The U.S. Economy: Stand by for more worse news

[joepistole]

As I predicted back in post 670 (see relevant part re-posted in post 817, this page) Fed was forced to drop exclusive use of BLS's unemployment index as 6.5% came much too quickly with that false index of US's unemployment as trigger for returning interest rate to normal. Here is how Yellen stated this in her speech today:

"the FOMC explicitly recognized that factors determining maximum employment “may change over time and may not be directly measurable,” and that assessments of the level of maximum employment “are necessarily uncertain and subject to revision.” Accordingly, the reformulated forward guidance reaffirms the FOMC’s view that policy decisions will not be based on any single indicator, but will instead take into account a wide range of information on the labor market, as well as inflation and financial developments."

Bold added by Billy T. Read all her speech at: http://www.bloomberg.com/news/2014-08-22/text-of-yellen-s-remarks-at-the-jackson-hole-symposium.html

Note at least Joepistole is consistent. He is still attacking Shaddow Stats data and defending BLS's (now even abandoned by Fed, as I predicted it would be in post 670) unemployment index as an accurate measure of the unemployment picture as he was back here:

Except, the Fed isn't abandoning the BLS numbers and they sure the he'll are not using your Shadow Stats. Further, you are changing the issue here. The Fed's statement addressed the issue of maximum or full employment. There never has been a good measure of full employment. It has always been estimated and based on a number of factors. That is different from what you have been saying (I.e BLS unemployment number is understated). The Fed does't quarrel with how the unemployment rate is calculated or the validity of the data.

 

[Billy T]

(1)Except, the Fed isn't abandoning the BLS numbers .... (2) That is different from what you have been saying (I.e BLS unemployment number is understated).

On (1): No? then why did the Fed need to develop its own measure for US unemployment?

On (2): No Yellen said EXACTLY what I have been stating: Here are her words:
" the decline in the unemployment rate over this period somewhat overstates the improvement in overall labor market conditions."

I. e. "The improvement in overall labor market conditions" has not been as much as the BLS's 6.2% unemployment indicates.

 

[joepistole]

On (1): No? then why did the Fed need to develop its own measure for US unemployment?

It isn’t developing its own measures – damn minor details again. It is using existing metrics. Go back and reread the FOMC materials you posted, “FOMC’s view that policy decisions will not be based on any single indicator, but will instead take into account a wide range of information on the labor market, as well as inflation and financial developments." It doesn’t say anything about developing its own metrics.

On (2): No Yellen said EXACTLY what I have been stating: Here are her words:
" the decline in the unemployment rate over this period somewhat overstates the improvement in overall labor market conditions."

Oh hogwash, the day you and Yellen are on the same page is the day Hell freezes over. The link below provides the actual text of her comments today. She is pondering slack in the labor market and potential causes for that slack. There is slack in the labor markets, that really isn't the question or disputed. The question is how do you know when the slack is no longer there. That is important, because whenever we get to that point the Fed will need to reverse monetary policy. Most economists think full employment reached when the unemployment rate reaches 5%. Traditionally, full employment has been estimated to be between 4% and 5% unemployment. Fed failure to predict and react to full employment could lead to inflation and stagflation or even recession if it acts prematurely and too aggressively. The unemployment rate is kind of like porridge, you don't want it too hot or too cold. You want it just right. Too hot and businesses cannot find workers and you get wage inflation and slow growth. Too cold and you get recession.

Below is the text of Yellen’s remarks in full. She didn’t say the things you have quoted her as saying.

http://www.federalreserve.gov/newsevents/speech/yellen20140822a.htm

I.e. "The improvement in overall labor market conditions" has not been as much as the BLS's 6.2% unemployment indicates.

That isn’t what she said. That is what you said.

 

[Michael]

ZeroHedge did a Word-Cloud of that Gnome they picked to be the chainperson of our Central Planners Central Bank at their exclusive Jackson Hole conference - that's where our Political Masters determine the fate of the so called "Freemarkets" in the Land of the Free/Tax Chattel.

Labor even beat out the generic word Market with Inflation a close third. I'll leave it to you to read between the lines.

Oh, and the word salad you see below: THAT'S how our political Masters attempt to 'inform' the general public.

wage developments reflect not only cyclical but also secular trends that have likely affected the evolution of labor’s share of income in recent years. As I noted, real wages have been rising less rapidly than productivity, implying that real unit labor costs have been declining, a pattern suggesting that there is scope for nominal wages to accelerate from their recent pace without creating meaningful inflationary pressure. However, research suggests that the decline in real unit labor costs may partly reflect secular factors that predate the recession, including changing patterns of production and international trade, as well as measurement issues. If so, productivity growth could continue to outpace real wage gains even when the economy is again operating at its potential.

What a metaphorical farce.

 

[Billy T]

It isn’t developing its own measures – damn minor details again. ...

In your typical, cheery picking and distorting way, you left out the explicit statement that FMOC (of the Fed) said it had "reformulated" ... so "policy decisions will not be based on any single indicator" - i.e. as I predicted back in post 670, would be necessary the Fed ceased to use BLS's unemployment < 6.5% as the trigger for interest rate retuning to normal.

Here is Yellen's full statement, which you cut the front part off to distort:
""the FOMC explicitly recognized that factors determining maximum employment “may change over time and may not be directly measurable,” and that assessments of the level of maximum employment “are necessarily uncertain and subject to revision.” Accordingly, the reformulated forward guidance reaffirms the FOMC’s view that policy decisions will not be based on any single indicator, but will instead take into account a wide range of information on the labor market, as well as inflation and financial developments."

Below is the text of Yellen’s remarks in full. She didn’t say the things you have quoted her as saying.

http://www.federalreserve.gov/newsevents/speech/yellen20140822a.htm...

Your now bold text is a lie. Tell what you claim I attributed to her by false quote. Then I'll direct your to exactly where in her speech she said any thing I quoted her saying. You in contrast have cheery picked and distorted what she said as I illustrated above.

I gave link to her entire talk earlier and it is exactly (word for word) the same text as in your link above.

 

[joepistole]

In your typical, cheery picking and distorting way, you left out the explicit statement that FMOC (of the Fed) said it had "reformulated" ... so "policy decisions will not be based on any single indicator" - i.e. as I predicted back in post 670, would be necessary the Fed ceased to use BLS's unemployment < 6.5% as the trigger for interest rate retuning to normal.

No, I left out nothing. I used your citations in your posts verbatim – nothing more, nothing less. So that makes you the cherry picker if there is one. Further, none of the additional text changes anything and actually, you predicted the Fed would back away from their original unemployment target to begin ending quantitative easing. Because your thesis was the Fed could not end quantitative easing without damaging the economy. You were fond of calling it quantitative infinity.

And the Fed (i.e. Bernanke) has done exactly what it said it would, when the unemployment rate approached 6.5% the Fed began ending its program of quantitative easing (i.e. your quantitative infinity). So the reality is you were wrong about quantitative easing. And the Fed isn’t backing away from the BLS unemployment number and it certainly isn’t using your Shadow Stats rabbit in the hat number. There is nothing in the FOMC statement that could lead one to logically come to that conclusion. The Fed is considering the impact of new structural changes in the workforce. That isn’t alarming. That isn’t surprising, and that does not negate current methodologies or metrics.

One more detail, Bernanke made that 6.5% comment in an offhand manner to a reporter who pressed him on the issue. I have never known the Fed’s not to consider all relevant factors and to be fixated on a single economic index. Economic indicators are never taken alone. They are always viewed in context and in conjunction with several other metrics. Economic metrics all work together to paint a picture of the economic condition. As there can be exogenous events which can and do distort any single metric. That is why whenever you hear economists speak and prognosticate; there is always an implied ceteris paribus condition. Novices such as you are often unaware of often unspoken condition.

In Here is Yellen's full statement, which you cut the front part off to distort:
""the FOMC explicitly recognized that factors determining maximum employment “may change over time and may not be directly measurable,” and that assessments of the level of maximum employment “are necessarily uncertain and subject to revision.” Accordingly, the reformulated forward guidance reaffirms the FOMC’s view that policy decisions will not be based on any single indicator, but will instead take into account a wide range of information on the labor market, as well as inflation and financial developments."
Your now bold text is a lie. Tell what you claim I attributed to her by false quote. Then I'll direct your to exactly where in her speech she said any thing I quoted her saying. You in contrast have cheery picked and distorted what she said as I illustrated above.

I gave link to her entire talk earlier and it is exactly (word for word) the same text as in your link above.

You quoted portions of her text, which I explained and refuted – damn minor details again. What you are doing is misconstruing her words. The Fed, nor Yellin said the things you attribute to her. Because you misconstrue her words and the words of the Fed, party out of zeal and party out of ignorance. You can quote her all day long, but as long as you continue to misconstrue those words, you will still be wrong. There is nothing in the FOMC release or Yellin’s comments that support your contentions and claims. That is the bottom line Billy T.

 

[pjdude1219]

If it is a "conspiracy" it is an open one - others well versed in economic agree that Shadow Stats's Data is just continuing the older calculation of the BLS, before methodology was changed, mainly to reduce the annual cost increase of the Social Security system - the "corrections for inflation." I.e. between 1997 and 1999, BLS redefined things so that part time workers were counted same as full time worker as "employed", so the people ceasing to look "actively" for work were not unemployed, even if they had actively looked for work for a year with no success, added adjustment for "quality" (BLS use smoke screen terminology to obscure what they are doing -I.e. BLS is doing "hedonic regression") so old type writer that cost $100 was more expensive than modern $1000 computer with word processor and printer used for writting letters. Same is true of cars and their tires - Accounting to BLS's new methodology, they only cost about half as much as the did a decade or more ago as their quality has more than doubled. That may be true for both these examples, but also true is writing a letter with machine or driving to work cost twice as much now - with no "quality adjustment" to your out of pocket cost for the machines. That is inflating faster than your average salary.

Another example, I've given before. Sally is finding it harder every year to buy the things she got from her parents when younger. She always used Dove soap, but now can not afford that so has had to switch to cheaper Ivory. BLS notes this general trend (substitution of hot dogs for beef etc.) and says: "Great - the cost of personnel hygiene and protein is declining so that component of inflation is actually negative. We can reduce the published inflation rate again."

Fed is trying hard to get BLS's computed inflation up to 2% and true inflation is well above that, but static salaries plus ceasing to work for one, plus only "Big Mac" jobs with low salary and or part time, coupled with the real out of pocket inflation, is make ever more people reduce their standard of living, like Sally did. That is why Fed can not get inflation rate up.
Here is that from Wiki (an obvious part of the conspiracy) That is true - only a few still prefer the BLS's older methodology. Even the Fed, which a year ago said 6.5% unemployment was its main guide as to when to start returning interests rates to normal, not longer thinks BLS's U3 is of much use. It is now just one index on their "dashboard." Total wages, seems to be more important to Yellen* - She still thinks US economy needs stimulus help or at least artificially & historically low interest rates. - We should her more on her POV tomorrow in the keynote speech. I'll be "all ears" - hope you will be too.

I agree total wages is a much better index of the economy that BLS's unemployment rate. Unfortunately with labor force participation rate falling and average salary (except for top 20%) static or actually declining for bottom 20%, total wages are not keeping up with inflation. - Not good for an economy that is 2/3 based of consumer buying. - Why even cheaper outlets did well until recently. Limited buying power customers gravitated there, but also partly because they let go full time employees and replaced them with lower wage part-time employees. They have done about all of that firing of full timers they can, so are not doing well anymore - only Sack 5th Avenue etc. are doing well.

* Members of the "conspiracy" identified here, but Millions of others who shop for food or pay for energy know U3 is not reflecting their cost of living so are members of the "conspiracy" too as they think the BLS's old method, still available as U6, reflects their cost of living better. I. e. That 12.6% is a more realistic index of their cost of living than 6.2% is.

so in other words you have no defense for relying on a hack than to say other's buy into it.

 

[Billy T]

so in other words you have no defense for relying on a hack than to say other's buy into it.

In post 811 you said:
"you quote conspiracy theotist sites like shadow states. the guy plays with numbers cause he doesn't like the government."

I pointed out that if it was a conspiracy, it was an open one that many joined - not one guy making up new calculation as he did not like the government. He did not like the changes the BLS introduced, so continued to calculate the way they did be for making changes that reduced the rate of inflation* - saving the government millions in the cost of the inflation adjustment given to people collecting their Social Security - how is that being a "hack" What did he hack?
-----------
* I gave several examples of how the reduction was achieved -The most outrageous one was when prices rose so much that "Sally" could no longer afford to buy Dove soap, and had to switch to cheaper Ivory, The BLS's survey crews accurately reported that expensive for personnel hygiene were falling - a negative contribution to the cost of living! Same with hot-dogs replacing beef, etc. BLS's reports prices are falling when in fact prices are rising so much that many must buy some cheaper substitute.

 

[joepistole]

I pointed out that if it was a conspiracy, it was an open one that many joined - not one guy making up new calculation as he did not like the government. He did not like the changes the BLS introduced, so continued to calculate the way they did be for making changes that reduced the rate of inflation* - saving the government millions in the cost of the inflation adjustment given to people collecting their Social Security - how is that being a "hack" What did he hack?

Actually, a lot of money can be made and is being made pandering to the conspiracy theorists. Yes there are a lot of conspiracy nuts out there, but that doesn’t make them correct (e.g. death a panel, Obama wasn’t born in America, death camps, etc.). Your Shadow Stats guy may not like the changes the BLS made in 1995, but most people, including the professionals and academics that rely on and use the BLS number do like the BLS changes. I have a difficult time believing your Shadow Stats guy doesn’t like the BLS changes as that is how he makes his money these days. Further if you did your homework and had read the changes the BLS made back in 1995 had the effect of raising unemployment rates because pre 1995, unemployment only measured people age 25 and above. Now unemployment measures all age groups.

Now you are mixing different metrics, unemployment and inflation. The discussion was the BLS unemployment metrics, now you are changing it to the inflation metric.
-----------

* I gave several examples of how the reduction was achieved -The most outrageous one was when prices rose so much that "Sally" could no longer afford to buy Dove soap, and had to switch to cheaper Ivory, The BLS's survey crews accurately reported that expensive for personnel hygiene were falling - a negative contribution to the cost of living! Same with hot-dogs replacing beef, etc. BLS's reports prices are falling when in fact prices are rising so much that many must buy some cheaper substitute.

It’s called substitution and there is nothing nefarious about it. It’s a fact; consumers change their consumption patterns when prices rise. It is basic supply and demand – nothing controversial. Substitution actually causes CPI to overstate inflation. There is no conspiracy to reduce Medicare, Medicaid, or Social Security costs by manipulating the inflation data and you have no evidence to the contrary. If anything, people in the BLS and other government workers are incented to increase the inflation number as their annual cost of living raises, including pension benefits, are tied to the official inflation rate.

Inflation measures are intended to reflect consumption patterns and as those patterns change, the metric much change to mimic the changing consumption pattern. And that is what the BLS CPI measure does. And it doesn’t do it frequently and it doesn’t just arbitrarily pull a number out of its hat. Changes to the CPI “bread basket” are made based on the results of the quarterly Consumer Expenditure Survey.

The bottom line is, it has been well known and well documented for many decades not what CPI overstates inflation and by most estimates, CPI overstates inflation by about 1% per year. This overstatement was a problem 30 years ago when I went through college and it remains a problem. Back in the 80’s there was talk of using the PPI index (Produce Price Index) rather than the CPI for government programs. The talk now is replacing the CPI with Chained CPI. If you have been paying attention to the discussion in Washington DC these days, you would know Republicans want to replace the CPI with Chained CPI and democrats want to keep CPI. Chained CPI makes continuous adjustments for the substitution bias versus the periodic adjustments for the substitution bias in the current fixed weight CPI. There is no conspiracy here. The current CPI measure overstates, not understates inflation, as you and your conspiracy friends would have us believe.

http://www.quickmba.com/econ/macro/cpi/

http://www.bls.gov/cex/

http://www.frbsf.org/economic-resea...-in-the-cpi-roughly-right-or-precisely-wrong/

http://en.wikipedia.org/wiki/United_States_Chained_Consumer_Price_Index

If your Shadow Stats man was actually doing what he claims he is doing, his numbers would understate unemployment and vastly overstate inflation. Of course we he overstates unemployment by including U-6 plus some magic into the BLS U3 and calling it unemployment. So that plus the fact that the pre-1995 survey questions have changed make it impossible for him to "adjust" his way out of the fact that he isn't reproducing the pre-1995 unemployment metrics. And his inflation data would not be adjusted for all of the know upward biases in the inflation metrics.

 

[Billy T]

{at Jackson Hole} Yellen advanced her argument that assessing the health of the job market must depend on indicators beyond the main unemployment rate, which has fallen to 6.2 percent from a post-recession peak of 10 percent. She cited the Fed’s Labor Market Conditions Index, which includes 19 data points, such as the labor force participation rate and the number of workers who are employed part-time because they can’t find full-time jobs.

A clear statement that Fed had to construct its own labor market index, as I predicted* it would be forced to, because BLS's unemployment index fell too rapidly to 6.2. It did this mainly for two reasons, which I cited in my old prediction and Yellen specifically mentioned too. People who looked for a jobs for many months or even more than a year with no job available for them give up - drop out of the labor force participation group, so BLS does not count them as unemployed. & Most new jobs created in 2013 were part time and/or "Big Mac" jobs but BLS counts these workers as if they were full time employed. That lowers BLS's "head line" unemployment rate U3.

Actual job creation, even falsely counting part time jobs and "big Mac" jobs is less than then natural growth of the potential labor force, which is about 250,000 per month - rarely if ever since 2008 recession have jobs been created at that rate. US got to BLS's 6.2 by replacing well paid full time jobs with part time and "Big Mac" jobs and by ignoring those who want to work but finally ceased looking.

What the BLS's tricks can't hide is that salaries are static or declining in purchasing power, except for the top 20% with good jobs still. Fundamentally, that is why the retail sales are not quite keeping up with population growth. Why this "recovery" is not making any difference for most - even after 6 years. Why the young are falling behind the living standard their parent had, Why they delay marriage - don't buy new homes, but rent or live in Dad's basement. Etc.

* Back in post 670 (see relevant part re-posted in post 817, this page)

 

[joepistole]

A clear statement that Fed had to construct its own labor market index, as I predicted* it would be forced to, because BLS's unemployment index fell too rapidly to 6.2. It did this mainly for two reasons, which I cited in my old prediction and Yellen specifically mentioned too. People who looked for a jobs for many months or even more than a year with no job available for them give up - drop out of the labor force participation group, so BLS does not count them as unemployed. & Most new jobs created in 2013 were part time and/or "Big Mac" jobs but BLS counts these workers as if they were full time employed. That lowers BLS's "head line" unemployment rate U3.

Hogwash Billy T at the very least you are being very disingenuous and you are doing a bit of cherry picking to boot. The BLS does not count part-time people as if they were full-time workers. As you well know, part-time workers are included in U-6.

Actual job creation, even falsely counting part time jobs and "big Mac" jobs is less than then natural growth of the potential labor force, which is about 250,000 per month - rarely if ever since 2008 recession have jobs been created at that rate. US got to BLS's 6.2 by replacing well paid full time jobs with part time and "Big Mac" jobs and by ignoring those who want to work but finally ceased looking.

Except none of that true, the BLS is not falsely counting jobs. Job growth has been occurring across the board, in healthcare, in finance, in energy, all high paying jobs. I know some companies who cannot get enough skilled workers and the starting salary for those positions is about $80,000. In case you haven’t noticed this country is in the middle of an oil explosion brought about by new technologies. Starting salaries in the oil industry begin at close to $100,000.

What the BLS's tricks can't hide is that salaries are static or delinking in purchasing power, except for the top 20% with good jobs still. Fundamentally, that is why the retail sales are not quite keeping up with population growth. Why this "recovery" is not making any difference for most - even after 6 years. Why the young are falling behind the living standard their parent had, Why they delay marriage - don't buy new homes, but rent or live in Dad's basement. Etc.

* Back in post 670 (see relevant part re-posted in post 817, this page)

Except, the BLS doesn’t do tricks - unlike your conspiracy buddies – and unfortunately for you and those of your ilk, this recovery is making a difference. Both full-time and part-time unemployment rates are falling. If unemployment rates are falling by definition, new job growth is keeping up with new job entrants into the market place. And median income is rising and has been rising since the recession. Government safety net spending on programs like unemployment insurance is down. Banks have stabilized. Industry is consistently adding 200k plus jobs every month, in healthcare, energy, construction, finance, and manufacturing, etc. whereas industry was losing nearly a million jobs a month and more with each passing month during The Great Recession.

https://www.census.gov/hhes/www/income/data/historical/household/

 

[Billy T]

... And median income is rising and has been rising since the recession. ... https://www.census.gov/hhes/www/income/data/historical/household/

Yes in nominal dollars, but not purchasing power. Partly why that is true is BECAUSE more members of the house hold have taken a job - Typically a "Big Mac" and even a second part time job to make ends meet. Also many are now understanding that going to college, does not provide the economic gains it once did, but leaves many with huge student loan debts to pay, so they work part time to help the family out instead.

From your own link, without cheery picking the data, here is the Medium and Mean salaries, showing both Nominal and constant value {purchasing power} dollars:

Table H-6. Regions--All Races by Median and Mean Income: 1975 to 2012
(Households as of March of the following year. Income in current and 2012 CPI-U-RS adjusted dollars)**

SUMMARY of data below:
In 12 years Median increased by 21.5% nominally but DECLINED in purchasing power by 9.4%.
In 12 years Mean increased by 24,7 % nominally but DECLINED in purchasing power by 6.5%.

I.e. Firing a full time worker and replacing him with two lower-paid part-time workers makes this change and also make BLS's unemployment drop from 10 to 6.2 in last decade but US is worse off as per capital buying power is dropping as are US standards of living. - The young know this directly, even if Joepistole does not.

USA year Number (thousands)
..........................Median income ..............................Mean income
............... Current dollars .. 2012 dollars.... Current $ & 2012 dollars
2012 122,459 ..... 51,017..... 51,017 ........... 71,274........... 71,274
2011 121,084 ..... 50,054..... 51,100 ........... 69,677........... 71,133
2010 119,927 ..... 49,276..... 51,892 ........... 67,392........... 70,970
2009 117,538 ..... 49,777..... 53,285 ........... 67,976........... 72,767
2008 117,181 ..... 50,303..... 53,644 ........... 68,424........... 72,968
2007 116,783 ..... 50,233..... 55,627 ........... 67,609........... 74,869
2006 116,011 ..... 48,201..... 54,892 ........... 66,570........... 75,810
2005 114,384 ..... 46,326..... 54,486 ........... 63,344........... 74,502
2004 113,343 ..... 44,334..... 53,891 ........... 60,466........... 73,501
2003 112,000 ..... 43,318..... 54,079 ........... 59,067........... 73,741
2002 111,278 ..... 42,409..... 54,127 ........... 57,852........... 73,837
2001 109,297 ..... 42,228..... 54,766 ........... 58,208........... 75,491
2000 108,209 ..... 41,990..... 55,987 ........... 57,135........... 76,180

Data from: https://www.census.gov/hhes/www/income/data/historical/household/

** PS if they used more realistic inflation correction, instead of BLS's, I.e. grocery store inflation with no BLS's "hedonistic correction", then both purchasing powers would be down more than 10%.

 

[joepistole]

Yes in nominal dollars, but not purchasing power. Partly why that is true is BECAUSE more members of the house hold have taken a job - Typically a "Big Mac" and even a second part time job to make ends meet. Also many are now understanding that going to college, does not provide the economic gains it once did, but leaves many with huge student loan debts to pay, so they work part time to help the family out instead.
From your own link, without cheery picking the data, here is the Medium and Mean salaries, showing both Nominal and constant value {purchasing power} dollars:

Table H-6. Regions--All Races by Median and Mean Income: 1975 to 2012
(Households as of March of the following year. Income in current and 2012 CPI-U-RS adjusted dollars)**

SUMMARY of data below:
In 12 years Median increased by 21.5% nominally but DECLINED in purchasing power by 9.4%.
In 12 years Mean increased by 24,7 % nominally but DECLINED in purchasing power by 6.5%.

I.e. Firing a full time worker and replacing him with two lower-paid part-time workers makes this change and also make BLS's unemployment drop from 10 to 6.2 in last decade but US is worse off as per capital buying power is dropping as are US standards of living. - The young know this directly, even if Joepistole does not.

USA year Number (thousands)
..........................Median income ..............................Mean income
............... Current dollars .. 2012 dollars.... Current $ & 2012 dollars
2012 122,459 ..... 51,017..... 51,017 ........... 71,274........... 71,274
2011 121,084 ..... 50,054..... 51,100 ........... 69,677........... 71,133
2010 119,927 ..... 49,276..... 51,892 ........... 67,392........... 70,970
2009 117,538 ..... 49,777..... 53,285 ........... 67,976........... 72,767
2008 117,181 ..... 50,303..... 53,644 ........... 68,424........... 72,968
2007 116,783 ..... 50,233..... 55,627 ........... 67,609........... 74,869
2006 116,011 ..... 48,201..... 54,892 ........... 66,570........... 75,810
2005 114,384 ..... 46,326..... 54,486 ........... 63,344........... 74,502
2004 113,343 ..... 44,334..... 53,891 ........... 60,466........... 73,501
2003 112,000 ..... 43,318..... 54,079 ........... 59,067........... 73,741
2002 111,278 ..... 42,409..... 54,127 ........... 57,852........... 73,837
2001 109,297 ..... 42,228..... 54,766 ........... 58,208........... 75,491
2000 108,209 ..... 41,990..... 55,987 ........... 57,135........... 76,180

Data from: https://www.census.gov/hhes/www/income/data/historical/household/

** PS if they used more realistic inflation correction, instead of BLS's, I.e. grocery store inflation with no BLS's "hedonistic correction", then both purchasing powers would be down more than 10%.

You may not be cherry picking, but you clearly are inventing some kind of new math which isn’t attached to anything resembling reality. This really isn’t that difficult, and table H-6 doesn’t say what you claim it says – clearly. Median income, even in constant dollars, has been rising with a few exceptions (e.g. The Great Recession). And as previously pointed out to you the BLS inflation measure is biased upward, for all the reasons previously given and you want to reinforce and double down on the upward bias inherent in the BLS inflation number. Boy that really makes sense – not! And making the allegations you make about part-time employment without a shred of evidence to back any of it up, makes sense too – NOT!. The bottom line here Billy T is you have no clue about the subject matter at hand.

 

[Billy T]

... you clearly are inventing some kind of new math which isn’t attached to anything resembling reality. This really isn’t that difficult, and table H-6 doesn’t say what you claim it says – clearly. Median income, even in constant dollars, has been rising with a few exceptions ...

No you must be inventing some new math. By My math
Mean purchasing power falling from $76,180 to $71,274 between 2000 and 2012 is exactly what I said a 6.5% DECLINE in purchasing power.
Median purchasing power falling from $55,987 to $51.017 between 2000 and 2012 is exactly what I said a 9.4% DECLINE in purchasing power.

BTW, some how a 7 in front of 1,274 got dropped in your post so I fixed that - but it was an obvious typo then nominal in 2012 and the corrected to 2012 dollars must be the same $71,274. There is some variation year to year up or down by less than two pecent - noise mainly - so to see a trend you can not cherry pick two consecutive year that happen to show what you want to claim is a trend - need at least 5 year intervals to see any real trend. I compared years 12 apart so that even the percentage change of the trend could be meaningfully calculated, but it could be wrong by a percent if other 12 year intervals instead of the latest data were used.

Your "few exceptions" must be a sick joke, built on statistical noise. True in two years from 2010 to 2012 the was a rise in the mean income by a total of $304* dollars but 210, 2011, & 2012 are thousands of dollar LESS than each and all the nine prior years!

* average rise of $152 is noise, but thousand of dollars DECLINE from average of 9 earlier years is real. Anyone giving even half glance at the right most column of data can see that.

 

[Michael]

Welcome to the New Economy where people from rich countries like China, often like to visit 3rd world countries like the United States of Mexico

USA Today: Capitalist Chinese tourists pump up Socialist California economy

 

[joepistole]

Welcome to the New Economy where people from rich countries like China, often like to visit 3rd world countries like the United States of Mexico

USA Today: Capitalist Chinese tourists pump up Socialist California economy

LOL, yeah the first thing the nuevo rich in developing countries do is send it to The United States. And why do they do that? Because The United States is a safe country. They know that if they fall out of favor with the government, troops will not arrive in the night, confiscate their wealth and throw them in a gulag. That is why the neuvo rich in developing countries like Russia, China, India, etc. move their new wealth to The United States as soon as possible. And that makes perfect sense. That is why they do it.

 

[Michael]

LOL, yeah the first thing the nuevo rich in developing countries do is send it to The United States. And why do they do that? Because The United States is a safe country. They know that if they fall out of favor with the government, troops will not arrive in the night, confiscate their wealth and throw them in a gulag. That is why the neuvo rich in developing countries like Russia, China, India, etc. move their new wealth to The United States as soon as possible. And that makes perfect sense. That is why they do it.

These are middle class tourists Joe - the middle class arising out of the 'Slave-Labor' like condition our Progressive Masters in Amoorika protect us Amoorikans from enduring with generous helpings of Welfare and ETA (many of whom, I suspect, will find their new slumlord speaks Mandarin in the coming decades).

 

[joepistole]

These are middle class tourists Joe - the middle class arising out of the 'Slave-Labor' like condition our Progressive Masters in Amoorika protect us Amoorikans from enduring with generous helpings of Welfare and ETA (many of whom, I suspect, will find their new slumlord speaks Mandarin in the coming decades).

That changes nothing. You are still repeating your inane notions of slavery and conspiracies. China by the way suffers from many maladies which will ultimately restrict growth. It is dealing with and inflation rate nearing double digits - a byproduct of currency manipulation it needs to grow its economy. It is desperately trying to avoid the effects of a severe real estate bubble. There are problems with regulation and the lack thereof, especially surrounding financial reporting. And finally it has a government which at its core is unstable. It is just a matter of time before China begins to crumble. I think we are seeing the early signs of economic degradation in China now. How much more time does China have? I don't know. It could be years then again it could be months or weeks. China isn't an open society, and that is a problem for China's long term economic health.

http://seekingalpha.com/article/2224063-7-signs-chinas-economy-is-headed-for-collapse

 

[Billy T]

... China isn't an open society, and that is a problem for China's long term economic health.

That is an article of faith - not well supported by historical fact that China was world's dominate power for 1700 years and not at all an "open society"

 

[Michael]

How much more time does China have? I don't know. It could be years then again it could be months or weeks.

LOL
China has been a unified Nation State for 2236 years. I'm pretty sure they'll last another couple of weeks

My point is hyper-regulated China was a Progressive Socialist crap-hole with upwards toward 30 MILLION Chinese starved to death in one bureaucratic blunder alone! Sprinkle in a teeny bit of Freedom (for adults to trade) and Wa-La, you have a vastly more prosperous society. Of course, I agree with your assessment that their bureaucratic idiots, much like ours, think they know more than the free-voluntary-exchange/markets. Which they don't. But get this, Socialism does such a good job destroying everything (we should actually change the words 'progressive socialism' to the phrase "people with guns shoved in your face forcing you to do what you otherwise wouldn't do - for your own good") that it's relatively easy for China to copy the infrastructure projects and technology 20 decades worth of free-market/voluntarism has developed. But, yes, once that comes to an end - they'll be just as f*cked as all other Central Banking/Central Planned economies.