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Thursday, March 10, 2011

There's Always A Pony In There Somewhere

Yeah, yeah, I know claims went up this week, but they were still at a level suggesting much better jobs. As long as it's below 400K, no need to start digging a bomb shelter.

We also have the Monthly Treasury Statement for February. Admittedly, this is a very easy comparison (I am carrying this one on my exception report with March being the next "real" comparison), but still it's purty:
Feb 2010:
HI Wages: 12,605
HI Self: 131
Feb 2011:
HI Wages: 13,457!!!!!!
HI Self: 131
January was in the positive range, and February's employment report is very solidly confirmed by these numbers. There were some oddities I couldn't resolve in the employment report. For one thing, it showed a big jump in government jobs. I was theorizing (based on employment advertising) that the drop in government jobs wasn't "real" in that much of it was due to retirements, meaning that those jobs would be filled again. Maybe that guess was correct.

If you look at Table A-8, non-ag jobs jumped by almost 350K. But government jobs jumped by 193K. So.... I really can't tell from looking at the yearly Medicare tax comparison because snow in 2010 fouled up the numbers in odd ways. The big drop in self-employed workers was one of the things I was looking for to signal a real turn in the job market.

Still, I can't be too optimistic about escape velocity. Picture this. You are one of those families with incomes below 40K. There's a lot of them. Their best hope this year is for better pay/hours. Their federal taxes increased in comparison to 2010. In many cases, their state/local taxes did also. If they have to drive to work, they probably will take an after-tax hit this year just between gas and federal tax of $650-$900. That's going to be around 3-5% less disposable income. Other increases are going to hit hard, and most households in this bracket are spending little on frivolities, so it is harder to pull in your horns.

For comparison purposes, prior years of February Medicare tax data:
Feb 2009:
HI Wages: 13,933
HI Self: 139
Feb 2008:
HI Wages: 15,107
HI Self: 136
Feb 2007:
HI Wages: 13,397
HI Self: 127
So we're better off than 2007. That isn't saying much. We still have to get climb back considerably more to get to 2009 levels. This is why Americans find the recovery less than convincing. There is some replacement income from Social Security and probably even more from public pensions, but life is hard if you are a working stiff.

We also got the March 10th Flow of Funds release. I'm settling down to read and ponder it. This release covers data through the end of Q4 2010. The profits for F.101 nonfinancial businesses (SA) took a real hit in Q4. See internal page 19, external page 26. These numbers are seasonally adjusted.


This is L.103, Nonfarm, nonfinancial noncorporate business.

Take a look at what has happened since 2007. Assets keep dropping and while liabilities are dropping, the net is not favorable.

Comments:
Next week should show a decline. Fat Tuesday had
some state offices closed and Spring Break is under way. I'm guessing higher gas prices will work their way through the economy quickly since there isn't a lot of
buffer. Higher claims by the beginning of May.
Sporkfed
 
Don't take this the wrong way - but I am hoping desperately that both you and I are reading this all wrong.

There's always a chance.
 
Take a Chance on QE

Check out today's TIPS yields.

-0.63% on the 5-year (technically a 4-year)?

Negative real yields can provide all kinds of unustainable short-term benefits. Gregory Mankiw and Paul Krugman must be tickled pink.
 
Did I just type unustainable? Good grief. Might just as well go with it, lol.

This whole economy is unustainable! ;)
 
As in "no use at all"? I'll go with that.

I've just been reading a bunch of green power babble. I think I'll go to bed and pull the covers up over my head.
 
MOM,

"I think I'll go to bed and pull the covers up over my head."

That may work for you, but I haven't upgraded my sheets to organically grown cotton yet.

My current sheets are unustainable. ;)
 
I'll find out today if I can telecommute part of my week. I could take a dollar an hour pay cut and still come out ahead if I could work from home three days a week.

The way I put it to them, in my proposal, is that it is a way to give employees a raise without it costing them anything. And it can be used to recruit new employees and retain old ones. I really thing more companies should consider it, at least for reliable employees.
 
I understand that taking the Making Work Pay tax credit away, and replacing it with a reduction in the Social Security tax is a net tax increase on the poor. But since many families making less than $40,000 per year have zero federal income tax withheld from wages (and didn't actually receive the Making Work Pay credit until they filed taxes), isn't most of the effect of this tax increase going to come in the spring of 2012, when they receive smaller tax refunds than before?
 
Peggy - the MWP was figured into withholding tables, so employees were supposed to get the month back pro rate per each period.

So no.
 
Teri - it makes sense to me as long as the connections are good enough. And yes, it definitely is equivalent to a raise.

But often companies are reluctant to start this because of personnel issues and worries over claims of favoritism.
 
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