Dovetailing nicely with the point I made yesterday about the discrepancy between the official numbers and how people are behaving, this post at Zerohedge from Charles Hugh Smith is interesting. Basically, purchasing managers are not behaving as though the country is on the verge of a boom which is the impression you might receive if you got absolutely all of your information from the The New York Times and the Washington Post.
Also, real wages are 4% lower than they were fifteen years ago:
In nominal terms, median household income is up a third from 2000–a strong showing indeed. But adjusted for official inflation (which understates inflation in key sectors such as healthcare and higher education), income has risen off the bottom (9.6% beneath 2000 levels) and is now only 3.9% below 2000 levels, but this is dismayingly at odds with the happy story of nominal gains.
This broad measure of household income doesn’t tell us how much of the gains have been captured by the top 10%; the top layer may have gained much more than the 90% below.
This also doesn’t reflect other potentially negative factors such as higher healthcare deductibles that lower actual take-home pay.
While “recovery” cheerleaders are busy predicting strong growth in wages going forward, they conveniently ignore that it will take another 4% of real gains just to get back to the levels of 15 years ago.
It doesn’t feel like a booming economy here in Chicago. Maybe my perspective is skewed. Maybe the official numbers are skewed.
Restaurants are busy in our area. Hotel reservations are harder to get. I was being asked for help finding jobs for people fairly often 4-5 years ago. Not so much now. Certainly much better than in 2009. However, I also know several people from our church who are still underemployed and some children of the people I work with still haven’t found (full time) work since they graduated, including a Penn and a Vanderbilt grad, both decent schools.
Steve
Living in coastal areas of CA, I see business activity, construction, sales picking up. But, this is an enclave that has a well-heeling population — many in the upper income brackets. In fact there are lots of out-of-state license plates around too, indicating people coming from out-of-area tracking work where it exists. So, yes there are bubbles of recovery. However, I see such flurries of growth as being more the exception than the norm, when looking at the country as a whole.
At the end of 2013, full-time employment was down 3.5% from the prior peek for people in the critical age group of 25-54. Since I was looking at it from the perspective of percentage of population w/ a FT job, that accounted for demographic factors. I doubt that age group made up the four million or so FT jobs in needed last year to get back to pre-recession levels.
Completely unrelatedly, how are private debt levels doing again?
How about a little fire, Scarecrow……..
http://www.zerohedge.com/news/2015-03-10/recession-watch-wholesale-sales-plunge-worst-lehman