Central Perk

sâmbătă, 11 ianuarie 2014

Mish's Global Economic Trend Analysis

48.6% of Spaniards Aged 18-24 Would Take Any Job, Anywhere, for Low Wages; Ikea Spain Gets 100,000 Applicants for 400 Jobs; Walmart, McDonalds Comparison

Posted: 11 Jan 2014 05:49 PM PST

In contrast to McDonalds' workers in the US demanding $15 an hour wages, Almost half of young Spaniards accept any job, anywhere, despite low salary

48.6% of Spaniards aged 18 to 24 said they would accept any job, anywhere and even with a low income. 84.9% felt very or fairly likely to have to work on what is available, 61.7% considered it equally likely to have to go abroad, and 79.2% said they need to study more. Despite this, an overwhelming majority (80%) are convinced that, at least in the near future, will have to be financially dependent on their family.

Future is Black

Young Spaniards recognize enjoy the benefits of the welfare state far more than their parents, except as regards stability and security. They are also convinced that their children will live much worse than them.

Frustrated Expectations

Only 20% of young people believe things will improve in the next two or three years, compared to 36% who think it will get worse. Moreover, nearly three in four young people (71%) considered likely to find little or no work in the coming year.

Ikea Spain Gets 100,000 Applicants for 400 Jobs

Also via translation from El Economista, please consider Ikea Spain Gets 100,000 Applicants for 400 Jobs

The Swedish multinational Ikea will have work to select staff for a store in Valencia because 100,000 people submitted applications to fill 400 jobs.

Ika received a total of 100,000 job applications through a web page offering. In the first 48 hours of processing, Ikea received 20,000 applications.

The store, which will open in summer, will have a staff of 400 employees and also generate about 80 indirect jobs to cover services such as security, transport and cleaning, among others.

Walmart, McDonalds Comparison

To be fair, there is a major difference between McDonalds' employees and Spaniards seeking jobs.

The McDonalds' employees demanding higher wages have jobs. Those seeking jobs, don't.

However, every McDonalds' employee knew their wage when they were hired. Like Spaniards willing to accept low wages, they took the jobs anyway.

1 Million McDonalds Applicants

I cannot find anything recent on McDonalds, but on April 28, 2011, Bloomberg reported "McDonald's and its franchisees hired 62,000 people in the U.S. after receiving more than one million applications, the Oak Brook, Illinois-based company said today in an e-mailed statement. Previously, it said it planned to hire 50,000."

Walmart 23,000 Applicants for 600 Jobs

On November 19, 2013 NBC Washington reported Walmart to Open First D.C. Stores Dec. 4

Walmart's H Street and Georgia Avenue locations will open Dec. 4 at 8 a.m. Both the 103,000-square-foot Georgia Avenue store and the 74,000-square-foot H Street location will feature fresh produce, a deli, organic food items and a full-service pharmacy.

The stores will hire a combined 600 associates after combing through the more 23,000 applications its received from potential employees.

The arrival of Walmart has not been a smooth one. Both stores were on the verge of never opening after the retail giant threatened to pull its plans if Mayor Vincent Gray signed a living wage bill.

The Large Retailer Accountability Act, known colloquially as the "Walmart Bill," would have required the company -- and other big-box retailers -- to pay its employees a minimum of $12.50 an hour.

Gray vetoed the bill in September.

Minimum wage in the District currently stands at $8.25 an hour.

Reflections on Living Wages

Take a poll of those employees. I bet 100% of them are happier to have a job at $8.25 an hour vs. no job at some presumed "living wage" that they would not get because there were no jobs.

Of course, now that they have a job and should be happy, some union activist is going to try to convince them they shouldn't be happy.

The Real Problem

Other than a couple of like-minded Austrian bloggers, no one has bothered to complain about the real problem: The Fed pumping money supply like mad, while holding interest rates low.

Five Results

Prices rising faster than wages
Grossly distorted income inequalities
Non-existent price signals
Interest rates that encourage hardware and software solutions to eliminate employees
Equity and bond market bubbles

I blasted the Fed regarding these issues early Friday.

For details and truly educational reading, please see Money as Communication: A Purposely "Non-Educational" Fallacious Video by the Atlanta Fed.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Spaniards Expelled from Belgium for Abusing Illegal Immigrant Social Aid Handouts

Posted: 11 Jan 2014 12:53 PM PST

What would happen if the US suddenly kicked out illegal immigrants for abuse of free handouts and social aid?

Belgium did just that. The numbers are small, but the point is that it happened at all.

Via translation from Libre Mercado, please consider Spaniards, among Europeans expelled from Belgium's abuse of social aid programs.

The Aliens Office of Belgium withdrew permission of residence to 323 Spaniards in 2013 because they no longer meet the requirements, such as having an employment contract, being a student or have become self-employed, and thus prevent impose burdens exaggerated to the coffers of the Belgian Social Security. Spanish rank third in number of expulsions, behind only Romanians and Bulgarians.

In total, Belgium expelled a total of 2,712 European citizens for these reasons over the past year. This represents an increase from 2012, when it withdrew permission for 2,407 people to stay in the country.

European citizens have the right to freedom of movement within the territory of the European Union, but must meet certain requirements during your stay at a home outside the Member State.

The Belgian Foreign Office explained that the main reason for removing these permissions have to do with "unreasonable burden on the social system" involving these citizens, by not complying with the conditions required to Europeans.

Not only does this happen in Europe, it happens in spite of alleged freedom of movement clauses for Eurozone nations.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Damn Cool Pics

Meanwhile In Detroit

Posted: 10 Jan 2014 07:58 PM PST

Welcome to Detroit.

Ensuring 2014 is a Year of Action to Grow the Economy

Featured

Weekly Address: Ensuring 2014 is a Year of Action to Grow the Economy

In this week’s address, President Obama calls 2014 a year of action, which should start with Congress quickly passing emergency unemployment insurance for the 1.3 million Americans who lost this vital lifeline as they fight to find jobs and make ends meet.

Click here to watch this week's Weekly Address.

Seth's Blog : The feedback you've been waiting for

The feedback you've been waiting for

"You did a great job. This is exactly what I was hoping for. I wouldn't change a thing. You completely nailed it, it's fabulous."

Of course, that's not feedback, really. It's applause.

Applause is great. We all need more of it.

But if you want to improve, you should actively seek feedback. And that feedback, if it's more than just carping, will be constructive. It will clearly and generously lay out ways you can more effectively delight your customers and create a remarkable experience that leads to ever more customers.

If you're afraid of that feedback, it's probably not going to arrive as often as you'd like it to. On the other hand, if you embrace it as the gift it can be, you may decide to go looking for it.

Empty criticism and snark does no one any good. But genuine, useful, insightful feedback is a priceless gift.

Applause is good too.

• Email to a friend •

vineri, 10 ianuarie 2014

Mish's Global Economic Trend Analysis

Humorous Quote of the Day
Employment vs. Jobs Discrepancy - December 2013 Data
Greece Industrial Production Declines 5th Consecutive Month, Unemployment New High of 27.8%; How Long Can Greek Coalition Last?
Big Miss: Nonfarm Payrolls +74,000 vs. 205,000 Expected; Unemployment Rate 6.7% as Labor Force Shrinks by 347,000
Investors Most Bullish in Nearly 27 Years

Humorous Quote of the Day

Posted: 10 Jan 2014 07:39 PM PST

A tip of the hat goes to Huky Guru at Guru's Blog regarding the non-shocking announcement that "One of the rescued countries provided "misleading" information to the troika as the ECB"

"In some cases, the information was incomplete, particularly in a country, even misleading at the beginning of the program," says the company chaired by Mario Draghi in the European Parliament formulated to evaluate the work of the troika questionnaire.

Guru Commented "Just one country provided misleading information? And it took four years to realize?"

That's pretty funny, but actually it is a sign the ECB thinks the bottom is in. That's when these kind of revelations come out.

Yet, as Guru implies, it likely was every country that received a bailout, that fabricated data.

Going back further still, I find it hard to believe that the ECB and the Brussels nanncrats did not know upfront that Greece was not ready for Eurozone membership, and that Greece lied on its application.

And finally, regardless of what these guys think, it's highly doubtful the crisis is over. The biggest eurozone trials are yet to come.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Employment vs. Jobs Discrepancy - December 2013 Data

Posted: 10 Jan 2014 01:02 PM PST

The wide discrepancy between jobs and employment continues for a third month.

Jobs vs. Employment Discussion

Before diving into the details, it is important to understand limits on data, and how the BLS measures jobs in the establishment survey vs. employment in the household survey.

Establishment Survey: If you work one hour that counts as a job. There is no difference between one hour and 50 hours.
Establishment Survey: If you work multiple jobs you are counted twice. Neither the BLS nor ADP weed out duplicate social security numbers.

Household Survey: If you work one hour or 80 you are employed.
Household Survey: If you work a total of 35 hours you are considered a full time employee. If you work 25 hours at one job and 10 hours at another, you are a fulltime employee.

Following are numbers from today's BLS jobs releases.

December 2013 vs. December Prior Years

Category	DEC 2008	DEC 2009	DEC 2010	DEC 2011	DEC 2012	DEC 2013
Employed Household	143,369	138,013	139,266	140,836	143,212	144,586
Jobs Establishment	134,425	129,373	130,395	132,498	134,691	136,877

Monthly Averages December 2013 vs. December Prior Years

Category	DEC 2009	DEC 2010	DEC 2011	DEC 2012	DEC 2013
Yoy Change Household	(5,356)	1,253	1,570	2,376	1,374
Yoy Change establishment	(5,052)	1,022	2,103	2,193	2,186
Monthly Average Household	-446	104	131	198	115
Monthly Average Establishment	-421	85	175	183	182

Notice how closely in sync the household survey has been to the establishment survey in terms of average gains or losses. A divergence developed in 2013.

Here is the data I posted last month (I did not check for revisions).

November 2013 vs. November Prior Years

Category	Nov 2008	Nov 2009	Nov 2010	Nov 2011	Nov 2012	Nov 2013
Employed Household	144,100	138,665	139,046	140,771	143,277	144,386
Jobs Establishment	135,130	129,593	130,300	132,268	134,472	136,765

Monthly Averages November 2013 vs. November Prior Years

Category	Nov 2009	Nov 2010	Nov 2011	Nov 2012	Nov 2013
Yoy Change Household	(5,435)	381	1,725	2,506	1,109
Yoy Change establishment	(5,537)	707	1,968	2,204	2,293
Monthly Average Household	-453	32	144	209	92
Monthly Average Establishment	-461	59	164	184	191

Last month the discrepancy between reported employment and reported jobs was 191,000 - 92,000 = 99,000.

This month the discrepancy between reported employment and reported jobs is 182,000 - 115,000 = 67,000.

These discrepancies started in 2013.

I asked the BLS to take multiple social security numbers into consideration. They cannot because all they have is raw counts. ADP could, but wouldn't, citing privacy issues.

However, there are no privacy issues. A program would be trivial to write, but most likely one would not even have to do that. A sort utility extracting and counting duplicate social security numbers would suffice.

I believe Obamacare is the reason for the discrepancy.

Obamacare Effect

Prior to Obamacare
34 hours worked = 1 parttime job household survey
34 hours worked = 1 job establishment survey

Enter obamacare
Person cut back to 25 hours and takes a second job for 10 hours
Here is the new math

25 + 10 = 1 fulltime job on the household survey.
25 + 10 = 2 jobs on the establishment survey.

In my example, the household survey totals up all the hours and says, voilla! (35 hours = full time). So a few extra hours that people pick up working 2 part time jobs now throws someone into full time status – thus no surge in part-time employment, but there is a surge in jobs.

Establishment Survey Jobs Surge Ended This Month

Interestingly, the surge in jobs in the establishment survey ended today. See Big Miss: Nonfarm Payrolls +74,000 vs. 205,000 Expected; Unemployment Rate 6.7% as Labor Force Shrinks by 347,000.

Two Possibilities

Perhaps today's weak job report is a one-time thing. Some economists blamed the weather.
The other possibility is the Obamacare effect has mostly played out, and Establishment Survey results going forward will not get a multiple job boost for the rest of the year.

If the Obamacare multiple job surge has indeed played out, monthly establishment survey job gains are going to be weaker than most expect for 2014.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Greece Industrial Production Declines 5th Consecutive Month, Unemployment New High of 27.8%; How Long Can Greek Coalition Last?

Posted: 10 Jan 2014 10:26 AM PST

Those expecting an uptick in Greek GDP received some sobering news this past week. Macropolis reports Unemployment hit new high of 27.8 pct in October, set to rise further.

According to the Hellenic Statistical Agency (ELSTAT), the seasonally adjusted jobless rate in October stood at 27.8 percent from an upwards revised 27.7 percent in the month of September. After the previous months' revisions, the October rate now holds the new high.

Women lead the way in the unemployment stakes with 32.1 percent lacking jobs compared to 24.7 percent for men.

All age groups are severely impacted by the devastating impact of the Greek depression with the unemployment rate having roughly tripled for each bracket compared to October 2009. For 25-34 year olds it stands at 37.8 percent from 13; for 35-44 at 23.8 percent from 8.3; 20.3 percent for the 45-54 age group and 16.6 percent for the 55-64 year olds. Youth unemployment impacts more than half of those between 15 and 24 looking for a job with the rate standing at 57.9 percent.

Greek Industrial Production Declines 5th Consecutive Month

RT reports Greek Industrial Output Downturn Worsens In November.

Greece's industrial production decreased for the fifth consecutive month in November, and at a faster pace than in the previous month, with all of the major industrial sectors recording decline in activity, data released by the Hellenic Statistical Authority showed Thursday.

Industrial production fell a working-day adjusted 6.1 percent on an annual basis in November, following the previous month's 4.7 percent decrease.

Sequentially, industrial production dropped 4.8 percent in November, after falling 7.9 percent in October, the agency said.

During the January-November period, overall industrial production dropped 3.9 percent from the corresponding period of last year.

With these kinds of numbers I keep wondering how long the coalition government of Prime Minister Antonis Samaras can last.

Coalition Majority Reduced to Three Seats

Reuters reports Fragile Greek coalition's majority shrinks

Prime Minister Antonis Samaras's majority of 26 seats after last year's election has dwindled to the point where it raises the risk of political instability that could hamper recovery and Greece's ability to meet targets for its international bailout.

Samaras expelled lawmaker Byron Polydoras from the conservatives' parliamentary group after he refused to back the new tax law demanded by Greece's lenders.

His expulsion reduces the parliamentary group of Samaras' conservative-Socialist coalition government to 153 in the 300-seat parliament.

Samaras's coalition falls when three more seats go. Polls show that opposition party Syriza would likely win the next election.

Syriza party leader Alexis Tsipras has vowed to scrap the country's bailout agreement as noted in Prisoner's Dilemma Game in Greece.

Given Greece's current account surplus (ignoring interest on bailout debt), Greece would indeed be in a good position to default.

When they do, and I believe they will, it will be interesting to watch the reactions of nannycrats in Brussels and Angela Merkel supporters in Germany.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Big Miss: Nonfarm Payrolls +74,000 vs. 205,000 Expected; Unemployment Rate 6.7% as Labor Force Shrinks by 347,000

Posted: 10 Jan 2014 08:38 AM PST

Initial Reaction

Once again, the stats reveal much weakness.

Big Miss: Nonfarm Payrolls rose by 74,000. The median forecast of 37 economists was 205,000 jobs according to USA Today.
The civilian institutional population rose by 178,000 but the labor force declined by 347,000.
Nonfarm payroll growth is the smallest number since January 2011.

Clearly, this is yet another bad report, with people dropping out of the labor force like mad.

Blaming the Weather

Amusingly, USA Today reports that "Paul Ashworth of Capital Economics says severe winter was the main culprit behind the disappointing job gains."

Did economists not know it was cold outside when they gave USA today their estimates? I guess not.

December BLS Jobs Statistics at a Glance

Nonfarm Payroll: +74,000 - Establishment Survey
Employment: +143,000 - Household Survey
Unemployment: -490,000 - Household Survey
Involuntary Part-Time Work: +48,000 - Household Survey
Voluntary Part-Time Work: -127,000 - Household Survey
Baseline Unemployment Rate: -0.3 to 6.7% - Household Survey
U-6 unemployment: +0.0 to 13.1% - Household Survey
Civilian Non-institutional Population: +178,000
Civilian Labor Force: -347,000 - Household Survey
Not in Labor Force: +525,000 - Household Survey
Participation Rate: -0.2 at 62.8 - Household Survey

Additional Notes About the Unemployment Rate

The unemployment rate varies in accordance with the Household Survey, not the reported headline jobs number, and not in accordance with the weekly claims data.
In the past year the population rose by 2,395,000.
In the last year the labor force fell by 547,000.
In the last year, those "not" in the labor force rose by 2,943,000
Over the course of the last year, the number of people employed rose by a mere 1,374,000 (an average of 114,500 a month)

The population rose by over 2 million, but the labor force fell by over a half-million. That's your declining unemployment rate in a nutshell.

Note last bullet point above.

The household survey shows a gain of employment averaging a mere 114,500 a month. Meanwhile, the payroll survey shows a rise of 182,000 jobs a month.

The rational explanation is a massive growth in part-time jobs.

I asked the BLS to investigate this but they do not have the data. ADP has the data but denied the request citing privacy issues.

There are no privacy issues - All ADP need do is take counts of people working more than one job and compare to historical trends.

December 2013 Jobs Report

Please consider the Bureau of Labor Statistics (BLS) December 2013 Employment Report.

The unemployment rate declined from 7.0 percent to 6.7 percent in December, while total nonfarm payroll employment edged up (+74,000), the U.S. Bureau of Labor Statistics reported today. Employment rose in retail trade and wholesale trade but was down in information.

Click on Any Chart in this Report to See a Sharper Image

Unemployment Rate - Seasonally Adjusted

Employment History Since January 2009

click on chart for sharper image

Change from Previous Month by Job Type

Hours and Wages

Average weekly hours of all private employees fell 0.1 to 34.4 hours. Average weekly hours of all private service-providing employees rose 0.1 to 33.2 hours.

Average hourly earnings of production and non-supervisory private workers rose $0.05 to $20.32. Average hourly earnings of private service-providing employees rose $0.03 to $20.12.

Real wages have been declining. Add in increases in state taxes and the average Joe has been hammered pretty badly. For 2013, one needs to factor in the increase in payroll taxes for Social Security.

For further discussion of income distribution, please see What's "Really" Behind Gross Inequalities In Income Distribution?

BLS Birth-Death Model Black Box

The BLS Birth/Death Model is an estimation by the BLS as to how many jobs the economy created that were not picked up in the payroll survey.

The Birth-Death numbers are not seasonally adjusted, while the reported headline number is. In the black box the BLS combines the two, coming up with a total.

The Birth Death number influences the overall totals, but the math is not as simple as it appears. Moreover, the effect is nowhere near as big as it might logically appear at first glance.

Do not add or subtract the Birth-Death numbers from the reported headline totals. It does not work that way.

Birth/Death assumptions are supposedly made according to estimates of where the BLS thinks we are in the economic cycle. Theory is one thing. Practice is clearly another as noted by numerous recent revisions.

Birth Death Model Adjustments For 2012

Birth Death Model Adjustments For 2013

Birth-Death Notes

Once again: Do NOT subtract the Birth-Death number from the reported headline number. That approach is statistically invalid.

In general, analysts attribute much more to birth-death numbers than they should. Except at economic turns, BLS Birth/Death errors are reasonably small.

For a discussion of how little birth-death numbers affect actual monthly reporting, please see BLS Birth/Death Model Yet Again.

Table 15 BLS Alternate Measures of Unemployment

click on chart for sharper image

Table A-15 is where one can find a better approximation of what the unemployment rate really is.

Notice I said "better" approximation not to be confused with "good" approximation.

The official unemployment rate is 6.7%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6.

U-6 is much higher at 13.1%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Labor Force Factors

Discouraged workers stop looking for jobs
People retire because they cannot find jobs
People go back to school hoping it will improve their chances of getting a job
People stay in school longer because they cannot find a job
Disability and disability fraud

Were it not for people dropping out of the labor force, the unemployment rate would be well over 9%.

And the discrepancy between the Household Survey and the Establishment survey sticks out like a sore thumb.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Investors Most Bullish in Nearly 27 Years

Posted: 10 Jan 2014 07:41 AM PST

Sentiment is not a timing indicator, but it is an indicator of problems. And bullish sentiment is greater today than at any time in the past 27 years according to Asbury Research.

Please consider When Being Bullish Can Become Problematic.

Investor sentiment is an important component of financial market analysis because it tells us what investors are collectively thinking. More specifically, when a certain type of investor gets either too bullish or too bearish on an asset, it usually means something important — that investors have become "off-sides" — and typically precedes a important trend reversal in the price of that asset.

One of the dozen or so data series that we track, the Investors Intelligence data, was particularly interesting this past week because the Bulls minus Bears subset of this series (blue line, lower panel of chart below) rose to an historic most bullish extreme that hasn't been seen since February 1987.

More simply stated, the stock market newsletter writers that have comprised this series since 1963 have not been this bullish in almost 27 years.

The red highlights on the show that, at 46, this series as at an historic high extreme, and that similar or lesser extremes have coincided with or led some of the most important peaks in the S&P 500 (black bars, upper panel) in recent history including October 2007, April 2010, and 2011.

Sentiment can always get more extreme, and indeed that is how it reached higher levels than the stock market peaks in 2000 and 2007. Thus my caution "sentiment is not a timing indicator."

Nonetheless, history suggests those plowing into the market today are going to regret it.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

sâmbătă, 11 ianuarie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Damn Cool Pics

Damn Cool Pics

Ensuring 2014 is a Year of Action to Grow the Economy

Seth's Blog : The feedback you've been waiting for

The feedback you've been waiting for

More Recent Articles

vineri, 10 ianuarie 2014

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

Pagini

Persoane interesate

Arhivă blog

sâmbătă, 11 ianuarie 2014

vineri, 10 ianuarie 2014

Pagini

Persoane interesate

Arhivă blog

Subscribe to