Saturday, September 04, 2010

WSJ Interactive Graph of the Great Mancession

Here's a great WSJ Interactive Graphic that allows you to watch: a) monthly job losses by sector from December 2007 to August 2010, and b) monthly changes in the number of unemployed workers by gender and race over the same period. 

When watching the job losses by sector, you'll see that that: a) construction and manufacturing were the two sectors hit with the most job losses during the recession (combined loss of almost 4 million jobs through August 2010), and b) education and health care were the only two private sectors that continued to add jobs during the entire recession (more than 1 million jobs combined through August).

Then watch the interactive graph of the monthly number of unemployed workers by gender and you'll see that men were disproportionately affected by job losses, to the extent that in many months there were two men unemployed for every female who was unemployed. Even now that the recession has ended, there were still 172 unemployed men in August for every 100 women who were unemployed.

These two trends in sector job losses/gains and unemployment by gender are directly related by these facts about employment shares by gender:

Education: 74.3% female, 25.9% male
Health Care: 74.6% female, 25.4% male
Construction: 4.4% female, 95.6% male
Manufacturing: 21.4% female, 78.6% male

In other words, these two interactive graphs help tell the story of the Great Mancession of 2007-2010 and how men were disproportionately affected by the recessionary conditions that adversely impacted male-dominated industries (construction and manufacturing), while employment in female-dominated industries actually increased throughout the entire recession.  And according to the employment report yesterday, there is still a 2% male-female jobless rate gap of 10.6% for men and 8.6% for women, so the Great Mancession is not yet close to ending.  

Bottom Line: Maybe it's not such a good time to be man, now that men are on the wrong side of the jobless rate gap by 2%, the wrong side of the college degree gap (142 women graduated from college in 2010 for every 100 men) and now even the wrong side of the wage gap.     

New Monthly Business Blog Rankings from Wikio

Top 20 Business Blogs, according to Wikio (see methodology here).

Friday, September 03, 2010

Colombia is the World's #1 Stock Market; Maybe It's Time for Obama to Push the U.S.- Colombia FTA

The chart above shows the MSCI Colombia Stock Market Index, monthly back to 1993 (data here).  Over almost every time horizon up to ten years, the returns for the Colombia stock market are the highest in the world:

YTD: 43.4%
One-Year: 67.2%
Three-Year: 25.1%
Five-Year: 25.8% (second to Indonesia's at 27.6%)
Ten-Year: 38.1% 

It's now been 1,382 days since the U.S.-Colombia free trade agreement (FTA) was signed in 2007, and it is now languishing into its fourth year awaiting Congressional approval.  The Latin American Trade Coalition estimates that almost $3 billion in tariffs have been imposed on U.S. exports since the FTA was signed.  Especially now that Colombia's stock market is booming, the failure to pass the Colombian FTA is especially inexcusable because it means that U.S. exporters are missing out on a golden opportunity to gain from Colombia's thriving economy.

The Colombian FTA has support from 1,200 American companies, associations, farm and ranch groups, and chambers of commerce, as well as support from the editorial boards of almost every major U.S. newspaper including the Wall Street Journal, L.A. Times, Washington Post, Miami Herald, Chicago Tribune, Detroit News, and even the New York Times, which wrote in 2008, “We don't say it all that often, but President Bush is right: Congress should pass the Colombian free-trade agreement now. We believe that the trade pact would be good for America's economy and workers.”

With incredible export opportunities awaiting U.S. manufacturers in booming, emerging markets like Colombia, with the huge potential to create much-needed jobs for America’s workers, and with universal support from almost every sector of the economy, what could possibly be holding up the FTAs with Panama, Colombia and Korea?  Apparently just one group: U.S. labor unions and their Democratic enablers in the White House and Congress. 

If Obama was really serious about supporting free trade, doubling U.S. exports, creating jobs and stimulating the economy, he could easily and costlessly accomplish all four by pushing Congress to approve the signed FTAs with Colombia, Panama and Korea. 

Private-Sector Jobs Increase for the 8th Month, First Time Since 2007; +763,000 Payroll Jobs This Year, But Almost +1.8 Million Total Household Jobs

Some highlights of today's employment report for August:

1. Private-sector jobs have increased in each month this year, and by 67,000 in August, bringing the total to 763,000 private-sector jobs that have been created this year.  This is the first time since December 2006 to July 2007, three years ago, of eight consecutive monthly gains in private-sector employment (see top chart above).

2. Temporary help service jobs increased in August by 16,800 to 2,116,000 jobs, the highest employment level in this sector since December 2008 (see middle chart above).  Except for a small decrease in July of 900 jobs, temporary employment has increased in each month since last October, following 23 consecutive monthly losses from November 2007 to September 2009.  Since last October, temporary employment has increased by 392,200.

3. Average overtime hours for manufacturing increased slightly in August to 3.9 hours from 3.8 hours in July, matching the 3.9 hours in May and June, which is the highest level of overtime since May 2008, more than two years ago. 

Update: Inspired by Scott Grannis' post today, the bottom chart above shows the monthly change in number of private-sector jobs using the household survey measure of total civilian employment that includes the self-employed, MINUS the total number of government employees from the household survey (data available here). Based on that measure of private-sector employment, the economy has added almost 1.8 million new jobs since the first of the year, a pace of more than 200,000 private-sector jobs per month.  (Thanks to Scott Grannis for clarification of how private-sector employment is calcuated using household data.)

Thursday, September 02, 2010

Instead of Marching, Let's End the War on Drugs

"Every time I see one of these marches or forums covered as significant, what occurs to me is that there is one thing we should all be focused on instead. It is, of all things, the War on Drugs. The most meaningfully pro-black policy today would be a white-hot commitment to ending its idiocy.

1. The War on Drugs destroys black families. It has become a norm for black children to grow up with their fathers in prison and barely knowing them. Data are unanimous in showing that children, especially poor ones, do better with two parents. We see the young black man in a do-rag pushing a baby carriage as a welcome sight rather than as a norm. That must stop.

2. The War on Drugs discourages young black men from seeking legal employment. Because the drugs' illegality keeps their price high, there are high salaries to be made in selling them -- not at first as a low-level runner, but potentially as one rises in the hierarchy. This makes selling drugs a standing alternative to legal employment, especially if one has a poor education.

3. The War on Drugs brings firearms into black lives. Policing turf for drug sales entails guns, which then become tools for maintenance of the pecking order, including settling petty scores. A striking difference between surveys of black ghettos before the War on Drugs and today is how common guns have become.

Marches don't hurt, but they are a misdirection of energy. And not from an equally empty war on racism in the Tea Party or the n-word. Black uplift in 2010 should be about a war on the War on Drugs -- after the success of which, I can guarantee you, slowly but surely, the teens would start pulling up their pants."

~John McWhorter

HT: Radley Balko

Rail Traffic At Highest Level Since 2008

WASHINGTON , D.C. – Sept. 2, 2010 – "The Association of American Railroads (AAR) today reported weekly rail traffic continues to set records with U.S. railroads posting their highest numbers for 2010 in both rail carloads and intermodal volume for the week ending Aug. 28. U.S. railroads originated 302,358 carloads for the week, up 5.8 percent compared with the same week in 2009 and intermodal traffic totaled 237,194 trailers and containers, up 17.1 percent from the same week in 2009 (see charts above).  Compared with the same week in 2009, container volume, a subset of intermodal, increased 18.1 percent and trailer volume rose 11.4 percent."  Other highlights include:

1. This is the 33rd consecutive week in 2010 that intermodal volume is above the same week in 2009, with 24 of those weeks being double-digit percentage gains. 

2. Rail carloads have increased in 26 out of the last 27 weeks versus the same week last year.

3. Fifteen of the 19 carload commodity groups increased from the comparable week in 2009 with significant increases in metallic ores (62.2 percent), metals and metal products (40.2 percent) and farm product excluding grain (33.4 percent).

4. Canadian railroads reported volume of 76,064 cars for the week, up 16.5 percent from last year, and 53,747 trailers or containers, up 24.4 percent from 2009. For the first 34 weeks of 2010, Canadian railroads reported cumulative volume of 2,458,747 carloads, up 20.6 percent from last year, and 1,585,669 trailers or containers, up 15.7 percent from last year.

5. Mexican railroads reported originated volume of 14,531 cars, up 18 percent from the same week last year, and 8,168 trailers or containers, up 26.7 percent.

MP: Warren Buffett's single most favorite economic indicator - rail freight traffic - continues to set records for both 2009 and 2010, with both rail carloads and intermodal volume now at the highest levels since 2008. Based on the steadily increasing volume of raw materials, natural resources, lumber, coal, grains, chemicals, metals, motor vehicles and paper products moving around the country by rail (and Canada and Mexico), the economic picture continues to get a little brighter almost every week.

7th Monthly Gain in Monster Employment Index

"The U.S. Monster Employment Index recorded its seventh consecutive month of positive year-over-year in August at a growth rate at 12.4 percent. The annual growth rate eased from July's 21% growth possibly due to moderation in underlying job market drivers. The Index dropped two points (1 percent) in August to 136 (from 138 in July) as online job demand eased contrary to seasonal patterns traditionally witnessed at this time of the year (see chart above). Highlights include:

1. Online recruitment activity rose in six of the 20 industries between July and August.  Compared to year-ago levels, 17 industries are showing positive growth trends, although at decelerated rates from July.

2. While the Monster Employment Index experienced a marginal contraction in August, several industries, occupations and all 28 metro markets including Cleveland and Detroit continue to record positive annual growth trends. 


Click arrow above to watch Dr. Hal Scherz's "video for doctors" above from Docs4PatientCare.  See his editorial in yesterday's WSJ here, about this "Waiting Room Letter for Physicians and Patients," here's an excerpt:

"ObamaCare will bring major cost increases, rising insurance premiums, higher taxes, a decline in new medical techniques, a fall-off in the development of miracle drugs as well as rationing by government panels and by bureaucrats like passionate rationing advocate Donald Berwick that will force delays of months or sometimes years for hospitalization or surgery."

Wednesday, September 01, 2010

Aug. Online Ads Increase By 1 Million vs. Apr. 2009

"Online advertised vacancies dropped 57,100 in August to 4,236,200, following an increase of 139,200 in July, according to The Conference Board Help Wanted OnLine (HWOL) Data Series released today. The gap between the number of unemployed and advertised vacancies (supply/demand rate) stood at 3.40 unemployed for every advertised vacancy in July (the last available unemployment data) but is down from its peak of 4.73 in October 2009."

“Labor demand continues to struggle to post gains month after month,” said June Shelp, Vice President at The Conference Board. “During the last few months, gains in online job demand one month have been partially offset by dips in the following month. But the good news is that overall job demand is still maintaining a modest upward trend for both the nation and most States.”

MP: Compared to last August (3.37 million ads), online advertised vacancies were 25.4% higher this August (4.236 million ), and except for July's level of 4.29 million online ads, was the highest monthly level since November 2008 (see chart above).  July's 25.4% year-over-year increase was the sixth straight increase of 20% or higher, and follows increases of 30.8% in July, 26.1% in June, 23.3% in May, 31.4% in April and 20.6% in March.  Compared to the April 2009 bottom of 3.2 million online vacancies, the August count of 4.23 million help wanted ads is more than one million job openings higher. 

See Scott Grannis' related post here.

Evidence of a New "Reverse Gender Wage Gap"

From Time Magazine:

"According to a new analysis of 2,000 communities by a market research company, in 147 out of 150 of the biggest cities in the U.S., young women's median full-time salaries are 8% higher than those of the guys in their peer group. In two cities, Atlanta and Memphis, those women are making around 20% more. This squares with earlier research from Queens College, New York, that had suggested that this was happening in major metropoles. But the new study suggests that the gap is bigger than thought, with young women in New York City, Los Angeles and San Diego making 17%, 12% and 15% more than their male peers respectively. And it also holds true even in reasonably small cities like Raleigh Durham, N.C., Charlotte, N.C., (both 14% more) and Jacksonville, Florida (6%).

Here's the slightly deflating caveat: this reverse gender gap, as it's known, applies only to unmarried, childless women under 30 who live in cities."

MP: In other words, if you control for all of the important variables that contribute to wage differentials (age, marital status, having children, etc.), i.e. impose ceteris paribus conditions, there is no evidence of gender discrimination, and either there is no statistically significant wage gap, or now there's a wage gap in favor of women. 

ASA Staffing Index, NRA Restaurant Index Flat

The American Staffing Association (ASA) Staffing Index for temporary and contract employment activity remained at 95 for the week of August 16 (same as last week), which is the highest index level since a reading of 97 in the week of September 29, 2008 (see chart above, data here).

Compared to the same week last year, the latest ASA Staffing Index has improved by 25% for Week 34 (see bottom chart above). This marks the 18th week in a row with percentage gains above 20% compared to the same month in 2009, the 27th straight week of double-digit percent increases vs. 2009, and the 33rd consecutive week for the ASA Index being above the same level in the previous year (every week this year). The improvements this year follow 80 consecutive weeks of percentage declines in the weekly index vs. the previous year that started in May 2008 and continued through the end of 2009.

In another report released yesterday, the National Restaurant Association's Restaurant Performance Index was flat in July (99.4) compared to June (99.5), but above the index levels in July of 2008 and July 2009.   

Tuesday, August 31, 2010

Free Health Care

And it's not in Canada or the's right here in the United States

Global Economic Recovery Watch: India +8.8%

Financial Times (free subscription required) -- "India’s economy grew a brisk 8.8 per cent from April to June, its fastest pace in two-and-a-half years, highlighting the strength of India’s economic recovery despite high inflation now acting as a drag on consumer spending.

Growth during the first quarter of India’s April to March financial year accelerated from the 8.6 per cent last quarter, driven by robust manufacturing and services growth, and a pick-up in farm production."

Case-Shiller Home Price Indexes Highest Since '08

New York, August 31, 2010 – "Data through June 2010, released today by Standard & Poor’s for its S&P/Case-Shiller Home Price Indices, the leading measure of U.S. home prices, show that the U.S. National Home Price Index rose 4.4% in the second quarter of 2010, after having fallen 2.8% in the first quarter. Nationally, home prices are 3.6% above their year-earlier levels.

In June, 17 of the 20 MSAs covered by S&P/Case-Shiller Home Price Indices and both monthly composites were up; and the two composites and 15 MSAs showed year-over-year gains. Housing prices have rebounded from crisis lows, but other recent housing indicators point to more ominous signals as tax incentives have ended and foreclosures continue.  In June, the 10-City and 20-City Composites recorded annual returns of +5.0% and +4.2%, respectively."

MP: Both the Composite-10 and Composite-20 Home Price Indexes reached their highest levels in June since December 2008. 

Buy Now or Wait? Check the Airfare Prediction Tool

When booking air travel, the dilemma is often: should I buy now or wait later to try to get a better price?  Now you've got some help. 

The Bing Travel Farecast provides a free airfare prediction tool that allows you to specify your travel dates and destinations, and you'll get a prediction of whether fares for your flight are rising or falling, so you can decide whether you should buy now or wait.

From the Bing website: "According to a third-party audit of our predictive technology, we're about 75% accurate and on average, customers will save over $50 on a typical round-trip transaction."
Here are details on Bing's predictive technology.

ECON 101: The Answer to A Housing Recovery is Lower Prices, Not Incessant Government Tinkering

"In order for the housing market to build a firm foundation that does not require government aid we will need to see a reduction in prices.

Congress is currently discussing creative new ways to prop up this market. It should be plain as day at this juncture that the government cannot fix the housing market with their incessant fidgeting. The market needs to correct further before reaching a sustainable bottom. Lower prices will act as an automatic stabilizer by generating significant demand. At this point, more government intervention merely kicks the can down the road by pulling demand from the future. We can continue to deny the simple economics at work here, but at some point the market will prevail and prices will settle at a level that the market can absorb. In my opinion, the sooner this happens the sooner we can get on with the recovery process. Unfortunately, politicians have elections to win so they will continue to use their law degrees to attempt to change the laws of economics. It won’t work."

~The Pragmatist Capitalist writing in the Business Insider

Monday, August 30, 2010

Global Recovery Still on Track, Despite Angst

"At an annual Federal Reserve retreat, angst, not panic, was the order of the day among officials and economists chastened by a deep recession and a disappointing rebound. "We'll slog our way through this," said Thomas Hoenig, president of the Federal Reserve Bank of Kansas City, which sponsored the symposium, summing up two days of presentations, discussions, dinner-table conversation and hiking.

Several foreign central bankers said they were struck by the unusual degree of pessimism they had witnessed in the U.S., a contrast to typical American optimism. "I can't wait to get back to my side of the world," said Alan Bollard, governor of the Reserve Bank of New Zealand. Growth in New Zealand, seen at around 3% this year and next, has been underpinned by strength in Australia and China."

~From today's WSJ article "Global Recovery Is Still Seen On Track, Despite the Angst"

GSEs Prevented Private Secondary Market

"A private secondary market for prime mortgages should have been a natural market development. Why did it never develop? The answer is obvious: no private entity could compete, or can now compete, with the government-granted advantages, and now the huge explicit subsidies, of the Government Sponsored Enterprises (GSEs). There can be no evolution of a private prime mortgage loan market while the GSEs make private competition impossible.

The core issue about GSEs is this: You can be a private company, with market discipline; or you can be part of the government, with government discipline. But you can't be both."

Read more of AEI's Alex Pollock's article "To Overhaul the GSEs, Divide Them into Three Parts" here.

Sunday, August 29, 2010

Promoting Homeownership Is Not Only Un-American: It Contributed to the Housing Bubble

From the article "The Un-American Dream":

"For nearly a century it has been the policy of the U.S. government to increase American homeownership. Its efforts include (but aren't limited to) bouts of easy money from the Fed, the mortgage-interest deduction, the exclusion of capital gains on primary residence sales, direct and indirect subsidies from the Department of Housing and Urban Development, and artificial liquidity pumped into the mortgage market via government sponsored entities Fannie and Freddie.

Policymakers assure us that the next generation of government housing programs will be "carefully designed" (bring on the next five-year plan, Comrade!). But the real question is why the government should be doing anything to promote homeownership.

"I do believe in the American Dream," said President Bush in 2002. "Owning a home is a part of that dream, it just is. Right here in America, if you own your own home, you're realizing the American dream." Bush was echoing a theme that reaches back at least to Herbert Hoover: When the government encourages homeownership, the story goes, it strengthens individuals and communities and thereby fosters the American Dream. They're wrong. A government crusade to promote homeownership is un-American.

America's distinction is that it was the first nation founded on the principle that you have a right to pursue your own happiness without government interference. But the government's homeownership crusade means it gets to decide how you should live, and stick-and-carrot you into living that way.

Here's the real lesson: The American Dream is not some government-subsidized house foisted on you by George W. Bush or Barney Frank. It's the undiluted freedom to decide how you want to live--and, if you want to own a home, it's the freedom to work, save, establish credit, and earn one. In America, the government's job is to protect our freedom to pursue our values, not to dictate what our values are. Its homeownership policy should be the same as its toaster oven policy: laissez-faire.

Government intervention in housing runs deep, and it can't be eliminated overnight. But the government should make its long-term goal to fully extricate itself from the housing market. It can then start gradually dismantling Fannie, Freddie, tax preferences for homeowners, and every other government housing program."

MP: You can add the government's role in promoting fixed-rate 30-year mortgages, and subsidizing FHA mortgages that only require a 3.5% down payment to the list of policies that the government has used to increase homeownership. 

The chart above shows how the political promotion of homeownership in the U.S. may have contributed to the housing bubble.  The blue line is the quarterly homeownership rate from the Census Bureau (data here) going back to 1991, which went from 64% in the early 1990s to a record high of more than 69% in 2004.  During that same time period, the Federal Housing Finance Agency's (FHFA) Home Price Index (data here) doubled from 100 in 1991 to 200 in 2005, before reaching a peak of more than 222 at the height of the real estate bubble in 2007. 

In the aftermath of  the real estate bubble's crash, the homeownership rate has fallen to a 10-year low of 66.9% (QII 2010) and the FHFA home price has fallen back to 2004 levels.   Promoting homeownership is not only un-American, but it helped create an unsustainable real estate bubble, which turned the "American dream" into an "American nightmare" for millions of Americans by turning "good renters into terrible homeowners."

Lessons on Trade, U.S. Manufacturing from Chile

1. WEST CHESTER, PA — "With the world captivated by the plight of 33 Chilean miners trapped in a mine more than 2,300 feet below the surface, a local manufacturer of drill rigs is involved in the rescue effort. Schramm Inc. is a major manufacturer of drill rigs and the manufacturer of the particular rig — the T685 — that reached the trapped miners a few days ago.  There are 40-plus Schramm drill rigs in Chile right now, said Edward Breiner, president and CEO of Schramm, in an interview Friday."

2. MILWAUKEE, WI --  "If not for a tiny camera system developed by Aries Industries of Waukesha, the families and rescuers of 33 trapped Chilean miners might not have caught a glimpse of their loved ones.  Aries manufactures pipeline inspection and rehabilitation equipment for water, wastewater, natural gas, oil and disaster recovery services. The company manufactures a camera system that has been used many times in coal mine disasters in this country and was available to Chilean rescuers."

A few points:

1. Chile has achieved a great deal of economic success in the last twenty years, largely because it has pursued free market policies that include very open free trade policies.  The OECD recognized Chile's economic success last December by inviting it to be the first South American country to join the club of developed countries, see CD post here.  With a more protectionist approach to trade with high tariffs, Chile may not have had access to the drill rigs and camera systems manufactured in the U.S. that are now helping in the rescue of the 33 miners.

2. We hear a lot of news about the "death of American manufacturing sector," the "loss of millions of manufacturing jobs," and how this will contribute to some permanent decline in the U.S. economy.  And yet the data show that manufacturing output was reaching historical all-time record highs before a sharp recession-related decline, and manufacturing output is gradually increasing and will probably be at record levels again within a few years (see CD posts here, here, and here).   The manufacturers highlighted here are probably just two examples of the thousands of successful American manufacturers that are world-leaders in high-tech manufacturing equipment.  

HT: Colin Grabow