CMP Associates Regulation Blog: Increase in Dec 2021 of Nonfarm Payroll Jobs by 199 Thousand and Private Payroll Jobs by 211 Thousand in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021), Twenty-Four Million Unemployed or Underemployed in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide, Accelerating Inflation Eroding Real Wages, Job Creation, Recovery Without Hiring, United States Current Account of Balance of Payments and Net International Investment Position, Stagflation Risks, Worldwide Fiscal, Monetary and External Imbalances, World Cyclical Slow Growth, and Government Intervention in Globalization: Part II

Increase in Dec 2021 of Nonfarm Payroll Jobs by 199 Thousand and Private Payroll Jobs by 211 Thousand in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021), Twenty-Four Million Unemployed or Underemployed in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide, Accelerating Inflation Eroding Real Wages, Job Creation, Recovery Without Hiring, United States Current Account of Balance of Payments and Net International Investment Position, Stagflation Risks, Worldwide Fiscal, Monetary and External Imbalances, World Cyclical Slow Growth, and Government Intervention in Globalization

Carlos M. Pelaez

I Twenty-Four Million Unemployed or Underemployed in the Lost Economic Cycle of the Global Recession with Economic Growth Underperforming Below Trend Worldwide

IA2 Number of People in Job Stress

IA3 Long-term and Cyclical Comparison of Employment

IA4 Job Creation

IB Stagnating Real Wages

I Recovery without Hiring

IA1 Hiring Collapse

IA2 Labor Underutilization

ICA3 Fifteen Million Fewer Full-time Jobs

IA4 Theory and Reality of Cyclical Slow Growth Not Secular Stagnation: Youth and Middle-Age Unemployment

II United States Current Account of Balance of Payments and Net International Investment Position

III World Financial Turbulence

IV Global Inflation

V World Economic Slowdown

VA United States

VB Japan

VC China

VD Euro Area

VE Germany

VF France

VG Italy

VH United Kingdom

VI Valuation of Risk Financial Assets

VII Economic Indicators

VIII Interest Rates

IX Conclusion

References

Appendixes

Appendix I The Great Inflation

IIIB Appendix on Safe Haven Currencies

IIIC Appendix on Fiscal Compact

IIID Appendix on European Central Bank Large Scale Lender of Last Resort

IIIG Appendix on Deficit Financing of Growth and the Debt Crisis

Preamble. The current federal debt limit of the United States is $29.04 trillion (https://home.treasury.gov/system/files/136/FINAL-Daily-Debt-Subject-Limit-Activity-2021_12_15.pdf). The Net International Investment Position of the United States, or foreign debt, is $16.1 trillion (https://www.bea.gov/sites/default/files/2021-12/intinv321.pdf Section II and earlier https://cmpassocregulationblog.blogspot.com/2021/10/total-nonfarm-hires-move-from-4986.html). The United States current account deficit is 3.7 percent of GDP in IIIQ2021 (Section II and earlier https://cmpassocregulationblog.blogspot.com/2021/10/total-nonfarm-hires-move-from-4986.html). The Treasury deficit of the United States reached $2.8 trillion in fiscal year 2021 (https://fiscal.treasury.gov/reports-statements/mts/). Total assets of Federal Reserve Banks reached $8.8 trillion on Jan 5, 2022 and securities held outright reached $8.3 trillion (https://www.federalreserve.gov/releases/h41/current/h41.htm#h41tab1). US GDP nominal NSA reached $23.2 trillion in IIIQ2021 (https://www.bea.gov/sites/default/files/2021-12/gdp3q21_3rd.pdf). Total Treasury interest-bearing, marketable debt held by private investors increased from $3635 billion in 2007 to $16,439 billion in Sep 2021 (Fiscal Year 2021) or increase by 352.2 percent (https://fiscal.treasury.gov/reports-statements/treasury-bulletin/).

Chart VII-4 of the Energy Information Administration provides the price of the Natural Gas Futures Contract increasing from $2.581 on Jan 4, 2021 to $3.717 per million Btu on Jan 4, 2022 or 44.0 percent.

Chart VII-4, US, Natural Gas Futures Contract 1

Source: US Energy Information Administration

https://www.eia.gov/dnav/ng/hist/rngc1d.htm

Chart VII-5 of the US Energy Administration provides US field production of oil decreasing from a peak of 12,966 thousand barrels per day in Nov 2019 to the final point of 11,473 thousand barrels per day in Oct 2021.

Chart VII-5, US, US, Field Production of Crude Oil, Thousand Barrels Per Day

Source: US Energy Information Administration

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MCRFPUS2&f=M

I Recovery without Hiring. Professor Edward P. Lazear (2012Jan19) at Stanford University finds that recovery of hiring in the US to peaks attained in 2007 requires an increase of hiring by 30 percent while hiring levels increased by only 4 percent from Jan 2009 to Jan 2012. The high level of unemployment with low level of hiring reduces the statistical probability that the unemployed will find a job. According to Lazear (2012Jan19), the probability of finding a new job in early 2012 is about one third of the probability of finding a job in 2007. Improvements in labor markets have not increased the probability of finding a new job. Lazear (2012Jan19) quotes an essay coauthored with James R. Spletzer in the American Economic Review (Lazear and Spletzer 2012Mar, 2012May) on the concept of churn. A dynamic labor market occurs when a similar number of workers is hired as those who are separated. This replacement of separated workers is called churn, which explains about two-thirds of total hiring. Typically, wage increases received in a new job are higher by 8 percent. Lazear (2012Jan19) argues that churn has declined 35 percent from the level before the recession in IVQ2007. Because of the collapse of churn, there are no opportunities in escaping falling real wages by moving to another job. As this blog argues, there are meager chances of escaping unemployment because of the collapse of hiring and those employed cannot escape falling real wages by moving to another job (Section II and earlier https://cmpassocregulationblog.blogspot.com/2021/12/recovery-without-hiring-in-lost.html). Lazear and Spletzer (2012Mar, 1) argue that reductions of churn reduce the operational effectiveness of labor markets. Churn is part of the allocation of resources or in this case labor to occupations of higher marginal returns. The decline in churn can harm static and dynamic economic efficiency. Losses from decline of churn during recessions can affect an economy over the long-term by preventing optimal growth trajectories because resources are not used in the occupations where they provide highest marginal returns. Lazear and Spletzer (2012Mar 7-8) conclude that: “under a number of assumptions, we estimate that the loss in output during the recession [of 2007 to 2009] and its aftermath resulting from reduced churn equaled $208 billion. On an annual basis, this amounts to about .4% of GDP for a period of 3½ years.”

There are two additional facts discussed in the next blog post: (1) there are about fifteen million fewer full-time jobs currently than before the recession of 2008 and 2009; and (2) the extremely high and rigid rate of youth unemployment is denying an early start to young people ages 16 to 24 years while unemployment of ages 45 years or over has swelled. There are four subsections. IA1 Hiring Collapse provides the data and analysis on the weakness of hiring in the United States economy. IA2 Labor Underutilization provides the measures of labor underutilization of the Bureau of Labor Statistics (BLS). Statistics on the decline of full-time employment are in IA3 Fifteen Million Fewer Full-time Jobs. IA4 Theory and Reality of Cyclical Slow Growth Not Secular Stagnation: Youth and Middle-Age Unemployment provides the data on high unemployment of ages 16 to 24 years and of ages 45 years or over and will be in the next blog post.

IA1 Hiring Collapse. An important characteristic of the current fractured labor market of the US is the closing of the avenue for exiting unemployment and underemployment normally available through dynamic hiring. Another avenue that is closed is the opportunity for advancement in moving to new jobs that pay better salaries and benefits again because of the collapse of hiring in the United States. Those who are unemployed or underemployed cannot find a new job even accepting lower wages and no benefits. The employed cannot escape declining inflation-adjusted earnings because there is no hiring. The objective of this section is to analyze hiring and labor underutilization in the United States.

Blanchard and Katz (1997, 53 consider an appropriate measure of job stress:

“The right measure of the state of the labor market is the exit rate from unemployment, defined as the number of hires divided by the number unemployed, rather than the unemployment rate itself. What matters to the unemployed is not how many of them there are, but how many of them there are in relation to the number of hires by firms.”

The natural rate of unemployment and the similar NAIRU are quite difficult to estimate in practice (Ibid; see Ball and Mankiw 2002).

The Bureau of Labor Statistics (BLS) created the Job Openings and Labor Turnover Survey (JOLTS) with the purpose that (https://www.bls.gov/jlt/jltover.htm#purpose):

“These data serve as demand-side indicators of labor shortages at the national level. Prior to JOLTS, there was no economic indicator of the unmet demand for labor with which to assess the presence or extent of labor shortages in the United States. The availability of unfilled jobs—the jobs opening rate—is an important measure of tightness of job markets, parallel to existing measures of unemployment.”

The BLS collects data from about 16,000 US business establishments in nonagricultural industries through the 50 states and DC. The data are released monthly and constitute an important complement to other data provided by the BLS (see also Lazear and Spletzer 2012Mar, 6-7).

There is socio-economic stress in the combination of adverse events and cyclical performance:

Mediocre economic growth below potential and long-term trend, resulting in idle productive resources with GDP three trillion dollars below trend). US GDP grew at the average rate of 3.1 percent per year from 1929 to 2020 (https://cmpassocregulationblog.blogspot.com/2021/12/us-gdp-growing-at-23-saar-in-iiiq2021.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/us-gdp-growing-at-21-saar-in-iiiq2021.html), with similar performance in whole cycles of contractions and expansions, but only at 1.3 percent per year on average from 2007 to 2020 and 1.3 percent from 2007 to 2020. GDP in IIIQ2021 is 17.7 percent lower than what it would have been had it grown at trend of 3.0 percent.
Private fixed investment stagnating initially followed by cumulative increase of 36.3 percent in the entire cycle from IVQ2007 to IIIQ2021 (https://cmpassocregulationblog.blogspot.com/2021/12/us-gdp-growing-at-23-saar-in-iiiq2021.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/us-gdp-growing-at-21-saar-in-iiiq2021.html).
Twenty four million or 13.6 percent of the effective labor force unemployed or underemployed in involuntary part-time jobs with cyclically stagnating or declining real wages (Section I and earlier https://cmpassocregulationblog.blogspot.com/2021/12/increase-in-nov-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/increase-in-oct-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/10/increase-in-sep-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/09/increase-in-aug-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/08/increase-in-jul-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/07/increase-in-jun-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/06/increase-in-may-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/05/increase-in-apr-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/04/increase-in-apr-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/04/increase-in-apr-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/03/increase-in-feb-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/02/increasing-valuations-of-risks.html and earlier https://cmpassocregulationblog.blogspot.com/2021/01/decrease-in-dec-2020-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2020/12/dollar-devaluation-increasing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/11/increase-in-oct-2020-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2020/10/increasingvaluations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2020/09/exchange-rate-fluctuations-1.html and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2020/07/increase-of-total-nonfarm-payroll-jobs.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/creation-of-three-million-private.html and earlier https://cmpassocregulationblog.blogspot.com/2020/05/fifty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2020/04/lockdown-of-economic-activity-in.html and earlier https://cmpassocregulationblog.blogspot.com/2020/03/stress-of-world-financial-markets-fomc.html and earlier https://cmpassocregulationblog.blogspot.com/2020/02/increasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2020/01/rising-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/12/increase-in-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/11/increasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/10/volatility-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/09/increase-in-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/08/dollar-appreciation-contraction-of.html and earlier https://cmpassocregulationblog.blogspot.com/2019/07/twenty-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2019/06/increase-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/05/fluctuating-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/04/flattening-yield-curve-of-treasury.html and earlier https://cmpassocregulationblog.blogspot.com/2019/03/dollar-revaluation-twenty-one-million.html and earlier https://cmpassocregulationblog.blogspot.com/2019/02/wait-and-see-patient-forecast-dependent.html and earlier https://cmpassocregulationblog.blogspot.com/2019/01/the-fed-will-be-patient-adjusting.html and earlier https://cmpassocregulationblog.blogspot.com/2018/12/fluctuation-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2018/11/fluctuations-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2018/10/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/09/twenty-on00000000e-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/08/fomc-policy-rate-unchanged-competitive.html and earlier https://cmpassocregulationblog.blogspot.com/2018/07/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/06/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/05/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/04/twenty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/03/twenty-three-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/02/twenty-four-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/01/twenty-three-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/12/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/11/unchanged-fomc-policy-rate-gradual.html and earlier https://cmpassocregulationblog.blogspot.com/2017/10/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/09/twenty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/08/data-dependent-monetary-policy-with.html and earlier https://cmpassocregulationblog.blogspot.com/2017/07/rising-yields-twenty-two-million.html and earlier https://cmpassocregulationblog.blogspot.com/2017/06/twenty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/05/twenty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/04/twenty-three-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/03/increasing-interest-rates-twenty-four.html and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2017/01/twenty-four-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-yields-and-dollar-revaluation.html and earlier http://cmpassocregulationblog.blogspot.com/2016/11/the-case-for-increase-in-federal-funds.html and earlier http://cmpassocregulationblog.blogspot.com/2016/10/twenty-four-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-valuations-of-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2016/08/global-competitive-easing-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/07/fluctuating-valuations-of-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2016/06/financial-turbulence-twenty-four.html and earlier http://cmpassocregulationblog.blogspot.com/2016/05/twenty-four-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/02/fluctuating-risk-financial-assets-in.html and earlier http://cmpassocregulationblog.blogspot.com/2016/01/weakening-equities-with-exchange-rate.html and earlier (http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-fed-funds-rate-followed-by.html and earlier http://cmpassocregulationblog.blogspot.com/2015/11/live-possibility-of-interest-rates.html and earlier http://cmpassocregulationblog.blogspot.com/2015/10/labor-market-uncertainty-and-interest.html and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what.html and earlier http://cmpassocregulationblog.blogspot.com/2015/08/fluctuating-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2015/07/turbulence-of-financial-asset.html)
Stagnating real disposable income per person or income per person after inflation and taxes (https://cmpassocregulationblog.blogspot.com/2022/01/real-disposable-income-decreasing-02.html and earlier https://cmpassocregulationblog.blogspot.com/2021/12/increase-in-nov-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/increase-in-oct-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/10/increase-in-sep-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/09/increase-in-aug-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/08/increase-in-jul-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/07/increase-in-jun-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/06/increase-in-may-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/05/increase-in-apr-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/04/increase-in-apr-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/03/increase-in-feb-2021-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2021/02/increasing-valuations-of-risks.html and earlier https://cmpassocregulationblog.blogspot.com/2021/01/recovering-gdp-of-major-world-economies.html and earlier https://cmpassocregulationblog.blogspot.com/2020/12/dollar-devaluation-increasing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/11/increase-in-oct-2020-of-nonfarm-payroll.html and earlier https://cmpassocregulationblog.blogspot.com/2020/10/increasingvaluations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2020/09/exchange-rate-fluctuations-1.html and earlier https://cmpassocregulationblog.blogspot.com/2020/08/thirty-eight-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2020/07/increase-of-total-nonfarm-payroll-jobs.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/creation-of-three-million-private.html and earlier https://cmpassocregulationblog.blogspot.com/2020/05/fifty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2020/04/lockdown-of-economic-activity-in.html and earlier https://cmpassocregulationblog.blogspot.com/2020/03/stress-of-world-financial-markets-fomc.html and earlier https://cmpassocregulationblog.blogspot.com/2020/02/increasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2020/01/increasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/12/increase-in-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/11/increasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/10/volatility-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/09/increase-in-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/08/dollar-appreciation-contraction-of.html and earlier https://cmpassocregulationblog.blogspot.com/2019/07/twenty-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2019/06/increase-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/05/fluctuating-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2019/04/flattening-yield-curve-of-treasury.html and earlier https://cmpassocregulationblog.blogspot.com/2019/03/dollar-revaluation-twenty-one-million.html and earlier https://cmpassocregulationblog.blogspot.com/2018/12/mediocre-cyclical-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/12/fluctuation-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2018/11/fluctuations-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2018/09/fomc-increases-policy-interest-rate.html and earlier https://cmpassocregulationblog.blogspot.com/2018/09/revision-of-united-states-national.html and earlier https://cmpassocregulationblog.blogspot.com/2018/09/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/08/revision-of-united-states-national.html and earlier https://cmpassocregulationblog.blogspot.com/2018/08/fomc-policy-rate-unchanged-competitive.html and earlier https://cmpassocregulationblog.blogspot.com/2018/07/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/06/stronger-dollar-mediocre-cyclical.html and earlier https://cmpassocregulationblog.blogspot.com/2018/05/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/04/twenty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/04/twenty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/03/twenty-three-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2018/02/twenty-four-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/12/dollar-devaluation-cyclically.html and earlier https://cmpassocregulationblog.blogspot.com/2017/12/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/11/unchanged-fomc-policy-rate-gradual.html and earlier https://cmpassocregulationblog.blogspot.com/2017/10/twenty-one-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/09/twenty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/08/data-dependent-monetary-policy-with.html and earlier https://cmpassocregulationblog.blogspot.com/2017/07/rising-yields-twenty-two-million.html and earlier https://cmpassocregulationblog.blogspot.com/2017/06/twenty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/05/twenty-two-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/04/twenty-three-million-unemployed-or.html and earlier https://cmpassocregulationblog.blogspot.com/2017/03/rising-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2017/02/twenty-six-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2017/01/twenty-four-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-yields-and-dollar-revaluation.html and earlier http://cmpassocregulationblog.blogspot.com/2016/12/mediocre-cyclical-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2016/12/rising-yields-and-dollar-revaluation.html and earlier http://cmpassocregulationblog.blogspot.com/2016/11/the-case-for-increase-in-federal-funds.html and earlier http://cmpassocregulationblog.blogspot.com/2016/11/the-case-for-increase-in-federal-funds.html and earlier http://cmpassocregulationblog.blogspot.com/2016/10/twenty-four-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-valuations-of-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2016/08/global-competitive-easing-or.html and earlier (http://cmpassocregulationblog.blogspot.com/2016/07/financial-asset-values-rebound-from.html and earlier http://cmpassocregulationblog.blogspot.com/2016/06/financial-turbulence-twenty-four.html and earlier http://cmpassocregulationblog.blogspot.com/2016/05/twenty-four-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/04/proceeding-cautiously-in-monetary.html and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/03/twenty-five-million-unemployed-or.html and earlier http://cmpassocregulationblog.blogspot.com/2016/02/fluctuating-risk-financial-assets-in.html and earlier http://cmpassocregulationblog.blogspot.com/2015/12/dollar-revaluation-and-decreasing.html and earlier http://cmpassocregulationblog.blogspot.com/2015/11/dollar-revaluation-constraining.html and earlier http://cmpassocregulationblog.blogspot.com/2015/11/dollar-revaluation-constraining.html and earlier http://cmpassocregulationblog.blogspot.com/2015/11/live-possibility-of-interest-rates.html and earlier http://cmpassocregulationblog.blogspot.com/2015/10/labor-market-uncertainty-and-interest.html and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-policy-dependent-on-what.html and earlier http://cmpassocregulationblog.blogspot.com/2015/08/fluctuating-risk-financial-assets.html and earlier http://cmpassocregulationblog.blogspot.com/2015/06/international-valuations-of-financial.html and earlier http://cmpassocregulationblog.blogspot.com/2015/06/higher-volatility-of-asset-prices-at.html and earlier http://cmpassocregulationblog.blogspot.com/2015/05/dollar-devaluation-and-carry-trade.html and earlier http://cmpassocregulationblog.blogspot.com/2015/04/volatility-of-valuations-of-financial.html)

Output of manufacturing (SIC) in Nov 2021 at 37.5 percent below long-term trend since 1919 and at 26.6 percent below trend since 1986. Output of manufacturing (NAICS) at 40.7 percent below trend measured from 1986 to 2006 and 24.6 percent below trend measured from 1999 to 2006 (https://cmpassocregulationblog.blogspot.com/2021/12/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/total-nonfarm-hires-move-from-4986.html and earlier https://cmpassocregulationblog.blogspot.com/2021/10/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/09/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/08/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/07/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/06/unchanged-fomc-target-fed-funds-rate.html and earlier https://cmpassocregulationblog.blogspot.com/2021/05/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/04/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/03/unchanged-fomc-target-fed-funds-rate.html and earlier https://cmpassocregulationblog.blogspot.com/2021/02/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2021/01/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/12/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/11/cumulative-growth-of-us-manufacturing.html and earlier (https://cmpassocregulationblog.blogspot.com/2020/10/cumulative-growth-of-us-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/09/federal-open-market-committee-leaves.html and earlier https://cmpassocregulationblog.blogspot.com/2020/08/us-industrial-production-increased-3.html and earlier https://cmpassocregulationblog.blogspot.com/2020/07/growth-of-industrial-production-of-54.html and earlier https://cmpassocregulationblog.blogspot.com/2020/06/recovery-in-jun-2020-of-manufacturing.html and earlier https://cmpassocregulationblog.blogspot.com/2020/05/recovery-without-hiring-twenty-million.html and earlier https://cmpassocregulationblog.blogspot.com/2020/04/contraction-of-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2020/03/sharp-contraction-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2020/02/declining-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2020/01/declining-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/12/diverging-economic-conditions-and.html and earlier https://cmpassocregulationblog.blogspot.com/2019/11/oscillating-risk-financial-assets-world.html and earlier https://cmpassocregulationblog.blogspot.com/2019/10/increasing-valuations-of-risk-financial_26.html and earlier https://cmpassocregulationblog.blogspot.com/2019/09/uncertain-fomc-outlook-of-monetary.html and earlier https://cmpassocregulationblog.blogspot.com/2019/08/global-decline-of-yields-of-government.html and earlier https://cmpassocregulationblog.blogspot.com/2019/07/global-manufacturing-stress-world.html and earlier https://cmpassocregulationblog.blogspot.com/2019/07/global-manufacturing-stress-world.html and earlier https://cmpassocregulationblog.blogspot.com/2019/06/fomc-outlook-uncertainty-central-bank.html and earlier https://cmpassocregulationblog.blogspot.com/2019/05/decreasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/04/increasing-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2019/03/inverted-yield-curve-of-treasury.html and earlier (https://cmpassocregulationblog.blogspot.com/2019/02/revaluation-of-yuanus-dollar-exchange.html and earlier https://cmpassocregulationblog.blogspot.com/2019/01/delays-in-updating-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/12/increase-of-interest-rates-by-monetary.html and earlier https://cmpassocregulationblog.blogspot.com/2018/11/weaker-world-economic-growth-with.html and earlier https://cmpassocregulationblog.blogspot.com/2018/10/oscillation-of-valuations-of-risk.html and earlier https://cmpassocregulationblog.blogspot.com/2018/09/world-inflation-waves-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/08/world-inflation-waves-lost-economic.html and earlier https://cmpassocregulationblog.blogspot.com/2018/07/continuing-gradual-increases-in-fed.html and earlier (https://cmpassocregulationblog.blogspot.com/2018/06/world-inflation-waves-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/05/dollar-revaluation-united-states_24.html and earlier (https://cmpassocregulationblog.blogspot.com/2018/04/rising-yields-world-inflation-waves.html and earlier https://cmpassocregulationblog.blogspot.com/2018/03/united-states-inflation-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/02/world-inflation-waves-united-states.html and earlier https://cmpassocregulationblog.blogspot.com/2018/01/dollar-devaluation-and-increasing.html and earlier https://cmpassocregulationblog.blogspot.com/2017/12/mediocre-cyclical-united-states_23.html and earlier https://cmpassocregulationblog.blogspot.com/2017/11/the-lost-economic-cycle-of-global_25.html and earlier https://cmpassocregulationblog.blogspot.com/2017/10/world-inflation-waves-long-term-and.html and earlier) (https://cmpassocregulationblog.blogspot.com/2017/09/monetary-policy-of-reducing-central.html and earlier https://cmpassocregulationblog.blogspot.com/2017/08/fluctuating-valuations-of-risk.html and earlier (https://cmpassocregulationblog.blogspot.com/2017/07/rising-valuations-of-risk-financial.html and earlier https://cmpassocregulationblog.blogspot.com/2017/06/fomc-interest-rate-increase-planned.html and earlier https://cmpassocregulationblog.blogspot.com/2017/05/dollar-devaluation-world-inflation.html and earlier https://cmpassocregulationblog.blogspot.com/2017/04/united-states-commercial-banks-assets.html and earlier https://cmpassocregulationblog.blogspot.com/2017/03/fomc-increases-interest-rates-world.html and earlier https://cmpassocregulationblog.blogspot.com/2017/02/world-inflation-waves-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2017/01/world-inflation-waves-united-states.html and earlier http://cmpassocregulationblog.blogspot.com/2016/12/of-course-economic-outlook-is-highly.html and earlier http://cmpassocregulationblog.blogspot.com/2016/11/interest-rate-increase-could-well.html and earlier http://cmpassocregulationblog.blogspot.com/2016/10/dollar-revaluation-world-inflation.html and earlier http://cmpassocregulationblog.blogspot.com/2016/09/interest-rates-and-volatility-of-risk.html and earlier http://cmpassocregulationblog.blogspot.com/2016/08/interest-rate-policy-uncertainty-and.html and earlier (http://cmpassocregulationblog.blogspot.com/2016/07/unresolved-us-balance-of-payments.html and earlier http://cmpassocregulationblog.blogspot.com/2016/06/fomc-projections-world-inflation-waves.html and earlier (http://cmpassocregulationblog.blogspot.com/2016/05/most-fomc-participants-judged-that-if.html and earlier (http://cmpassocregulationblog.blogspot.com/2016/04/contracting-united-states-industrial.html and earlier (http://cmpassocregulationblog.blogspot.com/2016/03/monetary-policy-and-competitive.html and earlier http://cmpassocregulationblog.blogspot.com/2016/02/squeeze-of-economic-activity-by-carry.html and earlier http://cmpassocregulationblog.blogspot.com/2016/01/unconventional-monetary-policy-and.html and earlier http://cmpassocregulationblog.blogspot.com/2015/12/liftoff-of-interest-rates-with-monetary.html and earlier http://cmpassocregulationblog.blogspot.com/2015/11/interest-rate-liftoff-followed-by.html http://cmpassocregulationblog.blogspot.com/2015/10/interest-rate-policy-quagmire-world.html and earlier http://cmpassocregulationblog.blogspot.com/2015/09/interest-rate-increase-on-hold-because.html and earlier http://cmpassocregulationblog.blogspot.com/2015/08/exchange-rate-and-financial-asset.html

The Bureau of Labor Statistics (BLS) revised on Mar 17, 2016 “With the release of January 2016 data on March 17, job openings, hires, and separations data have been revised from December 2000 forward to incorporate annual updates to the Current Employment Statistics employment estimates and the Job Openings and Labor Turnover Survey (JOLTS) seasonal adjustment factors. In addition, all data series are now available on a seasonally adjusted basis. Tables showing the revisions from 2000 through 2015 can be found using this link: http://www.bls.gov/jlt/revisiontables.htm.” (https://www.bls.gov/jlt/). The Bureau of Labor Statistics (BLS) revised on Mar 16, 2017: “With the release of January 2017 data on March 16, job openings, hires, and separations data have been revised to incorporate annual updates to the Current Employment Statistics employment estimates and the Job Openings and Labor Turnover Survey (JOLTS) seasonal adjustment factors” (https://www.bls.gov/jlt/revisiontables.htm) (https://www.bls.gov/jlt/). The Bureau of Labor Statistics (BLS) revised on Mar 16, 2018 “With the release of January 2018 data on March 16, job openings, hires, and separations data have been revised to incorporate annual updates to the Current Employment Statistics employment estimates and the Job Openings and Labor Turnover Survey (JOLTS) seasonal adjustment factors. Tables showing the revisions from 2013 through 2017 can be found using this link: https://www.bls.gov/jlt/revisiontables.htm (https://www.bls.gov/jlt/).“ The Bureau of Labor Statistics incorporated corrections on Sep 11, 2018: “This news release contains corrections to previously released data in tables A, 1-3, 5, 7-9, and 11. More information on these corrections as well as a complete list of corrections in this news release and in the JOLTS database can be found at www.bls.gov/bls/errata/jolts-errata-06122018.htm.” (https://www.bls.gov/news.release/pdf/jolts.pdf). The Bureau of Labor Statistics introduced revisions on Mar 15, 2019: (Revisions and Methodology Change
“With the release of January 2019 data on March 15, job openings, hires, and separations data have been revised to incorporate annual updates to the Current Employment Statistics employment estimates and the Job Openings and Labor Turnover Survey (JOLTS) seasonal adjustment factors. Tables showing the revisions from 2000 through 2018 can be found using this link: https://www.bls.gov/jlt/revisiontables.htm.

JOLTS Data by Firm Size
The firm size data have been updated to add calendar year 2017. There were no changes to the methodology. All estimates from December 2000 through December 2016 were subject to revision in the new release. The experimental firm size class estimates and information regarding the methodology are available on the JOLTS firm size class page)”.

The Bureau of Labor Statistics introduced revisions on Mar 17, 2020 (Revisions to Job Openings and Labor Turnover Data): “The JOLTS data are revised annually to reflect annual updates to the CES employment estimates. The JOLTS employment levels (not published) are ratio-adjusted to the CES employment levels, and the resulting ratios are applied to all JOLTS data elements. This annual benchmarking process results in revisions to both the seasonally adjusted and not seasonally adjusted JOLTS data series, for the period since the last benchmark was established. The seasonally adjusted data are recalculated for the most recent 5 years in order to reflect updated seasonal adjustment factors. Further, the alignment methodology creates a dependency of the not seasonally adjusted estimates on the seasonal adjustment process. Therefore, the data series that are not seasonally adjusted are also recalculated for the most recent 5 years in order to reflect the effect of the updated seasonal adjustment factors on the alignment process.”

On Mar 11, 2021, the BLS revised JOLTS data from 2016 to 2020 and introduced estimates for Jan 2021 (https://www.bls.gov/news.release/pdf/jolts.pdf).

Hiring in the nonfarm sector (HNF) has increased from 64.873 million in 2006 to 69.984 million in 2019 or by 5.111 million while hiring in the private sector (HP) has increased from 60.540 million in 2006 to 65.564 million in 2019 or by 5.024 million, as shown in Table I-1. The ratio of nonfarm hiring to employment (RNF) has fallen from 47.5 in 2005 to 46.4 in 2019 and in the private sector (RHP) from 53.2 in 2005 to 51.1 in 2019. Hiring did not recover from the global recession after 2007 as in previous cyclical expansions because of the low rate of economic growth in the cyclical expansion. The civilian noninstitutional population or those in condition to work increased from 228.815 million in 2006 to 259.175 million in 2019 or by 30.360 million. Hiring has not recovered prerecession levels while needs of hiring multiplied because of growth of population by more than 30 million. Private hiring of 60.450 million in 2006 was equivalent to 26.4 percent of the civilian noninstitutional population of 228.815, or those in condition of working, increasing to 65.564 million in 2019 or 25.3 percent of the civilian noninstitutional population of 259.175 million in 2019. The percentage of hiring in civilian noninstitutional population of 26.4 percent in 2006 would correspond to 68.422 million of hiring in 2019 (0.264x259.175), which would be 2.858 million higher than actual 65.564 million in 2019. There were wide oscillations in employment and hiring with high levels of unemployment in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Nonfarm hiring increased from 69.984 million in 2019 to 73.094 million in 2020 while the rate increased from 46.4 to 51.4. Private hiring increased from 65,564 million in 2019 to 68.899 million in 2020 while the rate increased from 51.1 in 2019 to 57.3 in 2020. 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 49 quarters from IIIQ2009 to IIIQ2021 and in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). 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, 201 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) (https://apps.bea.gov/iTable/index_nipa.cfm) and the third estimate of GDP for IIIQ2021 (https://www.bea.gov/sites/default/files/2021-12/gdp3q21_3rd.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 2.9 percent obtained by dividing GDP of $15,605.6 billion in IIQ2010 by GDP of $15,161.8 billion in IIQ2009 {[($15,605.6/$15,161.8) -1]100 = 2.9%], or accumulating the quarter on quarter growth rates (https://cmpassocregulationblog.blogspot.com/2021/12/us-gdp-growing-at-23-saar-in-iiiq2021.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/us-gdp-growing-at-21-saar-in-iiiq2021.html). The expansion from IQ1983 to IQ1986 was at the average annual growth rate of 5.7 percent, 5.3 percent from IQ1983 to IIIQ1986, 5.1 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 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, 4.6 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, 4.3 percent from IQ1983 to IIIQ1990, 4.0 percent from IQ1983 to IVQ1990, 3.8 percent from IQ1983 to IQ1991, 3.8 percent from IQ1983 to IIQ1991, 3.8 percent from IQ1983 to IIIQ1991, 3.7 percent from IQ1983 to IVQ1991, 3.7 percent from IQ1983 to IQ1992, 3.7 percent from IQ1983 to IIQ1992, 3.7 percent from IQ1983 to IIIQ1992, 3.8 percent from IQ1983 to IVQ1992, 3.7 percent from IQ1983 to IQ1993, 3.6 percent from IQ1983 to IIQ1993, 3.6 percent from IQ1983 to IIIQ1993, 3.7 percent from IQ1983 to IVQ1993, 3.7 percent from IQ1983 to IQ1994, 3.7 percent from IQ1983 to IIQ1994, 3.7 percent from IQ1983 to IIIQ1994, 3.7 percent from IQ1983 to IVQ1994, 3.6 percent from IQ1983 to IQ1995 and at 7.9 percent from IQ1983 to IVQ1983 (https://cmpassocregulationblog.blogspot.com/2021/12/us-gdp-growing-at-23-saar-in-iiiq2021.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/us-gdp-growing-at-21-saar-in-iiiq2021.html). The National Bureau of Economic Research (NBER) dates a contraction of the US from IQ1990 (Jul) to IQ1991 (Mar) (https://www.nber.org/cycles.html). The expansion lasted until another contraction beginning in IQ2001 (Mar). US GDP contracted 1.4 percent from the pre-recession peak of $9404.5 billion of chained 2012 dollars in IIIQ1990 to the trough of $9275.3 billion in IQ1991 (https://apps.bea.gov/iTable/index_nipa.cfm). 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 IIIQ2021 and in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) would have accumulated to 50.1 percent. GDP in IIIQ2021 would be $23,673.6 billion (in constant dollars of 2012) if the US had grown at trend, which is higher by $4194.7 billion than actual $19,478.9 billion. There are more than four trillion dollars of GDP less than at trend, explaining the 23.5 million unemployed or underemployed equivalent to actual unemployment/underemployment of 13.6 percent of the effective labor force with the largest part originating in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event (Section I and earlier https://cmpassocregulationblog.blogspot.com/2021/12/increase-in-nov-2021-of-nonfarm-payroll.html). Unemployment is decreasing while employment is increasing in initial adjustment of the lockdown of economic activity in the global recession resulting from the COVID-19 event (https://www.bls.gov/covid19/employment-situation-covid19-faq-december-2021.htm). US GDP in IIIQ2021 is 17.7 percent lower than at trend. US GDP grew from $15,767.1 billion in IVQ2007 in constant dollars to $19,478.9 billion in IIIQ2021 or 23.5 percent at the average annual equivalent rate of 1.5 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 2.9 percent per year from Nov 1919 to Nov 2021. Growth at 2.9 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 159.0076 in Nov 2021. The actual index NSA in Nov 2021 is 100.8699 which is 36.6 percent below trend. The underperformance of manufacturing in Mar-Nov 2020 originates partly in the earlier global recession augmented by the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Manufacturing grew at the average annual rate of 3.3 percent between Dec 1986 and Dec 2006. Growth at 3.3 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 167.8289 in Nov 2021. The actual index NSA in Nov 2021 is 100.8699, which is 39.9 percent below trend. Manufacturing output grew at average 1.8 percent between Dec 1986 and Nov 2021. Using trend growth of 1.8 percent per year, the index would increase to 136.9179 in Nov 2021. The output of manufacturing at 100.8699 in Nov 2021 is 26.3 percent below trend under this alternative calculation. Using the NAICS (North American Industry Classification System), manufacturing output fell from the high of 108.5167 in Jul 2007 to the low of 84.7321 in May 2009 or 21.9 percent. The NAICS manufacturing index increased from 84.7321 in Apr 2009 to 101.5378 in Nov 2021 or 19.8 percent. The NAICS manufacturing index increased at the annual equivalent rate of 3.5 percent from Dec 1986 to Dec 2006. Growth at 3.5 percent would increase the NAICS manufacturing output index from 104.6868 in Dec 2007 to 168.9711 in Nov 2021. The NAICS index at 101.5378 in Nov 2021 is 39.9 below trend. The NAICS manufacturing output index grew at 1.7 percent annual equivalent from Dec 1999 to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing output index from 104.6868 in Dec 2007 to 132.3657 in Nov 2021. The NAICS index at 101.5378 in Nov 2021 is 23.3 percent below trend under this alternative calculation.

Table I-1, US, Annual Total Nonfarm Hiring (HNF) and Total Private Hiring (HP) in the US in Thousands and Percentage of Total Employment

	HNF	Rate RNF	HP	Rate HP
2001	62,569	47.4	58,463	52.7
2002	58,199	44.5	54,254	49.7
2003	56,852	43.6	53,295	49.0
2004	60,525	45.9	56,673	51.4
2005	63,697	47.5	59,760	53.2
2006	64,873	47.5	60,540	52.9
2007	63,864	46.3	59,431	51.3
2008	56,407	41.1	52,808	46.0
2009	46,750	35.6	43,391	39.9
2010	49,655	38.1	45,749	42.4
2011	51,655	39.2	48,550	44.2
2012	53,343	39.8	49,818	44.4
2013	54,947	40.3	51,519	45.0
2014	58,955	42.4	55,369	47.3
2015	62,589	44.1	58,528	48.8
2016	63,743	44.2	59,500	48.7
2017	65,691	44.8	61,529	49.5
2018	68,596	46.1	64,284	50.8
2019	69,984	46.4	65,564	51.1
2020	73,094	51.4	68,899	57.3

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-1 shows the annual level of total nonfarm hiring (HNF) that collapsed during the global recession after 2007 in contrast with milder decline in the shallow recession of 2001. Nonfarm hiring has not recovered, remaining at a depressed level. The civilian noninstitutional population or those in condition to work increased from 228.815 million in 2006 to 259.175 million in 2019 or by 30.360 million. Hiring has not recovered precession levels while needs of hiring multiplied because of growth of population by more than 28 million. There were wide oscillations in employment and hiring with high levels of unemployment in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Nonfarm hiring increased from 69.984 million in 2019 to 73.094 million in 2020 while the rate increased from 46.4 to 51.4. Private hiring increased from 65,564 million in 2019 to 68.899 million in 2020 while the rate increased from 51.1 in 2019 to 57.3 in 2020.

Chart I-1, US, Level Total Nonfarm Hiring (HNF), Annual, 2001-2020

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-2 shows the ratio or rate of nonfarm hiring to employment (RNF) that also fell much more in the recession of 2007 to 2009 than in the shallow recession of 2001. Recovery is weak in the current environment of cyclical slow growth. There were wide oscillations in employment and hiring with high levels of unemployment in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Nonfarm hiring increased from 69.984 million in 2019 to 73.094 million in 2020 while the rate increased from 46.4 to 51.4. Private hiring increased from 65,564 million in 2019 to 68.899 million in 2020 while the rate increased from 51.1 in 2019 to 57.3 in 2020.

Chart I-2, US, Rate Total Nonfarm Hiring (HNF), Annual, 2001-2020

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Yearly percentage changes of total nonfarm hiring (HNF) are provided in Table I-2. There were much milder declines in 2002 of 7.0 percent and 2.3 percent in 2003 followed by strong rebounds of 6.5 percent in 2004 and 5.2 percent in 2005. In contrast, the contractions of nonfarm hiring in the recession after 2007 were much sharper in percentage points: 1.6 in 2007, 11.7 in 2008 and 17.1 percent in 2009. On a yearly basis, nonfarm hiring grew 6.2 percent in 2010 relative to 2009, 4.0 percent in 2011, 3.3 percent in 2012 and 3.0 percent in 2013. Nonfarm hiring grew 7.3 percent in 2014 and increased 6.2 percent in 2015. Nonfarm hiring grew 1.8 percent in 2016, increasing 3.1 percent in 2017. Nonfarm hiring increased 4.4 percent in 2018. Nonfarm hiring increased 2.0 percent in 2019. The relatively large length of 46 quarters of the current expansion reduces the likelihood of significant recovery of hiring levels in the United States because lower rates of growth and hiring in the final phase of expansions. Nonfarm hiring increased 4.4 percent in 2020 in wide oscillations in employment and hiring with high levels of unemployment in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).

Table I-2, US, Annual Total Nonfarm Hiring (HNF), Annual Percentage Change, 2002-2020

Year	Annual
2002	-7.0
2003	-2.3
2004	6.5
2005	5.2
2006	1.8
2007	-1.6
2008	-11.7
2009	-17.1
2010	6.2
2011	4.0
2012	3.3
2013	3.0
2014	7.3
2015	6.2
2016	1.8
2017	3.1
2018	4.4
2019	2.0
2020	4.4

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Total private hiring (HP) annual data are in Chart I-5. There has been sharp contraction of total private hiring in the US and inadequate recovery from 2010 to 2019. There were wide oscillations in employment and hiring with high levels of unemployment in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Nonfarm hiring increased from 69.984 million in 2019 to 73.094 million in 2020 while the rate increased from 46.4 to 51.4. Private hiring increased from 65,564 million in 2019 to 68.899 million in 2020 while the rate increased from 51.1 in 2019 to 57.3 in 2020.

Chart I-5, US, Total Private Hiring, Annual, 2001-2020

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-5A shows the ratio or rate of total private hiring to employment (RHP) that also fell much more in the recession of 2007 to 2009 than in the shallow recession of 2001. Recovery was weak in the environment of cyclical slow growth. There were wide oscillations in employment and hiring with high levels of unemployment in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Nonfarm hiring increased from 69.984 million in 2019 to 73.094 million in 2020 while the rate increased from 46.4 to 51.4. Private hiring increased from 65,564 million in 2019 to 68.899 million in 2020 while the rate increased from 51.1 in 2019 to 57.3 in 2020.

Chart I-5A, US, Rate Total Private Hiring, Annual, 2001-2020

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Total nonfarm hiring (HNF), total private hiring (HP) and their respective rates are in Table I-3 for the month of Nov in the years from 2001 to 2021. Hiring numbers are in thousands. There is recovery in HNF from 3580 thousand in Nov 2009 to 3756 thousand in Nov 2010, 3956 thousand in Nov 2011, 4098 thousand in Nov 2012, 4274 thousand in Nov 2013, 4634 thousand in Nov 2014, 4966 thousand in Nov 2015, 4918 thousand in Nov 2016, 5055 thousand in Nov 2017, 5389 thousand in Nov 2018, and 5397 in Nov 2019 for cumulative increase of 50.8 percent at the average yearly rate of 4.2 percent. HNF increased from 5397 thousand in Nov 2019 to 5563 thousand in Nov 2020 or 3.1 percent in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-Novy-19-2021). HNF increased from 5563 thousand in Nov 2020 to 6245 thousand in Nov 2021 or 12.3 percent in the return to economic activity. HP rose from 3371 thousand in Nov 2009 to 3552 thousand in Nov 2010, 3757 thousand in Nov 2011, 3891 thousand in Nov 2012, 4052 thousand in Nov 2013, 4407 thousand in Nov 2014, 4696 thousand in Nov 2015, 4668 thousand in Nov 2016, 4774 thousand in Nov 2017, 5106 thousand in Nov 2018 and 5089 thousand in Nov 2019 for increase of 51.0 percent at the average yearly rate of 4.2 percent. HP increased from 5089 in Nov 2019 to 5275 in Nov 2020 or 3.7 percent in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-Novy-19-2021). HP increased from 5275 thousand in Nov 2020 to 5929 thousand in Nov 2021 or 12.4 percent in the return to economic activity. HNF increased from 4971 thousand in Nov 2006 to 6245 thousand in Nov 2021 or 25.6 percent. HP has increased from 4698 thousand in Nov 2006 to 5929 thousand in Nov 2021 or by 26.2 percent. The civilian noninstitutional population of the US, or those in condition of working, rose from 229.905 million in Nov 2006 to 262.029 million in Nov 2021, by 32.124 million or 14.0 percent. There is often ignored fact that nonfarm hiring increased by 25.6 percent and private hiring by 26.2 percent while population available for working increased around 14.0 percent. There is major deterioration in Mar-Apr 2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Hiring in the nonfarm sector (HNF) has increased from 64.873 million in 2006 to 69.984 million in 2019 or by 5.111 million while hiring in the private sector (HP) has increased from 60.540 million in 2006 to 65.564 million in 2019 or by 5.024 million, as shown in Table I-1. The ratio of nonfarm hiring to employment (RNF) has fallen from 47.5 in 2005 to 46.4 in 2019 and in the private sector (RHP) from 53.2 in 2005 to 51.1 in 2019. Hiring did not recover from the global recession after 2007 as in previous cyclical expansions because of the low rate of economic growth in the cyclical expansion. The civilian noninstitutional population or those in condition to work increased from 228.815 million in 2006 to 259.175 million in 2019 or by 30.360 million. Hiring has not recovered prerecession levels while needs of hiring multiplied because of growth of population by more than 30 million. Private hiring of 60.450 million in 2006 was equivalent to 26.4 percent of the civilian noninstitutional population of 228.815, or those in condition of working, increasing to 65.564 million in 2019 or 25.3 percent of the civilian noninstitutional population of 259.175 million in 2019. The percentage of hiring in civilian noninstitutional population of 26.4 percent in 2006 would correspond to 68.422 million of hiring in 2019 (0.264x259.175), which would be 2.858 million higher than actual 65.564 million in 2019. There were wide oscillations in employment and hiring with high levels of unemployment in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Nonfarm hiring increased from 69.984 million in 2019 to 73.094 million in 2020 while the rate increased from 46.4 to 51.4. Private hiring increased from 65,564 million in 2019 to 68.899 million in 2020 while the rate increased from 51.1 in 2019 to 57.3 in 2020. 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. Cyclical slow growth over the entire business cycle from IVQ2007 to the present in comparison with earlier cycles and long-term trend (https://cmpassocregulationblog.blogspot.com/2021/12/us-gdp-growing-at-23-saar-in-iiiq2021.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/us-gdp-growing-at-21-saar-in-iiiq2021.html) explains the fact that there are many million fewer hires in the US than before the global recession. The labor market continues to be fractured, failing to provide an opportunity to exit from unemployment/underemployment or to find an opportunity for advancement away from declining inflation-adjusted earnings.

Table I-3, US, Total Nonfarm Hiring (HNF) and Total Private Hiring (HP) in the US in

Thousands and in Percentage of Total Employment Not Seasonally Adjusted

	HNF	Rate RNF	HP	Rate HP
2001 Nov	4308	3.3	4060	3.7
2002 Nov	4191	3.2	3920	3.6
2003 Nov	4163	3.2	3939	3.6
2004 Nov	4626	3.5	4348	3.9
2005 Nov	4747	3.5	4480	3.9
2006 Nov	4971	3.6	4698	4.1
2007 Nov	4694	3.4	4439	3.8
2008 Nov	3656	2.7	3454	3.0
2009 Nov	3580	2.7	3371	3.1
2010 Nov	3756	2.8	3552	3.3
2011 Nov	3956	3.0	3757	3.4
2012 Nov	4098	3.0	3891	3.4
2013 Nov	4274	3.1	4052	3.5
2014 Nov	4634	3.3	4407	3.7
2015 Nov	4966	3.4	4696	3.9
2016 Nov	4918	3.4	4668	3.8
2017 Nov	5055	3.4	4774	3.8
2018 Nov	5389	3.6	5106	4.0
2019 Nov	5397	3.5	5089	3.9
2020 Nov	5563	3.9	5275	4.3
2021 Nov	6245	4.2	5929	4.6

Note: “Hire any addition to an establishment’s payroll, including newly hired and rehired employees, Hires Rate the number of hires during the month divided by the number of employees who worked during or received pay for the pay period that includes the 12^th of the month” (https://www.bls.gov/opub/hom/glossary.htm) (https://www.bls.gov/opub/hom/jlt/pdf/jlt.pdf).

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-6 provides total nonfarm hiring monthly from 2001 to 2021. Nonfarm hiring rebounded in early 2010 but then fell and stabilized at a lower level than the early peak not-seasonally adjusted (NSA) of 4883 in May 2010 until it surpassed it with 5051 in Jun 2011 but declined to 3206 in Dec 2012. Nonfarm hiring fell to 3128 in Dec 2011 from 3956 in Nov 2011 and to revised 3744 in Feb 2012, increasing to 4288 in Mar 2012, 3206 in Dec 2012 and 4279 in Jan 2013 and declining to 3737 in Feb 2013. Nonfarm hires not seasonally adjusted increased to 4274 in Nov 2013 and 3335 in Dec 2013. Nonfarm hires reached 3822 in Dec 2014, 4136 in Dec 2015 and 3988 in Dec 2016. Nonfarm hires reached 4054 in Dec 2017, 4316 in Dec 2018, 4466 in Dec 2019, 4059 in Dec 2020 and 6245 in Nov 2021. Chart I-6 provides seasonally adjusted (SA) monthly data. The number of seasonally adjusted hires in Oct 2011 was 4370 thousand, increasing to revised 4560 thousand in Feb 2012, or 4.3 percent, moving to 4452 in Dec 2012 for cumulative increase of 2.2 percent from 4356 in Dec 2011 and 4614 in Dec 2013 for increase of 3.6 percent relative to 4452 in Dec 2012. The number of hires not seasonally adjusted was 5051 in Jun 2011, falling to 3128 in Dec 2011 but increasing to 4250 in Jan 2012 and declining to 3206 in Dec 2012. The number of nonfarm hiring not seasonally adjusted fell by 38.1 percent from 5051 in Jun 2011 to 3128 in Dec 2011 and fell 37.4 percent from 5120 in Jun 2012 to 3206 in Dec 2012 in a yearly-repeated seasonal pattern. The number of nonfarm hires not seasonally adjusted fell from 5129 in Jun 2013 to 3335 in Dec 2013, or decline of 35.0 percent, showing strong seasonality. The number of nonfarm hires not seasonally adjusted fell from 5612 in Jun 2014 to 3822 in Dec 2014 or 31.9 percent. The level of nonfarm hires fell from 5869 in Jun 2015 to 4136 in Dec 2015 or 29.5 percent. The level of nonfarm hires not seasonally adjusted fell from 6039 in Jun 2016 to 3988 in Dec 2016 or 34.0 percent. The level of nonfarm hires not seasonally adjusted fell from 6458 in Jun 2017 to 4054 in Dec 2017 or 37.2 percent. The level of nonfarm hires not seasonally adjusted fell from 6590 in Jun 2018 to 4316 in Dec 2018 or 34.5 percent. The level of nonfarm hires not seasonally adjusted fell from 6561 in Jun 2019 to 4466 in Dec 2019 or 31.9 percent. The level of nonfarm hires not seasonally adjusted fell from 8535 in Jun 2020 to 4059 in Dec 20 or 52.4 percent. There is sharp contraction in Mar-Apr 2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).

Chart I-6, US, Total Nonfarm Hiring (HNF), 2001-2021 Month SA

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Similar behavior occurs in the rate of nonfarm hiring in Chart I-7. Recovery in early 2010 was followed by decline and stabilization at a lower level but with stability in monthly SA estimates of 3.3 in Aug 2011 to 3.3 in Jan 2012, increasing to 3.4 in May 2012 and stabilizing to 3.3 in Jun 2012. The rate stabilized at 3.2 in Jul 2012, increasing to 3.3 in Aug 2012 but moving to 3.3 in Dec 2012 and 3.4 in Dec 2013. The rate not seasonally adjusted fell from 3.8 in Jun 2011 to 2.3 in Dec 2011, climbing to 3.8 in Jun 2012 but falling to 2.4 in Dec 2012. The rate of nonfarm hires not seasonally adjusted fell from 3.7 in Jun 2013 to 2.4 in Dec 2013. The NSA rate of nonfarm hiring fell from 4.0 in Jun 2014 to 2.7 in Dec 2014. The NSA rate fell from 4.1 in Jun 2015 to 2.9 in Dec 2015. The NSA rate fell from 4.2 in Jun 2016 to 2.7 in Dec 2016. The NSA rate fell from 4.4 in Jun 2017 to 2.7 in Dec 2017. The NSA rate fell from 4.4 in Jun 2018 to 2.9 in Dec 2018. The NSA rate fell from 4.3 in Jun 2019 to 2.9 in Dec 2019. The NSA rate fell from 6.2 in Jun 2020 to 2.8 in Dec 2020. Rates of nonfarm hiring NSA were in the range of 2.8 (Dec) to 4.5 (Jun) in 2006. The rate of nonfarm hiring SA stood at 4.5 in Nov 2021 and at 4.2 NSA in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).

Chart I-7, US, Rate Total Nonfarm Hiring, Month SA 2001-2021

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Private hiring rose in 2010 with stability and renewed increase in 2011 followed by almost stationary series in 2012. The number of private hiring seasonally adjusted fell from 4159 thousand in Sep 2011 to 4062 in Dec 2011 or by 2.3 percent, increasing to 4172 in Jan 2012 or increase by 0.3 percent relative to the level in Sep 2011. Private hiring fell to 4022 in Sep 2012 or lower by 3.3 percent relative to Sep 2011, moving to 4162 in Dec 2012 for decrease of 0.2 percent relative to 4172 in Jan 2012. The number of private hiring not seasonally adjusted fell from 4670 in Jun 2011 to 2949 in Dec 2011 or by 36.9 percent, reaching 3990 in Jan 2012 or decline of 14.6 percent relative to Jun 2011 and moving to 3030 in Dec 2012 or 35.6 percent lower relative to 4708 in Jun 2012. Hires not seasonally adjusted fell from 4791 in Jun 2013 to 3168 in Dec 2013, or 33.9 percent. The level of private hiring NSA fell from 5199 in Jun 2014 to 3620 in Dec 2014 or 30.4 percent. The level of private hiring fell from 5449 in Jun 2015 to 3914 in Dec 2015 or 28.2 percent. The level of private hiring not seasonally adjusted fell from 5608 in Jun 2016 to 3789 in Dec 2016 or 32.4 percent. The level of private hiring not seasonally adjusted fell from 6025 in Jun 2017 to 3839 in Dec 2017 or 36.3 percent. The level of private hiring not seasonally adjusted fell from 6132 in Jun 2018 to 4097 in Dec 2018 or 33.2 percent. The level of private hiring not seasonally adjusted fell from 6144 in Jun 2019 to 4250 in Dec 2019 or 30.8 percent. The level of private hiring not seasonally adjusted fell from 8192 in Jun 2020 to 3858 in Dec 2020 or 52.9 percent. Companies reduce hiring in the latter part of the year that explains the high seasonality in year-end employment data. For example, NSA private hiring fell from 5716 in Jun 2006 to 3652 in Dec 2006 or by 36.1 percent. Private hiring NSA data are useful in showing the huge declines from the period before the global recession. Hiring in the nonfarm sector (HNF) has increased from 64.873 million in 2006 to 69.984 million in 2019 or by 5.111 million while hiring in the private sector (HP) has increased from 60.540 million in 2006 to 65.564 million in 2019 or by 5.024 million, as shown in Table I-1. The ratio of nonfarm hiring to employment (RNF) has fallen from 47.5 in 2005 to 46.4 in 2019 and in the private sector (RHP) from 53.2 in 2005 to 51.1 in 2019. Hiring did not recover from the global recession after 2007 as in previous cyclical expansions because of the low rate of economic growth in the cyclical expansion. The civilian noninstitutional population or those in condition to work increased from 228.815 million in 2006 to 259.175 million in 2019 or by 30.360 million. Hiring has not recovered prerecession levels while needs of hiring multiplied because of growth of population by more than 30 million. Private hiring of 60.450 million in 2006 was equivalent to 26.4 percent of the civilian noninstitutional population of 228.815, or those in condition of working, increasing to 65.564 million in 2019 or 25.3 percent of the civilian noninstitutional population of 259.175 million in 2019. The percentage of hiring in civilian noninstitutional population of 26.4 percent in 2006 would correspond to 68.422 million of hiring in 2019 (0.264x259.175), which would be 2.858 million higher than actual 65.564 million in 2019. There were wide oscillations in employment and hiring with high levels of unemployment in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Nonfarm hiring increased from 69.984 million in 2019 to 73.094 million in 2020 while the rate increased from 46.4 to 51.4. Private hiring increased from 65,564 million in 2019 to 68.899 million in 2020 while the rate increased from 51.1 in 2019 to 57.3 in 2020.

Chart I-8, US, Total Private Hiring Month SA 2001-2021

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-9 shows similar behavior in the rate of private hiring. The rate in 2011 in monthly SA data did not rise significantly above the peak in 2010. The rate seasonally adjusted decreased from 3.8 in Sep 2011 to 3.7 in Dec 2011 and reached 3.7 in Dec 2012 and 3.7 in Dec 2013. The rate not seasonally adjusted (NSA) fell from 3.9 in Sep 2011 to 2.6 in Dec 2011, increasing to 3.9 in Oct 2012 but falling to 2.7 in Dec 2012 and 3.5 in Mar 2013. The NSA rate of private hiring fell from 4.9 in Jul 2006 to 3.5 in Aug 2009 but recovery was insufficient to only 3.9 in Aug 2012, 2.7 in Dec 2012 and 2.7 in Dec 2013. The NSA rate increased to 3.2 in Dec 2015 and 3.1 in Dec 2016, 3.1 in Dec 2017, 3.2 in Dec 2018, 3.3 in Dec 2019 and 3.2 in Dec 2020.

Chart I-9, US, Rate Total Private Hiring Month SA 2001-2021

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

The JOLTS report of the Bureau of Labor Statistics also provides total nonfarm job openings (TNF JOB), TNF JOB rate and TNF LD (layoffs and discharges) shown in Table I-4 for the month of Nov from 2001 to 2021. The final column provides annual TNF LD for the years from 2001 to 2020. Nonfarm job openings (TNF JOB) increased from 4317 in Nov 2007 to 6457 in Nov 2019 or by 49.6 percent while the rate increased from 3.0 to 4.0. Nonfarm job openings decreased from 6457 in Nov 2019 to 6311 in Nov 2020. There is improvement from 6311 in Nov 2020 to 9912 in Nov 2021 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). This was mediocre performance because the civilian noninstitutional population of the US, or those in condition of working rose from 232.939 million in Nov 2007 to 262.029 million in Nov 2021, by 29.090 million or 12.5 percent. Nonfarm layoffs and discharges (TNF LD) increased from 1912 thousand in Nov 2006 to 1958 thousand in Nov 2009 or 2.4 percent. The annual data show layoffs and discharges rising from 22.267 million in 2006 to 27.434 million in 2009 or by 23.2 percent. Business pruned payroll jobs to survive the global recession but there has not been sufficient hiring because of the low rate of GDP growth. 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. Layoffs and discharges decreased from 2102 thousand in Nov 2020 to 1389 thousand in Nov 2021 or by 33.9 percent in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).

Table I-4, US, Total Nonfarm Job Openings and Total Nonfarm Layoffs and Discharges, Thousands NSA

	TNF JOB	TNF JOB Rate	TNF LD	TNF LD Annual
Nov 2001	3372	2.5	2243	24971
Nov 2002	3126	2.3	1912	23621
Nov 2003	2970	2.2	1912	24353
Nov 2004	3119	2.3	1962	23701
Nov 2005	3889	2.8	1734	23495
Nov 2006	4298	3.0	1912	22267
Nov 2007	4317	3.0	1968	23556
Nov 2008	2959	2.1	2327	25443
Nov 2009	2258	1.7	1958	27434
Nov 2010	2956	2.2	1867	22562
Nov 2011	3291	2.4	1906	22134
Nov 2012	3575	2.6	1902	22023
Nov 2013	3768	2.6	1581	20959
Nov 2014	4463	3.1	1682	21147
Nov 2015	5272	3.5	1716	21779
Nov 2016	5536	3.6	1710	21240
Nov 2017	5840	3.8	1716	21585
Nov 2018	7125	4.5	1884	21804
Nov 2019	6457	4.0	1769	21851
Nov 2020	6311	4.2	2102	41018
Nov 2021	9912	6.2	1389

Notes: TNF JOB: Total Nonfarm Job Openings; LD: Layoffs and Discharges. “Job Openings: a specific position of employment to be filled at an establishment; conditions include the following: there is work available for the position, the job could start within 30 days, and the employer is actively recruiting for the position. Layoffs and Discharges: a separation of an employee from an establishment that is initiated by the employer; an involuntary separation; a period of forced unemployment.” (https://www.bls.gov/opub/hom/glossary.htm). See also: (https://www.bls.gov/opub/hom/jlt/pdf/jlt.pdf).

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-10 shows monthly job openings rising from the trough in 2009 to a high in the beginning of 2010. Job openings then stabilized into 2011 but have surpassed the peak of 3153 seasonally adjusted in Apr 2010 with 3970 seasonally adjusted in Dec 2012, which is higher by 29.5 percent relative to Apr 2010 but higher by 2.4 percent relative to 3878 in Nov 2012 and lower by 0.2 percent than 3979 in Mar 2012. Nonfarm job openings (TNF JOB) increased from 4317 in Nov 2007 to 6457 in Nov 2019 or by 49.6 percent while the rate increased from 3.0 to 4.0. Nonfarm job openings decreased from 6457 in Nov 2019 to 6311 in Nov 2020. There is improvement from 6311 in Nov 2020 to 9912 in Nov 2021 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). This was mediocre performance because the civilian noninstitutional population of the US, or those in condition of working rose from 232.939 million in Nov 2007 to 262.029 million in Nov 2021, by 29.090 million or 12.5 percent. Nonfarm layoffs and discharges (TNF LD) increased from 1912 thousand in Nov 2006 to 1958 thousand in Nov 2009 or 2.4 percent. The annual data show layoffs and discharges rising from 22.267 million in 2006 to 27.434 million in 2009 or by 23.2 percent. Business pruned payroll jobs to survive the global recession but there has not been sufficient hiring because of the low rate of GDP growth. 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 49 quarters from IIIQ2009 to IIIQ2021 and in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). 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, 201 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) (https://apps.bea.gov/iTable/index_nipa.cfm) and the third estimate of GDP for IIIQ2021 (https://www.bea.gov/sites/default/files/2021-12/gdp3q21_3rd.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 2.9 percent obtained by dividing GDP of $15,605.6 billion in IIQ2010 by GDP of $15,161.8 billion in IIQ2009 {[($15,605.6/$15,161.8) -1]100 = 2.9%], or accumulating the quarter on quarter growth rates (https://cmpassocregulationblog.blogspot.com/2021/12/us-gdp-growing-at-23-saar-in-iiiq2021.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/us-gdp-growing-at-21-saar-in-iiiq2021.html). The expansion from IQ1983 to IQ1986 was at the average annual growth rate of 5.7 percent, 5.3 percent from IQ1983 to IIIQ1986, 5.1 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 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, 4.6 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, 4.3 percent from IQ1983 to IIIQ1990, 4.0 percent from IQ1983 to IVQ1990, 3.8 percent from IQ1983 to IQ1991, 3.8 percent from IQ1983 to IIQ1991, 3.8 percent from IQ1983 to IIIQ1991, 3.7 percent from IQ1983 to IVQ1991, 3.7 percent from IQ1983 to IQ1992, 3.7 percent from IQ1983 to IIQ1992, 3.7 percent from IQ1983 to IIIQ1992, 3.8 percent from IQ1983 to IVQ1992, 3.7 percent from IQ1983 to IQ1993, 3.6 percent from IQ1983 to IIQ1993, 3.6 percent from IQ1983 to IIIQ1993, 3.7 percent from IQ1983 to IVQ1993, 3.7 percent from IQ1983 to IQ1994, 3.7 percent from IQ1983 to IIQ1994, 3.7 percent from IQ1983 to IIIQ1994, 3.7 percent from IQ1983 to IVQ1994, 3.6 percent from IQ1983 to IQ1995 and at 7.9 percent from IQ1983 to IVQ1983 (https://cmpassocregulationblog.blogspot.com/2021/12/us-gdp-growing-at-23-saar-in-iiiq2021.html and earlier https://cmpassocregulationblog.blogspot.com/2021/11/us-gdp-growing-at-21-saar-in-iiiq2021.html). The National Bureau of Economic Research (NBER) dates a contraction of the US from IQ1990 (Jul) to IQ1991 (Mar) (https://www.nber.org/cycles.html). The expansion lasted until another contraction beginning in IQ2001 (Mar). US GDP contracted 1.4 percent from the pre-recession peak of $9404.5 billion of chained 2012 dollars in IIIQ1990 to the trough of $9275.3 billion in IQ1991 (https://apps.bea.gov/iTable/index_nipa.cfm). 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 IIIQ2021 and in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) would have accumulated to 50.1 percent. GDP in IIIQ2021 would be $23,673.6 billion (in constant dollars of 2012) if the US had grown at trend, which is higher by $4194.7 billion than actual $19,478.9 billion. There are more than four trillion dollars of GDP less than at trend, explaining the 23.5 million unemployed or underemployed equivalent to actual unemployment/underemployment of 13.6 percent of the effective labor force with the largest part originating in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event (Section I and earlier https://cmpassocregulationblog.blogspot.com/2021/12/increase-in-nov-2021-of-nonfarm-payroll.html). Unemployment is decreasing while employment is increasing in initial adjustment of the lockdown of economic activity in the global recession resulting from the COVID-19 event (https://www.bls.gov/covid19/employment-situation-covid19-faq-december-2021.htm). US GDP in IIIQ2021 is 17.7 percent lower than at trend. US GDP grew from $15,767.1 billion in IVQ2007 in constant dollars to $19,478.9 billion in IIIQ2021 or 23.5 percent at the average annual equivalent rate of 1.5 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 2.9 percent per year from Nov 1919 to Nov 2021. Growth at 2.9 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 159.0076 in Nov 2021. The actual index NSA in Nov 2021 is 100.8699 which is 36.6 percent below trend. The underperformance of manufacturing in Mar-Nov 2020 originates partly in the earlier global recession augmented by the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Manufacturing grew at the average annual rate of 3.3 percent between Dec 1986 and Dec 2006. Growth at 3.3 percent per year would raise the NSA index of manufacturing output (SIC, Standard Industrial Classification) from 106.8161 in Dec 2007 to 167.8289 in Nov 2021. The actual index NSA in Nov 2021 is 100.8699, which is 39.9 percent below trend. Manufacturing output grew at average 1.8 percent between Dec 1986 and Nov 2021. Using trend growth of 1.8 percent per year, the index would increase to 136.9179 in Nov 2021. The output of manufacturing at 100.8699 in Nov 2021 is 26.3 percent below trend under this alternative calculation. Using the NAICS (North American Industry Classification System), manufacturing output fell from the high of 108.5167 in Jul 2007 to the low of 84.7321 in May 2009 or 21.9 percent. The NAICS manufacturing index increased from 84.7321 in Apr 2009 to 101.5378 in Nov 2021 or 19.8 percent. The NAICS manufacturing index increased at the annual equivalent rate of 3.5 percent from Dec 1986 to Dec 2006. Growth at 3.5 percent would increase the NAICS manufacturing output index from 104.6868 in Dec 2007 to 168.9711 in Nov 2021. The NAICS index at 101.5378 in Nov 2021 is 39.9 below trend. The NAICS manufacturing output index grew at 1.7 percent annual equivalent from Dec 1999 to Dec 2006. Growth at 1.7 percent would raise the NAICS manufacturing output index from 104.6868 in Dec 2007 to 132.3657 in Nov 2021. The NAICS index at 101.5378 in Nov 2021 is 23.3 percent below trend under this alternative calculation.

Chart I-10, US Job Openings, Thousands NSA, 2001-2021

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

The rate of job openings in Chart I-11 shows similar behavior. The rate seasonally adjusted increased from 2.3 in Jan 2011 to 2.8 in Dec 2011, 2.9 in Dec 2012, 2.9 in Dec 2013 and 3.5 in Dec 2014. The rate seasonally adjusted stood at 3.9 in Dec 2015 and 3.9 in Dec 2016. The rate seasonally adjusted reached 4.1 in Dec 2017 and 4.7 in Dec 2018. The rate not seasonally adjusted reached 4.2 in Dec 2019. The rate SA stood at 4.5 in Dec 2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). The rate not seasonally adjusted rose from the high of 2.6 in Apr 2010 to 3.1 in Apr 2013, easing to 2.5 in Dec 2013. The rate of job openings NSA fell from 3.4 in Jul 2007 to 1.7 in Nov 2009 and 1.6 in Dec 2009, recovering to 3.4 in Dec 2015. The rate of job opening NSA stood at 3.5 in Dec 2016, reaching 3.7 in Dec 2017 and 4.3 in Dec 2018. The rate of job openings NSA was 3.8 in Dec 2019. The rate of job openings NSA was 4.2 in Nov 2020, 4.0 in Dec 2020 and 6.2 in Nov 2021.

Chart I-11, US, Rate of Job Openings, NSA, 2001-2021

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Total separations are in Chart I-12. Separations are lower in 2012-17 than before the global recession but hiring has not recovered. Separations increased in the final segment.

Chart I-12, US, Total Nonfarm Separations, Month Thousands SA, 2001-2020

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-12A shows total separations in the US SA. Total separations increased from 4626 thousand NSA in Feb 2020 to 15.654 thousand in Mar 2020 and 11.616 thousand NSA in Apr 2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021), decreasing to 4658 thousand in May 2020, increasing 5491 in Jun 2020 and 5819 thousand in Jul 2020 and 5909 thousand in Aug 2020. Total separation eased to 5479 thousand in Sep 2020, increasing to 5508 thousand in Oct 2020 and decreasing to 5116 thousand in Nov 2020. Total separations increased to 5416 thousand in Dec 2020. Total separations increased to 5842 thousand in Jan 2021, decreasing to 4400 thousand in Feb 2021. Total separations increased to 4745 thousand in Mar 2021, 5671 thousand in Apr 2021, 5297 thousand in May 2021, 5820 thousand in Jun 2021, 6203 thousand in Jul 2021 and 7107 thousand in Aug 2021. Total separations decreased to 6544 thousand in Sep 2021, 6029 thousand in Oct 2021 and 5745 thousand in Nov 2021.

Chart I-12A, US, Total Nonfarm Separations, Month Thousands SA, 2001-2021

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-12A1, US, Total Nonfarm Separations, Month Thousands SA, 2016-2021

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-13 provides annual total separations. Separations fell sharply during the global recession but hiring has not recovered relative to population growth. Total separations show renewed increase in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).

Chart I-13, US, Total Separations, Annual, Thousands, 2001-2020

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Table I-5 provides total nonfarm total separations from 2001 to 2020 Separations fell from 62.632 million in 2006 to 48.671 million in 2010 or by 13.961 million and 49.614 million in 2011 or by 13.018 million. Total separations increased from 49.614 million in 2011 to 52.564 million in 2013 or by 2.950 million and to 55.931 million in 2014 or by 6.317 million relative to 2011. Total separations increased to 59.930 million in 2015 or by 10.316 million relative to 2011. Total separations increased to 61.512 million in 2016 or 11.898 million relative to 2011. Total separations increased to 63.447 million in 2017 or 13.833 million relative to 2011.Total separations increased to 66.201 million in 2018 or 16.587 million relative to 2011. Total separations increased to 67.993 million in 2019 or 18.379 million relative to 2011. Total separations jumped to 81.493 million in 2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) or 31.879 million relative to 2011

Table I-5, US, Total Nonfarm Total Separations, Thousands, 2001-2019

Year	Annual
2001	64348
2002	58719
2003	56918
2004	58459
2005	61185
2006	62632
2007	62652
2008	59882
2009	51939
2010	48671
2011	49614
2012	51093
2013	52564
2014	55931
2015	59930
2016	61512
2017	63447
2018	66201
2019	67993
2020	81493

Note: “Separation of an employee from an establishment (voluntary, involuntary, or other” (https://www.bls.gov/opub/hom/glossary.htm#turnover) (https://www.bls.gov/opub/hom/jlt/pdf/jlt.pdf).

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Monthly data of layoffs and discharges reach a peak in early 2009, as shown in Chart I-14. Layoffs and discharges dropped sharply with the recovery of the economy in 2010 and 2011 once employers reduced their job count to what was required for cost reductions and loss of business. 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. Growth rates have been unusually low in the expansion of the current economic cycle.

Chart I-14, US, Total Nonfarm Layoffs and Discharges, Monthly Thousands SA, 2001-2020

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-14A shows layoffs and discharges SA. There is jump in layoffs and discharges NSA from 1549 thousand in Feb 2020 to 12704 thousand in Mar 2020 and 9160 thousand in Apr 2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). Layoffs and discharges decreased to 2032 thousand in May 2020, increasing to 2233 thousand in Jun 2020. Layoffs and discharges decreased to 1789 thousand in Jul 2020, decreasing to 1704 thousand in Aug 2020 and 1663 thousand in Sep 2020. Layoffs and discharges increased to 1738 thousand in Oct 2020 and 2102 thousand in Nov 2020. Layoffs and discharges increased to 2100 thousand in Dec 2020. Layoffs and discharges reached 1389 thousand in Nov 2021.

Chart I-14A, US, Total Nonfarm Layoffs and Discharges, Monthly Thousands SA, 2001-2021

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-14A1, US, Total Nonfarm Layoffs and Discharges, Monthly Thousands SA, 2016-2021

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Layoffs and discharges in Chart I-15 rose sharply to a peak in 2009. There was pronounced drop into 2010 and 2011 with mild increase into 2012 and renewed decline into 2013. There is mild increase into 2014-2015 followed by decline in 2016 and stability/decline in 2017-2019.

Chart I-15, US, Total Nonfarm Layoffs and Discharges, Annual, 2001-2020

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Annual layoff and discharges are in Table I-6. Layoffs and discharges increased sharply from 22.267 million in 2006 to 27.434 million in 2009 or 23.2 percent. Layoff and discharges fell to 20.959 million in 2013 or 23.6 percent relative to 2009 and increased to 21.147 million in 2014 or 0.9 percent relative to 2013. Layoffs and discharges increased to 21.779 million in 2015 or 3.0 percent relative to 2014. Layoffs and discharges fell to 21.239 in 2016 or 2.5 percent relative to 2015. Layoffs and discharges increased to 21.608 million in 2017 or 1.7 percent relative to 2016. Layoffs and discharges increased to 21.803 million in 2018 or 0.9 percent relative to 2017. Layoffs and discharges decreased to 21.739 million in 2019 or 0.3 percent.

Table I-6, US, Total Nonfarm Layoffs and Discharges, Thousands, 2001-2019

Year	Annual
2001	24971
2002	23621
2003	24353
2004	23701
2005	23495
2006	22267
2007	23556
2008	25443
2009	27434
2010	22562
2011	22134
2012	22023
2013	20959
2014	21147
2015	21779
2016	21240
2017	21585
2018	21804
2019	21851
2020	41018

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Table I-7 provides total nonfarm QNF and total private QP quits in the US and their rates in the month of Nov from 2001 to 2021. Quits are employees who left their employment voluntarily.

Table I-7, US, Total Nonfarm Quits (HNF) and Total Private Quits (QP) in the US in the month of Nov from 2001 to 2021. There is an increase of total nonfarm quits QNF from 2758 thousand in Nov 2020 to 4044 thousand in Nov 2021 in contrast with relative stability in earlier years and from total private quits QP from 2626 thousand in Nov 2020 to 3857 thousand in Nov 2021.

Thousands and in Percentage of Total Employment Not Seasonally Adjusted

	QNF	Rate QNF	QP	Rate QP
2001 Nov	2127	1.6	2010	1.8
2002 Nov	1981	1.5	1862	1.7
2003 Nov	1988	1.5	1885	1.7
2004 Nov	2346	1.8	2241	2.0
2005 Nov	2444	1.8	2323	2.0
2006 Nov	2562	1.9	2440	2.1
2007 Nov	2325	1.7	2213	1.9
2008 Nov	1745	1.3	1663	1.5
2009 Nov	1410	1.1	1332	1.2
2010 Nov	1489	1.1	1418	1.3
2011 Nov	1631	1.2	1549	1.4
2012 Nov	1657	1.2	1562	1.4
2013 Nov	1952	1.4	1868	1.6
2014 Nov	2138	1.5	2046	1.7
2015 Nov	2409	1.7	2304	1.9
2016 Nov	2526	1.7	2413	2.0
2017 Nov	2645	1.8	2517	2.0
2018 Nov	2900	1.9	2758	2.2
2019 Nov	2938	1.9	2802	2.2
2020 Nov	2758	1.9	2626	2.2
2021 Nov	4044	2.7	3857	3.0

Note: “Quits includes employees who left voluntarily with the exception of retirements or transfers to other locations” (https://www.bls.gov/opub/hom/jlt/pdf/jlt.pdf). “Quits Rate” “The number of quits during the month divided by the number of employees who worked during or received pay for the pay period that includes the 12^th of the month” (https://www.bls.gov/opub/hom/glossary.htm).

Source: Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-15A provides total nonfarm quits QNF SA from 2001 to 2021. There are sharp decreases in the global recession after Dec 2007 followed by consistent increase with renewed sharp decline in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021).

Chart I-15A, US, Total Nonfarm Quits, SA, 2001-2021

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

Chart I-15A is the chart of total nonfarm quits SA from 2000 to 20021 of the Federal Reserve Bank of St. Louis.

Chart I-15A, US, Total Nonfarm Quits, SA, 2000-2021

Source: Federal Reserve Bank of St. Louis

https://fred.stlouisfed.org/series/JTSQUR

There is the same behavior in the chart of the rate of total nonfarm quits SA in Chart I-15B.

Chart I-15B, US, Total Nonfarm Quits Rate, SA, 2001-2021

Source: US Bureau of Labor Statistics

https://www.bls.gov/jlt/

II United States Current Account of Balance of Payments and International Investment Position. The current account of the US balance of payments is in Table VI-3A for IIIQ2020 and IIIQ2021. The Bureau of Economic Analysis analyzes as follows (https://www.bea.gov/sites/default/files/2021-12/trans321.pdf):

“The U.S. current-account deficit, which reflects the combined balances on trade in goods and services and income flows between U.S. residents and residents of other countries, widened by $16.5 billion, or 8.3 percent, to $214.8 billion in the third quarter of 2021, according to statistics released today by the U.S. Bureau of Economic Analysis (BEA). The revised second-quarter deficit was $198.3 billion. The third-quarter deficit was 3.7 percent of current-dollar gross domestic product, up from 3.5 percent in the second quarter.

The $16.5 billion widening of the current-account deficit in the third quarter reflected a reduced surplus on services and expanded deficits on secondary income and on goods that were partly offset by an expanded surplus on primary income.”

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 increased from $188.8 billion in IIIQ2020 to $237.7 billion in IIIQ2021. The current account deficit seasonally adjusted at annual rate increased from 3.3 percent of GDP in IIIQ2020 to 3.5 percent of GDP in IIQ2021, increasing at 3.7 percent of GDP in IIQ2021 (using the third update of GDP for IIIQ2021 (https://www.bea.gov/sites/default/files/2021-12/gdp3q21_3rd.pdf https://apps.bea.gov/iTable/index_nipa.cfm) in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021). The ratio of the current account deficit to GDP has stabilized around 3 percent of GDP compared with much higher percentages before the recession but is combined now with much higher imbalance in the Treasury budget (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). There is still a major challenge in the combined deficits in current account and in federal budgets.

Table VI-3A, US, Balance of Payments, Millions of Dollars NSA

	IIIQ2020	IIIQ2021	Difference
Goods Balance	-261,517	-296,723	-35,206
X Goods	352,449	436,343	23.8 ∆%
M Goods	-613,965	-733,066	19.4 ∆%
Services Balance	57,490	48,385	-9,105
X Services	165,120	189,854	15.0 ∆%
M Services	-107,629	-141,469	31.4 ∆%
Balance Goods and Services	-204,027	-248,338	-44,311
Exports of Goods and Services and Income Receipts	802,510	952,106	149,596
Imports of Goods and Services and Income Payments	-991,306	-1,189,791	-198,485
Current Account Balance	-188,796	-237,685	-48,889
% GDP SA	IIIQ2020	IIIQ2021	IIQ2021
	3.3	3.7	3.5

X: exports; M: imports

Balance on Current Account = Exports of Goods and Services – Imports of Goods and Services and Income Payments

Source: Bureau of Economic Analysis

https://www.bea.gov/data/economic-accounts/international#bop

The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IIIQ2021. There is deterioration in IIIQ2021 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) .

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/sites/default/files/2021-12/trans321.pdf

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/sites/default/files/2021-12/trans321.pdf

The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IIQ2021. There is deterioration in IIQ2021 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/research/data/us-business-cycle-expansions-and-contractions), in the lockdown of economic activity in the COVID-19 event and the through in Apr 2020 (https://www.nber.org/news/business-cycle-dating-committee-announcement-july-19-2021) .

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/sites/default/files/2021-09/trans221.pdf

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/sites/default/files/2021-09/trans221.pdf

The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IQ2021. There is deterioration in IQ2021 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic ac lockdown of economic activity in the COVID-19 event.

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/sites/default/files/2021-06/trans121.pdf

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/sites/default/files/2021-06/trans121.pdf

The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IVQ2020. There is deterioration in IVQ2020 in the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event.

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/sites/default/files/2021-03/trans420.pdf

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/sites/default/files/2021-03/trans420.pdf

The following chart of the BEA (Bureau of Economic Analysis) provides the US current account and component balances through IIIQ2020. There is deterioration in IIIQ2020 the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event.

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/sites/default/files/2020-12/trans320_0.pdf

The BEA analyzes the impact on data of the global recession, with output in the US reaching a high in Feb 2020 (https://www.nber.org/cycles.html), in the lockdown of economic activity in the COVID-19 event:

“Coronavirus (COVID-19) Impact on Second Quarter 2020 International Transactions

All major categories of current account transactions declined in the second quarter of 2020 resulting in part from the impact of COVID-19, as many businesses were operating at limited capacity or ceased operations completely, and the movement of travelers across borders was restricted. In the financial account, the ending of some currency swaps between the U.S. Federal Reserve System and some central banks in Europe and Japan contributed to U.S. withdrawal of deposit assets and U.S. repayment of deposit liabilities. The full economic effects of the COVID-19 pandemic cannot be quantified in the statistics because the impacts are generally embedded in source data and cannot be separately identified. For more information on the impact of COVID-19 on the statistics, see the technical note that accompanies this release.”

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/news/2020/us-international-transactions-second-quarter-2020

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/news/2020/us-international-transactions-second-quarter-2020

Chart VI-3B1*, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/news/2020/us-international-transactions-first-quarter-2020-and-annual-update

Chart VI-3B1*, US, Current Account Transactions, Quarterly SA

Source: https://www.bea.gov/news/2020/us-international-transactions-first-quarter-2020-and-annual-update

Chart VI-3B1, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/news/2019/us-international-transactions-first-quarter-2019-and-annual-update

Chart VI-3B1, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/news/2020/us-international-transactions-fourth-quarter-and-year-2019

Chart VI-3B2, US, Current Account and Components Balances, Quarterly SA

Source: https://www.bea.gov/news/2020/us-international-transactions-fourth-quarter-and-year-2019

The Bureau of Economic Analysis (BEA) provides analytical insight and data on the 2017 Tax Cuts and Job Act:

“In the international transactions accounts, income on equity, or earnings, of foreign affiliates of U.S. multinational enterprises consists of a portion that is repatriated to the parent company in the United States in the form of dividends and a portion that is reinvested in foreign affiliates. In response to the 2017 Tax Cuts and Jobs Act, which generally eliminated taxes on repatriated earnings, some U.S. multinational enterprises repatriated accumulated prior earnings of their foreign affiliates. In the first, second, and fourth quarters of 2018, the repatriation of dividends exceeded current-period earnings, resulting in negative values being recorded for reinvested earnings. In the first quarter of 2019, dividends were $100.2 billion while reinvested earnings were $40.2 billion (see table below). The reinvested earnings are also reflected in the net acquisition of direct investment assets in the financial account (table 6). For more information, see "How does the 2017 Tax Cuts and Jobs Act affect BEA’s business income statistics?" and "How are the international transactions accounts affected by an increase in direct investment dividend receipts?"”

Chart VI-3B, US, Direct Investment Earnings Receipts and Components

Source: https://www.bea.gov/news/2019/us-international-transactions-first-quarter-2019-and-annual-update

In their classic work on “unpleasant monetarist arithmetic,” Sargent and Wallace (1981, 2) consider a regime of domination of monetary policy by fiscal policy (emphasis added):

“Imagine that fiscal policy dominates monetary policy. The fiscal authority independently sets its budgets, announcing all current and future deficits and surpluses and thus determining the amount of revenue that must be raised through bond sales and seignorage. Under this second coordination scheme, the monetary authority faces the constraints imposed by the demand for government bonds, for it must try to finance with seignorage any discrepancy between the revenue demanded by the fiscal authority and the amount of bonds that can be sold to the public. Suppose that the demand for government bonds implies an interest rate on bonds greater than the economy’s rate of growth. Then if the fiscal authority runs deficits, the monetary authority is unable to control either the growth rate of the monetary base or inflation forever. If the principal and interest due on these additional bonds are raised by selling still more bonds, so as to continue to hold down the growth of base money, then, because the interest rate on bonds is greater than the economy’s growth rate, the real stock of bonds will growth faster than the size of the economy. This cannot go on forever, since the demand for bonds places an upper limit on the stock of bonds relative to the size of the economy. Once that limit is reached, the principal and interest due on the bonds already sold to fight inflation must be financed, at least in part, by seignorage, requiring the creation of additional base money.”

The alternative fiscal scenario of the CBO (2012NovCDR, 2013Sep17) resembles an economic world in which eventually the placement of debt reaches a limit of what is proportionately desired of US debt in investment portfolios. This unpleasant environment is occurring in various European countries.

The current real value of government debt plus monetary liabilities depends on the expected discounted values of future primary surpluses or difference between tax revenue and government expenditure excluding interest payments (Cochrane 2011Jan, 27, equation (16)). There is a point when adverse expectations about the capacity of the government to generate primary surpluses to honor its obligations can result in increases in interest rates on government debt.

First, Unpleasant Monetarist Arithmetic. Fiscal policy is described by Sargent and Wallace (1981, 3, equation 1) as a time sequence of D(t), t = 1, 2,…t, …, where D is real government expenditures, excluding interest on government debt, less real tax receipts. D(t) is the real deficit excluding real interest payments measured in real time t goods. Monetary policy is described by a time sequence of H(t), t=1,2,…t, …, with H(t) being the stock of base money at time t. In order to simplify analysis, all government debt is considered as being only for one time period, in the form of a one-period bond B(t), issued at time t-1 and maturing at time t. Denote by R(t-1) the real rate of interest on the one-period bond B(t) between t-1 and t. The measurement of B(t-1) is in terms of t-1 goods and [1+R(t-1)] “is measured in time t goods per unit of time t-1 goods” (Sargent and Wallace 1981, 3). Thus, B(t-1)[1+R(t-1)] brings B(t-1) to maturing time t. B(t) represents borrowing by the government from the private sector from t to t+1 in terms of time t goods. The price level at t is denoted by p(t). The budget constraint of Sargent and Wallace (1981, 3, equation 1) is:

D(t) = {[H(t) – H(t-1)]/p(t)} + {B(t) – B(t-1)[1 + R(t-1)]} (1)

Equation (1) states that the government finances its real deficits into two portions. The first portion, {[H(t) – H(t-1)]/p(t)}, is seigniorage, or “printing money.” The second part,

{B(t) – B(t-1)[1 + R(t-1)]}, is borrowing from the public by issue of interest-bearing securities. Denote population at time t by N(t) and growing by assumption at the constant rate of n, such that:

N(t+1) = (1+n)N(t), n>-1 (2)

The per capita form of the budget constraint is obtained by dividing (1) by N(t) and rearranging:

B(t)/N(t) = {[1+R(t-1)]/(1+n)}x[B(t-1)/N(t-1)]+[D(t)/N(t)] – {[H(t)-H(t-1)]/[N(t)p(t)]} (3)

On the basis of the assumptions of equal constant rate of growth of population and real income, n, constant real rate of return on government securities exceeding growth of economic activity and quantity theory equation of demand for base money, Sargent and Wallace (1981) find that “tighter current monetary policy implies higher future inflation” under fiscal policy dominance of monetary policy. That is, the monetary authority does not permanently influence inflation, lowering inflation now with tighter policy but experiencing higher inflation in the future.

Second, Unpleasant Fiscal Arithmetic. The tool of analysis of Cochrane (2011Jan, 27, equation (16)) is the government debt valuation equation:

(M_t + B_t)/P_t = E_t∫(1/R_t_{, t+τ})s_t_+τdτ (4)

Equation (4) expresses the monetary, M_t, and debt, B_t, liabilities of the government, divided by the price level, P_t, in terms of the expected value discounted by the ex-post rate on government debt, R_t_{, t+τ}, of the future primary surpluses s_t_+τ, which are equal to T_t_+τ – G_t_+τ or difference between taxes, T, and government expenditures, G. Cochrane (2010A) provides the link to a web appendix demonstrating that it is possible to discount by the ex post R_t_{, t+τ}. The second equation of Cochrane (2011Jan, 5) is:

M_tV(i_t, ·) = P_tY_t (5)

Conventional analysis of monetary policy contends that fiscal authorities simply adjust primary surpluses, s, to sanction the price level determined by the monetary authority through equation (5), which deprives the debt valuation equation (4) of any role in price level determination. The simple explanation is (Cochrane 2011Jan, 5):

“We are here to think about what happens when [4] exerts more force on the price level. This change may happen by force, when debt, deficits and distorting taxes become large so the Treasury is unable or refuses to follow. Then [4] determines the price level; monetary policy must follow the fiscal lead and ‘passively’ adjust M to satisfy [5]. This change may also happen by choice; monetary policies may be deliberately passive, in which case there is nothing for the Treasury to follow and [4] determines the price level.”

An intuitive interpretation by Cochrane (2011Jan 4) is that when the current real value of government debt exceeds expected future surpluses, economic agents unload government debt to purchase private assets and goods, resulting in inflation. If the risk premium on government debt declines, government debt becomes more valuable, causing a deflationary effect. If the risk premium on government debt increases, government debt becomes less valuable, causing an inflationary effect.

There are multiple conclusions by Cochrane (2011Jan) on the debt/dollar crisis and Global recession, among which the following three:

(1) The flight to quality that magnified the recession was not from goods into money but from private-sector securities into government debt because of the risk premium on private-sector securities; monetary policy consisted of providing liquidity in private-sector markets suffering stress

(2) Increases in liquidity by open-market operations with short-term securities have no impact; quantitative easing can affect the timing but not the rate of inflation; and purchase of private debt can reverse part of the flight to quality

(3) The debt valuation equation has a similar role as the expectation shifting the Phillips curve such that a fiscal inflation can generate stagflation effects similar to those occurring from a loss of anchoring expectations.

This analysis suggests that there may be a point of saturation of demand for United States financial liabilities without an increase in interest rates on Treasury securities. A risk premium may develop on US debt. Such premium is not apparent currently because of distressed conditions in the world economy and international financial system. Risk premiums are observed in the spread of bonds of highly indebted countries in Europe relative to bonds of the government of Germany.

The issue of global imbalances centered on the possibility of a disorderly correction (Pelaez and Pelaez, The Global Recession Risk (2007), Globalization and the State Vol. II (2008b) 183-94, Government Intervention in Globalization (2008c), 167-71). Such a correction has not occurred historically but there is no argument proving that it could not occur. The need for a correction would originate in unsustainable large and growing United States current account deficits (CAD) and net international investment position (NIIP) or excess of financial liabilities of the US held by foreigners net relative to financial liabilities of foreigners held by US residents. The IMF estimated that the US could maintain a CAD of two to three percent of GDP without major problems (Rajan 2004). The threat of disorderly correction is summarized by Pelaez and Pelaez, The Global Recession Risk (2007), 15):

“It is possible that foreigners may be unwilling to increase their positions in US financial assets at prevailing interest rates. An exit out of the dollar could cause major devaluation of the dollar. The depreciation of the dollar would cause inflation in the US, leading to increases in American interest rates. There would be an increase in mortgage rates followed by deterioration of real estate values. The IMF has simulated that such an adjustment would cause a decline in the rate of growth of US GDP to 0.5 percent over several years. The decline of demand in the US by four percentage points over several years would result in a world recession because the weakness in Europe and Japan could not compensate for the collapse of American demand. The probability of occurrence of an abrupt adjustment is unknown. However, the adverse effects are quite high, at least hypothetically, to warrant concern.”

The United States could be moving toward a situation typical of heavily indebted countries, requiring fiscal adjustment and increases in productivity to become more competitive internationally. The CAD and NIIP of the United States are not observed in full deterioration because the economy is well below trend. There are two complications in the current environment relative to the concern with disorderly correction in the first half of the past decade. In the release of Jun 14, 2013, the Bureau of Economic Analysis (http://www.bea.gov/newsreleases/international/transactions/2013/pdf/trans113.pdf) informs of revisions of US data on US international transactions since 1999:

“The statistics of the U.S. international transactions accounts released today have been revised for the first quarter of 1999 to the fourth quarter of 2012 to incorporate newly available and revised source data, updated seasonal adjustments, changes in definitions and classifications, and improved estimating methodologies.”

The BEA introduced new concepts and methods (http://www.bea.gov/international/concepts_methods.htm) in comprehensive restructuring on Jun 18, 2014 (http://www.bea.gov/international/modern.htm):

“BEA introduced a new presentation of the International Transactions Accounts on June 18, 2014 and will introduce a new presentation of the International Investment Position on June 30, 2014. These new presentations reflect a comprehensive restructuring of the international accounts that enhances the quality and usefulness of the accounts for customers and bring the accounts into closer alignment with international guidelines.”

Table IIA2-3 provides data on the US fiscal and balance of payments imbalances incorporating all revisions and methods. In 2007, the federal deficit of the US was $161 billion corresponding to 1.1 percent of GDP while the Congressional Budget Office estimates the federal deficit in 2012 at $1077 billion or 6.7 percent of GDP. The estimate of the deficit for 2013 is $680 billion or 4.1 percent of GDP. The combined record federal deficits of the US from 2009 to 2012 are $5094 billion or 31.6 percent of the estimate of GDP for fiscal year 2012 implicit in the CBO (CBO 2013Sep11) estimate of debt/GDP. The deficits from 2009 to 2012 exceed one trillion dollars per year, adding to $5.084 trillion in four years, using the fiscal year deficit of $1077 billion for fiscal year 2012, which is the worst fiscal performance since World War II. Federal debt in 2007 was $5035 billion, slightly less than the combined deficits from 2009 to 2012 of $5084 billion. Federal debt in 2012 was 70.3 percent of GDP (CBO 2015Jan26) and 72.2 percent of GDP in 2013, as shown in Table VI-3B with the latest revisions (https://www.cbo.gov/about/products/budget-economic-data#2) . This situation may worsen in the future (CBO 2013Sep17):

“Between 2009 and 2012, the federal government recorded the largest budget deficits relative to the size of the economy since 1946, causing federal debt to soar. Federal debt held by the public is now about 73 percent of the economy’s annual output, or gross domestic product (GDP). That percentage is higher than at any point in U.S. history except a brief period around World War II, and it is twice the percentage at the end of 2007. If current laws generally remained in place, federal debt held by the public would decline slightly relative to GDP over the next several years, CBO projects. After that, however, growing deficits would ultimately push debt back above its current high level. CBO projects that federal debt held by the public would reach 100 percent of GDP in 2038, 25 years from now, even without accounting for the harmful effects that growing debt would have on the economy. Moreover, debt would be on an upward path relative to the size of the economy, a trend that could not be sustained indefinitely.

The gap between federal spending and revenues would widen steadily after 2015 under the assumptions of the extended baseline, CBO projects. By 2038, the deficit would be 6½ percent of GDP, larger than in any year between 1947 and 2008, and federal debt held by the public would reach 100 percent of GDP, more than in any year except 1945 and 1946. With such large deficits, federal debt would be growing faster than GDP, a path that would ultimately be unsustainable.

Incorporating the economic effects of the federal policies that underlie the extended baseline worsens the long-term budget outlook. The increase in debt relative to the size of the economy, combined with an increase in marginal tax rates (the rates that would apply to an additional dollar of income), would reduce output and raise interest rates relative to the benchmark economic projections that CBO used in producing the extended baseline. Those economic differences would lead to lower federal revenues and higher interest payments. With those effects included, debt under the extended baseline would rise to 108 percent of GDP in 2038.”

The most recent CBO long-term budget on Jun 25, 2019 projects US federal debt at 144.0 percent of GDP in 2049 (Congressional Budget Office, The 2019 long-term budget outlook. Washington, DC, Jun 25 https://www.cbo.gov/publication/55331). Table VI-3B provides the balance of payments and net international investment position together with the fiscal imbalances of the US that were critical at the onset of the global recession after 2007 (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). Several past comments of this blog elaborate on these arguments, among which: 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 ) and are exploding again with the fiscal stimulus of the COVID-19 event.

Table VI-3B, US, Current Account, NIIP, Fiscal Balance, Nominal GDP, Federal Debt and Direct Investment, Dollar Billions and %

	2007	2008	2009	2010	2011
Goods & Services	-705	-709	-384	-495	-549
Exports Goods & Services & Income Receipts	2559.3	2742.3	2283.1	2624.0	2981.5
Imports Goods & Services & Income Payments	-3270.4	-3423.6	-2655.6	-3055.3	-3427.2
Current Account	-711	-681	-373	-431	-445
NGDP	14452	14713	14449	14992	15543
Current Account % GDP	-4.9	-4.6	-2.6	-2.9	-2.9
NIIP	-1279	-3995	-2628	-2512	-4455
US Owned Assets Abroad	20705	19423	19426	21767	22209
Foreign Owned Assets in US	21984	23418	22054	24279	26664
NIIP % GDP	-8.8	-27.2	-18.2	-16.8	-28.7
Exports Goods, Services and Income Receipts	2559	2742	2283	2624	2982
NIIP % Exports Goods, Services and Income Payments	-50	-146	-115	-96	-149
DIA MV	5858	3707	4945	5486	5215
DIUS MV	4134	3091	3619	4099	4199
Fiscal Balance	-161	-459	-1413	-1294	-1300
Fiscal Balance % GDP	-1.1	-3.1	-9.8	-8.7	-8.4
Federal Debt	5035	5803	7545	9019	10128
Federal Debt % GDP	35.2	39.4	52.3	60.8	65.8
Federal Outlays	2729	2983	3518	3457	3603
∆%	2.8	9.3	17.9	-1.7	4.2
% GDP	19.1	20.2	24.4	23.3	23.4
Federal Revenue	2568	2524	2105	2163	2303
∆%	6.7	-1.7	-16.6	2.7	6.5
% GDP	18.0	17.1	14.6	14.6	15.0

	2012	2013	2014	2015	2016
Goods & Services	-537	-461	-490	-499	-503
Exports Goods & Services & Income Receipts	3095.0	3213.0	3341.8	3207.3	3188.5
Exports Goods & Services & Income Receipts	3521.9	3561.8	3707.0	-3615.1	3616.9
Current Account	-426	-349	-365	-408	-428
NGDP	16197	16785	17527	18225	18715
Current Account % GDP	-2.6	-2.1	-2.1	-2.2	-2.3
NIIP	-4518	-5369	-6945	-7462	-8192
US Owned Assets Abroad	22562	24145	24883	23431	24060
Foreign Owned Assets in US	27080	29513	31828	30892	32252
NIIP % GDP	-27.9	-32.0	-39.6	-40.9	-43.8
Exports Goods, Services and Income	3095	3213	3342	3207	3189
NIIP % Exports Goods, Services and Income	-146	-167	-208	-233	-257
DIA MV	5969	7121	72421	7057	7422
DIUS MV	4662	5815	6370	6729	7596
Fiscal Balance	-1077	-680	-485	-442	-585
Fiscal Balance % GDP	-6.7	-4.1	-2.8	-2.4	-3.2
Federal Debt	11281	11983	12780	13117	14168
Federal Debt % GDP	70.3	72.2	73.7	72.5	76.4
Federal Outlays	3527	3455	3506	3692	3853
∆%	-2.1	-2.0	1.5	5.3	4.4
% GDP	22.0	20.8	20.2	20.4	20.8
Federal Revenue	2450	2775	3022	3250	3268
∆%	6.4	13.3	8.9	7.6	0.6
% GDP	15.3	16.7	17.4	18.0	17.6
	2017	2018	2019
Goods & Services	-550	-628	-616
Exports Goods & Services & Income Receipts	3444.8	3735.7	3763.9
Imports Goods & Services & Income Payments	3884.5	4226.7	4262.3
Current Account	-440	-491	-498
NGDP	19519	20580	21428
Current Account % GDP	2.3	2.4	2.3
NIIP	-7743	-9555	-10991
US Owned Assets Abroad	27773	25241	29317
Foreign Owned Assets in US	35516	34796	40309
NIIP % GDP	-39.7	-46.4	-51.3
Exports Goods, Services and Income	3445	3736	3764
NIIP % Exports Goods, Services and Income	-225	-256	-292
DIA MV	8910	7504	8838
DIUS MV	8925	8483	10581
Fiscal Balance	-665	-779	-984
Fiscal Balance % GDP	-3.5	-3.8	-4.6
Federal Debt	14665	15750	16803
Federal Debt % GDP	76.0	77.4	79.2
Federal Outlays	3982	4109	4447
∆%	3.3	3.2	8.2
% GDP	20.6	20.2	21.0
Federal Revenue	3316	3330	3462
∆%	1.5	0.4	4.0
% GDP	17.2	16.4	16.3

Sources:

Notes: NGDP: nominal GDP or in current dollars; NIIP: Net International Investment Position; DIA MV: US Direct Investment Abroad at Market Value; DIUS MV: Direct Investment in the US at Market Value. There are minor discrepancies in the decimal point of percentages of GDP between the balance of payments data and federal debt, outlays, revenue and deficits in which the original number of the CBO source is maintained. See Bureau of Economic Analysis, US International Economic Accounts: Concepts and Methods. 2014. Washington, DC: BEA, Department of Commerce, Jun 2014 http://www.bea.gov/international/concepts_methods.htm These discrepancies do not alter conclusions. Budget http://www.cbo.gov/

https://www.cbo.gov/about/products/budget-economic-data#6

https://www.cbo.gov/about/products/budget_economic_data#3

https://www.cbo.gov/about/products/budget-economic-data#2

https://www.cbo.gov/about/products/budget_economic_data#2 Balance of Payments and NIIP http://www.bea.gov/international/index.htm#bop Gross Domestic Product, , Bureau of Economic Analysis (BEA) http://www.bea.gov/iTable/index_nipa.cfm

Table VI-3C provides quarterly estimates NSA of the external imbalance of the United States. The current account deficit as percent of GDP at 2.4 percent in IQ2019 decreases to 1.9 percent in IVQ2019. The current account deficit at 2.1 percent in IQ2020 increases to 3.2 percent in IIQ2020. The current account deficit increases to 3.3 percent in IIIQ2020. The current account deficit stabilizes to 3.3 percent of GDP in IVQ2020. The current account deficit increases to 3.4 percent in IQ2021. The current account deficit increases to 3.5 percent of GDP in IIQ2021. The current account deficit increases to 3.7 percent in IIIQ2021. The absolute value of the net international investment position increases at $13.0 trillion in IIQ2020. The absolute value of the net international investment position increases to $13.8 trillion in IIIQ2020. The absolute value of the net international position increases to $14.0 trillion in IVQ2020. The absolute value of the net international investment position increased to $14.3 trillion in IQ2021. The absolute value of the net international investment position increases to $15.9 trillion in IIQ2021. The absolute value of the net international investment position increases to $16.1 trillion in IIIQ2021. The BEA explains as follows (https://www.bea.gov/sites/default/files/2021-12/intinv321.pdf): “

The U.S. net international investment position (IIP), the difference between U.S. residents' foreign financial assets and liabilities, was –$16.07 trillion at the end of the third quarter of 2021, according to statistics released today by the U.S. Bureau of Economic Analysis (BEA). Assets totaled $34.45 trillion, and liabilities were $50.53 trillion. At the end of the second quarter, the net investment position was –$15.91 trillion. The net investment positions and components of assets and liabilities are presented in table 1.
U.S. assets increased by $181.2 billion to a total of $34.45 trillion at the end of the third quarter, reflecting increases in portfolio investment and reserve assets. Portfolio investment assets increased by $194.3 billion to $16.16 trillion, driven by net U.S. purchases of foreign securities. Reserve assets increased by $105.0 billion to $695.1 billion, reflecting the allocation of $112.8 billion in new special drawing rights (SDRs) in August 2021 to the United States as its share of the $650 billion SDR allocation approved by the International Monetary Fund (IMF). The SDR is an international reserve asset created by the IMF to supplement its member countries' official reserves and can be exchanged between members for currencies such as the U.S. dollar, the euro, or the yen. The allocation in the third quarter was the largest in the history of the IMF.
U.S. liabilities increased by $346.3 billion to a total of $50.53 trillion at the end of the third quarter, mostly reflecting increases in other investment liabilities. Other investment liabilities increased by $294.8 billion to $7.77 trillion, reflecting increases in deposit liabilities and in SDR allocation liabilities that represent the U.S. long-term obligation to other IMF member countries holding SDRs. In an SDR allocation, the increase in U.S. liabilities offsets the increase in U.S. assets, so the allocation has no impact on the net international investment position.

In the third quarter of 2021, a new allocation of special drawing rights, approved by the International Monetary Fund to mitigate the impact of the COVID-19 pandemic on the finances of developing countries, contributed to the increases in U.S. assets and liabilities. The full economic effects of the COVID-19 pandemic cannot be quantified in the IIP statistics because the impacts are generally embedded in source data and cannot be separately identified.”

Table VI-3C, US, Current Account, Net International Investment Position and Direct Investment, Dollar Billions, NSA

	IIQ2020	IIIQ2020	IVQ2020	IQ2021	IIQ2021	IIIQ2021
Goods & Services	-159	-204	-196	-176	-208	-248
Primary Income	35	49	54	50	39	49
Secondary Income	-29	-34	-33	-33	-30	-38
Current Account	-154	-189	-176	-160	-199	-238
Current Account % GDP SA	3.2	3.3	3.3	3.4	3.5	3.7
NIIP	-12996	-13767	-14011	-14301	-15906	-16071
US Owned Assets Abroad	28788	29518	32256	32838	34273	34455
Foreign Owned Assets in US	-41783	-43285	-46268	-47139	-50179	-50526
DIA MV	7925	8346	9405	9892	10563	10543
DIUS MV	10035	10843	11978	12563	13473	13572

Notes: NIIP: Net International Investment Position; DIA MV: US Direct Investment Abroad at Market Value; DIUS MV: Direct Investment in the US at Market Value. See Bureau of Economic Analysis, US International Economic Accounts: Concepts and Methods. 2014. Washington, DC: BEA, Department of Commerce, Sep 2014

https://www.bea.gov/international/concepts_methods.htm

Chart VI-3CA of the US Bureau of Economic Analysis provides the quarterly and annual US net international investment position (NIIP) NSA in billion dollars. The NIIP deteriorated in 2008, improving in 2009-2011 followed by deterioration after 2012. There is improvement in 2017 and deterioration in 2018.

Chart VI-3CA, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

Chart VI-3C, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

Chart VI-3C1 provides the quarterly NSA NIIP.

Chart VI-3C1, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

Chart VI-3C2 updates annual and quarterly estimates of the US Net International Investment Position. There is continuing deterioration.

Chart VI-3C2, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

Chart VI-3C2 updates quarterly estimates of the US Net International Investment Position. There is continuing deterioration.

Chart VI-3C3, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

Chart VI-3C3, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2019/us-international-investment-position-third-quarter-2019

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2020/us-international-investment-position-fourth-quarter-and-year-2019

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2020/us-international-investment-position-first-quarter-2020-year-2019-and-annual-update

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2020/us-international-investment-position-second-quarter-2020

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2020/us-international-investment-position-third-quarter-2020

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2020/us-international-investment-position-third-quarter-2020

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2021/us-international-investment-position-fourth-quarter-and-year-2020

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2021/us-international-investment-position-fourth-quarter-and-year-2020

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2021/us-international-investment-position-first-quarter-2021-year-2020-and-annual-update

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2021/us-international-investment-position-first-quarter-2021-year-2020-and-annual-update

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2021/us-international-investment-position-second-quarter-2021

Chart VI-3C4, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2021/us-international-investment-position-second-quarter-2021

Chart VI-3C5, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2021/us-international-investment-position-third-quarter-2021

Chart VI-3C5A, US Net International Investment Position, NSA, Billion US Dollars

Source: Bureau of Economic Analysis

https://www.bea.gov/news/2021/us-international-investment-position-third-quarter-2021

CMP Associates Regulation Blog

Followers

Blog Archive

About Me

Monday, January 10, 2022

No comments:

Post a Comment