The Good News Economist

When all you read is gloom, turn here for a much different perspective.

Thursday, May 28, 2020

US Continuing Jobless Claims Fall by 3.86M

Continuing Jobless Claims in the United States decreased significantly last week to 21,052,000 from a record high of 24,912,000 in the previous week.

The numbers smashed the gloomy market forecast of 25.8 million and showed the first decrease in continuing claims since the corona-virus pandemic started in March.  Stated most succinctly:  3.86M *less* workers continued their claim for unemployment payments than in the week prior!  The incorrect upward forecast had predicted that nearly 1M *more* workers would be added to those already receiving claims.

The steep decline in these continuing claims was the first glimmer of hope for a job market frozen by COVID-19.  Continued declines of such magnitude (nearly 4M per week!) in the coming weeks could be significantly good news and measure just how many jobs have been permanently lost vs those only temporarily furloughed.


Friday, July 5, 2019

(Never Forget) Jobs Creation Continues in June

"Recession concerns are overblown" said Gus Faucher
chief economist at PNC Bank.

"There is no indication the labor market is in trouble or
the broader U.S. economy."

The economy added
224,000 jobs in June, surging
past expectations and helping
ease fears that economic growth might be losing momentum.

The unemployment rate
remains near a
half-century low.
The rate has
been at or below 4 percent for
more than a year, and many
companies say they are struggling to find enough workers
to fill all their job openings.

The strong numbers exceeded
analysts' expectations of only

Thursday, June 29, 2017

Stress Tests Clear All Banks -- Most to Issue Payouts Above Expectations

Remember the panic back in 2009?  All the banks were going to fail, right?

Remember we reported that "Tarp was working?"

Remember the stress tests?

Big U.S. banks plan to increase dividend payouts and share buybacks to their highest levels in years after the Federal Reserve on Wednesday approved capital plans for all 34 firms taking part in its annual stress tests.

The paybacks announced by banks following the tests’ release Wednesday were in many cases *above* what investors had expected.

Fed governor Jerome Powell said the stress-test process, now in its seventh year, “has motivated all of the largest banks to achieve healthy capital levels.”

Because of the great recession and potential financial meltdown, the stress tests were put in place.  With the tests in mind banks develop risk-management systems each year to meet the Fed’s test expectations.
This year’s passing grades suggest that those efforts have paid off. Banks today are better capitalized and more conservatively managed than in the years before the financial crisis and have better insight into risks lurking in their own books.
So bottom line, TARP did work.

Monday, May 29, 2017

Boulder County Colorado now boasts historically low unemployment at 1.8%

Just 3,398 people were looking for work in Boulder County Colorado in April 2o17, giving it the lowest urban unemployment rate in the country -- a skinny 1.8 percent.
While many would consider this great news, it's giving employers, who have thousands of jobs to fill, heartburn.
"We keep thinking it's hit rock bottom," said Angela Spinelli, director of talent acquisition for UCHealth. "but it keeps going lower. We're all trying to figure out how to get out in front of it."

(Stephanie Swartz)
UCHealth is trying to fill 200 jobs at its new Longs Peak Hospital in Longmont. The competition for talent is so fierce that the minute a viable candidate pops into view, recruiters rush to bring them in for an interview.
"When the market crashed (during the Great Recession), you could find a candidate and interview them three weeks later. Now you have to do it within the week because they are being interviewed by multiple companies," she said.
Even economists have entered the how-low-can-it-go sweepstakes debate that is front and center in the region.
"It's never been lower here than it's been in March and April," said Brian Lewandowski, an economist with CU's Leeds School of Business. "These are historic lows."
Modern records on the region's unemployment date back a quarter century, to 1990. According to this data, the only time Boulder County's unemployment rate was lower was for a brief time in 2000, when it hit 2 percent right before the tech bubble burst, Lewandowski said. It came close again in 2007, right before the financial crash, when it hit 2.8 percent.
Unemployment rate numbers, like other economic indicators, are revised as data is checked and analyzed post-collection. These latest numbers are not seasonally adjusted, and when they are they may move upward, according to Ryan Gedney, senior economist at the Colorado Department of Labor.
"I would imagine if Boulder isn't the lowest, it will be pretty darned close when the revisions are done in a couple of months," he said.
Out on the street, companies are scrambling to find new ways to recruit workers and to keep those they've recently hired, on the job.
Claudia Quezada does drywall work on the third floor of UCHealth-Longs Peak Hospital, 1750 Ken Pratt Blvd., May 24, 2017.
Claudia Quezada does drywall work on the third floor of UCHealth-Longs Peak Hospital, 1750 Ken Pratt Blvd., May 24, 2017. (Lewis Geyer / Staff Photographer)
The University of Colorado Leeds School of Business has 900 graduates to place this summer. For the past several years the school has enjoyed a placement rate of 90 percent plus. Thanks to the shortage of workers, average salaries have risen 3.5 percent, according to Katie Connor, director of career development for the school. New grads, on average, command salaries of $53,000.
"The economy has been very good to us," Connor said, "and it's providing great opportunities for our students."
But the Leeds School is seeing employers arriving on its doorstep earlier and earlier in the education process.
"Employers have had to step up their game," Connor said. "They want freshman to know who they are so they can attract those top students for internships in their sophomore and junior years and then hire them. Employers are on campus a lot more often."
Charles Schwab is one of those employers who shows up early and stays late at the Leeds School. It has 400 openings at its Colorado operations center in Lonetree, south of Denver, according to Brian McDonald, who oversees the company's retail, stock plan, and stock compliance services.
"The war for talent is not lost on us," McDonald said. "Financial services wasn't and still isn't the most popular industry when it comes to hiring, especially when you think about the 2008 and 2009 financial crisis.
Pavement is layed down in the parking lot in front of UCHealth-Longs Peak Hospital, 1750 E. Ken Pratt Blvd., Wednesday. May 24, 2017
Pavement is layed down in the parking lot in front of UCHealth-Longs Peak Hospital, 1750 E. Ken Pratt Blvd., Wednesday. May 24, 2017 (Lewis Geyer / Staff Photographer)
"We're finding that if you want top talent, you have to start in the career trajectory earlier. We did not have to do that 10 years ago."
McDonald said his company is able to fill most of its entry level jobs, but it has had to accelerate the pace at which it bumps salaries for those new hires because otherwise they loose them to other firms quickly.
"To retain talent is just as hard as to attract it. We have to stay incredibly competitive," he said.
UCHealth is also shifting its hiring stance, Spinelli said. "We find that we have to go out-of-state more often for our niche positions, and we would rather hire locally."
In response UCHealth has begun developing internal programs to train its own workers for some of its most demanding jobs.
"We're doing a lot of "grow-your-own" programs to develop our work force," she said.
Despite living with a chronically tight labor market and an overheated economy, no one is predicting crashes like those that occurred after the bust in 2001 and the housing collapse seven years later in 2008. Of course they're are not ruling them out entirely either, given the political uncertainty at home and abroad.
The economic expansion underway is 93 months old, according to Gedney, of the Colorado Department of Labor and Employment. That's younger than the 120-month expansion in the 1990s, he said.
Still the lack of workers is starting to slow the economy here and nationwide, he said. "The problem with low unemployment is that there are job openings and no one to fill them. This could cause businesses to say 'we can't find workers so let's figure out how to streamline things. It's natural for growth to slow," he said.
There is some comfort, however, for employers who are wringing their hands over unfilled jobs. Things could always be worse.

And for those looking for work -- guess what? -- this is just about as good as it gets.

Back just a few short years ago it was very hard to convince most folks that:  The Majority is always wrong! And here we are...
Thanks to: Jerd Smith: 303-473-1332, or

Friday, November 4, 2016

Unemployment Rate Drops to 4.9 percent; Wages Rise

When Obama assumed office, the unemployment rate was still rising sharply. It topped out at 10 percent in October 2009, hovering just below that level for the next year, before beginning a steady decline at the end of 2010 that has persisted into early-2016 and breaking through the 5 percent mark at the beginning of 2016.

The government, delivering the last major snapshot of the economy before Election Day 2016, reported on Friday that employers added 161,000 workers in October, a performance that suggested a healthy outlook for the months ahead.
The official unemployment rate dropped to 4.9 percent, from 5 percent. And average hourly earnings rose 2.8 percent year over year, a level not reached since 2008.
“It was pretty positive across the board,” said David Berson, chief economist at Nationwide Insurance, adding that “most importantly, we got a nice jump in average hourly earnings and that actually corresponds with other data.”
Does anyone out there remember what the economy was like when Obama took office?!

Saturday, November 28, 2015

Debunking The Negativity of Declining Labor Participation Rates

Many have tried to dilute all the incrediblely improving US economy jobs numbers -- which now show gains of nearly 13,500,000 new private sector jobs since the great recession.  Additionally folks have tried hard to discount the unemployment rate now hovering near 5 percent.  

The only remaining negative mantra continues to be "Declining Labor Participation Rates."  The "logic" goes something like this:  even though the unemployment rate is at 5%, the reason is because many people in the jobs market have "given up hope" and stopped looking for work.  Although you can always find examples of folks who have given up looking, the broad statement does not prove out in the general population.  In fact, the main reason today that folks have stopped looking for work:  THEY FEEL SECURE ENOUGH TO RETIRE!

The labor force participation rate, as defined by the Bureau of Labor Statistics, is “the percentage of the population [16 years and older] that is either employed or unemployed (that is, either working or actively seeking work).”
As the BLS has explained well before the great recession,  Every year after 2000, the rate declined gradually, from 66.8 percent in 2001 to 66.0 percent in 2004 and 2005. According to the BLS projections, the overall participation rate will continue its gradual decrease each decade and reach 60.4 percent in 2050.  Why?  Here are the BLS reasons:

1) The aging of baby boomers. A lower percentage of older Americans choose to work than those who are middle-aged. And so as baby boomers approach retirement age, it lowers the labor force participation rate.
2) A decline in working women. The labor force participation rate for men has been declining since the 1950s. But for a couple decades, a rapid rise in working women more than offset that dip. Women’s labor force participation exploded from nearly 34 percent in 1950 to its peak of 60 percent in 1999. But since then, women’s participation rate has been “displaying a pattern of slow decline.”
3) More young people are going to college. As BLS noted, “Because students are less likely to participate in the labor force, increases in school attendance at the secondary and college levels and, especially, increases in school attendance during the summer, significantly reduce the labor force participation rate of youths.”
So no matter who is president or who controls the congress -- and independent of the health of the economy -- the BLS projected in 2006 that labor force participation rates were going to go down.
Further another report from Shigeru Fujita at the Federal Reserve Bank of Philadelphia on Feb. 6, 2014,  teases out the relative impact of various causes for the declining labor force participation rate. 
However, Fujita concluded, “Almost all of the decline (80 percent) in the participation rate since the first quarter of 2012 is accounted for by the increase in nonparticipation due to retirement. This implies that the decline in the unemployment rate since 2012 is not due to more discouraged workers dropping out of the labor force."  (See page two of the report linked above).
So in fact what has occurred is two-fold... job creation is constant and retirement conditions have improved!
Fujita further concludes:  "The significant rise in retirement in the past three years is clearly related to the retirement of baby boomers. Remember that the first cohort of baby boomers was born in 1946. Importantly, this wave of retirements could have started earlier than three years ago. However, a plausible conjecture is that the 2008 financial crisis and associated loss of wealth might have had the effect of delaying their retirement age, while the subsequent recovery of financial wealth has allowed more of them to retire in the past few years."

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