22-08-2002 03:08									#181
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Hours worked for US production/non-supervisory workers on nonfarm payrolls is available from the BLS back to 1937, I have the data back to '64. Two weeks ago the BLS reported the number at 1768 hours.

el freako - you can statistically have a huge boom in employment with a decline in the employment rate... not sure which number from the BLS series you are refering to.

	22-08-2002 03:33									#182
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quote: Originally posted by Sten Sture el freako - you can statistically have a huge boom in employment with a decline in the employment rate.

Only if the working-age population is going up really fast (like 3%-4% a year), and if fewer people of working age have a job is the situation really good just because employment is rising?
For example between 1990 and 2000 Turkey's employment rose by 11% but it's employment rate fell from 56% to 48%.

quote: Originally posted by Sten Sture not sure which number from the BLS series you are refering to.

It's not from the BLS, I calculate my own employment rates using OECD data on employment and working-age population - again I use this method mainly for easy international comparisons.

	22-08-2002 03:42									#183
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I am not familiar with the OECD process, but here is the the household survey data from the BLS:

It shows that the employed percentage of the total population increased a decent amount during the ninties, and at a level higher than previous years.

Attachment: usempl1.jpg
This has been downloaded 58 time(s).

	22-08-2002 03:50									#184
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"If it was a boom comparable to those in the 1970's and 1980's then you would have seen a rise in the US's employment rate (employed/working age population) similar to those times - what happened was stagnation.
If employing all those immigrants was so important then why has the US's activity rate been falling for over a decade?"

I haven't taken a look at these numbers for a long time, but I always thought the female participation rate increase was the big contributer to the employment boom of the 70s and 80s. In the 90s, the big phenomenon seemed to be immigration. We were running out of bodies.

Anyway, the participation rate has fallen, but not exactly precipitously.

"You couldn't PM me either a link or the data could you?"

I wish I could remember where I saw it. I thought it was a pretty graph and mentally logged it. But as stated, I don't know the basis.

"My reason for choosing this measure of budget balance is (as usual) that is is the most internationally comparable figure. It reached a peak of $165bn surplus in Q1 2000 (1.7% of GDP), since then it has deteriorated by around 5% of GDP (or $10bn a week at today's prices"

Oh, OK. Now I understand (well at least enough for a layman). Some time ago you mentioned the UK's big budget swings last cycle. What was that swing again, and how does this one compare? Is that number on a similar basis to these account numbers?

	22-08-2002 04:08									#185
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by the by, Canada publishes some G7 data for GDP and gov debt data that lists comparisons, if you want to see the numbers/charts I could post them - not sure how those wylie Northerners adjust the numbers, but...

	22-08-2002 04:11									#186
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The main differences I can see between the BLS data and the OECD's is that the BLS uses 'adult population' (those aged over 15) as it's denominator whereas the OECD uses 'working age population' (those aged between 15 and 64).

However I think I know where the discrepancy is, the BLS seems to be using the old (pre-2000 census) data for population.

In my own figures I achieved a workaround by using the OECD's data for the share of population that is of working age and applied that to the latest US population estimates that I got from the BEA (line 16 on
this table)

I have attached the spreadsheet I used to calculate the data, it shows employment rates for most of the OECD countries for the period 1978-2002 (the 2002 figure being the OECD's own estimate for employment, I have made estimates for working age popualtion for both 2001 & 2002)

Attachment: employment rates.zip
This has been downloaded 6 time(s).

	22-08-2002 04:16									#187
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Good God. None of those Belgians work.

	22-08-2002 04:25									#188
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quote: Originally posted by DanS Anyway, the participation rate has fallen, but not exactly precipitously.

Well according to my data it rose from 70.5% in 1979 to a peak of 76.3% in 1990 - a rise of 0.5% a year
It then fell slowly to 76.1% in 1997 but since then has fallen sharply - the forecast for this year is 74.3% a fall of 0.4% a year.

quote: Originally posted by DanS Some time ago you mentioned the UK's big budget swings last cycle. What was that swing again, and how does this one compare? Is that number on a similar basis to these account numbers?

The move in the UK (on a similar basis) was from a surplus equivalent to 0.8% of GDP in 1989 to a deficit of 7.9% in 1993 - a deterioration of 2.2% per year.
In the US the balance has gone from a 1.7% surplus in Q1 2000 to a 3.3% deficit in Q2 2002 - again a deterioration of 2.2% per year.

	22-08-2002 04:33									#189
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Belgians? What about the Turks!

my god, we are downloading excel spreadsheets with employment figures from the internet...

	22-08-2002 04:39									#190
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quote: Originally posted by Sten Sture Belgians? What about the Turks!

Not to mention the Poles, however to see what can be done look at the data for Ireland, Holland and Spain.

quote: Originally posted by Sten Sture my god, we are downloading excel spreadsheets with employment figures from the internet...

If you liked that why not try my pride and joy

GDP per head relative to the USA from 1950-2005 for 38 countries plus data for the EU as a whole.

	22-08-2002 05:11									#191
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Nice. You've done a lot of work on it since you last posted it.

Re Ireland, it's heartwarming to see them do well--nothing short of amazing. I wonder when good times visited those shores last...

But Argentina has me crying in my beer.

	22-08-2002 05:18									#192
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Yup poor old Argentina.

And Russia and New Zealand.

These are the only economies to actually perform worse than the US's over the last half century (and they didn't start out anything like as rich).

But lucky Ireland will actually be richer than america in 3 years time!

	22-08-2002 05:30									#193
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Yes, the post-war era has been good for the rest of the world. It appears that this is finally reaching critical mass, and soon we'll be able to benefit more from this trend.

	22-08-2002 14:59									#194
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What prey tell is the "critical mass" ?

As for the 5-7 % budget deficit, you had a swing of 4 % already with the mild first stage of the recession. When we go into round 2 it will easily be the same amount again.

And Sten if you think the US economy is "healthy", then why isn't growth getting any traction with the Fed rate at 1.75 and the 10 year treasury at 4/4.25 % ? That should be enough to make an old elephant dance...

	22-08-2002 17:15									#195
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quote: And Sten if you think the US economy is "healthy", then why isn't growth getting any traction with the Fed rate at 1.75 and the 10 year treasury at 4/4.25 % ? That should be enough to make an old elephant dance...

Considering that a large slice of the last 5-7 years worth American investment was pissed away on the NASDAQ bubble, the US isn't doing too badly.
Also, you need to remember that it takes time for changes in interest rates to have any significant impacts on the economy (12-18 months in Australia).

	22-08-2002 19:14									#196
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"What prey tell is the "critical mass" ?"

The move from a unipolar economic world to a bipolar and then (in the future) multipolar economic world.

Not too long ago, the EU wasn't much compared to the US, but now it is, for instance (the critical mass being somewhere between 55% and 75% of US GDP). This has benefitted the US greatly over the last 7 years.

We can expect either or both China and India to make a similar run over the next century.

Last edited by DanS on 22-08-2002 at 19:22

	22-08-2002 20:18									#197
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quote: Originally posted by Case Considering that a large slice of the last 5-7 years worth American investment was pissed away on the NASDAQ bubble, the US isn't doing too badly.

What investment ? Nasdaq and the rest of the stock market was hot air in and hot air out.

	22-08-2002 20:20									#198
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"Not too long ago, the EU wasn't much compared to the US, but now it is, for instance (the critical mass being somewhere between 55% and 75% of US GDP)."

You really have a lot of funny ideas. While this critical mass thing doesn't make much sense, how on earth do you arrive at the idea that this "started" in 1995 for the EU ?

	22-08-2002 20:53									#199
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"how on earth do you arrive at the idea that this "started" in 1995 for the EU"

I didn't say it started in 1995. Rather, I implied that the U.S. benefitted most starting in 1995. That steep rise in investment starting in 1995 came from somewhere!

	22-08-2002 20:58									#200
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That steep rise in investment came after a very steep fall in the early 1990's.

Net Private Investment moved in the range of 6%-10% of net output during 1950-1985, however it collapsed to 4% in the early 1990's.
The steep rise you mention took it back to 8% in 2000 the average for the pervious 50 years but since then it has fallen back to below 5%.

	22-08-2002 21:11									#201
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"That steep rise in investment came after a very steep fall in the early 1990's."

Yes, but we're talking investment from overseas, which started making a huge difference in 1995.

Edit: 1997 was just astounding. Foreigners increased their investment in the US by almost a trillion dollars. I can only assume that much/most of this was from Europe.

And don't tell me I'm looking at the wrong line item.

Last edited by DanS on 22-08-2002 at 21:30

	22-08-2002 21:30									#202
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Here is the relevent spreadsheet if anyone want to see it:

Attachment: net investment.zip
This has been downloaded 3 time(s).

	22-08-2002 21:41									#203
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I'd expect most of those net inflows to actually come from Asia and recycled petro dollars. Europe had nowhere the trade surplus to match such capital outflows, and in those dimensions the divergence would be serious.

Also don't forget that the US bubble and the japanese slump went hand in hand.

	22-08-2002 21:51									#204
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DanS

Ah, I see what you are getting at.

However that made me wonder what proportion of the US's net investment (both private and public) is 'financed' from abroad.

Taking 'net foreign investment' (line 19 on this table) as a share of total net investment I can see how 'dependent' the US is on foreigners to finance it's investment.

The results were surprising, possibly alarming, as they show an increased dependence on foreign financing.

Net Foreign Investment as % of Net Investment:

1981-95: 22%
1996: 22%
1997: 21%
1998: 29%
1999: 37%
2000: 51%
2001: 58%
2002: 76%

Admittedly much of the rise since 2000 has come due to falling net investment as net foreign investment has been static.

In Q2 2002 it hit 79%, the previous high was 44% in Q3 1987 - hmm what happened in that quarter?

Last edited by el freako on 22-08-2002 at 22:00

	22-08-2002 22:17									#205
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ef: That's exactly what I'm getting at, although I didn't have clear %-ages in my mind.

Edit: I don't know enough to decide whether it is alarming or not. My gut instinct is to not be alarmed at all and look on it as a beneficial trend. Before now, nobody else would have had the wherewithal to even approach these levels, much less sustain them at least so far through a bear market of 73-74 proportions.

Roland: Well, the net direct investment inflows into U.S. companies comes about 80% from Europe. In many years, that's a substantial portion of all inflows.

Last edited by DanS on 22-08-2002 at 22:23

	22-08-2002 22:28									#206
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The tables I was looking at to get a rough feel for foreign appetite for keeping and adding to U.S. assets was the following...

http://www.bea.gov/bea/di/intinv1976_2001.xls

	23-08-2002 08:30									#207
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quote: Originally posted by Roland What investment ? Nasdaq and the rest of the stock market was hot air in and hot air out.

Huh? The bubble was good money in, and hot air out - many of the shares which investors bought at high prices are now totally worthless. This represents a massive waste of money which could have been invested in more productive areas of the economy.

	23-08-2002 12:27									#208
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"My gut instinct is to not be alarmed at all and look on it as a beneficial trend."

That gut instinct of yours makes we want to smash the wall in. Everything's good, little pinky fluffy clouds everywhere....

You can't run that deficit ferever. When you no longer do, you'll invest less or consume less. If you invest less, then net investment is about zero - and that means no output growth.

And foreign capital didn't flow into the US for the pinky fluffy clouds, but it wanted to play the bubble.

"Well, the net direct investment inflows into U.S. companies comes about 80% from Europe."

Only during the bubble, when european hot air (Vivendi, Vodafone or DT stock) was exchanged for american hot air. Inflated asset prices wreak havoc on the stats.

case:

"The bubble was good money in, and hot air out - many of the shares which investors bought at high prices are now totally worthless."

And where did the money go ? They had to buy the stocks from someone, you know....

"This represents a massive waste of money which could have been invested in more productive areas of the economy."

The waste of resources came with spending on useless capital assets, induced by the nasdaq bubble, artificially low interest rates and relentless cheerleading from the washingtonwallstreetmedia mafia. But it's not like anyone had put the now 6 or 7 trillion $ on the table that were now lost in the recent meltdown.

	24-08-2002 05:06									#209
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quote: Originally posted by Roland case: "The bubble was good money in, and hot air out - many of the shares which investors bought at high prices are now totally worthless." And where did the money go ? They had to buy the stocks from someone, you know....

My point is that the money was spent unproductively - investors bought (generally overpriced) shares which were offered by the companies and the companies then burnt through this money and went broke.

While the investment certainly wasn't a total loss to the economy, the US would be in much better shape if that money had been invested in more viable companies and the investors had gotten their money back.

	28-08-2002 01:10									#210
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The amount of money actually raised in IPOs of start-up crap tech companies was pretty small relative to the economy. That was part of the necessary mechanics - sell a small number of shares (3%-5%) of the company and create an artificial short. Rating the money flows by the last trade pricing of stock indicies overstates the magnitude of the bubble.

The real economic spending was by "normal" businesses and households to upgrade their technology infrastructure, and that wasn't good money chasing bad, it was good money chasing added productivity, albeit at a higher rate than should have been the case.

A post "crash" decline in the dollar, economic activity, and a rise in govt deficits is not symtematic of an impending collapse of the US economic system. We will continue, greatly to the annoyance of Roland , to be able to import vast amounts of capital. Indeed, US's most valuable asset is the ability to export the dollar and secure external funding as THE global safe haven.

The US is able to borrow money at 2% real. For 3% of GDP, please! Its immaterial. If you personally make 100k (after taxes) how big a deal is it to borrow 3k at 2% real? BFD.