Talk to me after jobs grow 200K/month for 6 months, says the Chicago Fed's Charles Evans, likely...


Talk to me after jobs grow 200K/month for 6 months, says the Chicago Fed's Charles Evans, likely the FOMC's leading dove (and that's saying something). "There is still a long way to go ... It is going to be difficult to expect the unemployment rate to come down very quickly," he tells the WSJ's Jon Hilsenrath.
Comments (12)
  • Tschurin
    , contributor
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    Especially because of the law of unintended consequences. A chief beneficiary of artifically low interest rates are mergers, LBO's, other acquisitions and modern-day Gordon Gekko greenmailers. The aftermath of a lot of that activity are "synergies" layoffs and other employment-reducing activities, not hiring. In otherwords, perhaps QE is part of the employment problem, not just, as the FOMC would have you believe, the cure.
    8 Mar 2013, 03:32 PM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    What is being missed... All employment watchers look beyond the BLS's face number of 7.7% and cite the U6 rate.True it is 14.6% and you can back up a claim the unemployment hasn't changed in 4+years.

     

    One also can agree with the Fed's claim that employment problems are structural ! They are ! No question about it.

     

    Above Tschurin correctly points out the buybacks and the big gobbling up the small will create synergies an stifle employment growth. Also, the new HCA has stunted the growth of employment and will really cause a big drop in there current numbers as Jan 1, 2014 approaches and more regulations and the penalty starts.

     

    The thing I see isn't being considered. The Fed has clearly decided to force dollars into equities and as a result baby boomers are seeing there portfolios claw back or even move higher than the 2007 highs and in combination; there home prices are rebounding.

     

    Also, existing home inventories are dropping. So, there is a chance for seniors now to sell and move or scale down.

     

    The result of this is a larger percentage of the 12,000 people who are reaching the retirement age each day can now retire. Many have been forced to stay employed and that left no space for the young to get into the market as middle aged folks couldn't move up an the entry jobs weren't opening.

     

    Thus, the U6 rate may continue to stay high ,but, the face number can easily come down. US population growth isn't too far off 0,so, workforce shrinking is structural... I've been in the overall bear camp,but,I am now invested back to normal levels.

     

    I'm not a fan of the Fed and agree with much of the criticisms,but, they do rule the roost and control the world's reserve.So,don't fight the Fed is as always the #1 rule in investing. Should the Fed take their foot off the gas the drop from their deceleration will truly be "THEE" buy able dip.

     

    The current US Government is doing all they can to change the USA and will succeed,but,nothing can hold down the US economy for too long.The rest of the world is coming into the consumer age are leaving there saving mentality.

     

    Thus, the US is influencing the rest of the countries of the world to become consumer driven an this includes the communist ones too.The world is one big place to sell too and the US companies have all the customers they need even if the workforce shrinks at home.
    9 Mar 2013, 06:14 AM Reply Like
  • Tschurin
    , contributor
    Comments (381) | Send Message
     
    I like your big-picture point of view. I don’t really know how many retirement-age baby boomers feel that secure; although they may feel better than a year or two ago. For one thing they can’t earn any return, to speak of, in their bank accounts or money market funds. For another thing, although they are eligible, or will soon be eligible, for medicare, their health insurance costs are probably rising at a rate noticeably above the CPI. Some of them, if they retire and lose company health plans, will have to pay more. Furthermore, they are aware that it is projected that the medicare system will be insolvent in 10 years; social security in 20 years. You get the idea….
    9 Mar 2013, 07:40 AM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    Tschurin, agree with the scenarios you write about,but, things are changing fast among them.Espicially the Medicare folks. There health insurance costs are what they are.The fact that the U6 rate is resisting any move down and the face rate dropped to 7.7% is showing this. Look at the overall consumer retail dollars growing shows that the lower work force isn't effecting the consumer driven market place.

     

    I do see some old established retailers falling short of years gone by,but, I think it is the shift to the internet economy.

     

    PS.. I get the Gov currently wants to drive the country into a sigle payer healthcare system,but, you get what you vote for !
    9 Mar 2013, 07:46 AM Reply Like
  • june1234
    , contributor
    Comments (4414) | Send Message
     
    You need that number each month just to keep up with new entries to the workforce that month
    9 Mar 2013, 07:29 AM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    june123. that is the standard line.. 200k to match new entires,but, problem has been seniors have stayed employed at abnormally high rates. Normally they retire in much higher %s in the past.As there wealth tanked they were/are forced to stay in the workforce. If they do return to normal levels 200K can/will cut rates faster.
    9 Mar 2013, 07:33 AM Reply Like
  • hahaha48
    , contributor
    Comments (1411) | Send Message
     
    Even than it does not matter if the jobs are not paying as well as before.
    You should look at the total earnings of the working group and not just number of workers
    9 Mar 2013, 08:46 AM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    hahaha48, perfect analysis.... There is the rub between the Treasury and the Fed.... Low wage jobs goose the rate,but, don't feed the Treasury ! They fall into the Romney's famous 47%..

     

    However,the real situation in the US is there are plenty of high wage jobs available,but, no pool of ppl to fill them. Current estimates are 4 million.
    Then there is the fact that 35% of the college pool never finishes and the 65% who do graduate are not in the math & sciences. Nor do they have the computer skills needed by the Gates;Ellison,Zuck,Cook or the Page's of the high tech world.

     

    What I see is the key that leads me in the direction of up is that housing is rebounding. Refurbishing used homes and building new homes requires jobs that do feed the Treasury. And, the rebound in housing has effects in many other manufacturing an service areas with higher waged jobs.

     

    Trend is our friend.
    9 Mar 2013, 03:14 PM Reply Like
  • Kyle Spencer
    , contributor
    Comments (1240) | Send Message
     
    Don't fight the Fed.
    9 Mar 2013, 09:30 AM Reply Like
  • The Sociology of Finance
    , contributor
    Comments (955) | Send Message
     
    Agreed.
    10 Mar 2013, 12:52 AM Reply Like
  • widesmile
    , contributor
    Comments (6) | Send Message
     
    I like some of bigthinker's ideas here. So I work in the healthcare industry and here's a thought some may have not considered. There are many people who stay in unsatisfactory jobs just to maintain their healthcare benefits. Imagine a world where they can maintain their healthcare coverage and perform jobs they want to do. Happy workers are productive. Short term I think the market is a little overvalued, but long term there are not ALL negatives.
    10 Mar 2013, 08:43 AM Reply Like
  • DaLatin
    , contributor
    Comments (1522) | Send Message
     
    Healthcare is a primary force in where many folks work. However, healthcare is now headed for a single payer system. I live on the border between Costa Rica and Panama. Costa Rica has such a system and Panama does not. Healthcare is 100 times better in Panama and very affordable.

     

    As in all countries.. Money talks an b/s goes to public medical facilities. Soon the US will follow other countries like England:Canada,Costa Rica and the majority will see rationing an poor care. Also, without the capitalistic nature more young folks will not choose medicine as there career.

     

    I,by law ,must be on the Costa Rica system and pay monthly. No problems there,but,I've never set foot in a public facility nor would I ever..

     

    Note: Costa Rica is a medical tourist hot spot. North Americans and EUs come by the plane loads for procedures an get great affordable care. But, 99% of Costa Ricans could never afford this care and wait years for 10 year old procedures in the public system. Or die wating.

     

    So be careful what you vote for and how much you believe in the folks who didn't read the 1000s of pages of what is to come.

     

    I say ride the market up and use stops.Never give anything back ! Because you'll need lots of money to get great medical care !
    10 Mar 2013, 09:14 AM Reply Like
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