MaxedOutMama
Thursday, April 22, 2010
The Quickie
Okay, I am so busy I am way short on sleep (spring yardwork added to everything else), but....
Initial Unemployment Claims:
This week's headline number (SA) is 456,000. The four-week moving average is 460,250. That's pretty high! Last week's big number apparently stemmed mostly from:
The NY numbers staggered me a bit. The entire list (use the link above and scroll to the bottom) is worth a look. Two states reported finance layoffs (AZ & TX). The usual transportation, services & manufacturing dominated the list.
EUC (extended continued claims) dropped 508,000 last week. That is a huge number, and it reflects the expiration of the emergency one-month extension in the first week of April. Don't look for this to help the economy! There are not jobs of any sort out there for many of these people. Congress is debating the new employment benefits program - from what I have read the hold up is paying for it. Well, they should pay for it - there is plenty that can be cut in the federal budget. But they should also do this ASAP, because this isn't going to help us, nor will it really save that much money. Many of these people will just move to food stamps, etc. Unfortunately, some will qualify for virtually no further assistance (the details depend a great deal on states). This is no joke; some of these will be homeless, jobless and penniless.
If you are wondering (and anyone with a brain should be) about those claim numbers, here is one reason: The March Producer Price Index (PPI) is out today. Our 12 month from Table A (SA):
To have a persistent recovery we need money circulating through the hands of consumers! The other side of all this shows up in H.8 (Bank Assets and Liabilities). Total credit dropped 6.4% in 2009, and 6.6% in Q1 of 2010. Loans and Leases dropped a staggering 10.2% in 2009, and 10.1% in Q1 of 2010.
Okay, okay, we are now a cash economy. Returns are so low that it makes little sense to borrow for most purposes.
So how's the cash-building going? Here is the sign of the gathering storm in H.8 Other Deposits: In 2008 and 2009 Other Deposits grew at a pace of 8.9% and 8.8% respectively. The quarterly trajectory from the last quarter of 2008:
A lot of the growth potential in 2008 and 2009 came from debt defaults. Try living rent and mortgage free for six months to a year - you'll have more money left over! But now that is fading as banks move in to foreclose on more of these homes, but the lower wages and salaries are still there. The toss-the-house-pay-the-CCs movement also helped the CC debt for a while, but that too will be fading - total credit card chargeoffs this year will remain very high.
Not everyone in the US is "banked" as we call it in the industry. From 20-30% of the population is "unbanked". They tend to be a much poorer segment of the population and have been hit hard in this recession due to disproportionate job losses. Thus their situations are net likely to be worse than the banked population..
Thus we can conclude that without borrowing, the ability to spend is going to be constrained by the growth in money flowing into the consumers' hands, and growth in Other Deposits is a good proxy for that. Other deposits even picks up a lot of welfare/government transfer benefits, as most are now done straight to bank accounts.
So don't expect consumer spending to lend huge impetus to the rest of this recovery. That has to wait. It seems likely that consumers overspent a bit out of necessity in Q1. In Q2 they will be helped by lower fuel bills due to spring weather. By Q3 that will mostly be gone, the Census jobs will be fading, and I am thinking that even more people will be both without a job AND without unemployment benefits.
So, to sum this up, the reason why we are seeing the compression in trade margins is that consumers don't have that much money to spend. Once you go cash, you end up budgeting almost on a yearly basis for heating/cooling/medical and the like, and consumers are lopping discretionary spending to fund forced spending.
The potential offset here are the financial conservatives. They have money if they still have jobs. But the issue with financial conservatives is that they are frugal - and they will probably spend it for needs, such as when they really need a new car - but they are not going to redo the kitchen on a whim. They have money because they spend less than their income. That is a habit and a discipline, and if (as many are experiencing) they see their monthly expenses veering closer to their monthly income, they tend to cut back on monthly expenses.
Realistically, one big issue is the age of heads of households. The consumer expenditures survey shows average reference person ages. Let's look at ages of the reference person by quintile of income from 2008 (the latest available):
I do not expect US consumer spending to return to the free and easy days of the last two decades in the next two decades. I don't think that CC-funded spending will return to recent norms in the next two decades. I think we will stabilize at a very different mindset. It makes no sense to borrow money at 8% when your returns are much less than that, and financial stability for the average household is acutely dependent on the ability to save. The younger crowd will find that they will have to save money to buy a home or a car. Some cash on the table will become a necessity.
Over time, the return to some fiscal sense will fuel a future growth, but it is not going to fuel much net growth in the next few years.
Initial Unemployment Claims:
This week's headline number (SA) is 456,000. The four-week moving average is 460,250. That's pretty high! Last week's big number apparently stemmed mostly from:
CA | +23,785 |
| Return to a five day workweek, as well as layoffs in the service industry. |
NY | +23,876 |
| Layoffs in the transportation and service industries. |
The NY numbers staggered me a bit. The entire list (use the link above and scroll to the bottom) is worth a look. Two states reported finance layoffs (AZ & TX). The usual transportation, services & manufacturing dominated the list.
EUC (extended continued claims) dropped 508,000 last week. That is a huge number, and it reflects the expiration of the emergency one-month extension in the first week of April. Don't look for this to help the economy! There are not jobs of any sort out there for many of these people. Congress is debating the new employment benefits program - from what I have read the hold up is paying for it. Well, they should pay for it - there is plenty that can be cut in the federal budget. But they should also do this ASAP, because this isn't going to help us, nor will it really save that much money. Many of these people will just move to food stamps, etc. Unfortunately, some will qualify for virtually no further assistance (the details depend a great deal on states). This is no joke; some of these will be homeless, jobless and penniless.
If you are wondering (and anyone with a brain should be) about those claim numbers, here is one reason: The March Producer Price Index (PPI) is out today. Our 12 month from Table A (SA):
Crude: +3.2%Looking at the 12-month % change in Crude and Intermediate Goods broken down from Table B for the last three months (unadjusted):
Intermediate: +0.6%
Finished: +6.0% (unadjusted)
All Crude:Read through the CPI report for March. The all-items unadjusted 12 month % change for CPI-U in March was +2.4%. The compression squeeze is on, and when this persists you really see it over time due to the manufacturing profit effects. Basically, the companies cut costs to compensate for declining margins. What else can you do? But over time, the result is lower investment and corporate spending, tight wages, etc. And this feeds back through the rest of the economy.
Jan: +25.2%
Feb: +28.6%
Mar: +33.4%
All Intermediate:
Jan: +4.6%
Feb: +5.6%
Mar: +7.7%
To have a persistent recovery we need money circulating through the hands of consumers! The other side of all this shows up in H.8 (Bank Assets and Liabilities). Total credit dropped 6.4% in 2009, and 6.6% in Q1 of 2010. Loans and Leases dropped a staggering 10.2% in 2009, and 10.1% in Q1 of 2010.
Okay, okay, we are now a cash economy. Returns are so low that it makes little sense to borrow for most purposes.
So how's the cash-building going? Here is the sign of the gathering storm in H.8 Other Deposits: In 2008 and 2009 Other Deposits grew at a pace of 8.9% and 8.8% respectively. The quarterly trajectory from the last quarter of 2008:
Q4 08: 19.0%If it had not been for tax refunds, which really boosted February 2010 (+6.9%) Q1 would have been worse. This is where the 9.4% YoY drop in total wages and salaries starts showing up.
Q1 09: 14.2%
Q2 09: 8.2%
Q3 09: 5.1%
Q4 09: 6.7%
Q1 10: 2.6%
A lot of the growth potential in 2008 and 2009 came from debt defaults. Try living rent and mortgage free for six months to a year - you'll have more money left over! But now that is fading as banks move in to foreclose on more of these homes, but the lower wages and salaries are still there. The toss-the-house-pay-the-CCs movement also helped the CC debt for a while, but that too will be fading - total credit card chargeoffs this year will remain very high.
Not everyone in the US is "banked" as we call it in the industry. From 20-30% of the population is "unbanked". They tend to be a much poorer segment of the population and have been hit hard in this recession due to disproportionate job losses. Thus their situations are net likely to be worse than the banked population..
Thus we can conclude that without borrowing, the ability to spend is going to be constrained by the growth in money flowing into the consumers' hands, and growth in Other Deposits is a good proxy for that. Other deposits even picks up a lot of welfare/government transfer benefits, as most are now done straight to bank accounts.
So don't expect consumer spending to lend huge impetus to the rest of this recovery. That has to wait. It seems likely that consumers overspent a bit out of necessity in Q1. In Q2 they will be helped by lower fuel bills due to spring weather. By Q3 that will mostly be gone, the Census jobs will be fading, and I am thinking that even more people will be both without a job AND without unemployment benefits.
So, to sum this up, the reason why we are seeing the compression in trade margins is that consumers don't have that much money to spend. Once you go cash, you end up budgeting almost on a yearly basis for heating/cooling/medical and the like, and consumers are lopping discretionary spending to fund forced spending.
The potential offset here are the financial conservatives. They have money if they still have jobs. But the issue with financial conservatives is that they are frugal - and they will probably spend it for needs, such as when they really need a new car - but they are not going to redo the kitchen on a whim. They have money because they spend less than their income. That is a habit and a discipline, and if (as many are experiencing) they see their monthly expenses veering closer to their monthly income, they tend to cut back on monthly expenses.
Realistically, one big issue is the age of heads of households. The consumer expenditures survey shows average reference person ages. Let's look at ages of the reference person by quintile of income from 2008 (the latest available):
All Consumer Units: 49.1We're dadgum bleeping middle-aged! Our whole society is! And this means that we really need to save more, as should really smack you right between the eyes as you note that the poorest households tend to be the oldest. The cost of medical insurance alone for an older household if they have to buy it on the open market is enough to crush the average budget.
Lowest Income: 51.6
2nd Lowest: 51.6
Median Fifth: 47.9
4th Highest: 46.9
Top Fifth: 47.4
I do not expect US consumer spending to return to the free and easy days of the last two decades in the next two decades. I don't think that CC-funded spending will return to recent norms in the next two decades. I think we will stabilize at a very different mindset. It makes no sense to borrow money at 8% when your returns are much less than that, and financial stability for the average household is acutely dependent on the ability to save. The younger crowd will find that they will have to save money to buy a home or a car. Some cash on the table will become a necessity.
Over time, the return to some fiscal sense will fuel a future growth, but it is not going to fuel much net growth in the next few years.
Comments:
<< Home
Hi MoM,
My question is, where does the savings rate fit in? Retail sales have been strong in 1q, so we've seen an increase in final domestic demand -- even ex-gas and cars. The consumer seems to be saving less and spending more on discretionary items, which is why retail and restaurant stocks are on a tear. This goes against sentiment indicators, jobless claims, and even the job portion of sentiment indicators like the ISM (which show little improvement).
So consumers don't seem to be saving to de-lever (decline in consumer credit is equal to write-offs). It is as if the financial crisis had never happened, and no one is concerned about losing their jobs.
I know you think its "compression" that is forcing spending higher, but the upper-level retailing (clothes and electronics) companies are saying otherwise.
My question is, where does the savings rate fit in? Retail sales have been strong in 1q, so we've seen an increase in final domestic demand -- even ex-gas and cars. The consumer seems to be saving less and spending more on discretionary items, which is why retail and restaurant stocks are on a tear. This goes against sentiment indicators, jobless claims, and even the job portion of sentiment indicators like the ISM (which show little improvement).
So consumers don't seem to be saving to de-lever (decline in consumer credit is equal to write-offs). It is as if the financial crisis had never happened, and no one is concerned about losing their jobs.
I know you think its "compression" that is forcing spending higher, but the upper-level retailing (clothes and electronics) companies are saying otherwise.
# posted by 
: 8:26 AM
: 8:26 AM
David - large time deposits have been falling. People may be putting more into stocks, but that is a small segment of the overall population. I ignore the savings rate produced by BEA totally. I've never found it correlates well to anything, just as I ignore the productivity figures.
The top 30% of the population does not drive the economy. The bottom 70% does, because it drives total jobs.
Now one thing we are clearly seeing is a pick-up in the higher-end retail and spending on big ticket items such as autos, and I think that is a result of the end of the crisis and pent-up demand. There has been a substantial financial recovery, and they get a lot of total wages and salaries. And the big bounce in home purchases really helped from last year.
But if you look at net patterns of spending, more for most of the population is moving toward "forced", which I consider used car purchases, all medical and drugs except for cosmetic surgery, food, fuel, utilities and most types of insurance.
So what I've currently got is that the incomes of the top 18% (net worth) are increasing quite rapidly. The bottom 30% are still net better off than when we entered by a long shot, due to a much higher percent of their incomes being spent on the basics, increased government transfer payments, and the deflationary pulse.
It is the middle which is being hollowed out. That is usually fatal for the US economy.
On average, wage earners are really still making less than they did when we entered the recession. Also, the extremely high teen unemployment rate is going to hurt the next two years.
I mean, nominally speaking, you expect food spending to rise because the population is rising. And even though food at home has deflated, in the entry to this recession a lot of adults were going hungry or were whacked down to the beans-and-rice level in order to feed their kids. Food stamps alone really helped food sales.
And believe me, when they were eating beans and rice they weren't buying basics such as clothing, coats and shoes either. There is pent-up demand here. People weren't even buying CLEANING products at the worst of it, David.
I expect that pent-up demand to carry us a while further, but then without jobs we are going to slowly sag again.
The best we can hope is that some of the private money in the ground comes out and starts to slowly generate a new carrying wave, because the fiscal problems of the state and local governments are going to force their total wages and salaries down.
The top 30% of the population does not drive the economy. The bottom 70% does, because it drives total jobs.
Now one thing we are clearly seeing is a pick-up in the higher-end retail and spending on big ticket items such as autos, and I think that is a result of the end of the crisis and pent-up demand. There has been a substantial financial recovery, and they get a lot of total wages and salaries. And the big bounce in home purchases really helped from last year.
But if you look at net patterns of spending, more for most of the population is moving toward "forced", which I consider used car purchases, all medical and drugs except for cosmetic surgery, food, fuel, utilities and most types of insurance.
So what I've currently got is that the incomes of the top 18% (net worth) are increasing quite rapidly. The bottom 30% are still net better off than when we entered by a long shot, due to a much higher percent of their incomes being spent on the basics, increased government transfer payments, and the deflationary pulse.
It is the middle which is being hollowed out. That is usually fatal for the US economy.
On average, wage earners are really still making less than they did when we entered the recession. Also, the extremely high teen unemployment rate is going to hurt the next two years.
I mean, nominally speaking, you expect food spending to rise because the population is rising. And even though food at home has deflated, in the entry to this recession a lot of adults were going hungry or were whacked down to the beans-and-rice level in order to feed their kids. Food stamps alone really helped food sales.
And believe me, when they were eating beans and rice they weren't buying basics such as clothing, coats and shoes either. There is pent-up demand here. People weren't even buying CLEANING products at the worst of it, David.
I expect that pent-up demand to carry us a while further, but then without jobs we are going to slowly sag again.
The best we can hope is that some of the private money in the ground comes out and starts to slowly generate a new carrying wave, because the fiscal problems of the state and local governments are going to force their total wages and salaries down.
David - another way to look at it is that over time, PCE is dependent on inflation and income increases. But month-by-month spending is dependent on consumers' cash-in-hand and ability to borrow. I'm saying that we can mostly discount the ability to borrow as a factor going forward, and that obviously consumers are trying to rebuild their cash positions to avoid further run-ups of CC spending. They might charge in an emergency, but the ones who will charge casually are going to be much fewer.
Okay, so if we look at February's personal income and outlays, we see that in both February and January real disposable income either dropped or remained stagnant, whereas both nominal and chained-dollar PCE increased.
But the build up in other deposits explains why, and also explains why March PCE will be good - that big pop in February (mostly from federal refunds) funded spending in March.
I DON'T think that inflation is forcing up spending overall. What I think is that business margins will remain mostly tight enough to prevent business expenditures from rising very much and jobs from being created at a decent rate.
And of course energy and utility costs will tend to erode the positions of the less wealthy households.
Okay, so if we look at February's personal income and outlays, we see that in both February and January real disposable income either dropped or remained stagnant, whereas both nominal and chained-dollar PCE increased.
But the build up in other deposits explains why, and also explains why March PCE will be good - that big pop in February (mostly from federal refunds) funded spending in March.
I DON'T think that inflation is forcing up spending overall. What I think is that business margins will remain mostly tight enough to prevent business expenditures from rising very much and jobs from being created at a decent rate.
And of course energy and utility costs will tend to erode the positions of the less wealthy households.
MOM:
The NY number is due to the budget impasse. The governor is not funding any road construction in the continuing resolutions, so a lot of work is on hold or has been canceled. All those construction workers are now collecting unemployment insurance.
The NY number is due to the budget impasse. The governor is not funding any road construction in the continuing resolutions, so a lot of work is on hold or has been canceled. All those construction workers are now collecting unemployment insurance.
# posted by : 9:53 AM
: 9:53 AM
MOM,
Great post.
The potential offset here are the financial conservatives. They have money if they still have jobs. But the issue with financial conservatives is that they are frugal - and they will probably spend it for needs, such as when they really need a new car - but they are not going to redo the kitchen on a whim. They have money because they spend less than their income. That is a habit and a discipline, and if (as many are experiencing) they see their monthly expenses veering closer to their monthly income, they tend to cut back on monthly expenses.
That's me! I drive a 1996 Camry. I have two burners on my stove that don't work. I have one of those stoves built into the countertop. I'm in no great hurry to remodel the countertop just to bring my total working burners back to 4. (The house is 20 years old and the stove came with it.)
I would also add that as income from interest falls, I do not spend more on discretionary items. I do the exact opposite of what the Fed wants. It's not out of spite though. It is simply that I try to budget my finances well into the future. If I think I will earn less going forward, then I must cut spending now to compensate. That's just how the math works (or should work) when one is retired.
Further, since my girlfriend is unemployed I have really cut back on my spending in order to compensate for that too.
Great post.
The potential offset here are the financial conservatives. They have money if they still have jobs. But the issue with financial conservatives is that they are frugal - and they will probably spend it for needs, such as when they really need a new car - but they are not going to redo the kitchen on a whim. They have money because they spend less than their income. That is a habit and a discipline, and if (as many are experiencing) they see their monthly expenses veering closer to their monthly income, they tend to cut back on monthly expenses.
That's me! I drive a 1996 Camry. I have two burners on my stove that don't work. I have one of those stoves built into the countertop. I'm in no great hurry to remodel the countertop just to bring my total working burners back to 4. (The house is 20 years old and the stove came with it.)
I would also add that as income from interest falls, I do not spend more on discretionary items. I do the exact opposite of what the Fed wants. It's not out of spite though. It is simply that I try to budget my finances well into the future. If I think I will earn less going forward, then I must cut spending now to compensate. That's just how the math works (or should work) when one is retired.
Further, since my girlfriend is unemployed I have really cut back on my spending in order to compensate for that too.
MoM, are those unemployment numbers layoffs from the private sector, or are there some government employees among them. I think that layoff of government employees might be a good thing. As Ko-Ko said, if you pick the right ones, they'd none of them be missed!
# posted by : 3:47 PM
: 3:47 PM
NJCommuter - That's all unemployment insurance applicants, which includes government.
There are some who lose jobs who aren't insured, of course. Contractors and a lot of self-employed, and so forth.
If we take out NY (which granted, are real unemployed), then the trend improves further.
There are some who lose jobs who aren't insured, of course. Contractors and a lot of self-employed, and so forth.
If we take out NY (which granted, are real unemployed), then the trend improves further.
Mark - believe it or not, not every retired person is financially conservative.
I think the constraint on the non-conservatives is increasingly high borrowing rates, and many of them already have CC debt.
Another segment (unknown, but real) are business owners who have cash and cash flow but may be constrained right now in expansion. There it is really sales.
I think the constraint on the non-conservatives is increasingly high borrowing rates, and many of them already have CC debt.
Another segment (unknown, but real) are business owners who have cash and cash flow but may be constrained right now in expansion. There it is really sales.
MOM,
Mark - believe it or not, not every retired person is financially conservative.
I was not attempting to generalize my mindset to other retirees. I was simply relating your commentary to me specifically.
Heaven help us all if every retiree became as financially conservative as I am. If nothing else, we'd find that we have way too many restaurants in this country.
Mark - believe it or not, not every retired person is financially conservative.
I was not attempting to generalize my mindset to other retirees. I was simply relating your commentary to me specifically.
Heaven help us all if every retiree became as financially conservative as I am. If nothing else, we'd find that we have way too many restaurants in this country.
MoM,
Thanks for the response. I agree that income growth is not supportive of spending. One thing I wonder about is how stocks can absorb week after week of a 460k 4-wk average claims number -- essentially where we started the year. There is little in the data that supports the notion of more money in consumer's pockets. In fact, we will face a headwind of no remaining stimulus by 3q.
The only thing that will save this economy now is 200k new jobs a month -- the bare minimum necessary. If we don't average that in 2q, I don't see how we can once stimulus becomes a headwind in 3q.
What kills me is how much policy makers are betting on a strong recovery. Should we double-dip, there is no "plan B", except maybe Bernanke adopts a 5% inflation target to "fight deflation" (which of course will be a disaster). People don't realize how much is policy makers are betting on a sustainable recovery. From the growing long term unemployed to credit card charge offs to mortgage "walk aways", the world may look much different in a few months...
Thanks for the response. I agree that income growth is not supportive of spending. One thing I wonder about is how stocks can absorb week after week of a 460k 4-wk average claims number -- essentially where we started the year. There is little in the data that supports the notion of more money in consumer's pockets. In fact, we will face a headwind of no remaining stimulus by 3q.
The only thing that will save this economy now is 200k new jobs a month -- the bare minimum necessary. If we don't average that in 2q, I don't see how we can once stimulus becomes a headwind in 3q.
What kills me is how much policy makers are betting on a strong recovery. Should we double-dip, there is no "plan B", except maybe Bernanke adopts a 5% inflation target to "fight deflation" (which of course will be a disaster). People don't realize how much is policy makers are betting on a sustainable recovery. From the growing long term unemployed to credit card charge offs to mortgage "walk aways", the world may look much different in a few months...
# posted by : 9:05 PM
: 9:05 PM
Mark - I wasn't trying to imply that you were off-base. I have been brooding lately about the problem of poor older households and CC debt, so it is just on my mind. A lot of older people were making up the gap that way.
David - I am not sure that the Fed is bamboozled. The way I read their recent statements they are quite worried.
In DC, I think it is still not quite sinking in. Recent proposals on energy/climate and the VAT amount to a hefty federal regressive tax burden, I guess to offset the SS losses.
Well, that will be fatal. You cannot fix an income problem compounded by a debt problem by regressive taxation.
In DC, I think it is still not quite sinking in. Recent proposals on energy/climate and the VAT amount to a hefty federal regressive tax burden, I guess to offset the SS losses.
Well, that will be fatal. You cannot fix an income problem compounded by a debt problem by regressive taxation.
Shouldn't initial claims be going down because the
pool of employed people is getting smaller ? What
would it look like shown as a percentage ?
Sporkfed
pool of employed people is getting smaller ? What
would it look like shown as a percentage ?
Sporkfed
# posted by : 5:02 AM
: 5:02 AM
Sporkfed - no, not really.
The workforce is about 150 million, or 150,000,000. One percent of that would be 1,500,000. So 500,000 weekly initial claims is about 1/3rd of 1 percent.
The workforce is about 150 million, or 150,000,000. One percent of that would be 1,500,000. So 500,000 weekly initial claims is about 1/3rd of 1 percent.
There's going to be a further deflationary trend in wages, as companies find it easier to fire employees up for a raise and replace them with someone hungrier. Already starting to see a bit of that where I work. I've been kicking around ideas to start up a small business, but still haven't settled on anything yet. It's definitely hard to sort out where we are headed. I've also been trying to sort out what we can do, if we can't sell this house. We sure can't afford taxes on two places.
MOM,
I have been brooding lately about the problem of poor older households and CC debt, so it is just on my mind. A lot of older people were making up the gap that way.
Here's something else to worry about. Check out this article from 2005.
Comparing the Retirement Savings of the Baby Boomers and Other Cohorts
Descriptive statistics. There was at least one retirement account in 57 percent of the households. The average or mean amount in the retirement accounts was $49,944, but the standard deviation was $174,193, suggesting that the dollar amount held in retirement accounts varies widely by individual households. The median amount held in retirement accounts--$2,000--provides another indication of the wide variation in the amounts held by households.
Wealth and income inequality just doesn't show up in the "average" data. "Average" data tends to make everything look better than it really is. I wish we had access to more "median" data.
It goes back to something that concerns me greatly. If half the people have all the debt and the other half have all the savings, then we're in far worse shape than the averages show.
Post a Comment
I have been brooding lately about the problem of poor older households and CC debt, so it is just on my mind. A lot of older people were making up the gap that way.
Here's something else to worry about. Check out this article from 2005.
Comparing the Retirement Savings of the Baby Boomers and Other Cohorts
Descriptive statistics. There was at least one retirement account in 57 percent of the households. The average or mean amount in the retirement accounts was $49,944, but the standard deviation was $174,193, suggesting that the dollar amount held in retirement accounts varies widely by individual households. The median amount held in retirement accounts--$2,000--provides another indication of the wide variation in the amounts held by households.
Wealth and income inequality just doesn't show up in the "average" data. "Average" data tends to make everything look better than it really is. I wish we had access to more "median" data.
It goes back to something that concerns me greatly. If half the people have all the debt and the other half have all the savings, then we're in far worse shape than the averages show.
<< Home
