I have a hard time keeping up with these things. People haven't been talking about the economy much since the election. I think there should be a "recession-o-meter" with different colors to tell us. Green could mean that the economy is great, and red could mean that we're completely screwed. Maybe there will be some kind of announcement on CNN or something?
I think that we have been out of recession since November 2001, which makes this a pretty wimpy-ass recovery.
And one where average salary increases for workers are a whopping 2.4% on average while CEOs saw their salaries increase by 12.6% in the same period.
Prices are rising faster than American paychecks http://www.mcall.com/business/local/all-wagesapr17,0,2716967.story?coll=all-businesslocal-hed For the first time in 14 years, the American work force has in effect gotten an across-the-board pay cut. The growth in wages in 2004 and the first two months of this year trailed the growth in prices, compounding the squeeze from higher housing, energy and other costs. The result is that people such as Victor Romero are finding themselves falling behind. The 49-year-old film-set laborer had to ditch his $1,100-a-month Los Angeles apartment because his rent kept rising while his pay of $24.50 an hour stayed flat. ''There's no such thing as raises anymore,'' Romero said. This is the first time that salaries have increased more slowly than inflation since the 1990-91 recession. While salary growth has been relatively sluggish since the 2001 downturn, inflation had stayed relatively subdued until last year, when the consumer price index rose 2.7 percent. But average hourly wages rose only 2.5 percent. The effective 0.2-percentage-point erosion in workers' living standards occurred while the economy expanded at a healthy 4 percent, better than the 3 percent historical average. At the same time, corporate profits hit record highs as companies got more productivity out of workers while keeping pay raises down. Some see climbing profits and stagnant wages as not only unfair but ultimately unsustainable. ''Those that are baking the larger pie ought to see their slices expanding,'' said Jared Bernstein, an economist with the liberal Economic Policy Institute in Washington. On the other hand, higher wages could hurt the economy by stoking inflation. Employers might pass the costs on to consumers in higher prices, and that in turn might prompt the Federal Reserve to raise interest rates even more aggressively, possibly slowing the recovery or even triggering a recession. For now, workers' wallets are being pummeled by something of a perfect storm of economic forces: a weak job market, rising health insurance premiums and inflationary pressures. The jobless factor The biggest factor is the slack employment market, which means there is little pressure on businesses to boost pay. ''They take advantage of you because there's no work and anyone will work for anything,'' Romero said. Although the unemployment rate has dropped to a relatively low 5.2 percent, that figure doesn't count the hundreds of thousands of jobless people who've given up their searches and dropped out of the labor market at a greater rate than any time since 1988. At the same time, the cost of health premiums has skyrocketed, eating into the pool of corporate cash set aside for raises. While pay increased only about 2.4 percent last year, benefit costs jumped almost 7 percent. Health care's bite With benefits factored in, workers' total compensation did outpace inflation in 2004, even if they didn't see it in their paychecks. But employers also are requiring workers to pay a greater share of their premiums. ''Health care has eroded the wage base,'' said Janemarie Mulvey, chief economist with the Employment Policy Foundation, a business-funded think tank in Washington. ''In the long run, we can't continue like this. If health care keeps crowding out wages forever, something's got to give.'' The squeeze is especially intense on the 47 percent of the work force whose employers don't directly provide their health insurance. For lower-income workers, who are more likely to be uninsured, the falling value of their wages is even more serious, because they're more likely to live paycheck to paycheck. And rising food and energy prices take a higher toll on the poor than on the rich. Historically, periods when wage growth is outpaced by inflation rarely last more than 18 months. That's partly because businesses don't want their employees' living standards to fall, because that injures morale, said Trewman Bewley, a Yale University economist who has studied wage activity during economic downturns. Many economists figure it's only a matter of time until workers can pry more money out of their employers to catch up to inflation again. If economic growth remains robust, as many forecasters predict, workers may gain greater leverage to negotiate wage hikes. ''Chances are that those workers that have problems getting by because of higher fuel prices will probably tell their employers, 'I can't make it,''' said John Lonski, chief economist at Moody's Investors Service. So far that hasn't worked for Brian Chartier. The 29-year-old Glendale, Calif., resident handles inventory for a Los Angeles manufacturing company. No one there, he said, has gotten a raise in two years. 'There are no jobs' ''They're able to do this and I haven't quit, because where am I going to go?'' he said. ''There are no jobs.'' While his salary remained flat, rising health-care premiums kept eating up more and more of his take-home pay, so he dropped out of his employer's insurance program. His rent also is climbing. As Chartier loaded bags of groceries into his Honda Civic last week, he boasted that they were full of bargains. ''I don't get a single thing that's not on sale,'' Chartier said. ''I can't afford to anymore.'' Despite their wages failing to keep pace with inflation, American consumers have kept shopping. Consumer spending has continued to rise. Analysts say that's partly because some shoppers are thinking less about their paychecks and more about their biggest asset: their homes. Taking shelter Home prices have risen 9 percent nationwide since last February, sheltering consumers, and the economy, from much of the pinch of higher prices. ''There's been a wealth effect afoot throughout much of the recession and the recovery,'' said Bernstein of the Economic Policy Institute, ''because no matter what people's incomes were doing, their wealth was improving � their biggest assets, their homes, were accruing.'' As inflation sparks higher interest rates, most economists expect the housing market to cool, making shoppers more dependent on their paychecks. And even those who have seen their paper wealth rise phenomenally aren't happy about rising costs and stagnant pay. Corina Swatz has seen the value of her Los Angeles home triple during the 10 years she's owned it. But neither she nor her husband has gotten a raise in more than a year. At the same time, gas prices have forced them to shell out $55 to fill the tank of their Chevy Tahoe. ''I used to spend $600 a month [on groceries]. Now I spend $800,'' Swatz, a mother of two, said as she made her weekly Costco run last week. The increased value of her home gives her only so much solace. ''We're hanging in there.'' Economy needs spending The danger is that people such as Swatz, despite their home-equity cushion, may rein in their spending and pull the rug out from under the economic expansion. That's what Gabriel Torres has done. The 56-year-old cook hasn't gotten a raise in years but pays ever higher prices to fill his Nissan X-terra. He and his wife have come up with a solution: cut down on driving. ''We don't go out much,'' Torres said. ''We used to. But now we only drive when we really have to.'' Nicholas Riccardi is a reporter for the Los Angeles Times, a Tribune Publishing newspaper.
From the article above... "Although the unemployment rate has dropped to a relatively low 5.2 percent, that figure doesn't count the hundreds of thousands of jobless people who've given up their searches and dropped out of the labor market at a greater rate than any time since 1988."
"Total nonfarm payroll employment increased by 110,000 in March, and the unemployment rate declined to 5.2 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported..." http://www.bls.gov/news.release/empsit.nr0.htm
You've been spouting this for a long time, now. Quantify your claims. How many people have dropped out, moon? My answer will be not enough to meaningfully move the unemployment rate. This excuse you posted doesn' t pass muster.
well from what i understand the economy was doing pretty damn good but the gas prices are finally starting to take their toll on consumer spending. that being said oil prices are topping out for the short term.
The job market for software engineers is in the worst shape in decades. Ask a employee from BMC software if you don't agree.
I'm not sure about the latest and greatest way to call a recession but I do know that we have borrowed money at rates that cause my head to spin. And govt. debt or spending (whichever way you say it) causes inflation. All inflation is caused by manipulation of debt/money supply- paper with green ink has zero value so the value is taken by the confidence of those who finance the debt. As more and more is borrowed to pay off the debt and fuel spending it breeds less confidence in the ability to repay. Interests start going up and eventually the little paper on green ink loses big chunks of buying power- walla! INFLATION. So inflation is here and the tsunami is coming. (has been hid over the past decade because China and other stupes have bought up our debt and manufactured goods at very cheap slave labor prices- so we had our cake and we ate it too. We could keep borrowing and keep spending) WOW- fountain of youth, I mean money. We will be the first nation in history to borrow our way to wealth and prosperity. Prices are going up. - That is recession- Big time up over the next 24 months. But if things really got bad, like our debt is not covered and our derivative exposure collapses or both then prices will plummet. That is called de-flation or Depression depending on how old you are.
Software engineers have a commoditized skill set that can be done in low wage countries more efficiently and much cheaper. There is good reason why that specific job market is not strong, and I'm guessing it will never rebound in this country. If I were a software engineer I would consider acquiring a new skill set.
That quote was from the article, which proves that the information I have been "spouting" for a long time is accurate, unlike any of the idiocy that passes as a post from you. According to the article, "hundreds of thousands." It is hard to quantify data that is not collected or kept track of by the government, but 200,000+ is a lot of people who have simply given up looking because the employment market is so bad. And of course, YOUR answer is backed up by data, right? I thought not. Certainly not to an ostrich like you.
What you said is true. However, most of us have a commoditized skill set but still need a job to make a living and buy tickets to the Rockets games. The key is balance of trade. What do we sell to buy products from other countries? We used to sell a lot of software. Now, more and more software is written in other countries. What new exports have we found to balance this shift in software industry?
