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Title: Americans haven’t gotten a raise in 16 years
Source: New York Post
URL Source: http://nypost.com/2016/04/30/americ ... nt-gotten-a-raise-in-16-years/
Published: Apr 30, 2016
Author: John Crudele
Post Date: 2016-04-30 20:03:13 by Justified
Keywords: None
Views: 634
Comments: 7

Mark Twain is credited with saying “figures don’t lie, but liars figure.” If he were around today Twain’s quote might go something like this: “Figures do lie, and liars figure out how to make people believe them.”

Granted, not as catchy.

But my quote goes a long way toward explaining something that is bothering many political pundits today. President Obama whined last week that he’s not getting enough credit for the economy.

Democrats are besides themselves wondering why Americans are so angry that they might be willing to elect Donald Trump president when the official unemployment rate is only 5%, oil prices are near their lowest level in a decade and the economy has been expanding for seven straight years.

Why aren’t Americans happier?

One of those pundits made me chuckle Tuesday night when he was talking about Trump’s primaries victories in another five states. He suggested that Americans were somehow being brainwashed by the media into thinking the economy was really bad when in fact it was good.

Then, on Thursday, the Commerce Department showed just how good the economy wasn’t. It announced that the Gross Domestic Product grew by an annual rate of just 0.5% in the first three months of 2016.

But that didn’t stop the media from trying to explain away the disappointment.

The New York Times, for example, suggested softly that “the recovery has two sides.” Toward the bottom of the piece, it included the startling facts that “factories shed nearly 50,000 jobs in February and March, wiping out all of the gains recorded last year. The proportion of Americans in the active labor force remains depressed by historical standards, and more than 6 million workers say they are in part-time positions because they cannot find full-time work.”

But hey, the paper continued, we found some anecdotes of companies that are hiring!

It’s not just political spin, however, that explains the rose-colored coverage. Another explanation is that the media is plain stupid — quick to accept guidance from economists on Wall Street, for example, who have a vested interest in making everything wonderful.

Economists understand what “statistical noise” is. If you don’t, here’s a definition from a website called WiseGeek: “Strictly defined, statistical noise is a term that refers to the unexplained variation or randomness that is found within a given data sample or formula. There are two primary forms of it: errors and residuals.”

In other words, economic statistics may not make sense in the short term because something is innocently interfering with the accuracy of the data or someone is intentionally fooling with the numbers.

I don’t think anyone today is intentionally fooling with the nation’s economic data, although I’ve proven that there were questionable data collections leading up to the presidential election in 2012. These days, I think the data is simply misleading.

Take the economic data that came out throughout the first quarter of 2016 as an example.

The Federal Reserve Bank of Atlanta keeps real-time track of the nation’s economy using something it calls GDPNow.

At the beginning of January, GDPNow was showing that US economy growth was around a 2.7% annualized rate. By last week, GDPNow had been ratcheted all the way down to 0.6% — which was slightly better than the actual number reported on Thursday by the Commerce Department.

How could the Atlanta Fed have been so wrong? Statistical noise made it tone-deaf to what was going on in the real world.

As I correctly predicted last December, the government’s economic data in the first quarter was thrown off by inaccurate seasonal adjustments, among other things.

Seasonal adjustments try to smooth out predictable economic patterns so that data doesn’t bounce around. You don’t want data to show that, for instance, millions of jobs are lost in the summertime just because teachers are temporarily laid off.

Seasonal adjustment programs typically look back five years to see what constitutes “normal.” But economic growth in the first quarters of both 2014 and 2015 was dismal because of horrible weather. So I conjectured in December that the government’s computers would overreact to any normal growth in 2016.

And that seems to be what happened. Early in the first quarter the government reported better-than-expected data (which led to the Atlanta Fed’s bad forecast of 2.6% growth). But those numbers were then quickly revised over the next few months.

This sort of statistical noise has been going on for years, mostly because the Great Recession threw off normal adjustments. And this will continue to happen. US economic data today is untrustworthy. Even worse, it is causing the Federal Reserve and others to make bad decisions.

This unpredictable, inaccurate data is causing politicians and others to incorrectly understand the mood of the nation.

Americans are angry because they don’t care about the statistical noise — they care about what they see with their own eyes.

True, there may have been 15 million new jobs created during the Obama administration — which, on the surface, is laudable. But that’s about half what was needed to both absorb newcomers to the workforce and those who were laid off over the past decade and would like to return.

And that drop in the unemployment rate that everyone likes to point to? Even the Fed doesn’t trust it and has formulated its own replacement gauge.

Here’s why: When you count all the workers who have been stuck with part-time employment or who haven’t searched for work in a year, the jobless rate is twice the official 5% level. And many of the full-time jobs created have been in the lower-paying service sector of the economy.

When you include those people who haven’t sought a job in more than a year, the unemployment rate jumps much higher.

How high? Washington doesn’t even bother trying to calculate what it is.

One last statistic, from Sentier Research. Median annual household income in the US reached $57,263 this past March, which was 4.5% higher than in March 2015.

But — and here’s where the anger comes in — this March’s figure is still slightly below the $57,342 median annual income in January 2000.

January 2000!

Americans haven’t gotten a raise in more than 16 years.

Statistical noise doesn’t just confuse economists and politicians. It also drowns out the sound of people complaining.

John Crudele is a Post business columnist.

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#1. To: All (#0)

I don’t think anyone today is intentionally fooling with the nation’s economic data, although I’ve proven that there were questionable data collections leading up to the presidential election in 2012. These days, I think the data is simply misleading.

I say they are trying to distort the data and have for some time.

It wasn't as bad as the MSM claimed under Bush and it is whole lot worse under Obama. I said it before all Obama had to do is not do a damn thing and the ship would have righted itself and he would have gotten the credit just like Clinton did. But no he is a complete asshat and asshats do what asshats do! Fuck things up worse!

Justified  posted on  2016-04-30   20:06:08 ET  Reply   Trace   Private Reply  


#2. To: Justified (#0) (Edited)

I don't think you should complain too much, you are doing better than most

average monthly income

1 Luxembourg $4,089 2 Norway $3,678 3 Austria $3,437 4 United States $3,263 5 United Kingdom $3,065 6 Belgium $3,035 7 Sweden $3,023 8 Ireland $2,997 9 Finland $2,925 10 South Korea $2,903 11 France $2,886 12 Canada $2,724 13 Germany $2,720 14 Singapore $2,616 15 Australia $2,610

70 Pakistan $255

paraclete  posted on  2016-05-01   2:30:30 ET  Reply   Trace   Private Reply  


#3. To: paraclete (#2)

Inflation kills you. If you are not increasing income above inflation you are losing income. Many of the companies have cut the older workers to higher new young people at half the cost and zero experience. They have tried exporting the jobs which did not work well. Then higher foreign works which has not worked well either. Now they are trying to have the old guys teach the new young guys their job but work ethics is not there so that will not work well either. The old ways worked because that's what it took and now we have to relearn this painful lesson all over again.

There are 2 big factors here. Global corporate model and massive unsustainable power stealing central government. All trying to destroy the middle class which makes a country great.

Justified  posted on  2016-05-01   9:03:10 ET  Reply   Trace   Private Reply  


#4. To: Justified (#3) (Edited)

All trying to destroy the middle class which makes a country great.

it isn't the middle class that makes a country great, it is the working class, a forgotten class in the US, now downtrodden and hardly more than slaves. Don't tell us how you suffer inflation, when did you suffer 18% interest rates?, When was your last meal? You don't really know inflation, you think 2% is ruinous. You priced yourself out of the labour market and someone was glad to give the job to a chinese coolie, meanwhile more of the coolie class flooded across your borders to become slaves of the middle class. Don't worry deflation is coming, we are already seeing it and you will too as your big profiteering corporations fight for market share in a declining market, they are falling over at an astonishing rate, too stupid to stop chasing the last dollar

paraclete  posted on  2016-05-01   9:13:45 ET  Reply   Trace   Private Reply  


#5. To: paraclete (#4)

it isn't the middle class that makes a country great, it is the working class,

Middle class is the working class. The upper class don't matter and neither does the lower class.

a forgotten class in the US, now downtrodden and hardly more than slaves.

They're there of their own design. They don't want to work and would rather set at home watching jerry springer on a big screen tv. They are the worst group who refuse to sacrifice and claim everyone owes them a living wage while they refuse to show up to work on time and refuse to work with out causing issues. I believe the upper class got tired of this crap from them and thats why we have so many illegal aliens here to take the jobs these people would have.

BTW 2%? How about 2% over a 10 or even a 20 year period. 2% is alot when you don't have 2% to give. America and western countries screwed the pooch with global corporate models and big over burdensome governments.

Justified  posted on  2016-05-01   9:41:51 ET  Reply   Trace   Private Reply  


#6. To: Justified (#0)

Americans haven’t gotten a raise in more than 16 years.

But the globalist CEOs are doing great hiring illegals and H-1Bs.

A government strong enough to impose your standards is strong enough to ban them.

ConservingFreedom  posted on  2016-05-01   19:50:03 ET  Reply   Trace   Private Reply  


#7. To: ConservingFreedom (#6)

But the globalist CEOs are doing great

at feathering their own nests

paraclete  posted on  2016-05-02   9:23:00 ET  Reply   Trace   Private Reply  


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