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Thread: Payroll employment increases by 321,000 in November; unemployment rate unchanged

  1. #171
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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    Quote Originally Posted by WallStreetVixen View Post
    My research generally speaks for itself.
    Erm.... You haven't posted any research. You certainly haven't linked to studies that track income or wages over a lifetime, as I requested. All you've posted are a couple of FRED graphs.


    Income earners are categorized from Red - Green, with red being the lowest income earners and green being the highest. Left to right from lowest income group to highest. 48% of people in the lowest income group are likely to stay there, if they were born within that income group. 27% of people born in the lowest income group are likely to move up in the second quintile, and so on and so forth.
    Yes. That's why I said that "68% of people born in the bottom quintile ($20k/household/yr) either stay in that quintile, or do not make it past the 2nd quintile ($40k/household/yr)." (emphasis added.)

    We also know that average income for the quintiles aren't changing significantly -- except, again, for the top 20%, and most of that is because of the top 0.01-5%:



    Yes, these charts aren't a perfect proxy for wages, since the top also gets income from assets and rent-seeking activities. Which, uh, poor people can't engage in as they don't have access to that kind of capital. I.e. we are mostly seeing wages as the income source for at least the bottom 3 quintiles, and they've barely budged since the 1960s and 1970s. How are these poor people getting richer again?


    Unit Labor cost is intended to track inflation. You don't adjust unit labour cost for inflation. That is statistically invalid. You should really reframe from looking up charts on Google, especially if you don't have a clue of the validity of your source.
    "Refrain"

    As best I can tell, the BLS's calculations for ULC don't use indexed wages. It uses C, rather than RC. Ch. 10, Calculation Procedures, BLS Handbook of Methods


    In addition, the annual changes in ULC do not routinely beat the CPIX -- as we'd need to see, if your ULC chart was in real dollars rather than nominal:




    There's also a ton of data (including charts I've already posted) that indicates both increases in productivity, and flat income (which in many cases is a valid proxy for wages) for the overwhelming majority of households. I could literally be here all day citing it. Kinda looks like you're going to need more than one FRED graph to overwhelm that.

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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    Quote Originally Posted by DA60 View Post
    My post was nothing to do with 'trends'...
    I know.. That was my onjection
    it was strictly to do with the BLS's report.
    More to the point, it was to try to cast doubt on the jobs part of the report at least that's the impression I got.


    Did I post any statistic that is not correct according to the BLS?

    Yes or no, please?
    The question is what is the accuracy of those published numbers, using just the rough standard error, the margin of error for +4,000 employed is +/- 436,000
    Do you really think that invalidates the +321,000 jobs with a margin of error of +/- 94,577?
    Therefore, since the world has still/Much good, but much less good than ill,
    And while the sun and moon endure/Luck's a chance, but trouble's sure,
    I'd face it as a wise man would,/And train for ill and not for good.

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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    Quote Originally Posted by pinqy View Post
    I know.. That was my onjection

    More to the point, it was to try to cast doubt on the jobs part of the report at least that's the impression I got.


    The question is what is the accuracy of those published numbers, using just the rough standard error, the margin of error for +4,000 employed is +/- 436,000
    Do you really think that invalidates the +321,000 jobs with a margin of error of +/- 94,577?
    I will take that as a 'no'.

    If you want to play 'I think you posted that for such-and-such reason', please find someone else to play with.

    I typed my post to introduce stats to the discussion...nothing else.


    Good day.

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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    Quote Originally Posted by Visbek View Post
    Erm.... You haven't posted any research. You certainly haven't linked to studies that track income or wages over a lifetime, as I requested. All you've posted are a couple of FRED graphs.
    What exactly do you call what I did here?


    Yes. That's why I said that "68% of people born in the bottom quintile ($20k/household/yr) either stay in that quintile, or do not make it past the 2nd quintile ($40k/household/yr)." (emphasis added.)
    No, 68% move at the second quintile or past it. Only 48% remain in the same quintile. How did you manage to confuse the chart and a basic explanation?

    We also know that average income for the quintiles aren't changing significantly -- except, again, for the top 20%, and most of that is because of the top 0.01-5%:



    Yes, these charts aren't a perfect proxy for wages, since the top also gets income from assets and rent-seeking activities. Which, uh, poor people can't engage in as they don't have access to that kind of capital. I.e. we are mostly seeing wages as the income source for at least the bottom 3 quintiles, and they've barely budged since the 1960s and 1970s. How are these poor people getting richer again?
    I've already explained, snapshot data doesn't show income growth of people overtime. They only show the status of people in one particular group in year 1, and the status of the same group in year 2.

    You need to track flesh and blood individuals to determine income growth. I've already presented two different studies showing this. One from the Boston Federal Reserve and the other is from the US Treasury, which you have decided not to address.



    In addition, the annual changes in ULC do not routinely beat the CPIX -- as we'd need to see, if your ULC chart was in real dollars rather than nominal:

    Unit Labor Cost doesn't need to beat the CPI. Unit Labour Cost already TRACKS the CPI. You're still not getting this, are you? Actually, there is a 0.82 correlation between the CPI and Unit Labour Cost, according to Brian Belski, chief investment strategist for Oppenheimer & Co. A rise in an economy’s unit labour costs represents an increased reward for labour’s contribution to output. However, a rise in labour costs higher than the rise in labour productivity may be a threat to an economy's cost competitiveness, in other words, too much inflation.

    Also, I don't understand why you look up these charts without taking the time to understand what it represents. If you look at your own chart, Unit Labour Cost moves almost in perfect sync with one another. This is because there is a very strong correlation between unit labour cost and inflation.

    There's also a ton of data (including charts I've already posted) that indicates both increases in productivity, and flat income (which in many cases is a valid proxy for wages) for the overwhelming majority of households. I could literally be here all day citing it. Kinda looks like you're going to need more than one FRED graph to overwhelm that.
    The ULC chart is all I need. Unit Labour Cost are Wags / Productivity. If Unit Labour Cost increase, that means wages are outpacing productivity. If labour cost declines, then productivity takes precedent. It's really that basic, and it is undebatable for the most part. The only information you have cited so far are mostly from individuals who really don't understand the issue. And just for your further understanding, Unit Labour Cost are index, because that is how the growth is measured.



    Unit Labour Cost are indexed to 2009 changes. Q1 2009 = 100, while Q3 2014 = 103.8. This means that Unit Labour Cost has grown 3.8% within the past 6 years.

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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    I’m not sure if you understand what author DANIEL AMERMAN CFA was trying to convey in his article dated 13 March 2012.

    Let’s start here…
    First of all you are looking at the wrong data set.
    Quote Originally Posted by pinqy View Post
    How is this a long history of remaining almost static?

    This is the chart the author was referencing…



    In addition, this chart shows the mutual relevance he was referring to…




    Quote Originally Posted by pinqy View Post
    The UE rate is Unemployed/labor force and the labor force participation rate is Labor force / population. The BLS analyst can't arbitrarily assign categories..its' all based on what the people say.
    Yes & No… While, like you point out, the UE rate is Unemployed/labor force and the labor force participation rate is Labor force / population. But it doesn’t end there. As the author pointed out, the population is being decreased because, as the chart above demonstrates, more and more people are now being classified as Discouraged Workers. And, as you know, those who have no job and are classed as marginally attached or Discouraged Workers—are by definition — counted as “not in the labor force”.


    Quote Originally Posted by pinqy View Post
    How? If someone says they were looking for work, BLS can't just decide to classify him as discouraged. You'll have to walk me through the steps you think happen, because right now, you're not making any sense.
    I’ll start with a question: If, during the survey call, an unemployed worker states that he hasn’t looked for a job in the last 4 weeks because he believes that there is no job available to them in their line of work, where should this person be placed?

    Previously, this person would would be classified as unemployed. Under the current rules…

    While still unemployed and in need of work, under the current survey rules, this person would be classed as a Discouraged Worker. He (along with everyone else considered Not In The Labor Force) is then removed from the list of Unemployed. Since he is not considered Unemployed and he is not counted as Employed then he is, by default, removed from the Labor Force Participation calculation.

    In effect, he vanishes from the calculation and the Unemployment great drops by one person.
    (See… Who is not in the labor force? [http://www.bls.gov/cps/cps_htgm.htm])
    Wake Up America!

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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    Quote Originally Posted by pinqy View Post
    The sample is surveyed. Responses are collected. Individuals are classified by category based on response. Everything is aggregated. Where do you see any "technique" to add or modify anything?

    Question from poll worker: So you’re an airline pilot and were laid off. Why don’t you have a job now?

    Respondent Answers: Because there aren’t any jobs available in my their line of work.

    Classification Category: Discouraged Worker - removed from the Labor Force Participation calculation.



    Question from poll worker: So how come you haven’t applied for a job in the last four weeks?

    Respondent Answers: They haven’t been able to find work.

    Classification Category: Discouraged Worker - removed from the Labor Force Participation calculation.



    Question from poll worker: How come you haven’t been able to find a job?

    Respondent Answers: Because I don’t have any skills or training.

    Classification Category: Discouraged Worker - removed from the Labor Force Participation calculation.



    Question from poll worker: Well since you were laid off and you say you really need the money, and you applied to all of these places, why do you think they didn’t hire you?

    Respondent Answers: Because I’m to old.

    Classification Category: Discouraged Worker - removed from the Labor Force Participation calculation.



    Question from poll worker: How come you haven’t been able to find a job?

    Respondent Answers: Because I’m discriminated upon.

    Classification Category: Discouraged Worker - removed from the Labor Force Participation calculation.



    In all of the above examples, the respondent is actually unemployed, willing and able to work and all five of them can be classed (without their knowledge) as a Discouraged Worker. By definition they are no longer unemployed and they are removed from the Labor Force Participation calculation.

    The Unemployment rate goes down and the Government pats itself on the back.


    Just to be clear... the following is a direct Cut & Paste from the US Department of Labor > Bureau of Labor Statistics > Labor Force Statistics from the Current Population Survey > How the Government Measures Unemployment [http://www.bls.gov/cps/cps_htgm.htm]


    Who is not in the labor force? [http://www.bls.gov/cps/cps_htgm.htm]


    Discouraged workers are a subset of the marginally attached. Discouraged workers report they are not currently looking for work for one of the following types of reasons:

    • They believe no job is available to them in their line of work or area.
    • They had previously been unable to find work.
    • They lack the necessary schooling, training, skills, or experience.
    • Employers think they are too young or too old, or
    • They face some other type of discrimination.
    Wake Up America!

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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    Quote Originally Posted by WallStreetVixen View Post
    No, 68% move at the second quintile or past it. Only 48% remain in the same quintile. How did you manage to confuse the chart and a basic explanation?
    I'm not confusing it at all. You're just repeatedly not reading what I'm writing and/or fail to understand the chart.

    43% of adults in 1st quintile: Parents were also in 1st quintile (max household income $20k)
    25% of adults in 2nd quintile: Parents were in 1st quintile (max household income ($40k)
    68% of adults in either 1st or 2nd quintile: Parents were in 1st quintile
    Across the board, 30.8% of all adults stay in the same quintile as their parents.

    That does NOT suggest a huge amount of mobility from the bottom quintile, and this is half the reason why we say that the top and bottom quintiles are sticky.

    Yet again: If we had perfect intergenerational economic mobility (which, to be clear, no one expects to actually happen), then those numbers would be:
    20% stay in 1st quintile
    20% get to 2nd quintile
    20% of all adults would stay in the same quintile as their parents

    Get it...?


    Also, I don't understand why you look up these charts without taking the time to understand what it represents.... Unit Labour Cost are indexed to 2009 changes. Q1 2009 = 100, while Q3 2014 = 103.8. This means that Unit Labour Cost has grown 3.8% within the past 6 years.
    Unfortunately, you're the one misreading the chart. You're confusing the FRED's scale index with the CPIX.

    "Index = 2009" doesn't mean it is indexed to 2009 dollars. In fact, the y-axis isn't in dollars at all. It's using 2009 as a REFERENCE POINT for the y-axis scale, which is why you can change it in the FRED graph generator settings. The BLS uses ULC as "an indicator of inflationary pressure on producers." (To index by inflation, you'd have to apply a transformation.)

    Meanwhile, as I linked: The formula used by the BLS uses nominal dollars, rather than real dollars:

    ULC = (C / H) / (O / H)

    C = labor compensation (in nominal dollars)
    RC = labor compensation (in real dollars... notice how RC is absent from the formula?)
    H = hours
    O = output

    The formula isn't indexed to CPI. The FRED graph isn't either. Hence the charts showing that ULC, when adjusted for CPI, goes down rather than up.

    That's why I changed the FRED graph to annual percentage change.


    ....a rise in labour costs higher than the rise in labour productivity may be a threat to an economy's cost competitiveness, in other words, too much inflation.
    And yet, there are no indications that wages are significantly beating inflation. Again, there was the income chart I posted previously (which you seem to have ignored). We also have the percentage of change in private sector wages, again compared to percentage changes in CPIX:




    And of course we have research:
    A Decade of Flat Wages: The Key Barrier to Shared Prosperity and a Rising Middle Class

    On the chart on that page, you should see for 2000 to 2012:
    • Inflation rose 33.3%
    • Productivity rose 24.9%
    • Compensation increased 10.4%

    More:
    For most workers, real wages have barely budged for decades | Pew Research Center
    Between 2000 and 2012, American wages grew
    The Biggest Economic
    Wage stagnation: The big freeze | The Economist

    And productivity beating wages?
    America Workers Are More Productive, But Their Wages Are Flat, And In Some Cases, Lower
    Minimum Wage Would Be $21.72 If It Kept Pace With Increases In Productivity: Study
    Productivity Far Outpaces U.S. Factory Wages
    http://www.nytimes.com/2013/01/13/su...nate.html?_r=0


    Thus I repeat: Since the only thing you have in your favor is one graph you apparently don't understand, and since there is a preponderance of data and analysis to the contrary, I'm not finding your version terribly persuasive.

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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    Considering that you spew more inaccuracies than it takes for my 5000 character limit to debunk, I'll keep this limited the most inaccurate post.

    Quote Originally Posted by Visbek View Post
    Are they? A few funds really smack it out of the park with 11-15% returns, but most 401(k) long-term returns are apparently in the 5-6% range. Freedom!
    No, they haven't. You just made that up. the American Funds Growth Fund of America and the Fidelity Contrafund (two funds that are in most 401k) have made returns from 14.3% - 16.7%. on a long term average. So either you are looking at some really bad funds or you don't know what you are talking about. I should also take this time to point out that I'm a CFA. You can't just make up some things regarding finance and expect to get away with it.

    I'd be willing to change my mind if you posted actual statistics that show 401(k) recipients as better off than pension recipients...
    Huh? 401Ks are financial instruments. You only determine their effectiveness and performance by looking at returns. Of which case, we can look at the data. As I have said before, The American Growth Fund of America has consistently outperformed its benchmark. The net expense ratio is less than 1% with the fund outperforming the S&P consistently. The same is true with the T. Rowe Price Mid-Cap Growth funds and many other funds. These funds have consistently out performed their benchmarks.

    http://www.ebri.org/pdf/briefspdf/EB...o387.K-DBs.pdf

    lol, if you say so

    snip
    You're not reading any of the information you provide me. None of those sources discuss CEO compensation in regards to company performance. Two of them discuss compensation relative to stock performance, while the other two reference a study I've already mentioned.

    I assume you're referring to Jeff Smisek in 2012? His pay shrank by 41%... to $7.9 million. In a year when United Airlines lost $723 million. His base pay (just shy of $1 million) didn't change.
    You don't seem to understand this very much. Your base pay isn't the pay that is determined by performance. That is why it is considered your 'base pay.' Your base salary is only 20% or less of your overall compensation as CEO. Everything else is based on performance.

    United also cut 1300 jobs early in 2012, and another 600 in January 2013...
    I thought you were very clueless before, but somehow you've managed to surprise me.

    1) The entire airline industry severely suffered from the financial crisis. The recession severely affected the amount of travel consumers did, as well as their method of travel. Airline companies weren't losing money because they were ran ineffectively. They were losing money because there was a sluggish demand for airline trips. United Continental Holdings wasn't the only company suffering, the global airline industry is in a bear market.

    2) Jeff Smisek was given a paid his merger-related performance metrics, which was scheduled to be paid in 2012 - 2014, not for any performance regarding running an effective company. Whatever he received in those years was in addition to whatever he earned (or did not earn) in those particular years.

    3) What do the layoffs that occurred in 2012 have to do with the bonuses he acquired 2 years prior?

    4) He wasn't fired because he prevented the company from going under in 2010 with a successful merger, hence the bonuses.

    5) Jeff Smisek didn't receive a bonus... At all.

    6) Jeff Smisek compensation was linked directly to his performance.

    http://www.sec.gov/Archives/edgar/da...585zdef14a.htm

    In 2010, with the closing of the United Continental Merge (which saved United from bankruptcy), Smisek his income grew 237% in 2011, most of which was the growth in Annual Incentive Rewards. Very little regarding Smisek income changed between 2011 - 2012. The only thing that really changed was his stock rewards. The stock awards was benchmarked on company performance regarding company solvency and stability. The company grew in overall sales, but failed to retain cost. Pre-tax income performance targets for 2012 under the AIP were threshold—$300 million, target—$1.015 billion, and stretch—$1.5 billion. Pre-tax earnings was -$724 million, therefore, Smisek and other executives didn't meet their goal. As a result, Smiek was only eligible for 29% of his stock rewards.

    Overall, Smisek was paid well when he saved the company from going under. He wasn't paid as well when he failed to retain cost, which is a function of pre-tax margins. That is what CEO performance is. You really don't have a clue what you are talking about.

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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    Quote Originally Posted by Visbek View Post
    I'm not confusing it at all. You're just repeatedly not reading what I'm writing and/or fail to understand the chart.

    43% of adults in 1st quintile: Parents were also in 1st quintile (max household income $20k)
    25% of adults in 2nd quintile: Parents were in 1st quintile (max household income ($40k)
    68% of adults in either 1st or 2nd quintile: Parents were in 1st quintile
    Across the board, 30.8% of all adults stay in the same quintile as their parents.

    That does NOT suggest a huge amount of mobility from the bottom quintile, and this is half the reason why we say that the top and bottom quintiles are sticky.

    Yet again: If we had perfect intergenerational economic mobility (which, to be clear, no one expects to actually happen), then those numbers would be:
    20% stay in 1st quintile
    20% get to 2nd quintile
    20% of all adults would stay in the same quintile as their parents

    Get it...?
    48% of adults from the bottom have their children state within the same quintile.
    27% of adults from the bottom have their children move up to the 2nd bottom quintile.
    17% of adults from the bottom have their children move up to the middle quintile

    This does suggest income mobility, aside from the other data I have presented.


    Unfortunately, you're the one misreading the chart. You're confusing the FRED's scale index with the CPIX.

    "Index = 2009" doesn't mean it is indexed to 2009 dollars. In fact, the y-axis isn't in dollars at all. It's using 2009 as a REFERENCE POINT for the y-axis scale, which is why you can change it in the FRED graph generator settings. The BLS uses ULC as "an indicator of inflationary pressure on producers." (To index by inflation, you'd have to apply a transformation.)
    Your comprehension is very bad.

    I didn't say 2009 = 100 meant dollars. I said they were index to 2009 changes. Any changes in Unit Labour Cost starts from 2009. Since 2009, Unit Labor Cost increased 3.9%. And as you said, the reason why the BLS use ULC is the reason why ULC isn't adjusted for inflation. It already measures inflation.

    Meanwhile, as I linked: The formula used by the BLS uses nominal dollars, rather than real dollars:
    It's supposed to be in nominal dollars. There is no formula for measuring real unit labour cost, because Unit Labour Cost already tracks inflation. Unit Labour Cost aren't index to adjust for inflation. They're index to keep inflation in perspective. This is why there is a high correlation between ULC and inflation.

    And yet, there are no indications that wages are significantly beating inflation. Again, there was the income chart I posted previously (which you seem to have ignored). We also have the percentage of change in private sector wages, again compared to percentage changes in CPIX:
    Wages don't have to significantly beat inflation to outpace productivity. That is exactly what wages are doing for the past 6 years.

    Thus I repeat: Since the only thing you have in your favor is one graph you apparently don't understand, and since there is a preponderance of data and analysis to the contrary, I'm not finding your version terribly persuasive.
    If you want to go on a Googling rampage, go right ahead. Nothing you research refutes this datapoint, because its so basic that most economist understand this. You don't have to find it persuasive, but those are the facts. The facts are, Unit Labor Cost have increased steadily for 6 years. This means wages have outpaced productivity for the past 6 years. When unit labour cost increase, wages outpace productivity. That's not debatable.
    Last edited by WallStreetVixen; 12-10-14 at 01:57 AM.

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    Re: Payroll employment increases by 321,000 in November; unemployment rate unchanged

    Quote Originally Posted by pinqy View Post
    While that can happen in some agencies...those that are mostly policy and put out some statistics, I have never seen nor heard of it happening with any dedicated statistical agency such as Census, BEA, BLS, NASS, etc.
    Why didn't you mention the IRS? the EPA? the USGCRP? or The DOJ?


    All government workers are human. A large majority of government workers are Democrats. A certain percentage of those workers are die hard Obama supporters. You can't tell me that there isn't any fudging of the rules at a micro level that doesn't have a cumulative effect on the output of dedicated statistical agencies such as Census, BEA, BLS, NASS, etc. I find your naivety overwhelming. If that's what you really believe, then you are either looking through rose colored glasses or turning a blind eye to reality. In either case, I've got a bridge I'd like to sell you.

    Quote Originally Posted by pinqy View Post
    There is no incentive.
    Really. Oh my.
    Wake Up America!

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