Post-pandemic US GDP rate compared to G20 countries

[antlerradar]

A recession is when your neighbors wages are not increasing as fast as prices.

A depression is when your wages are not increasing as fast as prices.

Fair or not, just about everyone is or knows someone that is struggling because their wages are not keeping up.

 

[Big Sky Guy]

Yes, inflation is a legitimate item that makes people "feel" financially less well-off. Fed released its survey of Family Finances and it is hard to find something to be concerned about. Link attached, although I doubt 99.9% of the people care enough to look at it. It appears that Americans are better off (on average, of course), but feel worse about it. I do wonder if measurement methods are leading to problems in understanding the data, but I have worried about this for a long time.

View attachment 299546

https://www.federalreserve.gov/publications/files/scf23.pdf

Overlay that with rent or housing prices and I think that is at least 50% of the angst. 3% raise and housing has gone up 50-100% in similar time frame that math doesn’t add up when housing cost makes up such a large part of most peoples budgets. Add on interest rates and it’s pretty crazy. We could (or maybe “would” is the correct term as I hear all these new loan programs on radio now - 40 year mortgage etc.) not buy our house again and I would say the same is true for most all of those that bought 2020 and before. A lifetime of equity in your home in 5 years sure seems like a “bubble” but as they say:

“Yesterday is history, tomorrow’s a mystery and today is a gift that’s why they call it the present!”

 

[AlaskaHunter]

The economy always has cycles, no matter which political party is in office. The current cycle has been an incredibly long up cycle, basically from back during Obama, continuing trough Trump, and now through Biden. History says it will down cycle at some point, as it always does. Personally, I feel it all follows home construction cycles. Eventually everyone who can afford a house, and lots who can't, buy one. When housing slows, everything else follows. Home demand is starting to decline, prices will follow,

Unemployment rate is good news. Today at 3.8%, back in 2009 it peaked at 10% then steady decline to 3.5% just before the pandemic hit.

The supply of single family houses is almost half of pre-pandemic levels so even though demand has decreased with mortgage rates near 8%, the low supply has kept prices high.

Is there any country in the world that has recovered stronger from the Pandemic compared to the US in terms of unemployement, GDP, reduction of inflation?

 

[BigHornRam]

Also post-pandemic unemployment rates have been low....3.8% is low by historic perspective.

Is there any country in the world that has recovered stronger from the pandemic compared to the US?

Low unemployment rate is misleading. Long term this is going to bite US in the ass.

'The most chilling metric of all': Mike Rowe warns that 7 million American men are 'done' looking for work and have 'punched out' — why that's a serious problem

It’s taking a toll on multiple industries.

finance.yahoo.com

 

[JDH]

Low unemployment rate is misleading. Long term this is going to bite US in the ass.

'The most chilling metric of all': Mike Rowe warns that 7 million American men are 'done' looking for work and have 'punched out' — why that's a serious problem

It’s taking a toll on multiple industries.

finance.yahoo.com

I would have to agree. I'm a construction PM and everyone is short handed or has material supply issues still. This means the daily crews are smaller and I can't count the times I've offered to pay OT and very few people will take me up on it.

I don't think it will really happen due to the way people think about blue collar work, but I keep hearing people say that in a few years plumbers will make more than doctors.

 

[SAJ-99]

Is there any country in the world that has recovered stronger from the Pandemic compared to the US in terms of unemployement, GDP, reduction of inflation?

No.

Housing is a mess, but at least the transactional part has reacted rationally to the increase in rates. What is missing is that jobs in the industry remain robust. Somehow the feedback mechanism between rates, jobs, supply, and demand is broken, or at least twisted someway.

Even that doesn't fully explain the general dismal view of the economy. In many other countries (UK for example), mortgages are floating rate so rate increases are felt more directly. In the US, we can (and did) get 30yr fixed rate mortgages which insulates a large % of the population from rate increases.
Home ownership is about 65% (35% rent)
40% of homes are owned outright- no mortgage
65% of the homes with a mortgage are at sub-4%. (chart below- I know, trying to fool Americans with data again)
A few weeks ago Barclays wrote an article on Blame the Boomers for the structure of the housing market, so I will take a victory lap on that.

Why are home prices so expensive? Blame the boomers, Barclays says

Would-be homebuyers nationwide. are facing a spike in housing costs amid an ongoing affordability crisis - and baby boomers may be to blame, Barclays says.

www.foxbusiness.com

I get the frustration if someone wants to move from renting to buying (renting is now cheaper than buying), but expectations need to be reset. Expectations on size and amenities. My general conclusion is that people got used to having very cheap money for well over a decade and now that rates return to "normal" everyone is bitching and moaning about how they can't have everything they want. But I also acknowledge that Boomers, and now Gen X, are the ones I hear complaining the most and they are the most insulated from these problems. I guess Grandpa Simon yelling at the cloud was pretty accurate.

 

[Irrelevant]

Man, macro economics wasn't exactly my strong suit, but isn't inflation driven by prices and aren't prices set by costs, and aren't costs associated with worker wages? I mean you're paying more for milk because the costs of producing milk are higher, and those costs are primarily because people associated with producing milk are being more, it certainly isn't because we're paying cows more. I mean yes there is more that goes into it, but it's also fairly damn simple.

 

[stk]

Low unemployment rate is misleading. Long term this is going to bite US in the ass.

'The most chilling metric of all': Mike Rowe warns that 7 million American men are 'done' looking for work and have 'punched out' — why that's a serious problem

It’s taking a toll on multiple industries.

finance.yahoo.com

“The report points to reasons like caregiving for an elderly parent or child, health-related concerns, retiring early, going to school or joining the military.”

What? The reason men are leaving the workforce is to join the military?

 

[Irishman]

Unemployment rate is good news. Today at 3.8%, back in 2009 it peaked at 10% then steady decline to 3.5% just before the pandemic hit.

The supply of single family houses is almost half of pre-pandemic levels so even though demand has decreased with mortgage rates near 8%, the low supply has kept prices high.

Is there any country in the world that has recovered stronger from the Pandemic compared to the US in terms of unemployement, GDP, reduction of inflation?

Can't say that I disagree with you, the US appears to have rebounded better than any other economy. It may mean it falls most when things go bad?

 

[Hilljackoutlaw]

Exactly

Lots of discretionary purchases for all this “concern”. And gasoline prices? Give me a break. Top three selling vehicles are, again, Ram, Silverado and F-series. Data not matching the complaining. Faux misery.

I can't do my job to make my money to pay inflated prices without one of said vehicles.
I'm not loaded but I do pretty good and I don't do shit in this current economy. People spending frivolous in this economy are for lack of a better word...idiots or have become numb to it and don't care anymore. Down turn will come and that Taylor swift concert money should of been put in the piggy bank. And because of their financial stupidity they'll blame the next president whoever that may be when the down turn comes and their broke with no emergency funds to fall back on.
This current economy is about as fake as my neighbors tits when I was working in Vegas last year.

 

[SAJ-99]

“The report points to reasons like caregiving for an elderly parent or child, health-related concerns, retiring early, going to school or joining the military.”

What? The reason men are leaving the workforce is to join the military?

Yeah, that didn’t make sense. A person is considered in the workforce if they are able and of a certain age and not in school. I would think that the military should be considered a job but apparently it is looked at similarly to school?

and I don't do shit in this current economy.

No demand for Hill Jack Outlaws?
I don’t want to argue any individual’s story. There are millions of them. But I still see lots of adds for seasonal delivery drivers for UPS and Amazon at $21+ per hour. The average UPS full-time driver wage goes to $49/hr. Seems the economy is doing well. Sure, it won’t last forever because nothing does. But I am amazed at the amount of people that seem to be rooting for a down turn.

 

[stk]

Yeah, that didn’t make sense. A person is considered in the workforce if they are able and of a certain age and not in school. I would think that the military should be considered a job but apparently it is looked at similarly to school?

I looked at the fed report it referenced. It was in there too. Strange and doesn’t appears to obscure the real state of employment rather than illuminate it. Also totally irrelevant since military end strength numbers haven’t changed much in a couple decades.

 

[ismith]

https://www.usdebtclock.org/

Wages vs housing

 

[ismith]

Man, macro economics wasn't exactly my strong suit, but isn't inflation driven by prices and aren't prices set by costs, and aren't costs associated with worker wages? I mean you're paying more for milk because the costs of producing milk are higher, and those costs are primarily because people associated with producing milk are being more, it certainly isn't because we're paying cows more. I mean yes there is more that goes into it, but it's also fairly damn simple.

Inflation is driven by money supply. Look into how much the money supply has grown in the last three years and report back.

 

[SAJ-99]

Inflation is driven by money supply. Look into how much the money supply has grown in the last three years and report back.

Velocity also matters to inflation. I would argue probably more than absolute supply, but certainly can't separate the two. We certainly "printed" a ton of money, but people either didn't or couldn't spend it. This is why we haven't seen a recession and the economic numbers keep looking good despite predictions. That money is supporting spending as it trickles out of savings. But this is also making inflation "sticky". It seems everything is happening in slow motion compared to what we would expect with 500bps of Fed rate increases. Interesting times.

 

[BigHornRam]

Rick always has a good handle on where we are headed. Can't disagree with anything he says in this clip.

 

[AlaskaHunter]

The Fed seems to be doing decent job in reducing inflation rate at 3.7%, but to reduce it to the target 2% is quite a challange.
Other Countries despite various fiscal policies are at higher Sept inflation rates:
United Kingdom 6.7%
Australia 5.4%
South Africa 5.4%
Brazil 5.2%
India 5.0%
Mexico 4.5%

 

[SAJ-99]

Rick always has a good handle on where we are headed. Can't disagree with anything he says in this clip.

He's been doing that same rant for 20yrs. Maybe he will eventually be right, but if you traded with his view you would be broke. He makes good points, but the market is aware of all of this. I hate the emphasis on anniversaries, particularly going back to 1981. I don't believe the market doesn't has memory back that far. I also strongly disagree with the use of log charts for yields, but that is a different discussion.

 

[BigHornRam]

He's been doing that same rant for 20yrs. Maybe he will eventually be right, but if you traded with his view you would be broke. He makes good points, but the market is aware of all of this. I hate the emphasis on anniversaries, particularly going back to 1981. I don't believe the market doesn't has memory back that far. I also strongly disagree with the use of log charts for yields, but that is a different discussion.

I figured Rick's hat tip to Milton Friedman would get your hackles up SAJ-99.

 

[SAJ-99]

I figured Rick's hat tip to Milton Friedman would get your hackles up SAJ-99.

Yeah, I noticed that. Rick loves to name-drop on Milton. Milton, if alive, couldn’t pick Rick out of a lineup of two other people.