CMP Associates Regulation Blog

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.”

The Bureau of Labor Statistics (BLS) revised household data for seasonal factors in the release for Dec 2015 (http://www.bls.gov/news.release/pdf/empsit.pdf):

“Seasonally adjusted household survey data have been revised using updated seasonal adjustment factors, a procedure done at the end of each calendar year. Seasonally adjusted estimates back to January 2011 were subject to revision. The unemployment rates for January 2015 through November 2015 (as originally published and as revised) appear in table A on page 5, along with additional information about the revisions.”

The Bureau of Labor Statistics (BLS) revised household data for seasonal factors in the release for Dec 2016 (https://www.bls.gov/news.release/pdf/empsit.pdf):

“Seasonally adjusted household survey data have been revised using updated seasonal adjustment factors, a procedure done at the end of each calendar year. Seasonally adjusted estimates back to January 2012 were subject to revision. The unemployment rates for January 2016 through November 2016 (as originally published and as revised) appear in table A on page 5, along with additional information about the revisions.”

The Bureau of Labor Statistics (BLS) revised establishment data for seasonal and benchmarks in the release for Jan 2016 (http://www.bls.gov/news.release/pdf/empsit.pdf): “Establishment survey data have been revised as a result of the annual benchmarking process and the updating of seasonal adjustment factors. Also, household survey data for January 2016 reflect updated population estimates. See the notes beginning on page 4 for more information about these changes.”

The Bureau of Labor Statistics (BLS) revised establishment data for seasonal and benchmarks in the release for Jan 2017 (https://www.bls.gov/news.release/pdf/empsit.pdf): “Establishment survey data have been revised as a result of the annual benchmarking process and the updating of seasonal adjustment factors using an improved methodology to select models. Also, household survey data for January 2017 reflect updated population estimates. See the notes beginning on page 4 for more information about these changes.”

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 (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 7.529 million in Dec 2016 to 7.635 million in Jan 2017 and decrease to 7.528 million in Feb 2017. The rate of unemployment increased from 4.7 percent in Dec 2016 to 4.8 percent in Jan 2016 and decreased to 4.7 percent in Feb 2017. An important aspect of unemployment is its persistence for more than 27 weeks with 1.801 million in Feb 2017, corresponding to 23.9 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 5.598 million in Dec 2016 to 5.840 million in Jan 2017 and decreased to 5.704 million in Feb 2017. 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 14.995 million in Feb 2017 consists of:

· 7.528 million unemployed (of whom 1.801 million, or 23.9 percent, unemployed for 27 weeks or more) compared with 7.635 million unemployed in Jan 2017 (of whom 1.850 million, or 24.2 percent, unemployed for 27 weeks or more).

· 5.704 million employed part-time for economic reasons in Feb 2017 (who suffered reductions in their work hours or could not find full-time employment) compared with 5.804 million in Jan 2017

· 1.723 million who were marginally attached to the labor force in Feb 2017 (who were not in the labor force but wanted and were available for work) compared with 1.752 million in Jan 2017

Table I-2, US, People in Job Stress, Millions and % SA

	Feb 2017	Jan 2017	Dec 2016
Labor Force Millions	160.056	159.716	159.640
Unemployed Millions	7.528	7.635	7.529
Unemployment Rate (unemployed as % labor force)	4.7	4.8	4.7
Unemployed ≥27 weeks Millions	1.801	1.850	1.831
Unemployed ≥27 weeks %	23.9	24.2	24.3
Part Time for Economic Reasons Millions	5.704	5.840	5.598
Marginally Attached to Labor Force Millions	1.723	1.752	1.684
Job Stress Millions	14.995	15.227	14.811
In Job Stress as % Labor Force	9.3	9.5	9.3

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 59.7 in Nov 2016, 59.7 in Dec 2016, 59.9 in Jan 2017 and 59.7 in Feb 2017. 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. The employment population ratio reached 59.4 in Dec 2015 and 59.6 in Dec 2016.

Table I-3, US, Unemployment and Underemployment, SA, Millions and Percent

	Feb 2017	Jan 2017	Dec 2016	Nov 2016
Labor Force	160.056	159.716	159.640	159.456
Participation Rate	63.0	62.9	62.7	62.6
Unemployed	7.528	7.635	7.529	7.409
UNE Rate %	4.7	4.8	4.7	4.6
Part Time Economic Reasons	5.704	5.840	5.598	5.659
Marginally Attached to Labor Force	1.723	1.752	1.684	1.932
In Job Stress	14.955	15.227	14.811	15.000
In Job Stress % Labor Force	9.3	9.5	9.3	9.4
Employed	151.902	152.081	152.111	152.048
Employment % Population	59.7	59.9	59.7	59.7

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 2017. 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 2017 was 151.594 million (NSA) or 4.279 million more 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 254.246 million in Feb 2016 or by 22.288 million. The number employed increased 2.9 percent from Jul 2007 to Feb 2017 while the noninstitutional civilian population of ages of 16 years and over, or those available for work, increased 9.6 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 2017 would result in 161.446 million jobs (0.635 multiplied by noninstitutional civilian population of 254.246 million). There are effectively 9.852 million fewer jobs in Feb 2017 than in Jul 2007, or 161.446 million minus 151.594 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, 2001-2017

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 2016. 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, 2001-2017

Source: Bureau of Labor Statistics

The foundation of the second approach derives from Chart I-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 NSA grew 9.4 percent from 142.828 million in Jan 2001 to 156.255 million in Jul 2009. The civilian labor force is 2.1 percent higher at 159.482 million in Feb 2017 than in Jul 2009, 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 159.482 million in Feb 2017 to the noninstitutional population of 254.246 million in Feb 2017 was 62.7 percent. The labor force of the US in Feb 2017 corresponding to 66.8 percent of participation in the population would be 169.836 million (0.668 x 254.246). The difference between the measured labor force in Feb 2017 of 159.482 million and the labor force in Feb 2017 with participation rate of 66.8 percent (as in Jul 2007) of 169.836 million is 10.354 million. The level of the labor force in the US has stagnated and is 10.354 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, 2001-2017

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, 2001-2017

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 62.7 percent NSA in Feb 2017, 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, 2001-2017

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 7.887 million in Feb 2017, all numbers not seasonally adjusted.

Chart I-6, US, Unemployed, Thousands, SA, 2001-2017

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 decreased to 4.8 percent in Dec 2015 and 4.5 percent in Dec 2016, reaching 4.9 percent in Feb 2017.

Chart I-7, US, Unemployment Rate, SA, 2001-2017

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 annual level of unemployment fell 13.7 percent in 2015 and fell 6.6 percent in 2016. The level of unemployment decreased 4.0 percent in Feb 2017 relative to a year earlier.

Chart I-8, US, Unemployed, 12-month Percentage Change, NSA, 2001-2017

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 8.171 million in Dec 2011 but increasing to 8.305 million in Jan 2012 and 8.238 million in Feb 2012 but then falling to 7.943 million in Dec 2012 and increasing to 8.083 million in Jul 2013. The number employed part-time for economic reasons seasonally adjusted reached 5.704 million in Feb 2017. 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, 6.970 million in Dec 2014 and 6.179 million in Dec 2015. The number employed part-time for economic reasons NSA stood at 5.707 million in Dec 2016. The number employed part-time for economic reasons reached 5.773 million in Feb 2017. 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, 2001-2017

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 annual number of part-time for economic reasons fell 11.7 percent in 2015. The number of part-time for economic reasons decreased 6.7 percent in Dec 2016 relative to a year earlier. The level of part-time for economic reason fell 5.5 percent in Feb 2017 relative to a year earlier.

Chart I-10, US, Part-Time for Economic Reasons NSA 12-Month Percentage Change, 2001-2017

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 and 1.833 million in Dec 2015. The number marginally attached to the labor force stood at 1.684 million in Dec 2016. The level marginally attached to the labor force reached 1.723 million Feb 2017.

Chart I-11, US, Marginally Attached to the Labor Force, Thousands, NSA, 2001-2017

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 2017. 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 annual number of marginally attached to the labor force fell 11.4 percent in 2015. The number marginally attached to the labor force fell 7.2 percent in the 12 months ending in Dec 2013 and fell 6.9 percent in the 12 months ending in Dec 2014. The number marginally attached to the labor force fell 18.9 percent in the 12 months ending in Dec 2015 and decreased 8.1 percent in the 12 months ending in Dec 2016. The level of marginally attached to the labor force decreased 4.4 percent in the 12 months ending in Feb 2017.

Chart I-12, US, Marginally Attached to the Labor Force 12-Month Percentage Change, NSA, 2001-2017

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 9.9 percent and the number of people in job stress could be around 24.2 million, which is 14.4 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 2016, Jan 2016 and Feb 2017 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 2017. 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 2016, Jan 2017 and Feb 2017 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 2016 and was 62.5 percent in Jan 2017 and 62.7 percent in Feb 2017, 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 8.829 million unemployed in Feb 2017 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 16.716 million (Total UEM) and not 7.887 million (UEM) of whom many have been unemployed long term
the rate of unemployment is 9.9 percent (Total UEM%) and not 4.9 percent, not seasonally adjusted, or 4.7 percent seasonally adjusted
the number of people in job stress is close to 24.2 million by adding the 8.829 million leaving the labor force because they believe they could not find another job, corresponding to 14.4 percent of the effective labor force.

The row “In Job Stress” in Table I-4 provides the number of people in job stress not seasonally adjusted at 24.212 million in Feb 2017, 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 14.4 percent of the labor force in Feb 2017. The employment population ratio “EMP/POP %” dropped from 62.9 percent on average in 2006 to 59.4 percent in Feb 2016, 59.2 percent in Jan 2017 and 59.6 percent in Feb 2017. The number employed in Feb 2017 was 151.594 million (NSA) or 4.279 million more 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 254.246 million in Feb 2016 or by 22.288 million. The number employed increased 2.9 percent from Jul 2007 to Feb 2017 while the noninstitutional civilian population of ages of 16 years and over, or those available for work, increased 9.6 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 2017 would result in 161.446 million jobs (0.635 multiplied by noninstitutional civilian population of 254.246 million). There are effectively 9.852 million fewer jobs in Feb 2017 than in Jul 2007, or 161.446 million minus 151.594 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 (https://cmpassocregulationblog.blogspot.com/2017/02/recovery-without-hiring-ten-million.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. 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 2.1 percent on average in the cyclical expansion in the 30 quarters from IIIQ2009 to IVQ2016. 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 IVQ2016 (https://www.bea.gov/newsreleases/national/gdp/2017/pdf/gdp4q16_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 (https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2017/01/rising-valuations-of-risk-financial.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, 4.8 percent from IQ1983 to IIIQ1988, 4.8 percent from IQ1983 to IVQ1988, 4.8 percent from IQ1983 to IQ1989, 4.7 percent from IQ1983 to IIQ1989, 4.7 percent from IQ1983 to IIIQ1989, 4.5 percent from IQ1983 to IVQ1989. 4.5 percent from IQ1983 to IQ1990, 4.4 percent from IQ1983 to IIQ1990 and at 7.8 percent from IQ1983 to IVQ1983 (https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2017/01/rising-valuations-of-risk-financial.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 IVQ2016 would have accumulated to 30.5 percent. GDP in IVQ2016 would be $19,564.3 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2760.2 billion than actual $16,804.1 billion. There are about two trillion dollars of GDP less than at trend, explaining the 24.2 million unemployed or underemployed equivalent to actual unemployment/underemployment of 14.4 percent of the effective labor force (Section I and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html). US GDP in IVQ2016 is 14.1 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,804.1 billion in IVQ2016 or 12.1 percent at the average annual equivalent rate of 1.3 percent. Professor John H. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. Cochrane (2016May02) measures GDP growth in the US at average 3.5 percent per year from 1950 to 2000 and only at 1.76 percent per year from 2000 to 2015 with only at 2.0 percent annual equivalent in the current expansion. Cochrane (2016May02) proposes drastic changes in regulation and legal obstacles to private economic activity. 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 of manufacturing at average 3.1 percent per year from Jan 1919 to Jan 2017. Growth at 3.1 percent per year would raise the NSA index of manufacturing output from 108.2316 in Dec 2007 to 142.7575 in Jan 2017. The actual index NSA in Jan 2017 is 101.5620, which is 28.9 percent below trend. Manufacturing output grew at average 2.0 percent between Dec 1986 and Jan 2017. Using trend growth of 2.0 percent per year, the index would increase to 129.5532 in Jan 2017. The output of manufacturing at 101.5620 in Jan 2017 is 21.6 percent below trend under this alternative calculation.

Table I-4, US, Population, Labor Force and Unemployment, NSA

	2006	Feb 2016	Jan 2017	Feb 2017
POP	229	252,577	254,082	254,246
LF	151	158,279	158,676	159,482
PART%	66.2	62.7	62.5	62.7
EMP	144	150,060	150,527	151,594
EMP/POP%	62.9	59.4	59.2	59.6
UEM	7	8,219	8,149	7,887
UEM/LF Rate%	4.6	5.2	5.1	4.9
NLF	77	94,298	95,406	95,764
LF PART 66.2%		167,206	168,202	168,311
∆NLF UEM		8,927	9,526	8,829
Total UEM		17,146	17,675	16,716
Total UEM%		10.3	10.5	9.9
Part Time Economic Reasons		6,106	6,226	5,773
Marginally Attached to LF		1,803	1,752	1,723
In Job Stress		25,055	25,653	24,212
People in Job Stress as % Labor Force		15.0	15.3	14.4

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 s_i of a demographic group in an industry i and unemployment rate y_i of that demographic group (Lazear and Spletzer 2012JHJul22, 5-6):

Y = ∑_is_iy_i (1)

This equation can be decomposed for analysis as (Lazear and Spletzer 2012JHJul22, 6):

∆Y = ∑_i∆s_iy*_i+ ∑_i∆y_is*_i (2)

The first term in (2) captures changes in the demographic and industrial composition of the economy ∆s_i 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 ∆y_i, 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, 62.4 percent in Dec 2015 and 62.4 in Dec 2016. The civilian labor force participation rate was 62.4 percent in Dec 2016. The civilian labor force participation rate reached 62.7 in Feb 2017. 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 (https://cmpassocregulationblog.blogspot.com/2017/02/recovery-without-hiring-ten-million.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, 1979-2017

Year	Jan	Feb	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Annual
1979	62.9	63.0	62.9	64.5	64.9	64.5	63.8	64.0	63.8	63.8	63.7
1980	63.3	63.2	63.5	64.6	65.1	64.5	63.6	63.9	63.7	63.4	63.8
1981	63.2	63.2	63.9	64.6	65.0	64.6	63.5	64.0	63.8	63.4	63.9
1982	63.0	63.2	63.9	64.8	65.3	64.9	64.0	64.1	64.1	63.8	64.0
1983	63.3	63.2	63.4	65.1	65.4	65.1	64.3	64.1	64.1	63.8	64.0
1984	63.3	63.4	64.3	65.5	65.9	65.2	64.4	64.6	64.4	64.3	64.4
1985	64.0	64.0	64.6	65.5	65.9	65.4	64.9	65.1	64.9	64.6	64.8
1986	64.2	64.4	65.0	66.3	66.6	66.1	65.3	65.5	65.4	65.0	65.3
1987	64.7	64.8	65.6	66.3	66.8	66.5	65.5	65.9	65.7	65.5	65.6
1988	65.1	65.2	65.5	66.7	67.1	66.8	65.9	66.1	66.2	65.9	65.9
1989	65.8	65.6	66.2	67.4	67.7	67.2	66.3	66.6	66.7	66.3	66.5
1990	66.0	66.0	66.5	67.4	67.7	67.1	66.4	66.5	66.3	66.1	66.5
1991	65.5	65.7	66.0	67.2	67.3	66.6	66.1	66.1	66.0	65.8	66.2
1992	65.7	65.8	66.4	67.6	67.9	67.2	66.3	66.2	66.2	66.1	66.4
1993	65.6	65.8	66.3	67.3	67.5	67.0	66.1	66.4	66.3	66.2	66.3
1994	66.0	66.2	66.5	67.2	67.5	67.2	66.5	66.8	66.7	66.5	66.6
1995	66.1	66.2	66.4	67.2	67.7	67.1	66.5	66.7	66.5	66.2	66.6
1996	65.8	66.1	66.7	67.4	67.9	67.2	66.8	67.1	67.0	66.7	66.8
1997	66.4	66.5	67.0	67.8	68.1	67.6	67.0	67.1	67.1	67.0	67.1
1998	66.6	66.7	67.0	67.7	67.9	67.3	67.0	67.1	67.1	67.0	67.1
1999	66.7	66.8	67.0	67.7	67.9	67.3	66.8	67.0	67.0	67.0	67.1
2000	66.8	67.0	67.0	67.7	67.6	67.2	66.7	66.9	66.9	67.0	67.1
2001	66.8	66.8	66.6	67.2	67.4	66.8	66.6	66.7	66.6	66.6	66.8
2002	66.2	66.6	66.5	67.1	67.2	66.8	66.6	66.6	66.3	66.2	66.6
2003	66.1	66.2	66.2	67.0	66.8	66.3	65.9	66.1	66.1	65.8	66.2
2004	65.7	65.7	65.8	66.5	66.8	66.2	65.7	66.0	66.1	65.8	66.0
2005	65.4	65.6	66.0	66.5	66.8	66.5	66.1	66.2	66.1	65.9	66.0
2006	65.5	65.7	66.0	66.7	66.9	66.5	66.1	66.4	66.4	66.3	66.2
2007	65.9	65.8	65.8	66.6	66.8	66.1	66.0	66.0	66.1	65.9	66.0
2008	65.7	65.5	66.0	66.6	66.8	66.4	65.9	66.1	65.8	65.7	66.0
2009	65.4	65.5	65.5	66.2	66.2	65.6	65.0	64.9	64.9	64.4	65.4
2010	64.6	64.6	64.8	65.1	65.3	65.0	64.6	64.4	64.4	64.1	64.7
2011	63.9	63.9	64.1	64.5	64.6	64.3	64.2	64.1	63.9	63.8	64.1
2012	63.4	63.6	63.8	64.3	64.3	63.7	63.6	63.8	63.5	63.4	63.7
2013	63.3	63.2	63.5	64.0	64.0	63.4	63.2	62.9	62.9	62.6	63.2
2014	62.5	62.7	62.9	63.4	63.5	63.0	62.8	63.0	62.8	62.5	62.9
2015	62.5	62.5	63.0	63.1	63.2	62.7	62.3	62.5	62.5	62.4	62.7
2016	62.3	62.7	62.7	63.2	63.4	62.9	62.8	62.8	62.6	62.4	62.8
2017	62.5	62.7

Source: US Bureau of Labor Statistics

Chart I-12b, US, Labor Force Participation Rate, Percent of Labor Force in Population, NSA, 1979-2017

Source: Bureau of Labor Statistics

Broader perspective is in 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, 1948-2017

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, 1948-2017

Sources: US Bureau of Labor Statistics

The rate of labor force participation in the US is in Chart I-12E from 1948 to 2017. There is sudden decline during the global recession after 2007 without recovery explained by cyclical factors (Lazear and Spletzer2012JHJul22) as may many potential workers stopped their searches disillusioned that there could be an opportunity for them in sharply contracted markets.

Chart I-12E, US, Labor Force Participation Rate, Percent of Labor Force in Population, NSA, 1948-2017

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 2017. 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. 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 2016. 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 2.1 percent on average in the cyclical expansion in the 30 quarters from IIIQ2009 to IVQ2016. 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 IVQ2016 (https://www.bea.gov/newsreleases/national/gdp/2017/pdf/gdp4q16_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 (https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2017/01/rising-valuations-of-risk-financial.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, 4.8 percent from IQ1983 to IIIQ1988, 4.8 percent from IQ1983 to IVQ1988, 4.8 percent from IQ1983 to IQ1989, 4.7 percent from IQ1983 to IIQ1989, 4.7 percent from IQ1983 to IIIQ1989, 4.5 percent from IQ1983 to IVQ1989. 4.5 percent from IQ1983 to IQ1990, 4.4 percent from IQ1983 to IIQ1990 and at 7.8 percent from IQ1983 to IVQ1983 (https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2017/01/rising-valuations-of-risk-financial.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 IVQ2016 would have accumulated to 30.5 percent. GDP in IVQ2016 would be $19,564.3 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2760.2 billion than actual $16,804.1 billion. There are about two trillion dollars of GDP less than at trend, explaining the 24.2 million unemployed or underemployed equivalent to actual unemployment/underemployment of 14.4 percent of the effective labor force (Section I and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html). US GDP in IVQ2016 is 14.1 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,804.1 billion in IVQ2016 or 12.1 percent at the average annual equivalent rate of 1.3 percent. Professor John H. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. Cochrane (2016May02) measures GDP growth in the US at average 3.5 percent per year from 1950 to 2000 and only at 1.76 percent per year from 2000 to 2015 with only at 2.0 percent annual equivalent in the current expansion. Cochrane (2016May02) proposes drastic changes in regulation and legal obstacles to private economic activity. 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 of manufacturing at average 3.1 percent per year from Jan 1919 to Jan 2017. Growth at 3.1 percent per year would raise the NSA index of manufacturing output from 108.2316 in Dec 2007 to 142.7575 in Jan 2017. The actual index NSA in Jan 2017 is 101.5620, which is 28.9 percent below trend. Manufacturing output grew at average 2.0 percent between Dec 1986 and Jan 2017. Using trend growth of 2.0 percent per year, the index would increase to 129.5532 in Jan 2017. The output of manufacturing at 101.5620 in Jan 2017 is 21.6 percent below trend under this alternative calculation.

Chart I-13, US, Employment Level, Thousands, SA, 1948-2017

Source: US Bureau of Labor Statistics

The steep and consistent curve of growth of the US labor force is 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, 1948-2017, Thousands

Source: US Bureau of Labor Statistics

Chart I-15 for the period from 1948 to 2017. 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, 1948-2017, %

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, 1948-2017, Thousands

Source: US Bureau of Labor Statistics

Chart I-17 provides the rate of unemployment of the US from 1948 to 2017. 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 SA. The unadjusted rate of unemployment NSA reached 4.9 percent in Feb 2017.

Chart I-17, US, Unemployment Rate, SA, 1948-2017

Source: US Bureau of Labor Statistics

The number unemployed 27 weeks or more in Chart I-18 jumped to peak levels in the current cycle. There is insufficient decline to return to earlier levels.

Chart I-18, US, Unemployed for 27 Weeks or More, SA, 1948-2016, 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 59.6 NSA in Dec 2016. The employment population ration reached 59.6 NSA in Feb 2017. There is no comparable decline followed by stabilization during a cyclical expansion in Chart I-19.

Chart I-19, US, Employment-Population Ratio, 1948-2017

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, 1955-2017, 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 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, 4.2 percent in 1988 and 3.7 percent in 1989. In contrast, GDP grew 2.5 percent in 2010, 1.6 percent in 2011, 2.2 percent in 2012, 1.7 percent in 2013, 2.4 percent in 2014 and 2.6 percent in 2015. GDP grew 1.6 percent in 2016. Actual annual equivalent GDP growth in the twenty quarters from 2012 to 2016 is 2.0 percent and 1.9 percent in the four quarters ending in IVQ2016. GDP grew at 4.2 percent in 1985, 3.5 percent in 1986, 3.5 percent in 1987, 4.2 percent in 1988 and 3.7 percent in 1989. The forecasts of the central tendency of participants of the Federal Open Market Committee (FOMC) are in the range of 1.9 to 2.3 percent in 2017 (https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20161214.pdf) with less reliable forecast of 1.8 to 2.2 percent in 2017 (https://www.federalreserve.gov/monetarypolicy/files/fomcprojtabl20161214.pdf). Growth of GDP in the expansion from IVQ2009 to IVQ2016 has been at average 2.1 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
1939	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	2.2
1943	17.0	1993	2.7	2013	1.7
1944	8.0	1994	4.0	2014	2.4
1945	-1.0	1995	2.7	2015	2.6
1946	-11.6	1996	3.8	2016	1.6

Source: US Bureau of Economic Analysis http://www.bea.gov/iTable/index_nipa.cfm

Characteristics of the four cyclical contractions are 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 2.1 percent of the US economy in the thirty quarters of the current cyclical expansion from IIIQ2009 to IVQ2016. 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
4.8 percent in the first twenty-three quarters of expansion from IQ1983 to IIIQ1988
4.8 percent in the first twenty-four quarters of expansion from IQ1983 to IVQ1988
4.8 percent in the first twenty-five quarters of expansion from IQ1983 to IQ1989
4.7 percent in the first twenty-six quarters of expansion from IQ1983 to IIQ1989
4.7 percent in the first twenty-seven quarters of expansion from IQ1983 to IIIQ1989
4.5 percent in the first twenty-eight quarters of expansion from IQ1983 to IVQ1989
4.5 percent in the first twenty-nine quarters of expansion from IQ1983 to IQ1990
4.4 percent in the first thirty quarters of expansion from IQ1983 to IIQ1990

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, 2.2 percent in 2012, 1.7 percent in 2013, 2.4 percent in 2014, 2.6 percent in 2015 and 1.6 percent in 2016 (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, 4.8 percent from IQ1983 to IIIQ1988. 4.8 percent from IQ1983 to IVQ1988, 4.8 percent from IQ1983 to IQ1989, 4.7 percent from IQ1983 to IIQ1989, 4.7 percent from IQ1983 to IIIQ1989. 4.5 percent from IQ1983 to IVQ1989, 4.5 percent from IQ1983 to IQ1990, 4.4 percent from IQ1983 to IIQ1990 and at 7.8 percent from IQ1983 to IVQ1983. GDP grew 2.7 percent in the first four quarters of the expansion from IIIQ2009 to IIQ2010. GDP growth in the twenty quarters from 2012 to 2016 accumulated to 10.6 percent. This growth is equivalent to 2.0 percent per year, obtained by dividing GDP in IVQ2016 of $16,804.1 billion by GDP in IVQ2011 of $15,190.3 billion and compounding by 4/20: {[($16,804.1/$15,190.3)^4/20 -1]100 = 2.0 percent}.

Table I-7 shows that GDP grew 17.1 percent in the first thirty quarters of expansion from IIIQ2009 to IVQ2016 at the annual equivalent rate of 2.1 percent.

Table I-7, US, Number of Quarters, Cumulative Growth and Average Annual Equivalent Growth Rate in Cyclical Expansions

	Number of Quarters	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 IQ1983 to IIIQ1988 IQ1983 to IVQ1988 IQ1983 to IQ1989 IQ1983 to IIQ1989 IQ1983 to IIIQ1989 IQ1983 to IVQ1989 IQ1983 to IQ1990 IQ1983 to IIQ1990	13 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30	19.9 21.6 22.3 23.1 24.5 25.6 27.7 28.4 30.1 30.9 32.6 34.0 35.0 36.0 36.3 37.8 38.3	5.7 5.4 5.2 5.0 5.0 4.9 5.0 4.9 4.9 4.8 4.8 4.8 4.7 4.7 4.5 4.5 4.4
First Four Quarters IQ1983 to IVQ1983	4	7.8
Average First Four Quarters in Four Expansions*		7.7
IIIQ2009 to IVQ2016	30	17.1	2.1
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 2016. 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 2017 was 151.594 million (NSA) or 4.279 million more 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 254.246 million in Feb 2016 or by 22.288 million. The number employed increased 2.9 percent from Jul 2007 to Feb 2017 while the noninstitutional civilian population of ages of 16 years and over, or those available for work, increased 9.6 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 2017 would result in 161.446 million jobs (0.635 multiplied by noninstitutional civilian population of 254.246 million). There are effectively 9.852 million fewer jobs in Feb 2017 than in Jul 2007, or 161.446 million minus 151.594 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-22, US, Employed, Thousands, 2001-2017

Source: US Bureau of Labor Statistics

The US civilian labor force in Chart I-23 grew with few interruptions from 1979 to 1989.

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 2013-2017. There is substantial underperformance relative to trend before the global recession. 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 NSA grew 9.4 percent from 142.828 million in Jan 2001 to 156.255 million in Jul 2009. The civilian labor force is 2.1 percent higher at 159.482 million in Feb 2017 than in Jul 2009, 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 159.482 million in Feb 2017 to the noninstitutional population of 254.246 million in Feb 2017 was 62.7 percent. The labor force of the US in Feb 2017 corresponding to 66.8 percent of participation in the population would be 169.836 million (0.668 x 254.246). The difference between the measured labor force in Feb 2017 of 159.482 million and the labor force in Feb 2017 with participation rate of 66.8 percent (as in Jul 2007) of 169.836 million is 10.354 million. The level of the labor force in the US has stagnated and is 10.354 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-24, US, Civilian Labor Force, Thousands, 2001-2017

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 during 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.

Chart I-26, US, Civilian Labor Force Participation Rate, 2001-2017, %

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 million in Dec 1984 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 2017. Using seasonally adjusted data, the number unemployed rose from 6.727 million in Oct 2006 to 15.352 million in Oct 2009, declining to 13.093 million in Dec 2011, 8.718 million in Dec 2014 and 7.927 million in Dec 2015. The number unemployed SA stood at 7.529 million in Dec 2016. The level of unemployment SA was 7.528 million in Feb 2017. 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 2013 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 7.542 million in Dec 2015 and 7.170 million in Dec 2016. The level of unemployment was 7.887 million in Feb 2017.

Chart I-28, US, Unemployed Thousands 2001-2017

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 5.0 percent in Dec 2015. The rate of unemployment SA stood at 4.7 percent in Dec 2016. The rate of unemployment SA reached 4.7 percent in Feb 2017.

Chart I-30, US, Unemployment Rate, 2001-2017, %

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, 58.7 in Dec 2012, 58.7 in Dec 2013, 59.2 in Dec 2014 and 59.6 in Dec 2015, as shown in Chart I-32. The employment-population ratio reached 59.7 in Dec 2016. The employment population ratio stood at 59.7 in Feb 2017. 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 reached 59.4 percent in Dec 2015 and 59.6 percent in Dec 2016. The employment population ratio stood at 59.6 in Feb 2017.

Chart I-32, US, Employment Population Ratio, 2001-2017, %

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 or over remained at around 6 million during the expansion compared with somewhat above 1 million before the contraction, falling to 1.831 million in Dec 2016 seasonally adjusted and 1.769 million not seasonally adjusted. The level unemployed for 27 week or over reached 1.801 million SA in Feb 2017 and 1.878 million NSA.

Chart I-34, US, Number Unemployed for 27 Weeks or More, 2001-2017, 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 5.773 million not seasonally adjusted in Feb 2017.

Chart I-36, US, Part-Time for Economic Reasons, 2001-2017, Thousands

Source: US Bureau of Labor

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, 2.260 million in Dec 2014 and 1.833 million in Dec 2015. The level of marginally attached to the labor force reached 1.684 million in Dec 2016. The number of marginally attached to the labor force stood at 1.723 million in Feb 2017.

Chart I-37, US, Marginally Attached to the Labor Force, 2001-2017

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 2016. The civilian noninstitutional population grew by 45.5 percent from 174.215 million in 1983 to 253.538 million in 2016 and labor force higher by 42.7 percent, growing from 111.550 million in 1983 to 159.187 million in 2016. Total nonfarm payroll employment seasonally adjusted (SA) increased 235,000 in Feb 2017 and private payroll employment increased 227,000. The average monthly number of nonfarm jobs created from Feb 2015 to Feb 2016 was 217,000 using seasonally adjusted data, while the average number of nonfarm jobs created from Feb 2016 to Feb 2017 was 195,833, or decrease by 9.8 percent. The average number of private jobs created in the US from Feb 2015 to Feb 2016 was 203,583, using seasonally adjusted data, while the average from Feb 2016 to Feb 2017 was 179,667, or decrease by 11.7 percent. This blog calculates the effective labor force of the US at 168.311 million in Feb 2017 and 167,206 million in Feb 2016 (Table I-4), for growth of 1.105 million at average 92,083 per month. The difference between the average increase of 179,667 new private nonfarm jobs per month in the US from Feb 2016 to Feb 2017 and the 92,083 average monthly increase in the labor force from Feb 2016 to Feb 2017 is 87,584 monthly new jobs net of absorption of new entrants in the labor force. There are 24.212 million in job stress in the US currently. Creation of 87,584 new jobs per month net of absorption of new entrants in the labor force would require 276 months to provide jobs for the unemployed and underemployed (24.212 million divided by 87,584) or 23 years (276 divided by 12). The civilian labor force of the US in Feb 2017 not seasonally adjusted stood at 159.482 million with 7.887 million unemployed or effectively 16.716 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 168.311 million. Reduction of one million unemployed at the current rate of job creation without adding more unemployment requires 0.9 years (1 million divided by product of 87,584 by 12, which is 1,051,008). Reduction of the rate of unemployment to 5 percent of the labor force would be equivalent to unemployment of only 7.974 million (0.05 times labor force of 159.482 million). New net job creation would be minus 0.087 million (7.887 million unemployed minus 7.974 million unemployed at rate of 5 percent) that at the current rate would take 0.0 years (0.087 million divided by 1,051,008). Under the calculation in this blog, there are 16.716 million unemployed by including those who ceased searching because they believe there is no job for them and effective labor force of 168.311 million. Reduction of the rate of unemployment to 5 percent of the labor force would require creating 9.265 million jobs net of labor force growth that at the current rate would take 7.9 years (16.716 million minus 0.05(168.311 million) = 8.300 million divided by 1,051,008 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 2017 was 151.594 million (NSA) or 4.279 million more 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 254.246 million in Feb 2016 or by 22.288 million. The number employed increased 2.9 percent from Jul 2007 to Feb 2017 while the noninstitutional civilian population of ages of 16 years and over, or those available for work, increased 9.6 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 2017 would result in 161.446 million jobs (0.635 multiplied by noninstitutional civilian population of 254.246 million). There are effectively 9.852 million fewer jobs in Feb 2017 than in Jul 2007, or 161.446 million minus 151.594 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:

Table I-8, US, Monthly Change in Jobs, Number SA

Month	1981	1982	1983	2008	2009	2010	Private
Jan	94	-326	224	17	-793	23	14
Feb	68	-5	-75	-84	-702	-68	-53
Mar	105	-130	172	-78	-823	164	122
Apr	73	-280	276	-210	-687	243	192
May	10	-45	277	-186	-349	524	97
Jun	197	-243	379	-162	-471	-137	119
Jul	112	-342	418	-213	-329	-68	103
Aug	-36	-158	-308	-267	-213	-36	113
Sep	-87	-181	1115	-450	-220	-52	121
Oct	-99	-277	271	-474	-204	262	212
Nov	-209	-123	353	-766	-2	119	129
Dec	-278	-14	356	-694	-275	87	108
			1984			2011	Private
Jan			446			43	51
Feb			481			189	232
Mar			275			225	248
Apr			363			346	354
May			308			77	132
Jun			379			225	190
Jul			313			69	184
Aug			242			110	142
Sep			310			248	282
Oct			286			209	194
Nov			349			141	168
Dec			128			209	226
			1985			2012	Private
Jan			266			358	366
Feb			124			237	236
Mar			346			233	237
Apr			196			78	90
May			274			115	135
Jun			146			76	57
Jul			190			143	160
Aug			193			177	174
Sep			203			203	194
Oct			188			146	168
Nov			209			132	152
Dec			167			244	240
			1986			2013	Private
Jan			125			211	226
Feb			107			286	267
Mar			94			130	152
Apr			187			197	195
May			127			226	242
Jun			-94			162	179
Jul			318			122	146
Aug			114			261	242
Sep			347			190	184
Oct			186			212	214
Nov			186			258	250
Dec			205			47	73
			1987			2014	Private
Jan			172			190	204
Feb			232			151	139
Mar			249			272	261
Apr			338			329	299
May			226			246	252
Jun			172			304	259
Jul			347			202	226
Aug			171			230	238
Sep			228			280	237
Oct			492			227	214
Nov			232			312	302
Dec			294			255	240
			1988			2015	Private
Jan			94			234	227
Feb			453			238	222
Mar			276			86	97
Apr			245			262	235
May			229			344	324
Jun			363			206	195
Jul			222			254	239
Aug			124			157	115
Sep			339			100	116
Oct			268			321	314
Nov			339			272	260
Dec			290			239	217
			1989			2016	Private
Jan			262			126	110
Feb			258			237	221
Mar			193			225	189
Apr			173			153	158
May			118			43	17
Jun			116			297	269
Jul			40			291	249
Aug			49			176	143
Sep			250			249	223
Oct			111			124	132
Nov			277			164	178
Dec			96			155	150
			1990			2017	Private
Jan			336			238	221
Feb			248			235	227

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 2016. 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 2013-2017 while population growth continued.

Chart I-38, US, Total Nonfarm Payroll Jobs SA 2001-2017

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 2001-2017

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 2016 to Feb 2017, not seasonally adjusted (NSA), are in Table I-9. Total nonfarm employment increased by 2,352,000 (row A, column Change), consisting of growth of total private employment by 2,144,000 (row B, column Change) and increase by 208,000 of government employment (row C, column Change). Monthly average growth of private payroll employment has been 178,667, which is mediocre relative to 24 to 30 million in job stress, while total nonfarm employment has grown on average by only 196,000 per month, which does not significantly reduce job stress with 154.750 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 11,000, at the monthly rate of 917 while private service providing employment grew by 1,942,000, at the monthly average rate of 161,833. An important feature in Table I-9 is that jobs in professional and business services increased 598,000 with temporary help services increasing 88,000. 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 and investment in a fractured job market. The segment leisure and hospitality added 286,000 jobs in 12 months. An important characteristic is that the loss of government jobs has stabilized in federal government with increase of 42,000 jobs while states increased 15,000 jobs and local government added 151,000 jobs. Local government provides the bulk of government jobs, 14.593 million, while federal government provides 2.803 million and states’ government 5.225 million.

Table I-9, US, Employees in Nonfarm Payrolls Not Seasonally Adjusted, in Thousands

	Feb 2016	Feb 2017	Change
A Total Nonfarm	141,919	144,271	2,352
B Total Private	119,506	121,650	2,144
B1 Goods Producing	19,244	19,446	202
B1a Manufacturing	12,290	12,301	11
B2 Private service providing	100,262	102,204	1,942
B2a Wholesale Trade	5,812	5,862	50
B2b Retail Trade	15,481	15,607	126
B2c Transportation & Warehousing	4,880	4972	92
B2d Financial Activities	8,155	8,342	187
B2e Professional and Business Services	19,609	20,207	598
B2e1 Temporary help services	2,753	2,841	88
B2f Health Care & Social Assistance	18,840	19,290	450
B2g Leisure & Hospitality	14,889	15,175	286
C Government	22,413	22,621	208
C1 Federal	2,761	2,803	42
C2 State	5,210	5,225	15
C3 Local	14,442	14,593	151

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 Dec 2016 and

Jan 2017. 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 235,000 SA total nonfarm jobs created in Feb 2017 relative to Jan 2017 actually correspond to increase of 1460 thousand jobs NSA, as shown in row A. Most of this difference in Jan 2017 is due to the necessary benchmark and seasonal adjustments in the beginning of every year. The 227,000 total private payroll jobs SA created in Feb 2017 relative to Jan 2017 actually correspond to increase of 552 thousand jobs NSA. The analysis of NSA job creation in the prior Table I-9 does show improvement over the 12 months ending in Feb 2017 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 2017 SA	Feb 2017 SA	∆	Jan 2017 NSA	Feb 2017 NSA	∆
A Total Nonfarm	145,563	145,798	235	143,261	144,721	1460
B Total Private	123,247	123,474	227	121,098	121,650	552
B1 Goods Producing	19,848	19,943	95	19,337	19,446	109
B1a Constr.	6,823	6,881	58	6,414	6,475	61
B Mfg	12,354	12,382	28	12,261	12,301	40
B2 Private Service Providing	103,399	103,531	132	101,761	102,204	443
B2a Wholesale Trade	5,894	5,904	10	5,845	5,862	17
B2b Retail Trade	15,921	15,895	-26	15,833	15,607	-226
B2c Couriers & Mess.	658	659	1	672	635	-37
B2d Health-care & Social Assistance	19,293	19,326	33	19,236	19,290	54
B2De Profess. & Business Services	20,462	20,499	37	20,088	20,207	119
B2De1 Temp Help Services	2,968	2,971	3	2,835	2,841	6
B2f Leisure & Hospit.	15,768	15,794	26	15,027	15,175	148

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

http://www.bea.gov/iTable/index_nipa.cfm

Manufacturing jobs not seasonally adjusted decreased 11,000 from Feb 2016 to
Feb 2017 or at the average monthly rate of 917. Industrial production decreased 0.3 percent in Jan 2017 and increased 0.6 percent in Dec 2016 after decreasing 0.2 percent in Nov 2016, with all data seasonally adjusted, as shown in Table I-1. The Board of Governors of the Federal Reserve System conducted the annual revision of industrial production released on Apr 1, 2016 (http://www.federalreserve.gov/releases/g17/revisions/Current/DefaultRev.htm):

“The Federal Reserve has revised its index of industrial production (IP) and the related measures of capacity and capacity utilization.[1] Total IP is now reported to have increased about 2 1/2 percent per year, on average, from 2011 through 2014 before falling 1 1/2 percent in 2015.[2] Relative to earlier reports, the current rates of change are lower, especially for 2014 and 2015. Total IP is now estimated to have returned to its pre-recession peak in November 2014, six months later than previously estimated. Capacity for total industry is now reported to have increased about 2 percent in 2014 and 2015 after having increased only 1 percent in 2013. Compared with the previously reported estimates, the gain in 2015 is 1/2 percentage point higher, and the gain in 2013 is 1/2 percentage point lower. Industrial capacity is expected to increase 1/2 percent in 2016.”

The report of the Board of Governors of the Federal Reserve System states (https://www.federalreserve.gov/releases/g17/Current/default.htm):

“Industrial production decreased 0.3 percent in January following a 0.6 percent increase in December. In January, manufacturing output moved up 0.2 percent, and mining output jumped 2.8 percent. The index for utilities fell 5.7 percent, largely because unseasonably warm weather reduced the demand for heating. At 104.6 percent of its 2012 average, total industrial production in January was at about the same level as it was a year earlier. Capacity utilization for the industrial sector fell 0.3 percentage point in January to 75.3 percent, a rate that is 4.6 percentage points below its long-run (1972–2016) average.” In the six months ending in Jan 2017, United States national industrial production accumulated change of 0.0 percent at the annual equivalent rate of 0.0 percent, which is equal to growth of 0.0 percent in the 12 months ending in Jan 2017. Excluding growth of 0.6 percent in Dec 2016, growth in the remaining five months from Aug to Jan 2017 accumulated to minus 0.6 percent or minus 1.4 percent annual equivalent. Industrial production declined in four of the past six months and increased 0.3 percent in one month and 0.6 percent in another month. Industrial production grew at annual equivalent 0.4 percent in the most recent quarter from Nov 2016 to Jan 2017 and decreased at 0.4 percent in the prior quarter Aug 2016 to Oct 2016. Business equipment accumulated change of 0.0 percent in the six months from Aug 2016 to Jan 2017, at the annual equivalent rate of 0.0 percent, which is lower than growth of 1.2 percent in the 12 months ending in Jan 2017. The Fed analyzes capacity utilization of total industry in its report (https://www.federalreserve.gov/releases/g17/Current/default.htm): “Capacity utilization for the industrial sector fell 0.3 percentage point in January to 75.3 percent, a rate that is 4.6 percentage points below its long-run (1972–2016) average.” United States industry apparently decelerated to a lower growth rate followed by possible acceleration and weakening growth in past months. Manufacturing declined 22.3 from the peak in Jun 2007 to the trough in Apr 2009 and increased 16.4 percent from the trough in Apr 2009 to Dec 2016. Manufacturing grew 16.2 percent from the trough in Apr 2009 to Jan 2017. Manufacturing in Jan 2017 is lower by 9.8 percent relative to the peak in Jun 2007. 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 IVQ2016 would have accumulated to 30.5 percent. GDP in IVQ2016 would be $19,564.3 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2760.2 billion than actual $16,804.1 billion. There are about two trillion dollars of GDP less than at trend, explaining the 25.2 million unemployed or underemployed equivalent to actual unemployment/underemployment of 15.0 percent of the effective labor force (Section I and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html). US GDP in IVQ2016 is 14.1 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,804.1 billion in IVQ2016 or 12.1 percent at the average annual equivalent rate of 1.3 percent. Professor John H. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. Cochrane (2016May02) measures GDP growth in the US at average 3.5 percent per year from 1950 to 2000 and only at 1.76 percent per year from 2000 to 2015 with only at 2.0 percent annual equivalent in the current expansion. Cochrane (2016May02) proposes drastic changes in regulation and legal obstacles to private economic activity. 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 of manufacturing at average 3.1 percent per year from Jan 1919 to Jan 2017. Growth at 3.1 percent per year would raise the NSA index of manufacturing output from 108.2316 in Dec 2007 to 142.7575 in Jan 2017. The actual index NSA in Jan 2017 is 101.5620, which is 28.9 percent below trend. Manufacturing output grew at average 2.0 percent between Dec 1986 and Jan 2017. Using trend growth of 2.0 percent per year, the index would increase to 129.5532 in Jan 2017. The output of manufacturing at 101.5620 in Jan 2017 is 21.6 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 87.2 percent in IIIQ2016. Most of US national income is in the form of services. In Feb 2017, there were 144.271 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 121.650 million NSA in Feb 2017 accounted for 84.3 percent of total nonfarm jobs of 144.271 million, of which 12.301 million, or 10.1 percent of total private jobs and 8.5 percent of total nonfarm jobs, were in manufacturing. Private service-providing jobs were 102.204 million NSA in Feb 2017, or 70.8 percent of total nonfarm jobs and 84.0 percent of total private-sector jobs. Manufacturing has share of 10.4 percent in US national income in IIIQ2016 and durable goods 6.0 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 IIQ2016	% Total	SAAR IIIQ2016	% Total
National Income WCCA	15,905.5	100.0	16,173.7	100.0
Domestic Industries	15,697.6	98.7	15,969.7	98.7
Private Industries	13,843.4	87.0	14,095.4	87.2
Agriculture	123.9	0.8	122.0	0.8
Mining	187.7	1.2	187.7	1.2
Utilities	164.9	1.0	172.0	1.1
Construction	765.2	4.8	771.3	4.8
Manufacturing	1658.4	10.4	1676.5	10.4
Durable Goods	972.8	6.1	977.4	6.0
Nondurable Goods	685.6	4.3	699.2	4.3
Wholesale Trade	920.7	5.8	957.9	5.9
Retail Trade	1118.6	7.0	1136.2	7.0
Transportation & WH	495.7	3.1	505.7	3.1
Information	578.8	3.6	596.0	3.7
Finance, Insurance, RE	2807.8	17.7	2862.6	17.7
Professional & Business Services	2246.5	14.1	2293.6	14.2
Education, Health Care	1633.0	10.3	1651.7	10.2
Arts, Entertainment	675.1	4.2	688.0	4.3
Other Services	467.1	2.9	474.2	2.9
Government	1854.3	11.7	1874.3	11.6
Rest of the World	207.8	1.3	204.0	1.3

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

Chart I-42 provides output of durable manufacturing from 1972 to 2016. Output fell sharply during the global recession, recovering at relatively high pace. Output is lower than extrapolation of trend.

Chart I-42, US, Output of Durable Manufacturing, 1972-2017

Source: Board of Governors of the Federal Reserve

http://www.federalreserve.gov/releases/g17/Current/default.htm

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 7.638 million in 2010 relative to 2007 and fell by 952,000 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 137.999 million in 2007 to 136.381 million in 2013, by 1.618 million or 1.2 percent. Nonfarm jobs increased from 137.999 million in 2007 to 144,306 million in 2016, by 6.308 million or 4.6 percent. The US noninstitutional population or in condition to work increased from 231.867 million in 2007 to 253.538 million in 2016, by 21,671 million or 9.3 percent. The ratio of nonfarm jobs of 137.999 million in 2007 to the noninstitutional population of 231.867 was 59.5. Nonfarm jobs in 2016 corresponding to the ratio of 59.5 of nonfarm jobs/noninstitutional population would be 150.855 million (0.595x253.538). The difference between actual nonfarm jobs of 144.306 million in 2016 and nonfarm jobs of 150.855 million that are equivalent to 59.5 percent of the noninstitutional population as in 2007 is 6.549 million fewer jobs. The proper explanation for this loss of work opportunities is not in secular stagnation but in cyclically slow growth. 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). 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 IVQ2016 would have accumulated to 30.5 percent. GDP in IVQ2016 would be $19,564.3 billion (in constant dollars of 2009) if the US had grown at trend, which is higher by $2760.2 billion than actual $16,804.1 billion. There are about two trillion dollars of GDP less than at trend, explaining the 24.2 million unemployed or underemployed equivalent to actual unemployment/underemployment of 14.4 percent of the effective labor force (Section I and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html). US GDP in IVQ2016 is 14.1 percent lower than at trend. US GDP grew from $14,991.8 billion in IVQ2007 in constant dollars to $16,804.1 billion in IVQ2016 or 12.1 percent at the average annual equivalent rate of 1.3 percent. Professor John H. Cochrane (2014Jul2) estimates US GDP at more than 10 percent below trend. Cochrane (2016May02) measures GDP growth in the US at average 3.5 percent per year from 1950 to 2000 and only at 1.76 percent per year from 2000 to 2015 with only at 2.0 percent annual equivalent in the current expansion. Cochrane (2016May02) proposes drastic changes in regulation and legal obstacles to private economic activity. 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 of manufacturing at average 3.1 percent per year from Jan 1919 to Jan 2017. Growth at 3.1 percent per year would raise the NSA index of manufacturing output from 108.2316 in Dec 2007 to 142.7575 in Jan 2017. The actual index NSA in Jan 2017 is 101.5620, which is 28.9 percent below trend. Manufacturing output grew at average 2.0 percent between Dec 1986 and Jan 2017. Using trend growth of 2.0 percent per year, the index would increase to 129.5532 in Jan 2017. The output of manufacturing at 101.5620 in Jan 2017 is 21.6 percent below trend under this alternative calculation.

Table I-12, US, Total Nonfarm Employment in Thousands

Year	Total Nonfarm	Year	Total Nonfarm
1980	90,533	2000	132,024
1981	91,297	2001	132,087
1982	89,689	2002	130,649
1983	90,295	2003	130,347
1984	94,548	2004	131,787
1985	97,532	2005	134,051
1986	99,500	2006	136,453
1987	102,116	2007	137,999
1988	105,378	2008	137,242
1989	108,051	2009	131,313
1990	109,527	2010	130,361
1991	108,427	2011	131,932
1992	108,802	2012	134,175
1993	110,935	2013	136,381
1994	114,398	2014	139,958
1995	117,407	2015	141,843
1996	119,836	2016	144,306

Source: US Bureau of Labor Statistics http://www.bls.gov/

Chart I-43 provides annual nonfarm jobs from 2000 to 2016. Cyclically slow growth in the expansion since IIIQ2009 has not been sufficient to recover nonfarm jobs. Because of population growth, there are 6.549 million fewer nonfarm jobs in the US in 2016 than in 2007.

Chart I-43, US, Annual Nonfarm Jobs, NSA, Thousands, 2000-2016

Source: US Bureau of Labor Statistics http://www.bls.gov/

Chart I-44 provides annual nonfarm jobs in the US from 1980 to 1995. 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, 1980-1996

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 = 6,409-952	4,539 = 6,337-1,798

*[(130,801x1.049)-130,801] = 6,409 thousand

**[(107,405)x1.059 – 107,405] = 6,337 thousand

Source: US Bureau of Labor Statistics http://www.bls.gov/data/

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

{[(wage bill in Jan 2017)/(wage bill in Jan 2016)]-1}100 =

{[($26.35x34.4)/($25.50x34.2)]-1]}100

= {[($906.44)/($872.10)]-1}100 = 3.9%

CPI inflation was 2.5 percent in the 12 months ending in Jan 2017 (http://www.bls.gov/cpi/) for an inflation-adjusted wage-bill change of 1.4 percent :{[(1.039/1.025)-1]100 = 1.4%} (see Table IB-5 below for Dec 2016 with minor rounding difference). The wage bill for Feb 2017 before inflation adjustment increased 2.8 percent relative to the wage bill for Feb 2016:

{[(wage bill in Feb 2017)/(wage bill in Feb 2016)]-1}100 =

{[($26.20x34.1)/($25.49x34.1)]-1]}100

= {[$893.42)/$869.21]-1}100 = 2.8%}

Average hourly earnings increased 2.8 percent from Feb 2016 to Feb 2017 {[($26.20/$25.49) – 1]100 = 2.8%} while hours worked changed 0.0 percent {[(34.1/34.1) – 1]100 = 0.0%}. The increase of the wage bill is the product of the increase of hourly earnings of 2.8 percent and change of hours worked of 0.0 percent {[(1.028x1.00) -1]100 =2.8%} with small rounding error. 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 (https://cmpassocregulationblog.blogspot.com/2017/02/world-inflation-waves-united-states.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 2016	Dec 2016	Jan 2017	Feb 2017
Total Private	$25.38	$25.98	$26.03	$26.09
Goods Producing	$26.54	$27.24	$27.30	$27.30
Service Providing	$25.10	$25.68	$25.73	$25.81
Average Weekly Earnings
Total Private	$875.61	$893.71	$895.43	$897.50
Goods Producing	$1,069.56	$1,095.05	$1,097.46	$1,100.19
Service Providing	$835.83	$855.14	$854.24	$856.89
Average Weekly Hours
Total Private	34.5	34.4	34.4	34.4
Goods Producing	40.3	40.2	40.2	40.3
Service Providing	33.3	33.3	33.2	33.2

Source: US Bureau of Labor Statistics

Average weekly hours in Table IB-2 fell from 34.8 in Dec 2007 at the beginning of the contraction to 33.7 in Jun 2009, which was the last month of the contraction. Average weekly hours rose to 34.4 in Dec 2011 and oscillated to 34.8 in Dec 2012 and 34.7 in Dec 2013. Average weekly hours of all employees decreased to 34.6 in Dec 2014 and 34.5 in Dec 2015. Average weekly hours stood at 34.3 in Dec 2016. Average weekly hours reached 34.1 in Feb 2017. The BLS is revising the data from 2006 to 2009 (http://www.bls.gov/ces/#notices) now available in the release for Jan 2016 and subsequent months.

Table IB-2, US, Average Weekly Hours of All Employees, NSA 2006-2017

Year	Jan	Feb	Mar	Apr	May	Jun	Jul	Aug	Sep	Oct	Nov	Dec	Annual
2006			34.0	34.4	34.1	34.5	34.7	34.5	34.3	34.7	34.3	34.4
2007	33.9	34.0	34.2	34.5	34.3	34.5	34.8	34.5	34.8	34.3	34.3	34.8	34.4
2008	34.0	34.0	34.6	34.2	34.2	34.8	34.3	34.5	34.2	34.2	34.4	33.9	34.3
2009	33.6	34.0	33.9	33.5	33.6	33.7	33.8	34.3	33.7	33.8	34.2	33.8	33.8
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	34.3	34.4	34.4	34.4	34.8	34.3	34.4	34.3
2012	34.5	34.2	34.2	34.6	34.2	34.4	34.7	34.5	34.8	34.3	34.3	34.8	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	34.7	34.4	34.4	34.5	34.5	35.1	34.3	34.5	34.8	34.5	34.5
2016	34.2	34.1	34.2	34.3	34.6	34.4	34.4	34.4	34.4	34.8	34.3	34.3	34.4
2017	34.4	34.1

Source: US Bureau of Labor Statistics

Chart IB-1 provides average weekly hours of all employees seasonally adjusted. There was sharp contract during the global recession. Hours returned to levels before the contraction.

Chart IB-1, US, Average Weekly Hours of All Employees, SA 2006-2017

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 0.2 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 1.0 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 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 0.3 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 increased 1.9 percent in the 12 months ending in Feb 2015 and 2.3 percent in the 12 months ending in Mar 2015. Real hourly earnings increased 2.4 percent in the 12 months ending in Apr 2015 and increased 2.4 percent in the 12 months ending in May 2015. Real hourly earnings increased 1.3 percent in the 12 months ending in Jun 2015 and increased 1.9 percent in the 12 months ending in Jul 2015. Real hourly earnings increased 2.8 percent in the 12 months ending in Aug 2015 and increased 2.2 percent in the 12 months ending in Sep 2015. Real hourly earnings increased 2.3 percent in the 12 months ending in Oct 2015 and increased 1.9 percent in the 12 months ending in Nov 2015. Real hourly earnings increased 1.8 percent in the 12 months ending in Dec 2015 and increased 1.1 percent in the 12 months ending in Jan 2016. Real hourly earnings increased 0.8 percent in the 12 months ending in Feb 2016 and increased 0.9 percent in the 12 months ending in Mar 2016. Real hourly earnings increased 1.5 percent in the 12 months ending in Apr 2016 and increased 2.2 percent in the 12 months ending in May 2016. Real hourly earnings increased 1.6 percent in the 12 months ending in Jun 2016 and increased 2.0 percent in the 12 months ending in Jul 2016. Real hourly earnings increased 0.8 percent in the 12 months ending in Aug 2016 and increased 1.3 percent in the 12 months ending in Sep 2016. Real hourly earnings increased 2.0 percent in the 12 months ending in Oct 2016 and increased 0.2 percent in the 12 months ending in Nov 2016. Real hourly earnings increased 0.6 percent in the 12 months ending in Dec 2016 and increased 0.8 percent in the 12 months ending in Jan 2017. Real hourly earnings are oscillating in part because of world inflation waves caused by carry trades from zero interest rates to commodity futures (https://cmpassocregulationblog.blogspot.com/2017/02/world-inflation-waves-united-states.html) and in part because of the collapse of hiring (https://cmpassocregulationblog.blogspot.com/2017/02/recovery-without-hiring-ten-million.html) originating in weak economic growth (https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html). The BLS is revising the data from 2006 to 2009 (http://www.bls.gov/ces/#notices) now available in the release for Jan 2016 and subsequent releases.

Table IB-3, US, Average Hourly Earnings Nominal and Inflation Adjusted, Dollars and % NSA

	AHE ALL	12 Month- Nominal ∆%	∆% 12 Month CPI	12-Month Real ∆%
2007
Jan*	$20.69*	4.2*	2.1	2.1*
Feb*	$20.78*	4.1*	2.4	1.7*
Mar	$20.75	3.4	2.8	0.6
Apr	$20.99	3.1	2.6	0.5
May	$20.77	3.5	2.7	0.8
Jun	$20.77	3.6	2.7	0.9
Jul	$20.94	3.3	2.4	0.9
Aug	$20.80	3.3	2.0	1.3
Sep	$21.13	3.8	2.8	1.0
Oct	$21.01	2.4	3.5	-1.1
Nov	$21.07	3.1	4.3	-1.2
Dec	$21.30	3.4	4.1	-0.7
2010
Jan	$22.51	2.1	2.6	-0.5
Feb	$22.57	1.6	2.1	-0.5
Mar	$22.48	1.2	2.3	-1.1
Apr	$22.53	1.8	2.2	-0.4
May	$22.60	2.5	2.0	0.5
Jun	$22.34	1.7	1.1	0.6
Jul	$22.41	1.9	1.2	0.7
Aug	$22.55	1.8	1.1	0.7
Sep	$22.60	1.8	1.1	0.7
Oct	$22.70	1.9	1.2	0.7
Nov	$22.69	1.1	1.1	0.0
Dec	$22.76	1.7	1.5	0.2
2011
Jan	$23.16	2.9	1.6	1.3
Feb	$22.99	1.9	2.1	-0.2
Mar	$22.90	1.9	2.7	-0.8
Apr	$22.96	1.9	3.2	-1.3
May	$23.06	2.0	3.6	-1.5
Jun	$22.81	2.1	3.6	-1.4
Jul	$22.94	2.4	3.6	-1.2
Aug	$22.85	1.3	3.8	-2.4
Sep	$23.05	2.0	3.9	-1.8
Oct	$23.30	2.6	3.5	-0.9
Nov	$23.15	2.0	3.4	-1.4
Dec	$23.22	2.0	3.0	-1.0
2012
Jan	$23.56	1.7	2.9	-1.2
Feb	$23.40	1.8	2.9	-1.1
Mar	$23.39	2.1	2.7	-0.6
Apr	$23.61	2.8	2.3	0.5
May	$23.32	1.1	1.7	-0.6
Jun	$23.27	2.0	1.7	0.3
Jul	$23.48	2.4	1.4	1.0
Aug	$23.26	1.8	1.7	0.1
Sep	$23.67	2.7	2.0	0.7
Oct	$23.52	0.9	2.2	-1.3
Nov	$23.58	1.9	1.8	0.1
Dec	$23.85	2.7	1.7	1.0
2013
Jan	$23.88	1.4	1.6	-0.2
Feb	$23.90	2.1	2.0	0.2
Mar	$23.84	1.9	1.5	0.4
Apr	$23.92	1.3	1.1	0.2
May	$23.80	2.1	1.4	0.7
Jun	$23.92	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	$24.16	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	$24.30	2.1	2.1	0.0
Jun	$24.42	2.1	2.1	0.0
Jul	$24.31	2.1	2.0	0.1
Aug	$24.32	2.2	1.7	0.5
Sep	$24.50	1.4	1.7	-0.3
Oct	$24.52	2.0	1.7	0.3
Nov	$24.78	2.8	1.3	1.5
Dec	$24.59	1.2	0.8	0.4
2015
Jan	$24.88	2.2	-0.1	2.3
Feb	$25.05	1.9	0.0	1.9
Mar	$25.04	2.2	-0.1	2.3
Apr	$24.94	2.2	-0.2	2.4
May	$24.88	2.4	0.0	2.4
Jun	$24.77	1.4	0.1	1.3
Jul	$24.83	2.1	0.2	1.9
Aug	$25.04	3.0	0.2	2.8
Sep	$25.05	2.2	0.0	2.2
Oct	$25.14	2.5	0.2	2.3
Nov	$25.38	2.4	0.5	1.9
Dec	$25.21	2.5	0.7	1.8
2016
Jan	$25.50	2.5	1.4	1.1
Feb	$25.49	1.8	1.0	0.8
Mar	$25.49	1.8	0.9	0.9
Apr	$25.60	2.6	1.1	1.5
May	$25.68	3.2	1.0	2.2
Jun	$25.42	2.6	1.0	1.6
Jul	$25.53	2.8	0.8	2.0
Aug	$25.52	1.9	1.1	0.8
Sep	$25.74	2.8	1.5	1.3
Oct	$26.04	3.6	1.6	2.0
Nov	$25.87	1.9	1.7	0.2
Dec	$25.90	2.7	2.1	0.6
2017
Jan	$26.35	3.3	2.5	0.8
Feb	$26.20	2.8

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 by the BLS are in Table IB-4. 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 0.5 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 1.2 percent in Oct 2012 and gained 1.0 percent in Dec 2012 but declined 0.2 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 0.3 percent in Apr 2013, increasing 0.7 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 changed 0.0 percent in the 12 months ending in Apr 2014. Real hourly decreased 0.1 percent in the 12 months ending in May 2014. Real hourly earnings increased 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 0.4 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 0.4 percent in the 12 months ending in Dec 2014. Real hourly earnings increased 2.3 percent in the 12 months ending in Jan 2015 and increased 1.9 percent in the 12 months ending in Feb 2015. Real hourly earnings increased 2.2 percent in the 12 months ending in Mar 2015 and increased 2.4 percent in the 12 months ending in Apr 2015. Real hourly earnings increased 2.4 percent in the 12 months ending in May 2015 and 1.3 percent in the 12 months ending in Jun 2015. Real hourly earnings increased 2.0 percent in the 12 months ending in Jul 2015 and increased 2.8 percent in the 12 months ending in Aug 2015. Real hourly earnings increased 2.3 percent in the 12 months ending in Sep 2015. Real hourly earnings increased 2.3 percent in the 12 months ending in Oct 2015 and increased 1.9 percent in the 12 months ending in Nov 2015. Average hourly earnings increased 1.8 percent in the 12 months ending in Dec 2015 and increased 1.0 percent in the 12 months ending in Jan 2016. Real hourly earnings increased 0.7 percent in the 12 months ending in Feb 2016 and increased 0.9 percent in the 12 months ending in Mar 2016. Real hourly earnings increased 1.5 percent in the 12 months ending in Apr 2016 and increased 2.2 percent in the 12 months ending in May 2016. Real hourly earnings increased 1.6 percent in the 12 months ending in Jun 2016 and increased 2.0 percent in the 12 months ending in Jul 2016. Real hourly earnings increased 0.9 percent in the 12 months ending in Aug 2016 and increased 1.2 percent in the 12 months ending in Sep 2016. Real hourly earnings increased 1.9 percent in the 12 months ending in Oct 2016 and increased 0.3 percent in the 12 months ending in Nov 2016. Real hourly earnings increased 0.7 percent in the 12 months ending in Dec 2016 and increased 0.8 percent in the 12 months ending in Jan 2017. Real hourly earnings are oscillating in part because of world inflation waves caused by carry trades from zero interest rates to commodity futures (https://cmpassocregulationblog.blogspot.com/2017/02/world-inflation-waves-united-states.html) and in part because of the collapse of hiring (https://cmpassocregulationblog.blogspot.com/2017/02/recovery-without-hiring-ten-million.html) originating in weak economic growth (https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html). The BLS is revising the data from 2006 to 2009 (http://www.bls.gov/ces/#notices) now available in the release for Jan 2016 and subsequent releases.

Table IB-4, US, Average Hourly Earnings of All Employees NSA in Constant Dollars of 1982-1984

Year	Jan	Aug	Sep	Oct	Nov	Dec
2006		9.87	10.03	10.16	10.14	10.21
2007	10.22	10.00	10.13	10.06	10.02	10.14
2008	10.09	9.81	9.91	10.03	10.34	10.45
2009	10.44	10.27	10.28	10.30	10.37	10.36
2010	10.39	10.33	10.35	10.38	10.37	10.38
2011	10.52	10.09	10.16	10.29	10.23	10.29
2012	10.39	10.10	10.23	10.17	10.24	10.39
∆%12M	-1.2	0.1	0.7	-1.2	0.1	1.0
2013	10.37	10.18	10.32	10.29	10.34	10.43
∆%12M	-0.2	0.8	0.9	1.2	1.0	0.4
2014	10.41	10.22	10.29	10.33	10.49	10.47
∆%12M	0.4	0.4	-0.3	0.4	1.5	0.4
2015	10.65	10.51	10.53	10.57	10.69	10.66
∆%12M	2.3	2.8	2.3	2.3	1.9	1.8
2016	10.76	10.60	10.66	10.77	10.72	10.73
∆%12M	1.0	0.9	1.2	1.9	0.3	0.7
2017	10.85
∆%12M	0.8

Source: US Bureau of Labor Statistics

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

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 $10.33 in 2009 and $10.35 in 2010 to $10.24 in 2011 and $10.23 in 2012 or loss of 1.0 percent (data in http://www.bls.gov/data/). Annual real hourly earnings increased 0.6 percent in 2013 relative to 2012 and increased 0.5 percent in 2014 relative to 2013. Annual real hourly earnings increased 2.1 percent in 2015 relative to 2014. Annual real hourly earnings increased 1.2 percent in 2016 relative to 2015. Annual real hourly earnings increased 5.9 percent from 2007 to 2016 at the rate of 0.6 percent per year. Annual real hourly earnings increased 3.5 percent from 2009 to 2016 at the rate of 0.5 percent per year and increased 6.8 percent from 2008 to 2016 at the rate of 0.8 percent per year. Real hourly earnings of US workers are crawling in a fractured labor market. The economic welfare or wellbeing of United States workers deteriorated in a recovery without hiring (https://cmpassocregulationblog.blogspot.com/2017/02/recovery-without-hiring-ten-million.html), stagnating/declining real wages and 24.2 million unemployed or underemployed (Section I and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html) because of mediocre economic growth (https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html).

The BLS is revising the data from 2006 to 2009 (http://www.bls.gov/ces/#notices) now available for the release of Jan 2016 and subsequent releases.

Chart IB-2, US, Average Hourly Earnings of All Employees in Constant Dollars of 1982-1984, SA 2006-2017

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 Sep 2014. Average hourly earnings adjusted for inflation increased in Oct-Dec 2014, Jan-Dec 2015, Jan-Dec 2016 and Jan 2017.

Chart IB-3, Average Hourly Earnings of All Employees NSA 12-Month Percent Change, 1982-1984 Dollars, NSA 2007-2017

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 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 fell 0.3 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 fell 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 0.6 percent in the 12 months ending in Jun 2012 and 1.8 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 1.9 percent in the 12 months ending in Sep 2012. Real weekly earnings fell 2.6 percent in the 12 months ending in Oct 2012 and increased 0.1 percent in the 12 months ending in Nov 2012 and 2.1 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 0.6 percent in the 12 months ending in Apr 2013 and increased 1.0 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 1.7 percent in the 12 months ending in Jul 2013. Real weekly earnings increased 0.8 percent in the 12 months ending in Aug 2013, 1.2 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 1.3 percent in the 12 months ending in Nov 2013 and increased 0.1 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 0.6 percent in the 12 months ending in Oct 2014. Average weekly earnings increased 2.9 percent in the 12 months ending in Nov 2014 and increased 0.1 percent in the 12 months ending in Dec 2014. Average weekly earnings increased 2.9 percent in the 12 months ending in Jan 2015 and increased 2.5 percent in the 12 months ending in Feb 2015. Average weekly earnings adjusted for inflation increased 2.3 percent in the 12 months ending in Mar 2015 and increased 2.4 percent in the 12 months ending in Apr 2015. Average weekly earnings adjusted for inflation increased 2.4 percent in the 12 months ending in May 2015 and increased 0.1 percent in the 12 months ending in Jun 2015. Average weekly earnings increased 2.0 percent in the 12 months ending in Jul 2015 and 4.2 percent in the 12 months ending in Aug 2015. Average weekly earnings adjusted for inflation increased 1.7 percent in the 12 months ending in Sep 2015 and increased 2.4 percent in the 12 months ending in Oct 2015. Average weekly earnings adjusted for inflation increased 1.6 percent in the 12 months ending in Nov 2015 and increased 1.5 percent in the 12 months ending in Dec 2015. Average weekly earnings increased 1.1 percent in the 12 months ending in Jan 2016. Average weekly earnings contracted 0.7 percent in the 12 months ending in Feb 2015 and contracted 0.5 percent in the 12 months ending in Mar 2016. Average weekly earnings increased 1.2 percent in the 12 months ending in Apr 2016 and increased 2.8 percent in the 12 months ending in May 2016. Average weekly earnings increased 1.3 percent in the 12 months ending in Jun 2016 and increased 1.7 percent in the 12 months ending in Jul 2016. Average weekly earnings decreased 1.2 percent in the 12 months ending in Aug 2016 and increased 1.6 percent in the 12 months ending in Sep 2016. Average weekly earnings increased 2.8 percent in the 12 months ending in Oct 2016 and decreased 1.2 percent in the 12 months ending in Nov 2016. Average weekly earnings increased 0.1 percent in the 12 months ending in Dec 2016 and increased 1.4 percent in the 12 months ending in Jan 2017. 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/2017/01/world-inflation-waves-united-states.html). On an annual basis, average weekly earnings in constant 1982-1984 dollars increased from $347.17 in 2007 to $354.15 in 2013, by 2.0 percent or at the average rate of 0.3 percent per year (data in http://www.bls.gov/data/). Annual average weekly earnings in constant dollars of $352.95 in 2010 fell 0.4 percent to $351.67 in 2012. Annual average weekly earnings increased from $347.17 in 2007 to $356.90 in 2014 or by 2.8 at the average rate of 0.4 percent. Annual average weekly earnings in constant increased from $347.17 in 2007 to $364.62 in 2015 by 5.0 percent at the average rate of 0.6 percent per year. Annual average weekly earnings in constant increased from $347.17 in 2007 to $367.30 in 2016 by 5.8 percent at the average rate of 0.6 percent per year. 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 24.2 million unemployed or underemployed (Section I and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html) in a recovery without hiring (https://cmpassocregulationblog.blogspot.com/2017/02/recovery-without-hiring-ten-million.html) because of mediocre economic growth (https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html). The BLS is revising the data from 2006 to 2009 (http://www.bls.gov/ces/#notices) available in the release for Jan 2016 and subsequent releases.

Table IB-5, US, Average Weekly Earnings of All Employees in Constant Dollars of 1982-1984, NSA 2007-2017

Year	Jan	Aug	Sep	Oct	Nov	Dec
2006		340.60	344.02	352.68	347.94	351.16
2007	346.51	345.14	352.69	344.91	343.85	352.91
2008	342.93	338.41	338.90	342.99	355.78	354.11
2009	350.89	352.16	346.41	348.20	354.76	350.29
2010	350.09	358.43	352.80	356.00	354.66	355.14
2011	359.67	346.97	349.47	358.11	350.99	353.95
2012	358.60	348.33	355.96	348.76	351.31	361.49
∆%12M	-0.3	0.4	1.9	-2.6	0.1	2.1
2013	352.58	351.08	360.10	354.10	355.85	361.82
∆%12M	-1.7	0.8	1.2	1.5	1.3	0.1
2014	353.93	353.78	355.10	356.29	366.21	362.34
∆%12M	0.4	0.8	-1.4	0.6	2.9	0.1
2015	364.09	368.80	361.10	364.67	372.14	367.72
∆%12M	2.9	4.2	1.7	2.4	1.6	1.5
2016	368.11	364.50	366.76	374.88	367.65	367.96
∆%12M	1.1	-1.2	1.6	2.8	-1.2	0.1
2017	373.27
∆%12M	1.4

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 2012-2017. The increase in the final segment is mostly because of collapse of commodity prices in reversals of carry trade exposures followed by reversal of carry trades and new decreases/stability. The BLS is revising the data from 2006 to 2009 (http://www.bls.gov/ces/#notices) available for the release of Jan 2016 and subsequent releases.

Chart IB-4, US, Average Weekly Earnings of All Employees in Constant Dollars of 1982-1984, SA 2006-2017

Source: US Bureau of Labor Statistics http://www.bls.gov/

Chart IB-5, US, Average Weekly Earnings of All Employees NSA in Constant Dollars of 1982-1984 12-Month Percent Change, NSA 2007-2017

Source: US Bureau of Labor Statistics http://www.bls.gov/

IIA United States International Trade. Table IIA-1 provides the trade balance of the US and monthly growth of exports and imports seasonally adjusted with the latest release and revisions (http://www.census.gov/foreign-trade/). Because of heavy dependence on imported oil, fluctuations in the US trade account originate largely in fluctuations of commodity futures prices caused by carry trades from zero interest rates into commodity futures exposures in a process similar to world inflation waves (https://cmpassocregulationblog.blogspot.com/2017/02/world-inflation-waves-united-states.html). The Census Bureau revised data for 2016, 2015, 2014 and 2013. Exports increased 0.6 percent in Jan 2017 while imports increased 2.3 percent. The trade deficit increased from $44,259 million in Dec 2016 to $48,492 million in Jan 2017. The trade deficit deteriorated to $48,189 million in Mar 2015. The trade deficit improved to $40,885 million in Apr 2015 and $40,170 million in May 2015. The trade deficit deteriorated to $42,973 million in Jun 2015 and improved to $39,900 million in Jul 2015, deteriorating to $44,639 million in Aug 2015. The trade deficit improved to $41,072 million in Sep 2015, deteriorating to $41,600 million in Oct 2015 and improving to $41,122 million in Nov 2015. The trade deficit deteriorated to $45,588 million in Mar 2016, improving to $37,259 million in Mar 2016. The trade deficit deteriorated to $38,544 million in Apr 2016, deteriorating to $42,189 million in May 2016 and $45,073 million in Jun 2016. The trade deficit improved to $39,691 million in Jul 2016, deteriorating to $40,513 million in Aug 2016. The trade deficit improved to $36,026 million in Sep 2016, deteriorating to $42,577 million in Oct 2016. The trade deficit deteriorated to $45,484 million in Nov 2016, improving to $44,259 million in Dec 2016. The trade deficit deteriorated to $48,492 million in Jan 2017.

Table IIA-1, US, Trade Balance of Goods and Services Seasonally Adjusted Millions of Dollars and ∆%

	Trade Balance	Exports	Month ∆%	Imports	Month ∆%
Jan 2017	-48,492	192,094	0.6	240,586	2.3
Dec 2016	-44,259	191,014	2.7	235,273	1.5
Nov	-45,484	185,995	-0.2	231,478	1.1
Oct	-42,577	186,398	-2.0	228,975	1.2
Sep	-36,026	190,210	1.0	226,236	-1.1
Aug	-40,513	188,326	0.9	228,839	1.2
Jul	39,691	186,444	2.0	226,134	-0.7
Jun	-45,073	182,723	0.8	227,796	1.9
May	-42,189	181,297	-0.2	223,485	1.5
Apr	-38,544	181,570	1.7	220,115	2.0
Mar	-37,259	178,543	-1.2	215,802	-4.7
Feb	-45,588	180,747	1.1	226,336	1.9
Jan	-43,356	178,813	-2.3	222,170	-1.1
Dec 2015	-41,487	183,074	-0.3	224,561	-0.1
Nov	-41,122	183,576	-1.1	224,698	-1.1
Oct	-41,600	185,587	-1.0	227,186	-0.6
Sep	-41,072	187,550	0.5	228,622	-1.1
Aug	-44,639	186,620	-1.8	231,259	0.5
Jul	-39,900	190,106	-0.1	230,006	-1.4
Jun	-42,973	190,347	0.0	233,320	1.2
May	-40,170	190,361	-0.7	230,531	-0.9
Apr	-40,885	191,675	0.6	232,560	-2.5
Mar	-48,189	190,448	0.3	238,637	5.5
Feb	-36,268	189,852	-1.1	226,121	-3.4
Jan	-42,057	191,968	-2.8	234,024	-3.0
Jan-Dec 2016	-500,560	2,212,079	-2.2	2,712,639	-1.8

Note: Trade Balance of Goods = Exports of Goods less Imports of Goods. Trade balance may not add exactly because of errors of rounding and seasonality. Source: US Census Bureau, Foreign Trade Division

Table IIA-1B provides US exports, imports and the trade balance of goods. The US has not shown a trade surplus in trade of goods since 1976. The deficit of trade in goods deteriorated sharply during the boom years from 2000 to 2007. The deficit improved during the contraction in 2009 but deteriorated in the expansion after 2009. The deficit could deteriorate sharply with growth at full employment.

Table IIA-1B, US, International Trade Balance of Goods, Exports and Imports of Goods, Millions of Dollars, Census Basis

	Balance	∆%	Exports	∆%	Imports	∆%
1960	4,608	(X)	19,626	(X)	15,018	(X)
1961	5,476	18.8	20,190	2.9	14,714	-2.0
1962	4,583	-16.3	20,973	3.9	16,390	11.4
1963	5,289	15.4	22,427	6.9	17,138	4.6
1964	7,006	32.5	25,690	14.5	18,684	9.0
1965	5,333	-23.9	26,699	3.9	21,366	14.4
1966	3,837	-28.1	29,379	10.0	25,542	19.5
1967	4,122	7.4	30,934	5.3	26,812	5.0
1968	837	-79.7	34,063	10.1	33,226	23.9
1969	1,289	54.0	37,332	9.6	36,043	8.5
1970	3,224	150.1	43,176	15.7	39,952	10.8
1971	-1,476	-145.8	44,087	2.1	45,563	14.0
1972	-5,729	288.1	49,854	13.1	55,583	22.0
1973	2,389	-141.7	71,865	44.2	69,476	25.0
1974	-3,884	-262.6	99,437	38.4	103,321	48.7
1975	9,551	-345.9	108,856	9.5	99,305	-3.9
1976	-7,820	-181.9	116,794	7.3	124,614	25.5
1977	-28,352	262.6	123,182	5.5	151,534	21.6
1978	-30,205	6.5	145,847	18.4	176,052	16.2
1979	-23,922	-20.8	186,363	27.8	210,285	19.4
1980	-19,696	-17.7	225,566	21.0	245,262	16.6
1981	-22,267	13.1	238,715	5.8	260,982	6.4
1982	-27,510	23.5	216,442	-9.3	243,952	-6.5
1983	-52,409	90.5	205,639	-5.0	258,048	5.8
1984	-106,702	103.6	223,976	8.9	330,678	28.1
1985	-117,711	10.3	218,815	-2.3	336,526	1.8
1986	-138,279	17.5	227,159	3.8	365,438	8.6
1987	-152,119	10.0	254,122	11.9	406,241	11.2
1988	-118,526	-22.1	322,426	26.9	440,952	8.5
1989	-109,399	-7.7	363,812	12.8	473,211	7.3
1990	-101,719	-7.0	393,592	8.2	495,311	4.7
1991	-66,723	-34.4	421,730	7.1	488,453	-1.4
1992	-84,501	26.6	448,164	6.3	532,665	9.1
1993	-115,568	36.8	465,091	3.8	580,659	9.0
1994	-150,630	30.3	512,626	10.2	663,256	14.2
1995	-158,801	5.4	584,742	14.1	743,543	12.1
1996	-170,214	7.2	625,075	6.9	795,289	7.0
1997	-180,522	6.1	689,182	10.3	869,704	9.4
1998	-229,758	27.3	682,138	-1.0	911,896	4.9
1999	-328,821	43.1	695,797	2.0	1,024,618	12.4
2000	-436,104	32.6	781,918	12.4	1,218,022	18.9
2001	-411,899	-5.6	729,100	-6.8	1,140,999	-6.3
2002	-468,263	13.7	693,103	-4.9	1,161,366	1.8
2003	-532,350	13.7	724,771	4.6	1,257,121	8.2
2004	-654,830	23.0	814,875	12.4	1,469,704	16.9
2005	-772,373	18.0	901,082	10.6	1,673,455	13.9
2006	-827,971	7.2	1,025,967	13.9	1,853,938	10.8
2007	-808,763	-2.3	1,148,199	11.9	1,956,962	5.6
2008	-816,199	0.9	1,287,442	12.1	2,103,641	7.5
2009	-503,582	-38.3	1,056,043	-18.0	1,559,625	-25.9
2010	-635,362	26.2	1,278,495	21.1	1,913,857	22.7
2011	-725,447	14.2	1,482,508	16.0	2,207,954	15.4
2012	-730,446	0.7	1,545,821	4.3	2,276,267	3.1
2013	-689,470	-5.6	1,578,517	2.1	2,267,987	-0.4
2014	-735,194	6.6	1,621,172	2.7	2,356,366	3.9
2015	-745,660	1.4	1,502,572	-7.3	2,248,232	-4.6
2016	-734,316	-1.5	1,454,624	-3.2	2,188,940	-2.6

Source: US Census Bureau, Foreign Trade Division

http://www.census.gov/briefrm/esbr/www/esbr042.html

Chart IIA-1 of the US Census Bureau of the Department of Commerce shows that the trade deficit (gap between exports and imports) fell during the economic contraction after 2007 but has grown again during the expansion. The low average rate of growth of GDP of 2.1 percent during the expansion beginning since IIIQ2009 does not deteriorate further the trade balance. Higher rates of growth may cause sharper deterioration.

Chart IIA-1, US, International Trade Balance, Exports and Imports of Goods and Services USD Billions

Source: US Census Bureau

Table IIA-2B provides the US international trade balance, exports and imports of goods and services on an annual basis from 1992 to 2016. The trade balance deteriorated sharply over the long term. The US has a large deficit in goods or exports less imports of goods but it has a surplus in services that helps to reduce the trade account deficit or exports less imports of goods and services. The current account deficit of the US not seasonally adjusted decreased from $137.2 billion in IIIQ2015 to $133.2 billion in IIIQ2016 (http://www.bea.gov/international/index.htm). The current account deficit seasonally adjusted at annual rate increased from 2.7 percent of GDP in IIIQ2015 to 2.6 percent of GDP in IIQ2016, decreasing to 2.4 percent of GDP in IIIQ2016 (http://www.bea.gov/international/index.htm http://www.bea.gov/iTable/index_nipa.cfm). The ratio of the current account deficit to GDP has stabilized around 3 percent of GDP compared with much higher percentages before the recession (see Pelaez and Pelaez, The Global Recession Risk (2007), Globalization and the State, Vol. II (2008b), 183-94, Government Intervention in Globalization (2008c), 167-71). The final rows of Table IIA-2B show marginal improvement of the trade deficit from $548,625 million in 2011 to lower $536,773 million in 2012 with exports growing 4.3 percent and imports 3.0 percent. The trade balance improved further to deficit of $461,876 million in 2013 with growth of exports of 3.4 percent while imports virtually stagnated. The trade deficit deteriorated in 2014 to $490,176 million in 2014 with growth of exports of 3.6 percent and of imports of 4.0 percent. The trade deficit deteriorated in 2015 to $500,361 million with decrease of exports of 4.9 percent and decrease of imports of 3.7 percent. The trade deficit deteriorated in 2016 to $502,252 million with decrease of exports of 2.3 percent and decrease of imports of 1.8 percent. Growth and commodity shocks under alternating inflation waves (https://cmpassocregulationblog.blogspot.com/2017/02/world-inflation-waves-united-states.html) have deteriorated the trade deficit from the low of $383,774 million in 2009.

Table IIA-2B, US, International Trade Balance of Goods and Services, Exports and Imports of Goods and Services, SA, Millions of Dollars, Balance of Payments Basis

	Balance	Exports	∆%	Imports	∆%
1960	3,508	25,940	NA	22,432	NA
1961	4,195	26,403	1.8	22,208	-1.0
1962	3,370	27,722	5.0	24,352	9.7
1963	4,210	29,620	6.8	25,410	4.3
1964	6,022	33,341	12.6	27,319	7.5
1965	4,664	35,285	5.8	30,621	12.1
1966	2,939	38,926	10.3	35,987	17.5
1967	2,604	41,333	6.2	38,729	7.6
1968	250	45,543	10.2	45,293	16.9
1969	91	49,220	8.1	49,129	8.5
1970	2,254	56,640	15.1	54,386	10.7
1971	-1,302	59,677	5.4	60,979	12.1
1972	-5,443	67,222	12.6	72,665	19.2
1973	1,900	91,242	35.7	89,342	23.0
1974	-4,293	120,897	32.5	125,190	40.1
1975	12,404	132,585	9.7	120,181	-4.0
1976	-6,082	142,716	7.6	148,798	23.8
1977	-27,246	152,301	6.7	179,547	20.7
1978	-29,763	178,428	17.2	208,191	16.0
1979	-24,565	224,131	25.6	248,696	19.5
1980	-19,407	271,834	21.3	291,241	17.1
1981	-16,172	294,398	8.3	310,570	6.6
1982	-24,156	275,236	-6.5	299,391	-3.6
1983	-57,767	266,106	-3.3	323,874	8.2
1984	-109,072	291,094	9.4	400,166	23.6
1985	-121,880	289,070	-0.7	410,950	2.7
1986	-138,538	310,033	7.3	448,572	9.2
1987	-151,684	348,869	12.5	500,552	11.6
1988	-114,566	431,149	23.6	545,715	9.0
1989	-93,141	487,003	13.0	580,144	6.3
1990	-80,864	535,233	9.9	616,097	6.2
1991	-31,135	578,344	8.1	609,479	-1.1
1992	-39,212	616,882	6.7	656,094	7.6
1993	-70,311	642,863	4.2	713,174	8.7
1994	-98,493	703,254	9.4	801,747	12.4
1995	-96,384	794,387	13.0	890,771	11.1
1996	-104,065	851,602	7.2	955,667	7.3
1997	-108,273	934,453	9.7	1,042,726	9.1
1998	-166,140	933,174	-0.1	1,099,314	5.4
1999	-258,617	969,867	3.9	1,228,485	11.8
2000	-372,517	1,075,321	10.9	1,447,837	17.9
2001	-361,511	1,005,654	-6.5	1,367,165	-5.6
2002	-418,955	978,706	-2.7	1,397,660	2.2
2003	-493,890	1,020,418	4.3	1,514,308	8.3
2004	-609,883	1,161,549	13.8	1,771,433	17.0
2005	-714,245	1,286,022	10.7	2,000,267	12.9
2006	-761,716	1,457,642	13.3	2,219,358	11.0
2007	-705,375	1,653,548	13.4	2,358,922	6.3
2008	-708,726	1,841,612	11.4	2,550,339	8.1
2009	-383,774	1,583,053	-14.0	1,966,827	-22.9
2010	-494,658	1,853,606	17.1	2,348,263	19.4
2011	-548,625	2,127,021	14.8	2,675,646	13.9
2012	-536,773	2,218,989	4.3	2,755,762	3.0
2013	-461,876	2,293,457	3.4	2,755,334	0.0
2014	-490,176	2,376,577	3.6	2,866,754	4.0
2015	-500,361	2,261,163	-4.9	2,761,525	-3.7
2016	-502,252	2,209,418	-2.3	2,711,671	-1.8

Source: US Census Bureau

Chart IIA-2 of the US Census Bureau provides the US trade account in goods and services SA from Jan 1992 to Jan 2017. There is long-term trend of deterioration of the US trade deficit shown vividly by Chart IIA-2. The global recession from IVQ2007 to IIQ2009 reversed the trend of deterioration. Deterioration resumed together with incomplete recovery and was influenced significantly by the carry trade from zero interest rates to commodity futures exposures (these arguments are elaborated in Pelaez and Pelaez, Financial Regulation after the Global Recession (2009a), 157-66, Regulation of Banks and Finance (2009b), 217-27, International Financial Architecture (2005), 15-18, The Global Recession Risk (2007), 221-5, Globalization and the State Vol. II (2008b), 197-213, Government Intervention in Globalization (2008c), 182-4 http://cmpassocregulationblog.blogspot.com/2011/07/causes-of-2007-creditdollar-crisis.html http://cmpassocregulationblog.blogspot.com/2011/01/professor-mckinnons-bubble-economy.html http://cmpassocregulationblog.blogspot.com/2011/01/world-inflation-quantitative-easing.html http://cmpassocregulationblog.blogspot.com/2011/01/treasury-yields-valuation-of-risk.html http://cmpassocregulationblog.blogspot.com/2010/11/quantitative-easing-theory-evidence-and.html http://cmpassocregulationblog.blogspot.com/2010/12/is-fed-printing-money-what-are.html). Earlier research focused on the long-term external imbalance of the US in the form of trade and current account deficits (Pelaez and Pelaez, The Global Recession Risk (2007), Globalization and the State Vol. II (2008b) 183-94, Government Intervention in Globalization (2008c), 167-71). US external imbalances have not been fully resolved and tend to widen together with improving world economic activity and commodity price shocks. There are additional effects for revaluation of the dollar with the Fed orienting interest rate increases while the European Central Bank and the Bank of Japan determine negative nominal interest rates.

Chart IIA-2, US, Balance of Trade SA, Monthly, Millions of Dollars, Jan 1992-Jan 2017

Source: US Census Bureau

Chart IIA-3 of the US Census Bureau provides US exports SA from Jan 1992 to Jan 2017. There was sharp acceleration from 2003 to 2007 during worldwide economic boom and increasing inflation. Exports fell sharply during the financial crisis and global recession from IVQ2007 to IIQ2009. Growth picked up again together with world trade and inflation but stalled in the final segment with less rapid global growth and inflation.

Chart IIA-3, US, Exports SA, Monthly, Millions of Dollars Jan 1992-Jan 2017

Source: US Census Bureau

Chart IIA-4 of the US Census Bureau provides US imports SA from Jan 1992 to Jan 2017. Growth was stronger between 2003 and 2007 with worldwide economic boom and inflation. There was sharp drop during the financial crisis and global recession. There is stalling import levels in the final segment resulting from weaker world economic growth and diminishing inflation because of risk aversion and portfolio reallocations from commodity exposures to equities.

Chart IIA-4, US, Imports SA, Monthly, Millions of Dollars Jan 1992-Jan 2017

Source: US Census Bureau

There is deterioration of the US trade balance in goods in Table IIA-3 from deficit of $64,071 million in Jan 2016 to deficit of $69,684 million in Jan 2017. The nonpetroleum deficit increased by $3153 million while the petroleum deficit increased $2738 million. Total exports of goods increased 9.4 percent in Jan 2017 relative to a year earlier while total imports increased 9.2 percent. Nonpetroleum exports increased 7.0 percent from Jan 2016 to Jan 2017 while nonpetroleum imports increased 6.5 percent. Petroleum imports increased 48.1 percent.

Table IIA-3, US, International Trade in Goods Balance, Exports and Imports $ Millions and ∆% SA

	Jan 2017	Jan 2016	∆%
Total Balance	-69,684	-64,071
Petroleum	-7,557	-4,819
Non Petroleum	-61,282	-58,129
Total Exports	127,954	116,977	9.4
Petroleum	9,317	6,575	41.7
Non Petroleum	117,625	109,908	7.0
Total Imports	197,638	181,048	9.2
Petroleum	16,874	11,394	48.1
Non Petroleum	178,906	168,037	6.5

Details may not add because of rounding and seasonal adjustment

Source: US Census Bureau

US exports and imports of goods not seasonally adjusted in Jan 2017 and Jan 2016 are in Table IIA-4. The rate of growth of exports was minus 3.2 percent and minus 2.6 percent for imports. The US has partial hedge of commodity price increases in exports of agricultural commodities that increased 22.3 percent and of mineral fuels that increased 53.6 percent both because prices of raw materials and commodities increase and fall recurrently as a result of shocks of risk aversion and portfolio reallocations. The US exports an insignificant but growing amount of crude oil, increasing 37.0 percent in cumulative Jan 2017 relative to a year earlier. US exports and imports consist mostly of manufactured products, with less rapidly increasing prices. US manufactured exports increased 4.9 percent while manufactured imports increased 9.6 percent. Significant part of the US trade imbalance originates in imports of mineral fuels decreasing 51.0 percent and petroleum increasing 52.8 percent with wide oscillations in oil prices. The limited hedge in exports of agricultural commodities and mineral fuels compared with substantial imports of mineral fuels and crude oil results in waves of deterioration of the terms of trade of the US, or export prices relative to import prices, originating in commodity price increases caused by carry trades from zero interest rates. These waves are similar to those in worldwide inflation.

Table IIA-4, US, Exports and Imports of Goods, Not Seasonally Adjusted Millions of Dollars and %, Census Basis

	Jan 2017 $ Millions	Jan 2016 $ Millions	∆%
Exports	117,711	108,273	8.7
Manufactured	83,085	79,230	4.9
Agricultural Commodities	12,350	10,099	22.3
Mineral Fuels	10,321	6,719	53.6
Petroleum	7,552	5,513	37.0
Imports	185,841	165,873	12.0
Manufactured	158,622	144,666	9.6
Agricultural Commodities	10,080	10,099	-0.2
Mineral Fuels	17,077	11,312	51.0
Petroleum	15,713	10,281	52.8

Source: US Census Bureau