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Thread: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by WallStreetVixen View Post
    Despite a large amount of jobs being vacant in the economy, people refuse to take them. 2013 created less employment than 2012. 2014 rolls along, and not only did it create the most jobs in the entire expansion, but it also created jobs at the fastest rate since the 90s. This is because congress failed to extend unemployment benefits in December 2013. This forced millions of people that were collecting checks to search for work.
    I'll add briefly to your point about the demand for positions, as there is a broader context. There was also an increase in the supply of positions (job openings) especially from 2013 and afterward. For a quick sketch, the JOLTS data showed 3.612 million openings in December 2012, 3.914 million openings in December 2013 and 5.028 million openings in December 2014. The number of openings increased notably as household deleveraging finally ended in 2013 as revealed by data among the Federal Reserve's Financial Accounts report, among other sources. The end of household deleveraging contributed to an increase in aggregate demand, certain sectors could no longer accommodate that increase in demand via productivity gains, and the demand among employers for labor (supply of positions for potential employees) picked up as evidenced in the JOLTS data. Of course, some of the data is still subject to revision, but it appears that the revisions would need to be fairly large to materially change the general themes noted above.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by Samhain View Post
    I did something of value. I provided liquid capital to a bank for them invest in other projects. For a guaranteed return, they own the risk and the reward.
    You did nothing of value.

    Banks don't need your deposits to have money to lend. They can lend first, and then acquire the money overnight. When they lend, the deposit that is generated from the lending automatically supplies the money that they need to acquire.

    Regardless, interest is the price of money. In the real world, things are priced according to supply and demand. Things that are cheap to produce and are in ample supply don't cost much. Money can be created at virtually no cost by the fed and in unlimited supply, so there is no reason for the price of money to be high - it should be almost free, thus ZIRP (zero interest rate policy) makes a lot of sense and is perfectly normal and sustainable.

    You should have made the effort to invest money into something productive, like start a business, or directly fund (taking substantial risk) a business. Even spending your money on consumer goods would have been more productive because spending increased demand, which results in increased production.
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    I see a big problem with the idea that whatever the majority wants is OK.

  3. #183
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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by imagep View Post
    Banks don't need your deposits to have money to lend. They can lend first, and then acquire the money overnight. When they lend, the deposit that is generated from the lending automatically supplies the money that they need to acquire.

    Regardless, interest is the price of money. In the real world, things are priced according to supply and demand. Things that are cheap to produce and are in ample supply don't cost much. Money can be created at virtually no cost by the fed and in unlimited supply, so there is no reason for the price of money to be high - it should be almost free, thus ZIRP (zero interest rate policy) makes a lot of sense and is perfectly normal and sustainable.

    You did nothing of value. You should have made the effort to invest money into something productive, like start a business, or directly fund (taking substantial risk) a business. Even spending your money on consumer goods would have been more productive because spending increased demand, which results in increased production.
    Banks only get funding via that process when there is a temporary funding problem. They are only allowed to loan out a % of their deposits.

  4. #184
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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by Samhain View Post
    Banks ... are only allowed to loan out a % of their deposits.
    I thought it was the other way around.
    They needed to have a % of their loans in deposits.
    I may be wrong.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by Samhain View Post
    Banks only get funding via that process when there is a temporary funding problem. They are only allowed to loan out a % of their deposits.
    It is correct that banks can only lend out a percent of their deposits, but it's around 90% of their deposits. But banks don't have to lend from deposits at all, they can lend 100% of the money that they acquire from other sources, such as investors, interbank lending system loans, the discount window, etc.

    A bank can make a loan even if they don't have any excess reserves from deposits. They will acquire the money overnight once the loan is made, and it's pretty much an automatic (highly computerized) system that just happens with little if any human intervention.

    You wonder why the interest rate you get at the bank is so low, it's because the bank doesn't have much of a need for your deposits. Your money is not in high demand, nor is the rental of it rare or valuable.

    Entrepreneurial endeavor is rare, passive savings is common. Sorry to burst your bubble.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by Chainsaw View Post
    Since the liberals have a made it comfortable to ride the entitlement deadbeat-wagon, more Americans are doing just that rather than working,......ie so the jobless rate drops. Do you REALLY think that is a benefit to society? The job participation rate is at a 40 plus year low, it is even worse for women and minorities, food stamps, welfare and all the other entitlements have historical high usage, both in numbers and percentage of population. Is that REALLY progress in the mind of a progressive grubercrat?
    LOL!

    U mad bro?
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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by Declan View Post
    I've never seen a study on it, but it raises an interesting question: would a dollar spent on something with a 3% profit margin result in different velocity than a dollar spent on something with a 20% profit margin.
    All economic choices, including resource allocation, have tradeoffs (opportunity costs) on account of scarcity. Furthermore asymmetric information (imperfect information and/or differing access to information) coupled with uncertainty impose their own inefficiencies. Moreover, the context in which companies operate is dynamic. Hence, what might appear to be an optimal choice today, might well be suboptimal for the long-term. For example, consider the case of a company determining how to allocate its resources. For purposes of simplicity, let's just assume it has $1 billion available for investment into only two possibilities (1) a product with steady growth in sales and a profit margin of 20% per unit and, (2) another product with uncertain growth in sales, a limited customer base, and little if any profit margin. What choice should the company make?

    The rational answer would appear to be that it should not waste its capital and, therefore, it should plow its investment into the first product to maximize its profits and shareholder welfare. But the empirical evidence across industries is not so clear-cut on account of the factors that I mentioned earlier e.g., uncertainty.

    There are numerous cases where the inferior product that was passed up established firms but embraced by newer ones, evolved into a high value product over time with value that matched or exceeded that produced by the high value product(s) embraced by the established companies. Moreover, the newer companies that chose to invest in the development of such products wound up with lower cost structures on account of efficiencies driven by trying to survive while the more established firms had less competitive cost structures that evolved from their paying less attention to costs from their being accustomed to selling high value products. In time, those once inferior products wound up becoming disruptive technologies.

    Suddenly what had seemed to be the rational choice to invest in the more profitable product, was actually the suboptimal cost. Instead of promoting shareholder welfare, the seemingly rational choice undermined it in the long-term. Many firms when confronted by such disruptive technologies have declined or disappeared with significant and even total destruction of shareholder wealth.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by donsutherland1 View Post
    All economic choices, including resource allocation, have tradeoffs (opportunity costs) on account of scarcity. Furthermore asymmetric information (imperfect information and/or differing access to information) coupled with uncertainty impose their own inefficiencies. Moreover, the context in which companies operate is dynamic. Hence, what might appear to be an optimal choice today, might well be suboptimal for the long-term. For example, consider the case of a company determining how to allocate its resources. For purposes of simplicity, let's just assume it has $1 billion available for investment into only two possibilities (1) a product with steady growth in sales and a profit margin of 20% per unit and, (2) another product with uncertain growth in sales, a limited customer base, and little if any profit margin. What choice should the company make?

    The rational answer would appear to be that it should not waste its capital and, therefore, it should plow its investment into the first product to maximize its profits and shareholder welfare. But the empirical evidence across industries is not so clear-cut on account of the factors that I mentioned earlier e.g., uncertainty.

    There are numerous cases where the inferior product that was passed up established firms but embraced by newer ones, evolved into a high value product over time with value that matched or exceeded that produced by the high value product(s) embraced by the established companies. Moreover, the newer companies that chose to invest in the development of such products wound up with lower cost structures on account of efficiencies driven by trying to survive while the more established firms had less competitive cost structures that evolved from their paying less attention to costs from their being accustomed to selling high value products. In time, those once inferior products wound up becoming disruptive technologies.

    Suddenly what had seemed to be the rational choice to invest in the more profitable product, was actually the suboptimal cost. Instead of promoting shareholder welfare, the seemingly rational choice undermined it in the long-term. Many firms when confronted by such disruptive technologies have declined or disappeared with significant and even total destruction of shareholder wealth.
    Sure Eastman-Kodak is an example of that, but it really doesn't address the issue on the consumption side. Would me buying a bag of chips at 3% profit for Kroger for $1 be better or worse for the economy than me buying a pack of firecrackers for $1 at a 20% profit to the head shop.
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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%



    Economics One | A blog by John B. Taylor

    One year after recovery started (2010) was pathetic compared to prior recoveries - weaker than all the other deep recessions in American history. In 2011 it was so weak so as to be non-existent. By 2012 it was the worst three year recovery in US history. In 2013 was still unusually weak, so weak that Obama's guy, Larry Summers’, defined it as “secular stagnation” .In 2014 it was still a not so great recovery, till late in the year when if FINALLY acted more like a normal recovery. So now, as we approach year 6, we are showing some robust signs in job growth.

    Even so, the recovery is not where it should be. Four quarters of growth in 2014 looks to average only 2.2% compared with 4.4% in the corresponding quarters of the 1980s recovery. And as of January 2015 the employment-to-population ratio is still lower than at the start of the recovery.

    It's good that we are finally showing some real recovery, but that does not undue the lost output from years of needless stagnation from mutton-headed administration "management".
    Last edited by maxparrish; 03-09-15 at 04:28 PM.

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    Re: Payrolls Climb More Than Forecast, U.S. Jobless Rate at 5.5%

    Quote Originally Posted by maxparrish View Post


    Economics One | A blog by John B. Taylor

    One year after recovery started (2010) was pathetic compared to prior recoveries - weaker than all the other deep recessions in American history. In 2011 it was so weak so as to be non-existent. By 2012 it was the worst three year recovery in US history. In 2013 was still unusually weak, so weak that Obama's guy, Larry Summers’, defined it as “secular stagnation” .In 2014 it was still a not so great recovery, till late in the year when if FINALLY acted more like a normal recovery. So now, as we approach year 6, we are showing some robust signs in job growth.

    Even so, the recovery is not where it should be. Four quarters of growth in 2014 looks to average only 2.2% compared with 4.4% in the corresponding quarters of the 1980s recovery. And as of January 2015 the employment-to-population ratio is still lower than at the start of the recovery.

    It's good that we are finally showing some real recovery, but that does not undue the lost output from years of needless stagnation from mutton-headed administration "management".
    It depends on what metrics and what time periods we are looking at.

    Under Obama, the unemployment rate actually recovered faster than under Reagan. Plus, Reagan experienced a double dip, which Obama did not. The recovery under Reagan was the result of huge increases in deficit spending which we haven't had under Obama with the exception of his first couple of years in office (the first of those two years is actually attributable to Bush).

    If the current economic expansion continues through the end of the Obama administration, it will be one of the longer economic expansions in history.

    Truthfully, the POTUS isn't the only controlling factor of our economy. Giving all the blame or credit to the POTUS is foolish.
    Quote Originally Posted by ocean515 View Post
    ...I'm not interested in debating someone who is trolling for an argument....
    Quote Originally Posted by Papa bull View Post
    I see a big problem with the idea that whatever the majority wants is OK.

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