Social mobility in the USA

[mookiemookie]

Originally Posted by August

Important part highlighted.

It doesn't change the fact that the NBER uses a (very long) rear view mirror in calling recession beginning and end dates. There is a fundamental difference between saying something is over and saying when that something ended. That is the crux of the discussion. The majority of NBER committee members will tell you that the recession is over (Feldstein, Frankel) but what they will not do is commit to putting a date on it. Yet.

Regardless, the majority of economic data is showing an end to the recession. No one can ignore that. However, the recovery is another phase altogether. It may take years for a recovery to happen.

But since people seem to like charts, here's one:



This here's the Chicago Fed National Activity Index

The CFNAI is a weighted average of 85 existing monthly indicators(pdf) of national economic activity. It is constructed to have an average value of zero and a standard deviation of one. Since economic activity tends toward trend growth rate over time, a positive index reading corresponds to growth above trend and a negative index reading corresponds to growth below trend.

The 85 economic indicators that are included in the CFNAI are drawn from four broad categories of data: production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories. Each of these data series measures some aspect of overall macroeconomic activity. The derived index provides a single, summary measure of a factor common to these national economic data.

[CaptainHaplo]

I admit I am no learned economist in the classical sense. You can argue whether the recession is over, temporarily in abeyance, whatever. To the average joe on the street, it really doesn't matter is the point - until the job market turns around. To the average guy or gal - the old statement of "its the economy, stupid" still applies - and so its the improvement in the job market - jobs available, unemployment lowering, as well as the quality of the jobs and their duration, that becomes the main factor that is looked at by the masses.

True, it doesn't meet standard definitions, but telling me the "recession is over" when my state has a 11.2% unemployment rate, doesn't mean anything to me in real terms, because while the fall may be over, the job market is still in the basement.

I'm lucky, I am not one of those who lost their job. But in looking for another one - or a second one - the pickings ae slim. I can only feel sympathy for all those who are families or individuals without a job at all. I am able to cover things while my lady is still looking. Not all families are so lucky.

Sure, the article is likely technically true, but it feels like everyone is just waiting for the other shoe to drop......

[mookiemookie]

Originally Posted by CaptainHaplo

I admit I am no learned economist in the classical sense. You can argue whether the recession is over, temporarily in abeyance, whatever. To the average joe on the street, it really doesn't matter is the point - until the job market turns around. To the average guy or gal - the old statement of "its the economy, stupid" still applies - and so its the improvement in the job market - jobs available, unemployment lowering, as well as the quality of the jobs and their duration, that becomes the main factor that is looked at by the masses.

True, it doesn't meet standard definitions, but telling me the "recession is over" when my state has a 11.2% unemployment rate, doesn't mean anything to me in real terms, because while the fall may be over, the job market is still in the basement.

I'm lucky, I am not one of those who lost their job. But in looking for another one - or a second one - the pickings ae slim. I can only feel sympathy for all those who are families or individuals without a job at all. I am able to cover things while my lady is still looking. Not all families are so lucky.

Sure, the article is likely technically true, but it feels like everyone is just waiting for the other shoe to drop......

I know exactly what you're saying. I often do speaking engagements for public funds groups (people in charge of investing school district/local county/city funds)around here and I run into the same kind of thing. These investors, especially for the smaller school districts and cities are by and large not very sophisticated...a lot of them have just been placed in charge of this in addition to their accounting and other job responsibilities. It's hard to show them charts like this and say "See! The aggregate data shows things are getting better!" when they personally don't see it. The recovery thus far has been "lumpy"...a lot of places are still having tough times, but there's a lot of places that are doing well. It makes it hard to believe when you personally don't see something. It's like a "trust me, take my word for it" thing, which can be hard to swallow. But the bottom line is that things are not getting worse. But full recovery is going to take a long time to happen.

I think the employment situation is going to be very bad for a long time. One of the economists I place a lot of faith in puts it this way:

We started the decade with a national payroll level of 130.8 million. We finished the decade practically unchanged at 130.9 million. Meanwhile, the total pool of available labour rose from 146 million to 159 million. In other words, we have the same number of jobs today as we did a decade ago, and yet we also have 13 million more people competing for them. It was more than just a lost decade for the equity market. It was a lost decade for the labour market.

Making up all those jobs is going to take years. This chart illustrates percentage of job losses from the last peak and compares it across recessions...you can see that we're going to take a long, long time to recover:

[August]

Originally Posted by mookiemookie

But the bottom line is that things are not getting worse. But full recovery is going to take a long time to happen.

Well again I hope you're right it is no guarantee that things are going to get better, or that it's just a temporary hesitation before continuing the free fall.

[Aramike]

An economic recession, for practical purposes is based upon a baseline ... ergo, over a 2 year period the recession has perhaps ended. However, over a 10 year period, the economy is still in recession.

The best analogy is a beach front where the water line is receeding. Indeed, the waves still come in and dampen the sand on the beach, but the waves keep coming up the sand less and less.

Hence the need for a long view. And, in the long view, there is no way in hell anyone can claim we are not in a recession. We may be making some gains, but are they merely waves soaking the beach or is the average waterline actually growing higher?

True, it doesn't meet standard definitions, but telling me the "recession is over" when my state has a 11.2% unemployment rate, doesn't mean anything to me in real terms, because while the fall may be over, the job market is still in the basement.

So Haplos arguement against a wide measure of a national cycle is his personal perception of a single factor at a very local level.
Thats like people arguing for or against global warming on the basis that it was hot or cold this morning where they live.