. Average weekly hours remained relatively stable in the period before the contraction and fell sharply during the contraction as business could not support lower production with the same labor input. Average weekly hours rose rapidly during the expansion; stabilized at a level below that prevailing before the contraction; and are around the level before the contraction.
Chart IB-1, US, Average Weekly Hours of All Employees, SA 2006-2014
Source: US Bureau of Labor Statistics
Calculations of inflation-adjusted average hourly earnings using BLS data are in Table IB-3. The final column of Table IB-3 (“12-Month Real ∆%”) provides inflation-adjusted average hourly earnings of all employees in the US. Average hourly earnings rose above inflation throughout the first nine months of 2007 just before the global recession that began in the final quarter of 2007 when average hourly earnings began to lose to inflation. In contrast, average hourly earnings of all US workers have risen less than inflation in four months in 2010 and in all but the first month in 2011 and the loss accelerated at 1.8 percent in Sep 2011, declining to a real loss of 1.1 percent in Feb 2012 and 0.6 percent in Mar 2012. There was a gain of 0.5 percent in Apr 2012 in inflation-adjusted average hourly earnings but another fall of 0.6 percent in May 2012 followed by increases of 0.3 percent in Jun and 1.0 percent in Jul 2012. Real hourly earnings stagnated in the 12 months ending in Aug 2012 with increase of only 0.1 percent, and increased 0.7 percent in the 12 months ending in Sep 2012. Real hourly earnings fell 1.3 percent in Oct 2012 and gained 1.0 percent in Dec 2012 but declined 0.3 percent in Jan 2013 and stagnated at change of 0.1 percent in Feb 2013. Real hourly earnings increased 0.4 percent in the 12 months ending in Mar 2013 and 0.2 percent in Apr 2013, increasing 0.6 percent in May 2013. In Jun 2013, real hourly earnings increased 1.0 percent relative to Jun 2012. Real hourly earnings fell 0.6 percent in the 12 months ending in Jul 2013 and increased 0.8 percent in the 12 months ending in Aug 2013. Real hourly earnings increased 1.2 percent in the 12 months ending in Oct 2013 and 1.0 percent in Nov 2013. Real hourly earnings increased 0.4 percent in the 12 months ending in Dec 2013. Real hourly earnings increased 0.4 percent in the 12 months ending in Jan 2014 and 1.7 percent in the 12 months ending in Feb 2014. Real hourly earnings increased 1.3 percent in the 12 months ending in Mar 2014. Real hourly earnings changed 0.0 percent in the 12 months ending in Apr 2014. Real hourly earnings stagnated at 0.0 percent in the 12 months ending in May 2014. Real hourly earnings fell 0.1 percent in the 12 months ending in Jun 2014. Real hourly earnings increased 0.1 percent in the 12 months ending in Jul 2014 and increased 0.5 percent in the 12 months ending in Aug 2014. Real hourly earnings fell 0.3 percent in the 12 months ending in Sep 2014 and increased 0.3 percent in the 12 months ending in Oct 2014. Real hourly earnings increased 1.5 percent in the 12 months ending in Nov 2014. Real hourly earnings increased 0.4 percent in the 12 months ending in Dec 2014 and increased 2.3 percent in the 12 months ending in Jan 2015. Real hourly earnings are oscillating in part because of world inflation waves caused by carry trades from zero interest rates to commodity futures (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html) and in part because of the collapse of hiring (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html) originating in weak economic growth (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html).
Table IB-3, US, Average Hourly Earnings Nominal and Inflation Adjusted, Dollars and % NSA
| AHE ALL | 12 Month- | ∆% 12 Month CPI | 12-Month | |
| 2007 | ||||
| Jan* | $20.69* | 4.2* | 2.1 | 2.1* |
| Feb* | $20.77* | 4.1* | 2.4 | 1.7* |
| Mar | $20.80 | 3.6 | 2.8 | 0.8 |
| Apr | $21.03 | 3.3 | 2.6 | 0.7 |
| May | $20.82 | 3.8 | 2.7 | 1.1 |
| Jun | $20.81 | 3.8 | 2.7 | 1.1 |
| Jul | $20.97 | 3.4 | 2.4 | 1.0 |
| Aug | $20.83 | 3.5 | 2.0 | 1.5 |
| Sep | $21.17 | 4.0 | 2.8 | 1.2 |
| Oct | $21.05 | 2.6 | 3.5 | -0.9 |
| Nov | $21.12 | 3.3 | 4.3 | -1.0 |
| Dec | $21.35 | 3.6 | 4.1 | -0.5 |
| 2010 | ||||
| Jan | $22.53 | 2.0 | 2.6 | -0.6 |
| Feb | $22.59 | 1.4 | 2.1 | -0.7 |
| Mar | $22.49 | 1.1 | 2.3 | -1.2 |
| Apr | $22.54 | 1.8 | 2.2 | -0.4 |
| May | $22.61 | 2.5 | 2.0 | 0.5 |
| Jun | $22.35 | 1.7 | 1.1 | 0.6 |
| Jul | $22.42 | 1.8 | 1.2 | 0.6 |
| Aug | $22.55 | 1.7 | 1.1 | 0.6 |
| Sep | $22.61 | 1.8 | 1.1 | 0.7 |
| Oct | $22.70 | 1.9 | 1.2 | 0.7 |
| Nov | $22.70 | 1.1 | 1.1 | 0.0 |
| Dec | $22.77 | 1.7 | 1.5 | 0.2 |
| 2011 | ||||
| Jan | $23.17 | 2.8 | 1.6 | 1.2 |
| Feb | $23.00 | 1.8 | 2.1 | -0.3 |
| Mar | $22.91 | 1.9 | 2.7 | -0.8 |
| Apr | $22.97 | 1.9 | 3.2 | -1.3 |
| May | $23.07 | 2.0 | 3.6 | -1.5 |
| Jun | $22.82 | 2.1 | 3.6 | -1.4 |
| Jul | $22.95 | 2.4 | 3.6 | -1.2 |
| Aug | $22.86 | 1.4 | 3.8 | -2.3 |
| Sep | $23.06 | 2.0 | 3.9 | -1.8 |
| Oct | $23.31 | 2.7 | 3.5 | -0.8 |
| Nov | $23.16 | 2.0 | 3.4 | -1.4 |
| Dec | $23.22 | 2.0 | 3.0 | -1.0 |
| 2012 | ||||
| Jan | $23.57 | 1.7 | 2.9 | -1.2 |
| Feb | $23.41 | 1.8 | 2.9 | -1.1 |
| Mar | $23.40 | 2.1 | 2.7 | -0.6 |
| Apr | $23.62 | 2.8 | 2.3 | 0.5 |
| May | $23.33 | 1.1 | 1.7 | -0.6 |
| Jun | $23.28 | 2.0 | 1.7 | 0.3 |
| Jul | $23.49 | 2.4 | 1.4 | 1.0 |
| Aug | $23.27 | 1.8 | 1.7 | 0.1 |
| Sep | $23.68 | 2.7 | 2.0 | 0.7 |
| Oct | $23.52 | 0.9 | 2.2 | -1.3 |
| Nov | $23.59 | 1.9 | 1.8 | 0.1 |
| Dec | $23.85 | 2.7 | 1.7 | 1.0 |
| 2013 | ||||
| Jan | $23.88 | 1.3 | 1.6 | -0.3 |
| Feb | $23.91 | 2.1 | 2.0 | 0.1 |
| Mar | $23.84 | 1.9 | 1.5 | 0.4 |
| Apr | $23.92 | 1.3 | 1.1 | 0.2 |
| May | $23.80 | 2.0 | 1.4 | 0.6 |
| Jun | $23.93 | 2.8 | 1.8 | 1.0 |
| Jul | $23.81 | 1.4 | 2.0 | -0.6 |
| Aug | $23.80 | 2.3 | 1.5 | 0.8 |
| Sep | $24.17 | 2.1 | 1.2 | 0.9 |
| Oct | $24.04 | 2.2 | 1.0 | 1.2 |
| Nov | $24.11 | 2.2 | 1.2 | 1.0 |
| Dec | $24.30 | 1.9 | 1.5 | 0.4 |
| 2014 | ||||
| Jan | $24.35 | 2.0 | 1.6 | 0.4 |
| Feb | $24.58 | 2.8 | 1.1 | 1.7 |
| Mar | $24.50 | 2.8 | 1.5 | 1.3 |
| Apr | $24.40 | 2.0 | 2.0 | 0.0 |
| May | $24.31 | 2.1 | 2.1 | 0.0 |
| Jun | $24.42 | 2.0 | 2.1 | -0.1 |
| Jul | $24.31 | 2.1 | 2.0 | 0.1 |
| Aug | $24.33 | 2.2 | 1.7 | 0.5 |
| Sep | $24.50 | 1.4 | 1.7 | -0.3 |
| Oct | $24.53 | 2.0 | 1.7 | 0.3 |
| Nov | $24.79 | 2.8 | 1.3 | 1.5 |
| Dec | $24.60 | 1.2 | 0.8 | 0.4 |
| 2015 | ||||
| Jan | $24.89 | 2.2 | -0.1 | 2.3 |
| Feb | $25.08 | 2.0 |
Note: AHE ALL: average hourly earnings of all employees; CPI: consumer price index; Real: adjusted by CPI inflation; NA: not available
*AHE of production and nonsupervisory employees because of unavailability of data for all employees for Jan-Feb 2006
Source: US Bureau of Labor Statistics
Calculations of inflation-adjusted average hourly earnings using BLS data are in Table IB-3. The final column of Table IB-3 (“12-Month Real ∆%”) provides inflation-adjusted average hourly earnings of all employees in the US. Average hourly earnings rose above inflation throughout the first nine months of 2007 just before the global recession that began in the final quarter of 2007 when average hourly earnings began to lose to inflation. In contrast, average hourly earnings of all US workers have risen less than inflation in five months in 2010 and in all but the first month in 2011 and the loss accelerated at 1.8 percent in Sep 2011, declining to a real loss of 1.1 percent in Feb 2012 and 0.5 percent in Mar 2012. There was a gain of 0.6 percent in Apr 2012 in inflation-adjusted average hourly earnings but another fall of 0.6 percent in May 2012 followed by increases of 0.3 percent in Jun and 0.9 percent in Jul 2012. Real hourly earnings stagnated in the 12 months ending in Aug 2012 with increase of only 0.1 percent, and increased 0.7 percent in the 12 months ending in Sep 2012. Real hourly earnings fell 1.2 percent in Oct 2012 and gained 1.0 percent in Dec 2012 but declined 0.3 percent in Jan 2013 and stagnated at change of 0.2 percent in Feb 2013. Real hourly earnings increased 0.4 percent in the 12 months ending in Mar 2013 and 0.2 percent in Apr 2013, increasing 0.7 percent in May 2013. In Jun 2013, real hourly earnings increased 1.1 percent relative to Jun 2012. Real hourly earnings fell 0.6 percent in the 12 months ending in Jul 2013 and increased 0.8 percent in the 12 months ending in Aug 2013. Real hourly earnings increased 1.2 percent in the 12 months ending in Oct 2013 and 0.9 percent in Nov 2013. Real hourly earnings increased 0.4 percent in the 12 months ending in Dec 2013. Real hourly earnings increased 0.4 percent in the 12 months ending in Jan 2014 and 1.7 percent in the 12 months ending in Feb 2014. Real hourly earnings increased 1.3 percent in the 12 months ending in Mar 2014. Real hourly changed 0.0 percent in the 12 months ending in Apr 2014. Real hourly changed 0.0 percent in the 12 months ending in May 2014. Real hourly earnings changed 0.0 percent in the 12 months ending in Jun 2014. Real hourly earnings increased 0.1 percent in the 12 months ending in Jul 2014 and increased 0.5 percent in the 12 months ending in Aug 2014. Real hourly earnings fell 0.3 percent in the 12 months ending in Sep 2014 and increased 0.4 percent in the 12 months ending in Oct 2014. Real hourly earnings increased 1.5 percent in the 12 months ending in Nov 2014 and 0.5 percent in the 12 months ending in Dec 2014. Real hourly earnings increased 2.3 percent in the 12 months ending in Jan 2015. Real hourly earnings are oscillating in part because of world inflation waves caused by carry trades from zero interest rates to commodity futures (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html) and in part because of the collapse of hiring (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html) originating in weak economic growth (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html).
Table IB-4, US, Average Hourly Earnings of All Employees NSA in Constant Dollars of 1982-1984
| Year | Jan | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
| 2006 | 9.88 | 9.97 | 9.87 | 10.03 | 10.16 | 10.14 | 10.21 | |
| 2007 | 10.22 | 9.99 | 10.07 | 10.02 | 10.15 | 10.07 | 10.05 | 10.16 |
| 2008 | 10.11 | 9.83 | 9.76 | 9.82 | 9.93 | 10.05 | 10.36 | 10.46 |
| 2009 | 10.46 | 10.19 | 10.23 | 10.28 | 10.29 | 10.31 | 10.38 | 10.37 |
| 2010 | 10.40 | 10.25 | 10.28 | 10.33 | 10.35 | 10.38 | 10.37 | 10.39 |
| 2011 | 10.52 | 10.11 | 10.16 | 10.09 | 10.16 | 10.29 | 10.24 | 10.29 |
| 2012 | 10.40 | 10.14 | 10.25 | 10.10 | 10.23 | 10.17 | 10.25 | 10.39 |
| ∆%12M | -1.1 | 0.3 | 0.9 | 0.1 | 0.7 | -1.2 | 0.1 | 1.0 |
| 2013 | 10.37 | 10.25 | 10.19 | 10.18 | 10.32 | 10.29 | 10.34 | 10.43 |
| ∆%12M | -0.3 | 1.1 | -0.6 | 0.8 | 0.9 | 1.2 | 0.9 | 0.4 |
| 2014 | 10.41 | 10.25 | 10.20 | 10.23 | 10.29 | 10.33 | 10.50 | 10.48 |
| ∆%12M | 0.4 | 0.0 | 0.1 | 0.5 | -0.3 | 0.4 | 1.5 | 0.5 |
| 2015 | 10.65 | |||||||
| ∆%12M | 2.3 |
Source: US Bureau of Labor Statistics
Chart IB-2 of the US Bureau of Labor Statistics plots average hourly earnings of all US employees in constant 1982-1984 dollars with evident decline from annual earnings of $10.34 in 2009 and $10.35 in 2010 to $10.24 in 2011 and $10.24 again in 2012 or loss of 1.1 percent (data in http://www.bls.gov/data/). Annual real hourly earnings increased 0.5 percent in 2013 relative to 2012 and increased 0.5 percent in 2014 relative to 2013. The economic welfare or wellbeing of United States workers deteriorated in a recovery without hiring (http://cmpassocregulationblog.blogspot.com/2015/02/g20-monetary-policy-recovery-without.html), stagnating/declining real wages and 27.2 million unemployed or underemployed (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html) because of mediocre economic growth (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html).
Chart IB-2, US, Average Hourly Earnings of All Employees in Constant Dollars of 1982-1984, SA 2006-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/
Chart IB-3 provides 12-month percentage changes of average hourly earnings of all employees in constant dollars of 1982-1984, that is, adjusted for inflation. There was sharp contraction of inflation-adjusted average hourly earnings of US employees during parts of 2007 and 2008. Rates of change in 12 months became positive in parts of 2009 and 2010 but then became negative again in 2011 and into 2012 with temporary increase in Apr 2012 that was reversed in May with another gain in Jun and Jul 2012 followed by stagnation in Aug 2012. There was marginal gain in Sep 2012 with sharp decline in Oct 2012, stagnation in Nov 2012, increase in Dec 2012 and renewed decrease in Jan 2013 with near stagnation in Feb 2013 followed by mild increase in Mar-Apr 2013. Hourly earnings adjusted for inflation increased in Jun 2013 and fell in Jul 2013, increasing in Aug-Dec 2013 and Jan-Mar 2014. Average hourly earnings stagnated in Apr-May 2014 and rebounded mildly in Jul 2014, increasing in Aug 2014 and decreasing in Sep 2014. Average hourly earnings adjusted for inflation increased in Oct-Dec 2014 and Jan 2015.
Chart IB-3, Average Hourly Earnings of All Employees NSA 12-Month Percent Change, 1982-1984 Dollars, NSA 2007-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/
Average weekly earnings of all US employees in the US in constant dollars of 1982-1984 from the dataset of the US Bureau of Labor Statistics (BLS) are provided in Table IB-5. Average weekly earnings fell 3.2 percent after adjusting for inflation in the 12 months ending in Aug 2011, decreased 0.9 percent in the 12 months ending in Sep 2011 and increased 0.6 percent in the 12 months ending in Oct 2011. Average weekly earnings fell 1.0 percent in the 12 months ending in Nov 2011 and 0.4 percent in the 12 months ending in Dec 2011. Average weekly earnings declined 0.3 percent in the 12 months ending in Jan 2012 and 0.5 percent in the 12 months ending in Feb 2012. Average weekly earnings in constant dollars were virtually flat in Mar 2012 relative to Mar 2011, decreasing 0.2 percent. Average weekly earnings in constant dollars increased 1.7 percent in Apr 2012 relative to Apr 2011 but fell 1.7 percent in May 2012 relative to May 2011, increasing 0.3 percent in the 12 months ending in Jun 2012 and 2.1 percent in the 12 months ending in Jul 2012. Real weekly earnings increased 0.4 percent in the 12 months ending in Aug 2012 and 2.1 percent in the 12 months ending in Sep 2012. Real weekly earnings fell 2.7 percent in the 12 months ending in Oct 2012 and increased 0.1 percent in the 12 months ending in Nov 2012 and 2.4 percent in the 12 months ending in Dec 2012. Real weekly earnings fell 1.7 percent in the 12 months ending in Jan 2013 and virtually stagnated with gain of 0.2 percent in the 12 months ending in Feb 2013, increasing 0.7 percent in the 12 months ending in Mar 2013. Real weekly earnings fell 0.7 percent in the 12 months ending in Apr 2013 and increased 0.9 percent in the 12 months ending in May 2013. Average weekly earnings increased 2.5 percent in the 12 months ending in Jun 2013 and fell 2.0 percent in the 12 months ending in Jul 2013. Real weekly earnings increased 0.7 percent in the 12 months ending in Aug 2013, 0.9 percent in the 12 months ending in Sep 2013 and 1.5 percent in the 12 months ending in Oct 2013. Average weekly earnings increased 1.2 percent in the 12 months ending in Nov 2013 and fell 0.2 percent in the 12 months ending in Dec 2013. Average weekly earnings increased 0.4 percent in the 12 months ending in Jan 2014 and 2.3 percent in the 12 months ending in Feb 2014. Average weekly earnings increased 2.4 percent in the 12 months ending in Mar 2014 and 0.3 percent in the 12 months ending in Apr 2014. Average weekly earnings in constant dollars increased 0.3 percent in the 12 months ending in May 2014 and changed 0.0 percent in the 12 months ending in Jun 2014. Real average weekly earnings increased 0.7 percent in the 12 months ending in Jul 2014 and 0.8 percent in the 12 months ending in Aug 2014. Real weekly earnings decreased 1.4 percent in the 12 months ending in Sep 2014 and increased 0.7 percent in the 12 months ending in Oct 2014. Average weekly earnings increased 3.0 percent in the 12 months ending in Nov 2014 and increased 0.2 percent in the 12 months ending in Dec 2014. Average weekly earnings increased 2.9 percent in the 12 months ending in Jan 2015 Table I-5 confirms the trend of deterioration of purchasing power of average weekly earnings in 2011 and into 2013 with oscillations according to carry trades causing world inflation waves (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html). On an annual basis, average weekly earnings in constant 1982-1984 dollars increased from $349.34 in 2007 to $354.19 in 2013, by 1.4 percent or at the average rate of 0.2 percent per year (data in http://www.bls.gov/data/). Annual average weekly earnings in constant dollars of $353.11 in 2010 were virtually unchanged at $353.00 in 2012. Annual average weekly earnings increased from $349.34 in 2007 to $356.96 in 2014 or by 2.2 at the average rate of 0.3 percent. Those who still work bring back home a paycheck that buys fewer high-quality goods than a year earlier. The fractured US job market does not provide an opportunity for advancement as in past booms following recessions because of poor job creation with 27.2 million unemployed or underemployed (Section I and earlier http://cmpassocregulationblog.blogspot.com/2015/02/job-creation-and-monetary-policy-twenty.html) in a recovery without hiring (http://cmpassocregulationblog.blogspot.com/2015/01/exchange-rate-conflicts-squeeze-of.html) because of mediocre economic growth (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html).
Table IB-5, US, Average Weekly Earnings of All Employees in Constant Dollars of 1982-1984, NSA 2007-2015
| Year | Jan | Sep | Oct | Nov | Dec |
| 2006 | 346.02 | 354.71 | 348.95 | 353.20 | |
| 2007 | 348.55 | 355.39 | 347.58 | 346.68 | 354.76 |
| 2008 | 344.58 | 341.51 | 345.63 | 358.50 | 356.85 |
| 2009 | 353.62 | 346.72 | 348.35 | 355.07 | 351.48 |
| 2010 | 350.39 | 352.96 | 356.00 | 354.81 | 355.29 |
| 2011 | 359.82 | 349.62 | 358.27 | 351.14 | 353.95 |
| 2012 | 358.75 | 357.13 | 348.76 | 351.46 | 362.53 |
| ∆%12M | -0.3 | 2.1 | -2.7 | 0.1 | 2.4 |
| 2013 | 352.58 | 360.25 | 354.10 | 355.85 | 361.82 |
| ∆%12M | -1.7 | 0.9 | 1.5 | 1.2 | -0.2 |
| 2014 | 353.93 | 355.10 | 356.43 | 366.36 | 362.49 |
| ∆%12M | 0.4 | -1.4 | 0.7 | 3.0 | 0.2 |
| 2015 | 364.23 | ||||
| ∆%12M | 2.9 |
Source: US Bureau of Labor Statistics http://www.bls.gov/
Chart IB-4 provides average weekly earnings of all employees in constant dollars of 1982-1984. The same pattern emerges of sharp decline during the contraction, followed by recovery in the expansion and continuing fall with oscillations caused by carry trades from zero interest rates into commodity futures from 2010 to 2011 and into 2012-2015. The increase in the final segment is mostly because of collapse of commodity prices in reversals of carry trade exposures.
Chart IB-4, US, Average Weekly Earnings of All Employees in Constant Dollars of 1982-1984, SA 2006-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/
Chart IB-5 provides 12-month percentage changes of average weekly earnings of all employees in the US in constant dollars of 1982-1984. There is the same pattern of contraction during the global recession in 2008 and then again trend of deterioration in the recovery without hiring and inflation waves. (http://cmpassocregulationblog.blogspot.com/2015/03/irrational-exuberance-mediocre-cyclical.html http://cmpassocregulationblog.blogspot.com/2015/01/competitive-currency-conflicts-world.html http://cmpassocregulationblog.blogspot.com/2014/12/patience-on-interest-rate-increases.html http://cmpassocregulationblog.blogspot.com/2014/11/squeeze-of-economic-activity-by-carry.html http://cmpassocregulationblog.blogspot.com/2014/10/financial-oscillations-world-inflation.html http://cmpassocregulationblog.blogspot.com/2014/09/world-inflation-waves-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2014/08/monetary-policy-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/07/world-inflation-waves-united-states.html http://cmpassocregulationblog.blogspot.com/2014/06/valuation-risks-world-inflation-waves.html http://cmpassocregulationblog.blogspot.com/2014/05/world-inflation-waves-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2014/04/imf-view-world-inflation-waves-squeeze.html http://cmpassocregulationblog.blogspot.com/2014/03/interest-rate-risks-world-inflation.html http://cmpassocregulationblog.blogspot.com/2014/01/world-inflation-waves-interest-rate.html http://cmpassocregulationblog.blogspot.com/2013/12/tapering-quantitative-easing-mediocre.html
http://cmpassocregulationblog.blogspot.com/2013/11/risks-of-zero-interest-rates-world.html http://cmpassocregulationblog.blogspot.com/2013/10/world-inflation-waves-regional-economic.html http://cmpassocregulationblog.blogspot.com/2013/08/duration-dumping-and-peaking-valuations.html http://cmpassocregulationblog.blogspot.com/2013/07/tapering-quantitative-easing-policy-and.html
http://cmpassocregulationblog.blogspot.com/2013/06/paring-quantitative-easing-policy-and.html http://cmpassocregulationblog.blogspot.com/2013/05/word-inflation-waves-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2013/04/world-inflation-waves-squeeze-of.html http://cmpassocregulationblog.blogspot.com/2013/04/recovery-without-hiring-ten-million.html http://cmpassocregulationblog.blogspot.com/2013/04/mediocre-and-decelerating-united-states.html http://cmpassocregulationblog.blogspot.com/2013/02/world-inflation-waves-united-states.html http://cmpassocregulationblog.blogspot.com/2012/12/recovery-without-hiring-forecast-growth.html http://cmpassocregulationblog.blogspot.com/2012/11/united-states-unsustainable-fiscal.html http://cmpassocregulationblog.blogspot.com/2012/09/recovery-without-hiring-world-inflation.html http://cmpassocregulationblog.blogspot.com/2012_09_01_archive.html http://cmpassocregulationblog.blogspot.com/2012/07/world-inflation-waves-financial.html http://cmpassocregulationblog.blogspot.com/2012/06/destruction-of-three-trillion-dollars.html http://cmpassocregulationblog.blogspot.com/2012/05/world-inflation-waves-monetary-policy.html http://cmpassocregulationblog.blogspot.com/2012/06/recovery-without-hiring-continuance-of.html http://cmpassocregulationblog.blogspot.com/2012/04/fractured-labor-market-with-hiring.html http://cmpassocregulationblog.blogspot.com/2012/03/global-financial-and-economic-risk.html http://cmpassocregulationblog.blogspot.com/2012/02/world-inflation-waves-united-states.html http://cmpassocregulationblog.blogspot.com/2012/01/world-inflation-waves-united-states.html http://cmpassocregulationblog.blogspot.com/2012/01/recovery-without-hiring-united-states.html
http://cmpassocregulationblog.blogspot.com/2012/09/recovery-without-hiring-world-inflation.html http://cmpassocregulationblog.blogspot.com/2012_09_01_archive.html http://cmpassocregulationblog.blogspot.com/2012/07/world-inflation-waves-financial.html http://cmpassocregulationblog.blogspot.com/2012/05/world-inflation-waves-monetary-policy.html http://cmpassocregulationblog.blogspot.com/2012/06/recovery-without-hiring-continuance-of.html http://cmpassocregulationblog.blogspot.com/2012/04/fractured-labor-market-with-hiring.html http://cmpassocregulationblog.blogspot.com/2012/03/global-financial-and-economic-risk.html http://cmpassocregulationblog.blogspot.com/2012/02/world-inflation-waves-united-states.html http://cmpassocregulationblog.blogspot.com/2012/01/world-inflation-waves-united-states.html http://cmpassocregulationblog.blogspot.com/2012/01/recovery-without-hiring-united-states.html).
Chart IB-5, US, Average Weekly Earnings of All Employees NSA in Constant Dollars of 1982-1984 12-Month Percent Change, NSA 2007-2015
Source: US Bureau of Labor Statistics http://www.bls.gov/
© Carlos M. Pelaez, 2009, 2010, 2011, 2012, 2013, 2014, 2015.
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