Case in point on corroborative evidence divorced from the government’s statistical adjustments, Gallup’s various surveys on the economy, focused almost exclusively on consumers, do not conform to the idea of strengthening resolve nor even more broad-based payroll expansion. The latest figures for July in the daily tracking of self-reported spending ticked up over June, but that observation, once again, is too narrowly focused to be of use. In fact, going back to February 2013 when the daily tracking average first hit $90, spending represented here has been largely stagnant for almost a year and a half now.
However, as much as that by itself should render great caution about interpretations tending toward further recovery, that stagnation does not come as a straight line (as straight lines and regularity are almost always typical of statistical problems). Rather, the volatility in the monthly figures (which are daily averages) has been far greater over that period, particularly on the downside. So you end up with a trend with more downside and what amounts to a ceiling on the upside. Taking further account of price changes, Gallup’s poll estimates here are actually declining in real terms, even if only gradually.
That data matches closely the retail sales figures released this morning. While in the narrow comparison with the first quarter spending might look accelerative, in this wider context it is nothing of the sort – amounting to simply less bad.
But it is not limited to consumer spending estimates, as expectations have actually been sinking this year instead of following the assumed track of the “strongest payroll expansion in years.”
What is interesting in Gallup’s polling compilations here is that the current conditions series is about flat to only slightly above the dreary and drastic winter; but remains significantly below last summer. However, the “Economic Outlook” segment of the index has been trending steadily downward since the beginning of the year, resting now quite a bit below last year.
It’s almost as if Gallup is surveying not consumers but bond market participants as the yield curve collapses in very similar fashion and timing to the outlook portion here. Of course, these are all survey indices of changes in polling data, including those regarding “expectations”, so all of this amounts to at best reasoned conjecture. But it is somewhat useful as it helps to decipher economic direction given the stark divergence in certain economic accounts. In other words, this looks far more like the US sales at McDonalds restaurants and far less like the ridiculous GDP revisions.
On that front, the primary impediment to actual economic health, as opposed to simply positive numbers on some spreadsheets, is and remains wages (again contradicting the idea of strengthening labor utilization). The US Conference of Mayors issued a report a few days ago that calculated lost wages in this “recovery.”
Jobs gained during the economic recovery from the Great Recession pay an average 23% less than the jobs lost during the recession according to a new report released today by The U.S. Conference of Mayors (USCM) under the leadership of President Sacramento Mayor Kevin Johnson. The annual wage in sectors where jobs were lost during the downturn was $61,637, but new jobs gained through the second quarter of 2014 showed average wages of only $47,171.
While the release is likely politically motivated, given the uniformity of party representation in its participation list, that does not alter the main idea, particularly as it has been confirmed in non-partisan fashion elsewhere. While the intentions here are almost totally overt in their political appeal to “inequality” as a partisan issue, that clouds the problem more than offers a pathway to solution. The typical and conventional devolution of wage problems runs along capitalism vs. government redistribution, when in reality it is competing forms of government redistribution; with capitalism actually left out of the argument altogether.
There is no way to square this circle whereby an economic “recovery” could produce those results, in everything from wages to stagnant spending and beyond. These are instead the hallmarks of redistribution simply moving some things forward while leaving the vast majority behind. The monetarist may expect that doing so will eventually lead to a full upward trend of sustainable and robust magnitude, but actual observation must conclude otherwise.
What is left is actually connecting the dots between all these appeals to redistribution and the growing and systemic weakness presented by pretty much every economic indication. The economy is not recovering or moving forward, but slowly sinking under the weight of sanctioned theft that comes in the form of asset bubbles (stock repurchasing “stealing” corporate resources from productive investment) and repression of risk, rates and returns.
A true capitalist system values wages and labor because that is the basis (or at least one half of it) of the creation of true wealth. A real recovery would see exactly that, and would thus be experiencing rising wages, likely at a robust clip, and leading to consumer spending and retail function at levels where there is no argument about cycle. Instead, the increase of bubbles through paper “wealth” simply masks these large and growing deficiencies under a pile of slight and indecisive positive numbers.
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