October 2014

Personal Income Rises 0.3% in August; Spending Increases 0.5% While Prices Fall

Other than the employment report, the report on Personal Income and Outlays for August from the Bureau of Economic Analysis was probably the most important economic release of this past week, as this is the report that gives us the monthly data on our personal consumption expenditures (PCE), which is nearly 69% of GDP, as well as the important monthly personal income data, total personal savings and the national savings rate, in addition to the price index for PCE,

Deconstructing the Minimum Wage Debate (version 2)

Minimum wage debates are back in vogue. Unfortunately, these discussions instead of reflecting a possible fix for America's economic woes are indicative of the key theoretical failure which permeates nearly all schools of economics. On one hand we find the modern Quantity Theory of Money (QTM) theorists equipped with their models of barter (general equilibrium theory) built on instantly and infinitely flexible wage and price price assumptions.

The Magical Shrinking Unemployment Rate

The September current population survey unemployment report dropped to 5.9% and all sing hallelujah the job crisis is over.  The unemployment rate hasn't been this low since July 2008.  The unemployment rate dropped two tenths of a percentage point in a month, but why it dropped is more interesting.  The main reason is the decline in those participating in the jobs market.

ADP Employment Report Shows Healthy Job Gains for September

ADP's proprietary private payrolls jobs report gives us a monthly gain of 213,000 private sector jobs for September 2014.  August's ADP private payroll gains were 202,000.  Manufacturing had the highest job growth by ADP's records since May 2010.  By ADP's survey, this is the sixth consecutive month where their reported private job gains are above 200 thousand.