How is the US economy right now?

[Unknown Pleasures]

No, quit rates track with the strength of the labor market. When people perceive jobs as being scarce, they're willing to put up with worse conditions and lower pay. When labor markets are tight (as they are now), you see more job hopping, higher wage growth, and more job satisfaction.


If your approach is "I'm just going to ignore all data and believe what I want," then I guess do what works for you, but just be aware that your beliefs are not going to have any connection with the world outside your own head.


See, that's the experience of a lot of people. People are doing extremely well, and their wages have risen more than inflation (remember, too, that we just had one year of really high inflation--it's 3.1% over the past 12 months), but they see gloom and doom from the media and think, "I'm good, but not everyone has been getting raises like I have." But most people have been.

Housing costs are included in CPI.

I think there's devil in the detail. Sure an economics textbook is gonna tell you quit rates are generally inflationary and show strength in labor markets... but there's a difference between recent surge that was COVID spawned than in traditional times. People who mass quit their fast food joint out of frustration and forcing them to close temporarily aren't moving on to high paying IT jobs.

And no, I'm not ignoring all the data, I already said I dislike my truth from anecdote and respect GDP and inflation numbers as a data point, but I think there's a lot of inherent weakness in the data. I feel comfortable in my view that posted headline inflation isn't a strong representation of what the majority of people are facing to maintain their accustomed lifestyle. I don't view it as a silver bullet accurate metric. You are right though, I looked it up and housing costs are included in the CPI - it isn't included in some of the other places I've lived.

 

[Jack V Savage]

I think there's devil in the detail. Sure an economics textbook is gonna tell you quit rates are generally inflationary and show strength in labor markets... but there's a difference between recent surge that was COVID spawned than in traditional times. People who mass quit their fast food joint out of frustration and forcing them to close temporarily aren't moving on to high paying IT jobs.

When the pandemic recession first hit, the quit rate fell drastically (consistent with the point that it's a measure of labor-market strength). Then it surged to unprecedented levels, and then it came down a lot, but it's still near pre-pandemic highs. I think that this is like the CPI thing. If we disregard metrics for no good reason or reinterpret them because they don't say what we want to hear, are we even really trying to form a view based on evidence?

 

[Unknown Pleasures]

When the pandemic recession first hit, the quit rate fell drastically (consistent with the point that it's a measure of labor-market strength). Then it surged to unprecedented levels, and then it came down a lot, but it's still near pre-pandemic highs. I think that this is like the CPI thing. If we disregard metrics for no good reason or reinterpret them because they don't say what we want to hear, are we even really trying to form a view based on evidence?

You heard the expression you can ask 5 economists the same question and get 6 different answers? And they are all shit traders. You can Google and find countless articles criticising CPI measures. Anyhow, I think it's just differing interpretations behind what's going on. When the pandemic hit people were all naturally fearful and initially held on to any job they had as people are generally told losing their job is one of the worst things that can ever happen to them. Then a bunch of folks realized living off the relief handouts was really the same result end of the day for them economically as working so all sorts of people quit their menial jobs and had little interest to come back. Servers for instance had their choice to basically work anywhere they wanted if they indeed wanted to work as vacancies were super high. Other folks realized they took too much bullshit for the amount they were getting paid in the cost of living challenges and posted stuff on doors they were all quitting because their bosses were (at least perceived to be) assholes. It's a tough sell to convince people to work one or two low paying jobs just to barely make rent and groceries at best versus coming up with other plans whether they be entitlements or other avenues and people don't rush to go back a lot of the time.

 

[Jack V Savage]

You heard the expression you can ask 5 economists the same question and get 6 different answers? And they are all shit traders.

OK. Economists are all bad. Still, the evidence suggests that the economy is extremely good right now.

You can Google and find countless articles criticising CPI measures.

I think you can find a lot of loons who feel in their gut that prices are always rising faster than the evidence shows, but it doesn't actually add up logically (all measures have to add up, and if they don't, we quickly get absurdities--like if nutters who claim inflation is a couple of percentage points over CPI are right, we often are in recession, even though job growth is strongly positive, and living standards would have to be falling over periods where it is clearly not). Private measures of inflation tend to track gov't-collected data very well, also (for example, see the Billion Prices Project). And BTW, CPI tends to overstate inflation.

Anyhow, I think it's just differing interpretations behind what's going on.

I think it's more of a debate between people who use evidence and people who don't than one about how to interpret evidence.

When the pandemic hit people were all naturally fearful and initially held on to any job they had as people are generally told losing their job is one of the worst things that can ever happen to them. Then a bunch of folks realized living off the relief handouts was really the same result end of the day for them economically as working so all sorts of people quit their menial jobs and had little interest to come back. Servers for instance had their choice to basically work anywhere they wanted if they indeed wanted to work as vacancies were super high. Other folks realized they took too much bullshit for the amount they were getting paid in the cost of living challenges and posted stuff on doors they were all quitting because their bosses were (at least perceived to be) assholes. It's a tough sell to convince people to work one or two low paying jobs just to barely make rent and groceries at best versus coming up with other plans whether they be entitlements or other avenues and people rush to go back a lot of the time.

The first part is right. When there's a big downturn in the economy, people are scared to quit their jobs, regardless of their work situations. Then, yeah, a huge increase in relief for the unemployed led to an increase in quits, but then the extraordinarily fast recovery also added to that. Fits the pattern perfectly, but trying to interpret the current high quit rate as a negative thing doesn't make any sense. All signs are that labor markets are very tight--low unemployment, high labor-force participation, high wages, high job satisfaction, high quits, low part-time for economic reasons, etc. The pattern is very clear. We're not getting mixed signals here.

 

[Unknown Pleasures]

OK. Economists are all bad. Still, the evidence suggests that the economy is extremely good right now.


I think you can find a lot of loons who feel in their gut that prices are always rising faster than the evidence shows, but it doesn't actually add up logically (all measures have to add up, and if they don't, we quickly get absurdities--like if nutters who claim inflation is a couple of percentage points over CPI are right, we often are in recession, even though job growth is strongly positive, and living standards would have to be falling over periods where it is clearly not). Private measures of inflation tend to track gov't-collected data very well, also (for example, see the Billion Prices Project). And BTW, CPI tends to overstate inflation.


I think it's more of a debate between people who use evidence and people who don't than one about how to interpret evidence.


The first part is right. When there's a big downturn in the economy, people are scared to quit their jobs, regardless of their work situations. Then, yeah, a huge increase in relief for the unemployed led to an increase in quits, but then the extraordinarily fast recovery also added to that. Fits the pattern perfectly, but trying to interpret the current high quit rate as a negative thing doesn't make any sense. All signs are that labor markets are very tight--low unemployment, high labor-force participation, high wages, high job satisfaction, high quits, low part-time for economic reasons, etc. The pattern is very clear. We're not getting mixed signals here.

the last part is exactly what i said. Quit rates during COVID went up not because people had better jobs to do, there was a lot of frustrations with the structure of the economy for low wage earners.

I view the signs of a great economy largely relates to how long the masses of persons out there have to work, to buy the average things they need and want so that they can live their life (so headline GDP usually gets a roll eyes from me).

If you're convinced that whatever your criteria is is at an all time high based on the statistics you found and formula you've created that's fine with me.

 

[Andy Capp]

Good for the rich and stock market - The worst I can recall in my lifetime for normal people.

One bedroom apartments are over $1000 in even bad areas. Owning a home is virtually impossible and are double/triple the price they should be. A single bag of groceries can be over $25. Fast food combos are over $10 and even nearing $20 in some cases.

So if you play Wall Street or own a company, you are sitting on a fat pile of cash. If you are a worker, you are probably struggling. I've never seen it worse.

That's only because you're not as old as me. The last while has been a period of high inflation where a lot of people lost ground and things like social safety nets haven't caught up because they aren't designed to, sadly. But since then things have stabilized for most.


When I graduated high school there was a recession and the unemployment rate in my town was about as bad as at the height of the pandemic. The main difference I see is that back then, people weren't thrust into a position where they were making all kinds of money but had no place to spend it, which is what happened during the pandemic and what caused inflationary pressures to be sustained over a longer period of time than they otherwise might.

This produced high demand for goods and services and has now resulted in inflation (obviously), severe labor shortages in many sectors, and in turn a need for many immigrants to fill that worker demand. Then, of course, a large influx of immigrants contributes to an already strained housing supply and here we are.

Having said all that, I think if no one does anything stupid it will work itself out over time, as 1-time events are wont to do. Worldwide disasters are usually really expensive. We just have to work to ensure we won't be paying for them forever. I have hope that awareness of the issues affecting poor people is higher than it used to be and there are people working toward long term change.

 

[Islam Imamate]

CPI's rent estimate has been coming down since March 2023, while Zillow's has been coming down since March 2022. Difference is that CPI looks at what people are paying, and Zillow looks at what's available to rent. But, yeah, there are big regional differences that could drive some differences in perception, depending on where people are. But to say that the U.S. economy is good or bad doesn't mean that it's uniformly good or bad in every town.

I saw a headline about how rent growth in Houston is down but it was from the POV of landlords and thus was framed as a bad thing if you can believe it. I think we're now in that lag phase where rents have been coming down but not noticeably enough across the major metro areas to be perceived by voters. In fact even in the long run I don't think voters will perceive that they've entered a healthy housing market as much as they will slowly forget that we had a bad one.

If one wanted to look for a rational explanation for a divergence between reality and perception here, I think you gotta start with the media. But secondarily, nominal price changes could be a factor. If your wages are up 11% and prices are up 9%, you might not think "my real wages are up 2%*," as much as "I got this big raise, and rising prices are taking most of it back!" People have a natural tendency to attribute good things that happen to them to their own merit and bad things to luck or forces beyond their control.

* Not exactly how the calculations work, but you get the idea.

You see that with housing. If someone's rent is going up its the fault of whoever is in office now but if that person finds a similar apartment for less and moves into it their rent has gone down but they experience it as their having found a good deal rather than macroeconomic conditions opening up that opportunity for them.

 

[Islam Imamate]

Good for the rich and stock market - The worst I can recall in my lifetime for normal people.

One bedroom apartments are over $1000 in even bad areas. Owning a home is virtually impossible and are double/triple the price they should be. A single bag of groceries can be over $25. Fast food combos are over $10 and even nearing $20 in some cases.

So if you play Wall Street or own a company, you are sitting on a fat pile of cash. If you are a worker, you are probably struggling. I've never seen it worse.

That would also apply to homeowners though since they are also sitting on a valuable asset which as you point out is as valuable now as it's ever been.

Even for renters the horizon is looking good as rents have started to slowly come down as cities have started building lots of market rate housing. The only roadblock there are NIMBY owners of SFH who try to block the building of housing at every turn.

 

[Jack V Savage]

the last part is exactly what i said. Quit rates during COVID went up not because people had better jobs to do, there was a lot of frustrations with the structure of the economy for low wage earners.

I view the signs of a great economy largely relates to how long the masses of persons out there have to work, to buy the average things they need and want so that they can live their life (so headline GDP usually gets a roll eyes from me).

If you're convinced that whatever your criteria is is at an all time high based on the statistics you found and formula you've created that's fine with me.

We have pretty much the same criteria. I just think we should measure whether they're met by looking at data rather than a gut feeling.

 

[tenniswhiz]

Now and then, I read Mayberry.
I've noticed that several people here complained about the finances on some threads.
All of them Americans.
"Because nearly the whole damn country is broke?"
"The economy is shit"
The inflation, the inflation, the inflation

So, is it true?
Are people doing worse than before?
Are you optimist about the future?
What do US people understand by poverty?

I’m doing better than I have ever done before. But I’m as S&P 500 type of guy.

 

[Natural Order]

We have no doctors and $2k/month rent on the handful of 1 bedroom apartments that come up for rent. Tent cities cropping up everywhere. All the while, immigrants being brought in in record numbers. It's beyond absurd and tragic to see such incompetency at the helm.

 

[Limeade]

What do you think of staying entirely on US stocks?

Would it be a good idea to diversify and add index funds from other markets? I mentioned Nikkei 225 and MSCI Europe the other day.

Or would it be a good idea to increase positions on bonds and treasuries to hedge against a downturn in the market? But that would mean losing out on these 20% returns

 

[cincymma79]

Kinda like Idiocracy

People really did float the rock as president if you recall

 

[Unknown Pleasures]

What do you think of staying entirely on US stocks?

Would it be a good idea to diversify and add index funds from other markets? I mentioned Nikkei 225 and MSCI Europe the other day.

Or would it be a good idea to increase positions on bonds and treasuries to hedge against a downturn in the market? But that would mean losing out on these 20% returns

There's likely some argument for that from a portfolio management perspective. Look up Efficient Frontier.

But the actual answer to your question is tough without knowing the specifics of your financial situation and objectives and risk tolerance (do you need any immediate income, liquidity needs, or have a long investment horizon for instance). Blanket questions like the one you ask will often have a big element of "it depends" to it.

Also, risk in staying in U.S. stocks can also dramatically differ depending on the specifics. A diversified portfolio across industries for large caps will have a much difference volatility than concentrated positions in small caps especially if those are in more volatile sectors.

In general, I'd advise time in market over timing the market, and predicting ups and downs and timing them well is very difficult, especially for a novice, but also experts. Lot of the time when people do it and it works, it's little more than luck.

 

[LeonardoBjj]

- Didnt want to start a thread. So will post here

Mortgage rates shoot to 2-month high after new report shows inflation is still hot​

PUBLISHED FRI, FEB 16 202412:53 PM ESTUPDATED 3 HOURS AGO
Diana Olick@IN/DIANAOLICK@DIANAOLICKCNBC@DIANAOLICK

• The average rate on the 30-year fixed mortgage jumped to 7.14%, according to Mortgage News Daily.
• Mortgage rates hit their last high in October, but then fell sharply over the next two months, leveling at around 6.6% in December.

Mortgage rates shot higher Friday after a monthly government report on wholesale prices showed inflation is still persistent and hotter than most analysts had expected.

The average rate on the 30-year fixed mortgage jumped to 7.14%, according to Mortgage News Daily. That is the highest level in two months.

Mortgage rates hit their last high in October but then fell sharply over the next two months, leveling out at around 6.6% in December. They climbed back over 7% last Friday after another government report on consumer prices came in higher than expected.

“There are two ways to look at recent rate trends in light of the data-driven spikes over the past two weeks,” said Matthew Graham, chief operating officer at Mortgage News Daily. “On one hand, we can take solace in the fact that rates are still almost a percent lower than they were in October. On the other, the optimism for lower rates in 2024 has abruptly given way to skepticism.”

The drop in rates at the end of last year had caused optimism in the housing market as higher interest rates, coupled with high home prices, sidelined buyers in the fall. Sales of newly built homes soared 8% in December, according to the U.S. Census Bureau, with lower rates acting as the primary driver.

Homebuilder sentiment, based on an index from the National Association of Home Builders, has been rising for the past three months as builders reported that lower interest rates were driving buyer traffic to their model homes. In February’s report, builders said they expected mortgage rates to continue to moderate in the coming months.

“Buyer traffic is improving as even small declines in interest rates will produce a disproportionate positive response among likely home purchasers,” said NAHB Chairman Alicia Huey, a homebuilder and developer from Birmingham, Alabama. “And while mortgage rates still remain too high for many prospective buyers, we anticipate that due to pent-up demand, many more buyers will enter the marketplace if mortgage rates continue to decline this year.”

Demand has been strong, despite high home prices and very low supply of homes for sale. Adding to that, President’s Day weekend is considered to be the unofficial start of the all-important spring housing market.

But this new upswing in rates could drive buyers away. In January, when rates flattened from their declines, both signed contracts on existing homes and new listings weakened, according to Redfin, a national real estate brokerage.

https://www.cnbc.com/2024/02/16/mortgage-rates-shoot-to-2-month-high-after-hot-inflation-report.html

 

[Spam On Rye]

No clue but eight triple A batteries cost $15.99 at Home Depot at the moment. They were $8.99 four years ago.

 

[Limeade]

There's likely some argument for that from a portfolio management perspective. Look up Efficient Frontier.

But the actual answer to your question is tough without knowing the specifics of your financial situation and objectives and risk tolerance (do you need any immediate income, liquidity needs, or have a long investment horizon for instance). Blanket questions like the one you ask will often have a big element of "it depends" to it.

Also, risk in staying in U.S. stocks can also dramatically differ depending on the specifics. A diversified portfolio across industries for large caps will have a much difference volatility than concentrated positions in small caps especially if those are in more volatile sectors.

In general, I'd advise time in market over timing the market, and predicting ups and downs and timing them well is very difficult, especially for a novice, but also experts. Lot of the time when people do it and it works, it's little more than luck.

Thank you.

No clue but eight triple A batteries cost $15.99 at Home Depot at the moment. They were $8.99 four years ago.

What luck i just bought some this week. Do you have walmart or Harbor Freight in your area?

Walmart AAA

AAA Zinc Chloride Batteries, 24 Pack

Amazing deals on this 24Pk Aaa Batteries at Harbor Freight. Quality tools & low prices.

www.harborfreight.com

 

[Spam On Rye]

Thank you.



What luck i just bought some this week. Do you have walmart or Harbor Freight in your area?

Walmart AAA

AAA Zinc Chloride Batteries, 24 Pack

Amazing deals on this 24Pk Aaa Batteries at Harbor Freight. Quality tools & low prices.

www.harborfreight.com

I have both but being in the Baltimore area I steer clear of those spots usually. That being said, might have to risk getting shot or stabbed for a deal like that. Thanks bro. Good lookin out.

 

[Unknown Pleasures]

No clue but eight triple A batteries cost $15.99 at Home Depot at the moment. They were $8.99 four years ago.

Batteries is a new one... wonder what's driving that - if it's just price gouging. I heard some people were blaming the price of soda going up on aluminum prices... I dunno. Sounds dubious. Luckily some of the most hard hit items have retreated.

https://www.cnn.com/2023/09/25/economy/us-workers-cost-of-living-inflation/index.html

Bloomberg - Are you a robot?

 

[nonoob]

Good for the rich and stock market - The worst I can recall in my lifetime for normal people.

One bedroom apartments are over $1000 in even bad areas. Owning a home is virtually impossible and are double/triple the price they should be. A single bag of groceries can be over $25. Fast food combos are over $10 and even nearing $20 in some cases.

So if you play Wall Street or own a company, you are sitting on a fat pile of cash. If you are a worker, you are probably struggling. I've never seen it worse.

Nobody that I know ever struggled more financially than they are now, during this administration. Since then, the price increases of gas, food, clothes, vehicle insurance and upkeep, medicine, health insurance, rent or mortgage & house insurance, etc. etc. etc.

I haven't seen a single price of ANYTHING that is equal to (or less than) the amount paid for during the last administration, and I Am Not A Trump/er/tard.