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TakeALeftTurn

(316 posts)
Fri May 31, 2013, 07:28 AM May 2013

Disposable incomes continue their relentless decline - down over $50bn so far this year [View all]

http://2.bp.blogspot.com/-tVaV9k1aJXE/UG29L-kE92I/AAAAAAAAAP4/rx4tbsBm-Mk/s400/Real+Median+Household+income.jpg

So far this year :-

131,000 full time jobs have been created
141,000 part time jobs have been created
291,000 people have taken an additional part time job (291,000 more multiple job holders).

This gives an increase in total wages of around $9bn (being generous).

However the Fiscal Cliff deal imposed tax hikes of $200bn on the middle class and below.
So far this year taxes have risen by $66bn

Disposable incomes have declined by around $57bn so far this year.

It is hardly surprising that the latest economic data indicates that the US is on the brink of recession. (See the blue line.)
http://www.demeadville.com/baro.html

Other factors
Hours worked is the same as January so there is no difference.

Inflation in basic necessities is higher than wage rises, particularly in things like food and gas.
The $57bn decline in disposable incomes is a significant understatement.

Labor rates will continue to be pressured by the huge over hang in the global labor supply and by increases in real unemployment.

Real unemployment has gone up by around 330,000 people since the start of the year.
(Only 272,000 new people have found jobs and 150,000+ jobs a month need to be added for flat unemployment due to population increases.)
Large numbers of people have dropped out of the labor force because there simply aren't enough jobs out there.

Real unemployment
http://www.shadowstats.com/alternate_data/unemployment-charts

When Obamacare is fully implemented in 2014, Healthcare spending will increase by around $300bn.
Almost all of it will be paid for by the middle class.
It will take around $300bn out of middle class pockets, that won't be spent on everything else.
As more people become aware of the expected 30 to 100% rises in Healthcare premiums next year, they are likely to start saving up for it and reducing their spending.
We have already seen a decline in credit card debt of around $9bn recently.

The recent 10% rises in house prices are revealed to be concentrated in the previously greatest bubble areas.
The first entrant hedge funds that bought up thousands of properties to rent out since 2009, are now getting out of the market.
Mortgage applications recently took a nose dive, largely due to the recent 20 basis points increase in average new mortgage rates.

New housing starts declined by 16.5% in April.

Things are going to get much worse in 2014.

Appendices

1. Aggregated jobs numbers for 2013 - jobs data without the hype

Employment data aggregated January to April 2013

I haven't seen the jobs numbers (NFP's) totalled up by month anywhere else, so I thought I would do it.

Household Survey
Total 274,000
Part time jobs 143,000
Full time jobs 131,000

Average 68,500 jobs per month

Establishment (business survey) - the numbers that get quoted in the media headlines

Total 754,000

Average 188,500 jobs per month

The difference between the two reports

The difference of 480,000 between the two reports can largely be accounted for by :

1) The Household survey does not count people who start a 2nd or 3rd job (291,000)
These are almost exclusively low paid part time jobs.

2) Overstatements on the BLS Birth/Death numbers of around 133,000. See 2.

2. Business start ups. The BLS Birth Death model is wrong

The number of new business start ups is declining and the number of people in those start ups is also declining.

During Bush and Clinton 11.3 people per thousand were employed in new business start ups.
The figure for the Obama period is 7.8 per thousand.

The number of new business start ups per thousand population is also declining.
For a long period the number was around 20.
Recently it has gone down to 19.

The reasons given for the decline in new business start ups are :-
Occupational licensing regimes
The increase in other government regulations
General economic uncertainty

New regulations are killing Business Start Ups and Jobs
http://www.insideronline.org/feature.cfm?id=355

New business start ups are declining.
In 2011 there were 543,000 new business start ups.
In 2012 this declined to 513,000.
http://www.cnbc.com/id/100649473

Yet despite this trend of fewer new businesses each year, the BLS are still estimating an increase in their Birth/Model numbers for the number of people employed in new businesses.

If a similar thing is happening now, to 2012, we would expect there to be a decline in the Birth/Death model of about 20,000 per month - year to year.
This would show a cumulative minus 80,000 jobs from January to April, whereas the Birth/Death model has reported a cumulative +53,000,- an overstatement of 133,000 jobs so far this year.
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kr HiPointDem May 2013 #1
Finally. A President and Congress that can stand up to special interests like the middle class. MannyGoldstein May 2013 #2
Indeed. Fearless May 2013 #19
Blankfein Turbineguy May 2013 #3
Is there a source for "new regulations killing stat-ups" that isn't Heritage Foundation? JHB May 2013 #4
That is why I couched it with "reasons given" TakeALeftTurn May 2013 #5
I know that the Heritage Foundation is a right wing Neocon think tank TakeALeftTurn May 2013 #6
And you probably won't hear anybody talking about it, especially the Reich-wing. Egalitarian Thug May 2013 #10
All of what you say is true TakeALeftTurn May 2013 #11
Part of the Big Squeeze. Egalitarian Thug May 2013 #12
no capital, no market. HiPointDem May 2013 #15
It's also the quality of the jobs SoCalDem May 2013 #7
Exactly TakeALeftTurn May 2013 #8
and the hit to the family is immeasurable as well SoCalDem May 2013 #9
Well what we need ctsnowman May 2013 #13
and that's exactly what we're going to get!! isn't that great!! they're expanding h1b visas and HiPointDem May 2013 #17
I feel your pain. ctsnowman Jun 2013 #23
Disposable Income? 4Q2u2 May 2013 #14
k/r marmar May 2013 #16
should we expect anything less og1 May 2013 #18
Welcome to DU my friend! hrmjustin May 2013 #20
Welcome to DU, are you equating the Bushs with the Clintons? Have you been on DU uppityperson May 2013 #21
Sorry, TakeALeftTurn, I think your left turn was just to keep you mountain grammy May 2013 #22
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