Wednesday, June 12, 2024

Told ya! INFLATION WATCH tells us things are under control. So why are rates still high?

I've been predicting a low number for inflation in May, given the plateauing and then decline in gas prices, along with no significant changes in prices at the stores. And sure enough, look what the Consumer Price Index report told us this morning!

Even better is the fact that it was the 4th straight month that food at home (groceries, generally) did not increase, with prices for dairy products and nonalcoholic beverages falling in May. The only chronic increases remain in shelter (up 0.4% in May, 5.4% in the last 12 months) and auto insurance (up 20.3% in the last 12 months, although it did go down 0.1% in May after two sizable increases in March and April.

The flat CPI also means we had strong increases in real average hourly earnings, which went up by 0.5% in May, and reversed the downward trend of the last 3 months.

And it increased the inflation-adjusted growth in wages that we've seen in wages compared to what we had during what Donald Trump called the "greatest economy ever." Aka, before the COVID pandemic broke out.

Seems like a good economy but not one that's overheating, with inflation staying at a manageable level. A perfect scenario for the Federal Reserve to reduce interest rates from the 23-year highs that they sit at today.

And yet later this afternoon...

Frustrating stuff, especially since starting to lower rates would likely encourage more homeowners to be open to putting their homes on the market, and likely limit the increases in housing prices that are one of the few real headwinds in this economy.

I guess we'll have to hope for more sanguine inflation news for the June CPI report. And given how several chain stores have announced price cuts in recent weeks, and that gas prices are now under $3 in parts of Madison, it's set up to be a tame number. Hopefully that would be the final push that the Fed needs to stop chasing the ghosts of 2022's inflation, and have an interest rate policy that is in line with the reality of 2024's America.

Tuesday, June 11, 2024

Wisconsin wages going in the right direction

Saw this interesting headline yesterday.

The June 5 report from payroll company ADP shows that the median annual pay in Wisconsin in May reached $59,000, up 5.3% from a year ago. That slightly beat out the nationwide median pay of $58,300 and 5% increases.

ADP’s report uses salary data from about 10 million employees over a 12-month period to calculate the data, it said in a media release....

That same report showed that, nationally, people who change jobs saw higher spikes than those who stayed in their jobs. While stayers got a 5% increase, those who switched jobs got a 7.8% increase.
Pretty good news for workers in this state, and all the more impressive when you dig into the report, and see that Wisconsin's 5.3% increase in median wage among its cohort of workers who stay at their jobs outpaces every other state in the Midwest.

Median annual pay increase, ADP Report, May 2024
Wis. +5.3%
Minn +5.1%
Ind. +5.0%
Mich +4.9%
Ohio +4.7%
Iowa +4.6%
Ill. +4.3%

That came a few days after the Quarterly Census of Employment and Wages (QCEW) gave a rundown of year-over-year growth at the end 2023 for the average weekly wage in all counties in the US, including Wisconsin. The QCEW said average weekly wages grew by 3.6% nationwide and 3.9% in Wisconsin, placing the state 2nd in the Midwest (just behind Iowa's 4.0% increase).

If you move that back to the end of 2019 (before the COVID pandemic), Wisconsin's average weekly wage grew by 20.76% over that four-year time period, beating the 19.37% increase in the Consumer Price Index over the same time, and just below the 21.09% increase in the US. And much like with job growth, there was wide variation among Wisconsin counties in wage growth over those 4 years, with the fastest growth happening in lower-wage rural counties (with the exception of Kenosha and St Croix Counties).

The Wisconsin counties that lag for wage growth also are largely rural, but they also include 3 counties with UW campuses, along with Waukesha County.

Yes, it's worth noting that Wisconsin's wages still are overall lower than the national average, but it is good to see that growth in 2023 was above the US average and among the best growth in the Midwest. And while not everybody's experience with inflation is the same (especially if housing, food, and gas take up more of your expenses than most people's), but in general, wages in Wisconsin have beaten inflation over the 2019-2023 period. Combine that with more jobs in that time period for the state and the country, and I'd say that's a better situation than we had before COVID became a thing.

Monday, June 10, 2024

Updated "gold standard" numbers show Wis with more jobs vs pre-COVID. But not true everywhere

Late last week, we got the full data set of the "gold standard" of job measurements, the Quarterly Census of Employment and Wages (QCEW). This included all counties in the US, and it went up through December 2023, which makes for a good place to look and see where things stood.

This is especially true since this report marked 4 years from the end of 2019, which was 3 months before businesses started shutting down as the COVID pandemic broke out full-force. And it makes a good checkpoint to see how well the country and states had recovered from the economic damage of the pandemic, if they had.

Nationwide, the QCEW says that the US had 3.23% more jobs at the end of 2023 than they did 4 years prior to that. In Wisconsin, we've grown slower in that time period, as we have for most of the last 20-30 years in both population and job growth, with a 1.19% gain in jobs under the QCEW. But some areas did a lot better than others within our state, particularly on a percentage basis.

The higher-gaining counties for jobs are mostly rural, with SW Wisconsin's Lafayette County leading the way. The exception of exurban counties such as St Croix and Calumet, and the continued growth in Kenosha County.

The counties with the highest percentage of jobs lost between the end of 2019 and 2023 have a lot more in common - a series of rural counties in Western and Central Wisconsin.

On a numbers basis, Dane County continues its trend of leading the way in Wisconsin. The QCEW says the county that includes Madison gained 7,346 jobs in that four-year period, a number that is all the more remarkable because Dane County lost nearly 20,000 in the first year of that time period, due to strong COVID restrictions and a lack of students returning to UW in the Fall of 2020.

Kenosha also has significantly more jobs than at the end of 2023, and 6 other Wisconsin counties had added more than 1,000 jobs.

On the job loss side, Milwaukee County was still at a deficit of nearly 20,000 jobs compared to where they were at the end of 2019, and some of that likely led to losses in Ozaukee County. But it's also worth noting that 3 of the 4 counties in the Fox Valley were down more than 1,500 jobs at the end of last year, and that Trempealeau's large percentage losses put it in the top 10 for overall jobs lost.

It illustrates how getting jobs and people back to Milwaukee is something that really matters when it comes to the overall economic performance of the state It'll be worth watching to see how the new sales taxes put in place for 2024 may help the chances of investments, in contrast to decades of defunding and handcuffing the state's largest economic engine.

These figures also illustrate how different the post-COVID recovery has (or has not) been for various areas of Wisconsin. Here in Madison, things seem better than ever, and jobs and new construction keep happening. But that might not be true in other parts of the state, and it makes it hard to have one unifying theme or message on the economy for all of the state's residents, because some have fallen behind in the 2020s, while others have been having booming growth.

Saturday, June 8, 2024

Jobs keep getting added in May, wages up too. But not the blowout that fires inflation

Given that we'd seen evidence of the economy softening in reports over the last month, a lot of people were looking to Friday's jobs report for May to see if there was reason for the concerns to go into full-blown alarm.

But instead, we found out the jobs market was still rolling along.

Good signs, generally. We are now more than 6 million jobs above our pre-COVID peak, a remarkable accomplishment given the large amount of Boomers that have aged out of the workforce in the last 4 years, and the fact that, you know...lots of people DIED in that time period.

And leading the way again was hiring in health care, which added another 68,300 jobs in May, and has added nearly 1.6 million jobs since the end of 2021.

It also was nice to see construction rebound from (seasonally-adjusted) flat April to add another 21,000 jobs in the sector in May. Manufacturing also had its 2nd straight month of gains in May (+8,000) and has almost entirely reversed the losses that sector suffered in Feburary and March. However, I'll note that while construction has been steadily adding jobs since the end of 2022 (384,000 since then), manufacturing employment continues to stay near its 2022 levels.

But what's up with the rise in unemployment to 4.0% (OK, 3.96%), and the losses in the labor force, with the number of "employed" falling by 408,000? Former Obama Administration advisor Jason Furman thinks it's not a big deal, and that the payrolls survey is likely more accurate on the overall picture. It also could give a clue as to what is (or is not) the potential for job growth in the economy.

So I don't think this report is quite the blockbuster that some have made it out to be. But the 0.4% increase in average hourly wages and 0.5% bump-up for non-supervisory workers is welcome recovery from the tepid 0.2% increase in April, and it will likely lead to a real wage increase when we see the CPI numbers come out next week.

It's certainly not a jobs report that you'd see if this was an economy stalling out toward recession, and let's see if a calmer inflation number for May will combine to soothe some worries people may have had as June began.

Tuesday, June 4, 2024

FINALLY, fake electors schemers indicted in Wisconsin. But I would hope there's more

I feel ya, Gov. Although I'd add in a side order of "WHAT TOOK SO GD LONG, JOSH?"

And only getting the 3 lawyer scumbags isn't nearly enough. There are still 10 WisGOPs that signed onto that fraud, and no Andrew Hitt, giving this act on national TV isn't going to make it OK.

Oh? Is that why you gladly went along with this scheme to override the choice of the voters of Wisconsin? The criminal complaint against Chesebro, Troupis and Roman lays out how the fake elector plan was intentionally done as a pretext to throw the election results into "dispute" for Congress on January 6, and wasn't a contigency plan in case some court bought the Trump folks' BS.

It is nice to think that some of these lowlifes might be perp-walked in my town in a few months. But this can't be all we get, either. And it never should have taken this long.

Monday, June 3, 2024

Disappointing manufacturing and construction figures add to reasons Fed should cut sooner

We had some more disappointing economic news come out this morning.
U.S. manufacturing activity slowed for a second straight month in May as new goods orders dropped by the most in nearly two years, and spending on construction projects slipped unexpectedly the month before, the latest indications that a gradual slowdown in the economy is taking hold.

The Institute for Supply Management's manufacturing purchasing managers index for May fell to 48.7 from 49.2 in April, the research group said on Monday, noting an increase in references to "softening" among survey respondents. It was both the second straight decline and the second month below the 50 level that separates growth from contraction. Economists polled by Reuters had a median estimate for 49.6.

Meanwhile, construction spending fell unexpectedly for a second month in April on declines in non-residential activity, although there was an improvement in single-family home building.
That has been an ongoing trend for construction, both in the welcome increases in single-family housing (up over 20% in the last 12 months measured), but also with an increase of public sector construction in recent months, which has mitigated a drop in the value of private sector construction for the first 4 months of 2024.

Today's figures added to not-good numbers on consumer spending from Friday, and lower revisions for spending and income in previous months. And economic growth prospects are getting lowered as a result.
Together, the two reports pointed to continued sluggishness in the economy as the second quarter began. Gross domestic product grew at just 1.3% in the first quarter, and until recently had been expected to reaccelerate in the current period. The Atlanta Fed's GDP Now model, which had tracked at well above a 2% growth rate through May, was revised down to just 1.8% following the ISM and construction spending releases.

With interest rates remaining high thanks to the Federal Reserve's focus on elevated inflation, spending on manufactured products and capital projects has been sluggish. Data last week showed consumer spending on goods fell in April as households showed signs of husbanding their dwindling savings.
The decline in growth predictions as April's data has come in was a bit startling to me.

The same report that showed lower consumer spending in April also indicated that inflation had slowed down. And gas prices were lower in May than they were in April. Which makes me ask again "Why are we keeping interest rates at their highest levels in 23 years?" I also suspect that we may see slowdowns in job growth when the new figures for May come out this Friday, and while I don't think we are near recession coming, I can't ignore that data has not been as strong as we would have anticipated.

I would hope the Fed is also keeping track of this change in trajectory, and stop chasing the ghost of an inflation that isn't nearly the threat to our economy that an economic slowdown would be, especially if it happens in maufacturing and construction.

Saturday, June 1, 2024

All it takes to bring Trump/GOP to justice is the willingness to do it. He ain't special.

As usual, our legacy/corporate media generally got it wrong when it came to analyzing the Trump trial, and how it was such an awful thing to have a former president face criminal charges. And that's called out in an excellent column in Defector by Tom Scocca, (PS - you need to be reading Defector, for both sports and takes on everyday life) where he says the "savvy" Acela corridor insiders really don't want to admit how simple it is to hold a powerful person accountable.

For the past eight years, a lot of essentially simple truths were treated as matters of paralyzing complexity. A man who ran his entire business empire on fraud, systematically cheated on his taxes, committed sexual assault, and conspired with his henchmen to obstruct justice had made himself into a presidential candidate, and then a president, and then an ex-president, and that second set of facts was somehow supposed to change the original, underlying facts. Presidents didn't do those sorts of things. Or, if a president did do those things, it certainly couldn't count—that would mean the president of the United States was a criminal, and that would mean ... well, it just couldn't.
And the correct answer was - "Why couldn't he be a criminal?" He's just a person elected by other people. He's not an immortal king. That's one of the founding principles of this country, from what I remember in my classes and my readings.

Scocca goes on to show that all it takes is for prosecutors and police to be willing to do their jobs, and ignore the outside noise about "tradition" and "institutions" and other Coastal BS. And that's why a case about what may seem like a small detail (covering up payments about an affair to keep it from getting out in the media) has turned Donald Trump into a convicted felon before the 2024 election.
While the opinion-havers were indulging themselves in mythology or fantasy—Trump as the embodiment of the will of the people, whose wrathful political power would only grow if challenged by law, or Trump as the highest of criminals, who must be punished by the highest of authorities—Bragg was putting together the documents and witnesses that would sustain 34 felony counts in a Manhattan courtroom. While the prosecutors with weightier, more historic-sounding charges were getting bogged down in their timelines and stymied by Trump's judiciary, the squalid little hush-money case kept moving.
And while the obstructionists in the federal side of the GOP have abused the DC crowd's vaunted INSTITUTIONS to insulate Trump from the consequences of his presidential-era corruption and lawlessness, Scocca points out that it's ground-level local and state lawsuits that are actually making Trump pay a legal price.
Donald Trump's political career has been one long demonstration that the legal structures that were supposed to be the bedrock of the rule of law are worthless. Impeachment was no match for a cynically disciplined political party. The Emoluments Clause and the Insurrection Clause are words on paper that the Supreme Court chose not to read. Even a well-tested prosecution machine like the Espionage Act is nothing that a determined judge can't rig her way around.

What caught up with Donald Trump was not the majesty of the republic but a civil suit for sexually assaulting someone in a department-store changing room and lying about it, and another civil suit for cooking the books on his property assessments, and now the criminal charges for covering up his hush-money payments. He is, as a matter of legal record, a rapist, a fraud, and a felon, on the edge of financial ruin and at risk of imprisonment. He might yet return to the White House, but he'll go there as a convicted crook.
This has to be a central message from Dems for the next 5 months. Some of it is about Trump himself, but suck in the rest of that rotten party with him. "Why is the entire GOP supporting this pathetic, amoral con artist whose only skill is shamelessness? What kind of weak losers would get behind this guy? And what do they think they're going to get out of it?"

All of them are the absolute dregs. No decent, self-respecting person should be associating with these grifters and BubbleWorld BSers. I am definitely staying here in Madison next month while those lowlifes are having their absurdities go on in Milwaukee.

And I sure would like to see Dems in both Wisconsin (THAT MEANS YOU, JOSH KAUL) and in DC to get a clue from what was done in these criminal and civil cases that Trump lost in New York. All you have to do is to file charges, speak the truths with force and constancy, and blast through all of the complaints by the protectors of privilege who claim it's somehow "different" when the people performing lawlessness, manipulations and thuggery are in positions of power.

This isn't a difficult concept to grasp. You just have to do it. And if Dem leaders aren't willing to take the steps to take out the trash that is making our political system fail, and stop giving impunity to people who break the law and who threaten everyday Americans for doing what their civic duty asks them to do, then GET ONES THAT WILL.