Does it fizzle? Does it sizzle

Employment & Productivity

No. It just lays there.

Originally published March 6, 2008

Surely all memory of the 1950s send-up of the original “kerplunk goes the tablet that gives the fizz” ad has long faded, but its apt description of the American job market is recently won.

In recent years our job market has indeed lost much of its fizz. This point is best made by the BLS’s quarterly business employment dynamics (BED) series. It comes out with a long delay—figures for the second quarter of 2007 were only released on February 14. But the BED series is very useful in analyzing longer-term trends.

Net changes in total employment over time are a function of gross job losses and gains. For example, in 2006, there was a net gain of 1.7 million jobs in the private sector, according to the BED program. (This number differs from the establishment survey.) But that net gain came from a gross gain of 30.8 million jobs, and gross losses of 29.1 million jobs. That’s quite a furious pace of turnover under a rather placid surface.

Continue reading Does it fizzle? Does it sizzle →

Forget the Participation Rate

Employment & Productivity

Originally published January 25, 2008

That’s what Chairman Jim Saxton (R-NJ) and his Joint Economic Committee advise anyway, and they seem to have a point. In their analysis of the merits of the various employment indicators in predicting recessions, they find that the participation rate with its laughable value of –161% is “actually bizarre” in that it tends to rise at the same rate during both expansions and recessions. That takes care of the booby prize. In terms of ability to predict recessions, balancing value and reliability, the initial UI series (weekly claims for unemployment insurance) ranked first, as did changes in the unemployment rate among the monthly indicators. Sad to say, the payroll and household series “are of no value as recession indicators.”

The Best
Series Value Reliability
Initial UI claims 76% 0.5
Employment/Population Ratio 51% 0.3
Continuing UI Claims 43% 1.8
Unemployment (CPS) 27% 0.8
Unemployment (MA) 15% 1.6
Unemployment (12M) 0% 2.5

The Worst
Series Value Reliability
Labor Force Participation -161% 0.1
Civilian Employment (MA) -80% 1.0
Payroll Employment (real time) -23% 1.3

More here:


http://www.house.gov/jec/studies/2008/Employment%20Numbers%20as%20Recession%20Indicators.pdf

– Philippa Dunne & Doug Henwood

Whiplash: Trading on the MTS Rollercoaster

Comments & Context

Originally published January 12, 2007

There ain’t no seat-belt hefty enough to keep you in your seat if you decide to take positions based on evidence in
the Monthly Treasury Statements. 

Every couple of months, an analyst seizes on a fluctuation, often a wild fluctuation,
in the Monthly Treasury Statements to make the case that the job market is either far stronger or way weaker
than the Bureau of Labor Statistics’ estimates suggest. Oh, OK, these remarks do come disproportionately
form those on the hunt for evidence that the Bureau of Labor Statistics is underestimating payrolls, witness recent attention to January’s surge in withholding at the federal level, recent stories focused on another strong showing in March receipts, and the fact that once the “hidden strength” story is out in the markets for a given month, the almost inevitable reversal in the following month never makes it to traders’ screens.

Continue reading Whiplash: Trading on the MTS Rollercoaster →

Donald Kohn’s “Less Alarmist” View

Fed Focus

Originally published November 28, 2007

Fed vice-chair Donald Kohn spoke at the Council on Foreign Relations in New York this morning, in a session moderated by Laurence Meyer. Kohn’s prepared remarks are on the Fed’s website at:

http://www.federalreserve.gov/newsevents/speech/kohn20071128a.htm

Unsurprisingly, the text reads mostly like a standard one the one hand/on the other analysis of the sort that caused Harry Truman to demand a one-handed economist. Though Kohn would never win any public speaking awards, there were some subtleties in the delivery that might be meaningful. For example, he drew out the reading of this sentence, as if for emphasis: "Some broader repricing of risk is not surprising or unwelcome in the wake of unusually thin rewards for risk taking in several types of credit over recent years." And he emphasized the starred words in the following passage: "Consequently, we might expect a **moderate** adjustment in the availability of credit to these key spending sectors….  Heightened concerns about larger losses at financial institutions now reflected in various markets have depressed equity prices and **could** induce more intermediaries to adopt a more defensive posture in granting credit, not only for house purchases, but for other uses a well." These emphases suggest that Kohn – who emphasized he was speaking for himself only and not his colleagues – holds a less alarmist view of things than do many market participants.

Continue reading Donald Kohn’s “Less Alarmist” View →

Sample Reports

Uncategorized

Our work speaks for itself, and here we’ve selected reports that cover a broad range of what we do. If you’d like to see how we did during stretches not included here, please contact us.


01/08/15

Jobs look solid: spiders spin an uneven tale
Arachnophobes beware.
Download TLR 01 08 2015


12/10/14

Wages strive to close the gaps
A look at real wages around the country since the trough. It helps, a lot, if you are sitting on valuable mineral resources. Maps included.
Download TLR 12 10 14


10/14/14

Fiscal drag; oil boost
Our oil call, and what it likely means.
Download TLR 10 14 2014


09/14/14

Work martyrs who can’t buy a house
Surprise: Housing boom/bust mostly about price. Afraid to take a vacation?
Download TLR 9 14 2014


03/12/14

Big freeze in sales tax receipts
“Really, when you look at this graph, you have to wonder how retail sales recovered from their recessionary depths.”<
Download TLR 3 12 2014


12/11/13

Sustainable improvement?
State revenue officials are encouraged by recent receipts. Is confusion giving way to, maybe, some confidence?
Download TLR 12 11 2013


07/31/2013

Waiting for the Jackson Hole research deluge
In 2012 the Jackson Hole meetings produced a slew of critical papers (see below). This year, researchers at the SF Fed cite weakness in wages of recent college grads, the “marginal workers” of the highly skilled, as evidence of continuing weakness in the job market.
Download TLR 07 31 2013


09/13/12

Incomes (& Fed policies?) take a beating
Research from former Fed officials and related academics sounds the alarm: QE can’t make a dent in the unemployment rate, and the FOMC has fewer options than members suggest.
Download TLR 09 13 2012


09/20/2011

The debtless recovery
Deleveraging continues, household balance sheets remain ragged, and corporate America: flush, tightfisted, eyes overseas.
Download TLR 09 20 2011


04/12/11

Crawling back to 2006, or 2004?
Animal dis-spirits: there isn’t a lot of new business formation out there. And please ignore those rumors about a big upward benchmark revision to payrolls. (Rumor? +500K; Reality? -378K.)
Download TLR 04 12 2011


01/13/2009

Sales tax receipts miss lowered forecasts, again
Things do not look good in revenue world. MEW goes negative, and Prof. Curtin, who heads up the UMich Consumer Confidence series, outlines the 5 degrees of discontent. Can’t we just keep it at 4?
Download TLR 01 13 2009


01/08/09

The news will keep getting worse
Carmen Reinhart and Kenneth Rogoff’s now classic, then new, study of international financial crises was not yet on the national radar screen, but it was on ours. We lay out their findings, and what we believed lay ahead for us, unfortunately we were right on the money.
Download TLR 01 08 2009


04/03/08

Tough love, Swedish style
News that the Fed is studying how Nordic countries handled their early-1990s banking crises cheered the markets, but the enthusiastic bidders must not
have been paying attention to the details. Sweden took a successful and painful stand, which included raising overnight rates 500% to defend the krona.
Can you imagine the Feds raising rates a relatively modest 10% in the current environment?
Download TLR_04_03_08


03/12/08

Can you say, “Housing, gas, and food prices?”
Or, stagflation hits the hotdog.
Download TLR 03 12 2008


01/14/08

Dimmed lights and a giant Grinch
A holiday season only Dr. Seuss’s infamous character could love: electricity prices keeping Christmas lights in storage, mall vacancies at 11-year highs, phones
disconnected over unpaid bills, our recession index moving into full alarm mode, and a giant inflatable Grinch replacing the usual riot of Christmas lights in rural
New York.
Download TLR_01_14_08


01/03/08

Can exports save us from a recession?
We’ve been hearing a lot of talk about how we can  export our way out of this mess, but a look at historical trends doesn’t support that view. State revenue estimators “take the ax” to their forecasts. Oh, and, December
saw a nasty spike in our recession index.
Download TLR_01_03_08


12/12/07

The Italians are coming…to buy Prada!
This is one mighty unusual weak-dollar environment. It’s all about tourists coming here to flex their currencies, which means our manufacturers aren’t getting
much of a boost, and, perhaps oddest of all, challenged Upstate New York is once again BJ’s strongest sales region.  But all that shopping isn’t enough to offset
domestic weakness; use this link to read what out tax contacts are saying about sagging sales tax receipts.
Download TLR_12_12_07


10/11/07

Could it be a recession?
Famous last words! With sales tax receipts plunging, we outline evidence that we are at the edge of a recession.<
Download TLR 10 11 2007


07/05/07

Sittin’ on the dock:
We wrote this report cataloguing the burgeoning costs of our fraying infrastructure, including both the crumbling rocks and gravel and the rusting research edge,
on the Fourth of July as a patriotic plea. Click here to find out why research in "emergent phenomena" is crucial to our maintaining a leading role in the world scientific community.
Download TLR_07_05_07


05/10/06

Edgy debtors and a history book
Although Yale Economist Robert Schiller didn’t utter the words "irrational exuberance," they did summarize his message to the then Fed chair on the day before the latter coined the phrase.  We wrote this report to make sure our readers knew what Dr. Schiller had dug up recently on real estate prices: There’s no real uptrend in housing prices over the last century, and the then-current boom was a real anomaly.
Download TLR051006