Where are we really at economically?

I am no economist, and won't even pretend to have a grasp on how the economy is REALLY doing. I do know that the economy seems to be being used by both sides of the political divide to attack the other side, with republicans insisting that all is ****, the economy is **** and the country is ****. I've got to say, I just don't see it, but on the other hand, I make a comfortable living and I no longer live in the US so I may be missing some stuff (it's not like we didn't get hit by inflation here in France).

-Inflation. This is the biggie. While inflation was brought down remarkably fast in the US compared to the rest of 1st world countries, and inflation was a world wide problem, just because the rate is now acceptable, it does not wipe away the effects of the spike (inflation is compounded by previous inflation). So it is undeniable that people are suffering financially, especially those with fixed incomes or those at an age where they can not find new jobs whose wages are more in line with inflation. Too many democrats are arguing as if the good economic results somehow erase this fact. That is a mistake

On the other hand let's look at the positives that republicans refuse to acknowledge.

-Labor participation. Early in the Biden admin, when the left pointed to the historical low unemployment, the right's rejoinder was that labor participation was down, so that the number was not really significant. labor participation has gone up steadily since Biden was sworn in, and now we have labor participation that is equal to what it was under Trump AND still incredibly low unemployment.
-Unemployment. Still super low
-Stock market. Has done well under Biden as a whole. Funny how a year and a half ago, when the market was not doing so well, posters here brought up all the retirees who were ****ed and had lost X amount because the stock market was not doing well. Toady when you point out that the market is doing well, the rejoinder from the right is that the stock market is only for rich people
-wages. This is the biggie IMO. What made inflation especially painful was that wages were increasing at a lesser rate than inflation, meaning that your pay raise just meant you were using slightly less money than before. Since March 2023 wages have outstripped inflation! Why is no one pointing that out? This doesn't mean that all of a sudden everyone is making more than they were before the inflation spike relatively speaking, but this is the way to get to that point. At this rate, wages as a whole will outperform inflation by mid 2024. I know it's not soon enough for most people, and obviously this is on average, many individuals will not be in that tranche. But one looks at the economy as whole not on an individual basis.
-Gas prices. One of the metrics that matters the most to Americans. I know it doesn't sound good on paper, but when you take into account inflation. Gas prices at the pump today are almost the same as Trump's on average (2.50$ in 2019 is 3.00$ in 2023). Of course, no one can crow about that because it just points to inflation again. But once =inflation is stabilised, the prices are baked in, nothing changes that

Globally, I think the US is doing very well considering that we came out of a massive world wide pandemic. Still some suffering, but pretending that all is going to **** just seems counterproductive, and factually wrong. What will it take for republicans to acknowledge that we are doing pretty well right now and stop living in a before world where they imagine that every thing was wonderful?

 

Despite what Democrats tell you one thing is completely undeniable.... The price of everyday services and goods is much higher than it was 2 years ago..... Say grocery items and pretty much everything in Walmart or home Depot or such.... Across the board most of it is up at least 20% compared to a couple of years ago.

It is completely undeniable that your dollar bill is not worth what it was a couple of years ago

 

Your dollar bill has never been worth what it was worth a couple of years ago.

That is how inflation works. All things being the same, the price of all items go up over time. Have wages caught up to that inflation? Not quite. But they are now outperforming inflation so should catch up soon. Yes it seems jarring to say that an item that cost 100$ four years ago now costs 120$, but if you are making 20 percent more on your pay check this is the same amount. While emotionally pertinent, to invoke the image of 5 cent candy bars is absolutely irrelevant. Those prices are now baked in. this is what happens with inflation. There is just more awareness of it right now as the prices visibly spiked rapidly (I can't remember anyone complaining that things were 8 percent more expensive in 2020 compared to 2016, and yet that was an undeniable fact) and many people's wages have not caught up with that yet. But they are catching up.
So the fact remains, many people who can't profit from the spike in wages or are on fixed incomes are suffering from the inflation. Many people are now getting wages that are superior to the inflation spike.
I own my own business that has a very low overhead so I really have not suffered from inflation that much. I charge more than I used to. problem solved. Once in a while I subcontract. I ask for 20 percent more than what the going rate used to be before the pandemic. some of my competitors have kept the same rates so they are cheaper than me. Sometimes I get these jobs sometimes I don't, but this represents about 10 percent of my income, so it really does not affect me.

 

That's great that it doesn't affect you but a lot of people who are on hourly wages are negatively effected. I know inflation is sequential over time but what we are seeing is a advanced rate of it over these last two years or so 3 years

 

Not true. The labor participation rate under Trump prior to the pandemic was 63.3%. The numbers for Nov 2023 was 62.8%. The unemployment rate under Trump prior to the pandemic was 3.5%. At the end of November, it was 3.7%.

The economy is improving, but it still not up to where it was under Trump. In addition, the inflation is the real killer.

 

Economics is a hot-button topic and people will believe whatever faction they're part of. Meanwhile those of us earning a living contending w/ major economic trends see the situation as a whole being a mixed bag w/ both possibilities and dangers.

Inflation spiked a year ago prompting a heavy handed response from the Fed. It's down from where it had been up to but it's higher than the decade before. We're better than when we were worse but we're worse off than before that. Humph.

Labor --my favorite metric is employment as % of the population as the headline unemployment rate is just a % of the labor force. That ignores workers who can't find work for prolonged periods plus discouraged workers. What we're looking at is (imho) a short term high in an overall decline.

Stocks The only reason they look good now is the fact that they'd gone down so low and now they're barely creaking up to where they were years ago. On average, for hundreds of years, stocks double every ten years. We're right now no better than where we were two years ago. imho that's a lost opportunity and a real loss considering inflation.
Oil What we know is that after many decades the U.S. became a net exporter of oil about 4 years ago. That stopped w/ a number of executive orders from Biden for climate change supposedly and we're back to importing. Gas prices are lower now than when they hit an all time high a couple years ago but they're still historically on the high side:

 

The biggest issues with the economy, and always with the economy is with housing and wages, specifically, hourly and low skilled wages, compared to 6 decades ago. Remember, a bartender with a working spouse, could afford to live in a home, and purchase a home, with high-interest rates from the 1960s. But today, being a bartender, or other low-skilled jobs would at best get you a cheap apartment and maybe, if you skim, some food, but not much else. And god forbid, if that person has a serious medical issue, and cannot afford the health care. The eocnomy is fine for CPAs, lawyers, professional managers, professional IT persons with unique skills, and other persons who have a professional career generally. Small businesses, in order o make ends meet, are now using the internet to make sales so that they can pay the bills, but they also rely on the industry leaders for those prices, niche markets customers, etc. But this has been the case for our economy since 1980s, when we began the trickle-down economics that Republicans are hold on to despite the evidence that it does not help the economy all that much, and creates greater income inequality, and wealth inequality.

 

While technically correct, you are pointing to the numbers of just one quarter of Trump's 4 year presidency. There was no other quarter with those numbers under Trump. 62.8 labor participation and 3.7 unemployment fits into any time in the Trump time line that we considered the 'good times'. As I acknowledged earlier, inflation has been tough for many people, though I do believe that many people are going with "item x used to cost 100 and now it costs 118" without acknowledging that wages have gone up alongside these increases. We have definitely not caught up to inflation yet, but we are not far away from doing so.
I may be incorrect, but @FatBack claims that hourly wage earners are negatively effected, it would seem to me that many low end hourly wage earners HAVE kept up with inflation (people earning say 16$ an hour before the pandemic could easily find jobs that paid 20$ an hour post pandemic, which is ahead of inflation (obviously mileage may vary depending on market and situation)) while middle class salaried employees certainly did not.

the one thing I failed to mention, which is a biggie, is of course interest rates. Those trying to get ahead to start their businesses or want to free themselves of being rentors are going to have to work extra hard to better their situation. Harder to quantify, but that is a massive impediment to personal progress. Obviously raising the rates is how we seem to be able to achieve this smooth landing that we are in vis a vis the economy, but buying equipment to start your business, or a vehicle to better your situation, or buy a house is rough today. In a ways that is the hardest hurdle

 

If there are so many jobs, why are there so many homeless and illegals who are living rent free?

seems quite strange to me the dichotomy of “really strong economy” and “massive homeless and illegal populations overwhelming city budgets”.

 

Those were the numbers just before the pandemic and they were trending better at the time.

The wages always lag behind inflation. This is especially true for the older people who are more dependent on SS and their investments.

The inflation has hurt more than just at the grocery store and gas station. The stock market is just now getting above where it peaked out in dollars. When you factor in inflation, the stock market is still down 15 to 20%.

 

I don't know much about economics, but I know how to read a chart. I don't know who should be credited for various movements in said charts, but if we are looking uniquely at 'better or worse than before', let's all be honest. Trump inherited a declining unemployment and the day he became president the unemployment decline continued exactly as it had been going. African American unemployment, which he continuously tried to take credit for also continued exactly at the same rate. He also inherited a historically low gas at the pump price.
The only metrics that really did do better under his presidency is indeed labor participation that had been in a free fall starting under the Bush recession and throughout the Obama years that then levelled out during the Trump years. The stock market also shot up (which I am now being told only benefits the wealthy). But Trump inherited a labor participation of 62.8 which was pretty much the average throughout his presidency if we exclude the pandemic year. He had one good quarter at 63.3. So let's not pretend that that was a constant. As for the stock market, indeed, if you take a very small window of time, it is 'down', but realistically retirees who have pension plans will have done very well from the day they started particpating in the stock market (I am 54, my 401k is doing very well since I started paying into it 25 years ago) let's stop pretending that retirees started investing into the stock market three years ago and have as a result lost money.
On paper, my 401k 'lost' 40000 dollars during the pandemic years on paper. In reality, what I have been putting in over the last 25 years has shot up tremendously. The stock market OVERALL did well under Trump, but there was one whole year where the market was flat. I can't remember the MAGA complaining about 401s, retirees etc...

 

The labor participation rate was at its highest level during GW Bush. It declined under Obama and stayed steady during Trump.

I my biggest quarrel is with Biden claiming improvements in the economy which are not real or are misleading.

i.e. "Inflation is down". It is down, but the effects of past inflation are permanent. i.e.

i.e. "The stock market is setting new records". Only in dollar amounts. In buying power it is down about 15 to 20%.

i.e. "The unemployment is at historic lows". Only because a major part of the population is no longer looking for work. Total employment is considerably less than during Trump.

I am 86 and have just about seen it all. My stock was climbing steadily in dollar amounts from the time I started investing after retiring from the military in 1979 until about 2022 at which point it dropped considerably. That is the time that inflation kicked in and it is up to about where it was in 2022 except inflation has taken away around 15 to 20% of it.

I have my Air Force retirement. I recently started getting a small VA military related disability and I have SS. All of those go up with inflation except they lag. For example, most cost of living calculations are done at the beginning of the year. As inflation goes up during that year, all that money is lost forever until the next cost of living adjustment a year later. I also get some retirement from Lockheed Martin. It is fixed and will never keep up with inflation. The net result is that I lose from inflation just like most of the elderly.

The short of it is, this economy sucks.

 

Another government hater who happily collects all kinds of government benefits. Priceless. They seem to be a dime a dozen on here.

Just in case you don't realize: If it was for the GOP, SS would be privatized by now, and you'd be fully dependent on the stock market for your retirement income. How does that sound? If I were you, I'd cheer Biden for getting the GOP to commit to hands off SS during the state of the union address.

It never ceases to amaze me how so many people vote against their own best interest.

 

I earned those benefits. To earn the same benefits, you only need to deed your body over to the US government and then hope that you have a body and that body is without pain or disability when it comes time to collect. Mine wasn't.

 

You had your monthly government payments during the pandemic. Others weren't so lucky. Yet, the government helping them out through stimulus caused inflation, which you now decry. Should the government have let all those people in the service sector sink, just so that YOU wouldn't be inconvenienced by inflation? BTW: SS recipients get COLA, so I don't know what you are complaining about.

 

I appreciate your objective response, and your personal input.
To your points: Indeed, inflation is baked in. Nothing can undo it over time. The only thing that can happen is that wages outstrip inflation, which has been the case since March 2023. Once again we are not quite there to outearn inflation, but we are pretty close. So while objectively "inflation is down" and we are entering what we call 'acceptable' inflation rates, we should not pretend that the past didn't happen.
In terms of the stock market, one should also look into the long term. Indeed if you invested a bucket of money in the market in 2019 even though you have good return on investment you will have not outperformed inflation. That would be a complete edge case though. I first put what was a large amount of money to me at the time in the market in 2007. Which immediately lost half it's value. In the long terms this has been a really great return. So while I understand that at the age of 86 you consider that you have 'lost' money in the last three years, it sounds to me like you have had some really great returns over the decades. While the market overall was good under Trump, between January 2018 and January 2019 the market was absolutely flat. Do you remember that ?
As to the unemployment numbers, you are incorrect, as I have pointed out, labor participation is equal today to what it was under Trump, as is unemployment, so no, employment is not "considerably less than during Trump"
As I stated in the OP, there are many people that suffer from inflation that do not have redress (ie retired) and are on fixed income that can not combat inflation. Overall that is not the case. Even your case where indeed, on paper you are worth less than you were 3 years ago, at the age of 86 you have reaped a great return on your investment

 

You are making stuff up. Show me where I said that.

I only complained about people who took advantage of the system.

Those that had already earned income continued to get their income. Many who had jobs, lost their jobs during the pandemic. Most were able to get government assistance, which I supported.

As I explained in another thread, the COLA lags. It only comes around once a year. You lose to inflation during that year and that money lost is never recovered.

 

Its not pointed out because it doesn't fit the narrative. Last year inflation outpaced wage growth, and we lost purchasing power, but now that wages outpace inflation, we are regaining it. It will take a while until we regain it all, but the direction is certainly right. Also, the prices of some products has come down, like
Airlines (-13%),
Car Rental (-9.6%),
Appliances (-9.6%,
Health Insurance (-34%)
Eggs (-22%)
Gasoline (24.8%)

Deflation is the anti-inflation. Here's the November 2023 breakdown
Popular consumer categories whose prices fell year-over-year
https://www.cnbc.com/2023/11/15/where-prices-fell-in-october-2023-in-one-chart.html

 

The stimulus payments under both Trump and Biden were instrumental to keep the people who lost their jobs afloat, yet, they were also a direct contributor to inflation down the road. So, if you supported those stimulus payments, why do you complain about inflation? The two are linked with each other. There is no such thing as a free lunch.

To me, inflation was a price worth paying for propping up the economy during the pandemic. Of course, the Biden haters rather use the term "Bidenflation" as a hammer in their zeal to get Trump re-elected.

As to COLA, the lag in inflation adjustment is not a big deal. Other people, for example those on minimum wage, did not get inflation adjustments at all, the federal minimum wage is still the same it was in 2010. I don't hear the GOP complain about this, though.

 

I think we are experiencing a dual personality economy. There's not question at the statistical level our good - low unemployment, strong markets, good GDP, etc. BUT, we have also experienced inflation of almost 18% over the past three years. The result being, where the economic rubber meets the road, ordinary society with ordinary people just trying to live normal lives, that party of the economy is poor. Ordinary families are struggling paycheck to paycheck, Young people starting out can't even find lodging at a rate that takes less than a half the salary. Inflation has driven housing costs through the sky; here in San Diego median homes are close to a million and rents look like house payments of a few year ago. Mortgages are 6.5-7.0%.

 

Year over year is meaningless - how about numbers since January of 2021. Since January 2021 to November 2023 CPI is up 17%. THAT's what inflation is about to to the average person and family.

 

You are asserting that unemployment trends do not change? Huh?

If one wants to lower the unemployment rate, it is far easier to do so when it is high then when it is low. It takes almost nothing to take an unemployment rate of 10% down to 9% ( it basically has nowhere else to go but down), while it is damned hard to take an unemployment rate that is already very low, and then drop that rate even further.

In Trumps case he took it from 4.7% to 3.6% prior to Covid ( a 23% reduction from an already very low number). To whatever extent you are going to attribute an unemployment rate to a President, significantly lowering an already very low rate is an incredible accomplishment, especially BECAUSE it was already low. You seem to be implying that because it was trending lower from the highs of 10% during Obama, and that it conintued to decrease, that he was somehow handed that reduction. Just because a President leaves office with a specific trend, does not mean that they deserve credit for that trend reducing itself into infinity. Such a characterization is nonsensical.

 

Lets do the math.

In February 2020, the LPR was 63.3% and the unemployment rate was 3.5%.

In November 2023, the LPR was 62.8% and the unemployment rate was 3.7%

Therefore, the percent employed in February 2020 was (0.633 X (1.000 -0.035))= 0.611 = 61.1%.

The percent employed in November 2023 was (0.628 X (1.000 -0.037))= 0.605 = 60.5%%.

The number employed was 0.6% higher under Trump prior to the pandemic than it is now.

 

In a lot of ways, it's a dumb game. Inflation tends to go up when employment and wages are high. If employment and wages are low, then you get to complain about that, but it means inflation is also likely low. There will almost always be metrics that are doing well and metrics that are suffering.

 

No, double digit drops in price of big ticket items like 34% drop in health care is not meaningless, but it seems like you did not read the rest of my post