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Friday, August 01, 2014 10:11 AM


Nonfarm Payrolls 209,000, Unemployment 6.2%, Employed +131,000


Initial Reaction

Counting the upwardly revised 298,000 nonfarm payroll report in June (originally reported as 288,000), this was a decent report.

Yet, digging into the details, the household survey showed a gain in employment of only 131,000. Thus, for the second consecutive month, the household survey was substantially weaker than the headline number.

The unemployment rate rose by 0.1% (by 197,000) thanks to a rise in the labor force greater than the rise in employment.

May BLS Jobs Statistics at a Glance

  • Nonfarm Payroll: +209,000 - Establishment Survey
  • Employment: +131,000 - Household Survey
  • Unemployment: +197,000 - Household Survey
  • Involuntary Part-Time Work: +275,000 - Household Survey
  • Voluntary Part-Time Work: -33,000 - Household Survey
  • Baseline Unemployment Rate: +0.1 at 6.1% - Household Survey
  • U-6 unemployment: +0.1 to 12.2% - Household Survey
  • Civilian Non-institutional Population: +209,000
  • Civilian Labor Force: +329,000 - Household Survey
  • Not in Labor Force: -119,000 - Household Survey
  • Participation Rate: +0.1 at 62.9 - Household Survey

Additional Notes About the Unemployment Rate

  • The unemployment rate varies in accordance with the Household Survey, not the reported headline jobs number, and not in accordance with the weekly claims data.
  • In the past year the working-age population rose by 2,226,000.
  • In the last year the labor force declined by 330,000.
  • In the last year, those "not" in the labor force rose by 1,939,000
  • In the past year, the number of people employed rose by 2,067,000 (an average of 172,250 a month)

Please note that over the course of the last year, the working-age population rose by more than the number of people employed. In normal times, the unemployment rate would have gone up slightly. Instead, the unemployment rate fell from 7.3% to 6.2%. Over 100% of the decline in unemployment was due to people dropping out of the labor force, rather than strength in the economy!

July 2014 Employment Report

Please consider the Bureau of Labor Statistics (BLS) July 2014 Employment Report.

Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 6.2 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in professional and business services, manufacturing, retail trade, and construction.

Click on Any Chart in this Report to See a Sharper Image

Unemployment Rate - Seasonally Adjusted



Nonfarm Employment January 2003 - July 2014



click on chart for sharper image

Nonfarm Employment Change from Previous Month by Job Type



Hours and Wages

Average weekly hours of all private employees has been flat for five months at 34.5 hours. Average weekly hours of all private service-providing employees was flat at 33.3 hours.

Average hourly earnings of private workers rose $0.04 to $20.61. Average hourly earnings of private service-providing employees rose $0.03 to $20.39.

For discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?

Birth Death Model

Starting January, I dropped the Birth/Death Model charts from this report. For those who follow the numbers, I keep this caution: Do not subtract the reported Birth-Death number from the reported headline number. That approach is statistically invalid. Should anything interesting arise in the Birth/Death numbers, I will add the charts back.

Table 15 BLS Alternate Measures of Unemployment



click on chart for sharper image

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Notice I said "better" approximation not to be confused with "good" approximation.

The official unemployment rate is 6.2%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 12.2%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Labor Force Factors

  1. Discouraged workers stop looking for jobs
  2. People retire because they cannot find jobs
  3. People go back to school hoping it will improve their chances of getting a job
  4. People stay in school longer because they cannot find a job
  5. Disability and disability fraud

Were it not for people dropping out of the labor force over the past several years, the unemployment rate would be well over 9%.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Thursday, July 31, 2014 10:44 PM


"Nancy's VoiceBox", Lou Gehrig's Disease, Google Glass


Occasionally I receive a touching email that also offers a practical solution to extreme challenges. This is one of those times. Please consider this email from reader "Zentangle".

Hi Mish,

I have been following your blog for years now. Time is precious and not many writers "stick" . . . but you have. Thank you for your insights and passion throughout the years.

Your stories of your wife's and your struggle with ALS had a powerful impact because during that time a dear friend and employee, Nancy, was in the same struggle.

My wife and I worked out a novel way for Nancy to communicate. We just posted a blog about it and I wanted you to be the first person I told.

With our belated sympathies, gratitude and heartfelt best wishes,

Rick Roberts & Maria Thomas
Zentangle

Let's hop over to Zentangle's most recent blog entry, simply labeled "ALS".

The article notes how Maria Thomas came up with an idea to get around the ALS communication problem.

I went through the same things.

My wife Joanne could not talk but she could write. Then she lost that ability but could manage to push a button say select phrases. Then everything went.

With that personal background, here is the idea that Maria Thomas came up with after several months of unsuccessfully trying to use a very expensive, speech-generating device (basically a computer with technology that tracked eye movements).

From Zentangle ...
She [Maria] lettered the alphabet, numbers and some key phrases on a large 3 x 4 foot piece of 1/2 inch foam board. I ordered a bunch of laser pointers. We got a pair of Nancy's sunglasses and removed the lenses. We used electrical tape to attached two small laser pointers with switches (so they would stay on without keeping them pressed in) to Nancy's eyeglass frames. We used two laser pointers so the frames were balanced, and if a battery ran out in one laser, the other could be immediately turned on.

Because the board was placed across the room from her, all Nancy had to do was move her head ever so slightly to point out the letters. The large board enabled Nancy to speak to the whole room or to one person. It worked perfectly from the very first minute she used it.

We remember fondly when we first set it up, that in spite of her circumstances, one of her first "spellings" was to tell a joke to her husband.

Suddenly, the Nancy we all knew was back . . . chatting, teasing and cracking jokes. She could "talk" again with her beloved husband, her family and her friends.

Nancy used her board to communicate with her family for months until just hours before she left.

The laser pointers were about $9 each. We had the foam board in our studio (a 40 x 60 inch half-inch thick foam board costs about $25). We used an old pair of Nancy's glasses. Total cost: about $45.

Her care givers had not seen anything like this before. As far as we know, this idea was not in use in this circumstance.

In Nancy Sampson's memory, please share this idea with anyone you know who can use it. This idea is made available under a Creative Commons Attribution-NonCommercial-ShareAlike License.

In her memory, we call it "Nancy's VoiceBox."

We love you, Nancy!
"Nancy's VoiceBox"



Google Glass

Nancy's Voicebox is a fantastic idea. But I think we can easily improve on it.

The problem I see is that "Nancy" (anyone with ALS), might not have the ability to turn their head and point a laser at a word or phrase.

The obvious solution is Google Glass. As long as someone can move their eye just a slight bit (something they probably can do) Google Glass will work.

I believe Steve Hawking, renown theoretical physicist could greatly benefit from such a device.

I am going to pass this on to my contacts at Google, and also to the Les Turner ALS foundation.

Mish Experiences

Those interested in my experiences with Lou Gherig's disease can read about them here ...

April 2, 2012: My Wife Joanne Has ALS, Lou Gehrig's Disease
May 16, 2012: My Wife Joanne Has Passed Away; Stop and Smell the Lilacs
May 14, 2013: Wine Country Conference Speaker Presentations All Posted (Hussman, Chanos, Martenson, Pettis, Mauldin, Mish)

In honor of Joanne and Nancy, please consider making a Donation to the Les Turner ALS foundation.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

3:04 PM


Driverless Cars on UK Public Streets Starting January; Transforming Personal Mobility; Taxi and Truck-Drivers Targeted


The march for fully autonomous driverless cars marches on. In May, Google announced the Next Phase in Driverless Cars: No Steering Wheel or Brake Pedals.

Google’s prototype for its new cars will limit them to a top speed of 25 miles per hour. The cars are intended for driving in urban and suburban settings, not on highways. The low speed will probably keep the cars out of more restrictive regulatory categories for vehicles, giving them more design flexibility.

Google is having 100 cars built by a manufacturer in the Detroit area, which it declined to name. Nor would it say how much the prototype vehicles cost. They will have a range of about 100 miles, powered by an electric motor that is roughly equivalent to the one used by Fiat’s 500e, Dr. Urmson said. They should be road-ready by early next year, Google said.

Google hopes to persuade regulators that the cars can operate safely without driver, steering wheel, brake or accelerator pedal. Those cars would rely entirely on Google sensors and software to control them.
Taxis Targeted

Google's cars come equipped with elaborate sensors that can see 600 feet in every direction, are fully electric, and have a range of about 100 miles, perfect for city use, especially driverless taxi cabs. Google plans for 2017 operation.
Last year, Lawrence D. Burns, former vice president for research and development at General Motors and now a Google consultant, led a study at the Earth Institute at Columbia University on transforming personal mobility.

The researchers found that Manhattan’s 13,000 taxis made 470,000 trips a day. Their average speed was 10 to 11 m.p.h., carrying an average of 1.4 passengers per trip with an average wait time of five minutes.

In comparison, the report said, it is possible for a futuristic robot fleet of 9,000 shared automated vehicles hailed by smartphone to match that capacity with a wait time of less than one minute. Assuming a 15 percent profit, the current cost of taxi service would be about $4 per trip mile, while in contrast, it was estimated, a Manhattan-based driverless vehicle fleet would cost about 50 cents per mile.

Driverless Cars on UK Public Streets Starting January

The BBC reports UK to Allow Driverless Cars on Public Roads in January.
The UK government has announced that driverless cars will be allowed on public roads from January next year. It also invited cities to compete to host one of three trials of the tech, which would start at the same time.

Business Secretary Vince Cable revealed the details of the new plan at a research facility belonging to Mira, an automotive engineering firm based in the Midlands.

"Today's announcement will see driverless cars take to our streets in less than six months, putting us at the forefront of this transformational technology and opening up new opportunities for our economy and society," he said.

The US States of California, Nevada and Florida have all approved tests of the vehicles. In California alone, Google's driverless car has done more than 300,000 miles on the open road.

In 2013, Nissan carried out Japan's first public road test of an autonomous vehicle on a highway.

And in Europe, the Swedish city of Gothenburg has given Volvo permission to test 100 driverless cars - although that trial is not scheduled to occur until 2017.

Competition cash

UK cities wanting to host one of the trials have until the start of October to declare their interest. The tests are then intended to run for between 18 to 36 months. A £10m fund has been created to cover their costs, with the sum to be divided between the three winners. Meanwhile, civil servants have been given until the end of this year to publish a review of road regulations.
Taxi, Truck Drivers First To Go

Taxi drivers, truck drivers, and mining operators will be the first to go.  I have written about this many times, and was largely dissed.

But the future advances relentlessly. My target of 2020 no longer looks optimistic; it looks pessimistic.

Further Discussion


All of the above will be in widespread usage by 2020. Personal cars will likely be the last affected. Taxis and commercial trucks will be first because eliminating the driver eliminates a huge expense.

Millions of drivers will lose their jobs. Inflationary? Hardly.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

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