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Tag Archives: wages

China’s growth—what do we actually know?

Tyler Cowen recently linked to a study of China’s economic growth, which suggests that official figures (roughly 8%) overstate the real GDP growth rate by about 1.8%/year between 2010 and 2016: Using publicly available data, we provide revised estimates of local and national GDP by re-estimating output of industrial, construction, wholesale and retail firms using data on value-added taxes. We also use several local economic indicators that are less likely to be...

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So You Want to Get Rich: Focus on Human Capital

So you want to get rich: OK, what’s the plan? If you ask youngsters how to get rich, many will respond by listing the professions the media focuses on: entertainment, actors/actresses, pro athletes, and maybe a few lionized inventors or CEOs. The media’s glorification of the few at the top of these sectors masks the statistical reality that those who attain wealth in these pursuits number in the hundreds or perhaps thousands, not in the millions. As in a lottery, the odds...

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Peter Schiff: Stagflation Is Coming (Video)

Peter Schiff recently appeared on along with Investor’s Advantage Corporation founder John Grace, to talk about the recent jobs report. Peter summed things up with a dire warning. Stagflation is coming and it’s going to be worse than 2008.The number of jobs in the September report created came in below expectations, but the unemployment rate dipped to “the lowest level since 1969.” Wages were up 0.3%.Grace opened things up asserting that wage growth is not keeping up...

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The 21st Century Misery Index: Labor’s Share of the Economy and Real-World Inflation

In the late 1970s and early 1980s, an era of stagflation, the Misery Index was the unemployment rate plus inflation, both of which were running hot. Now those numbers are at 50-year lows: both the unemployment rate and inflation are about as low as they can go, reaching levels not seen since the mid-1960s. (See chart below) By these measures, the U.S. economy’s Misery Index has never been lower and hence prosperity has never been higher or more widespread. But this simply...

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Why We’re Doomed: Stagnant Wages

Despite all the happy talk about “recovery” and higher growth, wages have gone nowhere since 2000–and for the bottom 20% of workers, they’ve gone nowhere since the 1970s. Gross domestic product (GDP) has risen smartly since 2000, but the share of GDP going to wages and salaries has plummeted: this is simply an extension of a 47-year downtrend. Last month I posted one reason Why We’re Doomed: Our Economy’s Toxic...

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A Tale of Two Housing Markets: Hot and Not So Hot

Though housing statistics such as average sales price are typically lumped into one national number, this is extremely misleading: there are two completely different housing markets in the U.S. One is hot, one is not so hot. Just as importantly, one may stay relatively hot while the other may stagnate or decline. All real estate is local, of course; there are thousands of...

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Weak Construction As Another Data Point For The Shaken Consumers of Global Turmoil

Total construction spending was essentially flat year-over-year in July 2016. Public construction at both the state and local and also the federal government levels declined more than 3% Y/Y. Excluding the public sector, private construction spending (NSA) was up just 3.9% in July for the second month in a row. That was the lowest increase since the housing rebound started in the summer of 2011. While total private construction includes both residential and non-residential activity, it has...

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Broader Alarm And Business Cycles

The NBER does not define a recession as two consecutive quarters of contracting GDP. That is the mainstream definition that largely survives as a coping mechanism to deny what might otherwise be quite apparent. That was certainly true in 2008, as only Q1 GDP declined and it wasn’t until Q4 2008 that this mythical “technical” definition was met. The NBER only made it worse by waiting until December that year to declare what was by then obvious to everyone, already one year in length. The...

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Housing Starting To Suggest Where Autos Already Are?

In yet another data point that identifies depression rather than a Great Recession, the Wall Street Journal reported last week what most people outside the economics profession had realized a long time ago. Janet Yellen likes to say that the housing market is recovering, highlighting the economic sector as one of the few bright spots left. The FOMC regularly and officially makes mention of it, largely for the same reason. As with everything else in this economy, however, that something is...

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Here’s Why Wages Have Stagnated–and Will Continue to Stagnate

Mainstream economists are mystified why wages/salaries are still stagnant after 7+ years of growth / “recovery.” The conventional view is that wages should be rising as the labor market tightens (i.e. the unemployment rate is low) and demand for workers increases in an expanding economy. But wages are only rising significantly for the top 5%, while workers between the bottom...

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