Comment by throw0101a | Hacker News Reader

Comment by throw0101a | Hacker News Reader

This article is from October, but people have been looking at the most recent survey results form UMichigan, and found the details… interesting. Specifically that expectations are highly correlated with how people self-identified politically. For example, Republicans have worse sentiments about the economy now than they did in March 2009, when the unemployment rate was 8.7%:

* https://fred.stlouisfed.org/series/UNRATE

And the economy was losing 800K jobs per month:

* https://fred.stlouisfed.org/graph/fredgraph.png?g=IXam

The UMichigan folks call out this this partisan lens explicitly:

* http://www.sca.isr.umich.edu

And while (some) folks have negative view on the economy (depending on their political leanings), there is a general positive feeling on their personal finances:

* https://www.langerresearch.com/category/cci/

And if people are worried about the economy like they say, you'd think they'd be saving. Yet US retail sales are up:

> US Retail Sales hit another all-time high while Consumer Sentiment is at its lowest level in 10 years. […]

* https://twitter.com/charliebilello/status/146063239508697498...

* https://twitter.com/TheStalwart/status/1460601503744466944

> if people are worried about the economy like they say, you'd think they'd be saving.

Not if the worry is inflation and supply chain instability. That pushes spending, not savings, forward.

Yup. I've begun and mostly completed my xmas shopping (for fear of not being able to get anything), and accelerated some purchases I was putting off (new phone, new computer etc).

Are jobs and employment rates really what we should be using to measure the economic outlook? Some people would be better off unemployed on government help, than employed full time at minimum wage in a city where housing is unaffordable and inflation is at 5%.

Additionally, increased spending can be a symptom of inflation as consumers rush to buy goods where prices lag.

how is this statement remotely true? Now is government help better than min wage? housing is still unaffordable and inflation is still 5%. There is no wealth creation on government assistance. In fact, there is wealth destruction.

I’m not saying that people being on government help is better for the economy than people working at minimum wage.

I’m saying that maybe employment rates aren’t as relevant of a measure as they once were, because employment at min wage isn’t as useful to the individual as it was 10, 20 years ago.

I suggest you look at the employment data breakdown. The DOL goes into a lot of detail about what jobs are created, at what pay, etc.

What do you believe the data will say about my statement? Will the data disprove it?

The data will show that policy makers don't just look at the unemployment rate, they look at the underlying drivers.

And it will also show very few people actually make minimum wage and most of them are young teenagers.

I think you’re giving policy makers too much credit by saying they look at the data, but that’s an aside :).

I’m not sure we even have to look at the data ourselves to find my statement true, if we accept the following as facts:

1) Wages have largely remained stagnant in the past 10 years

2) Inflation has increased in the past 10 years

3) Housing and healthcare costs have increased in the past 10 years

Thus, even if employment is exactly as it was ten years ago, it doesn’t seem meaningful in understanding economic health.

You don't think policy makers look at the data? Have you looked at the data?

It was tongue in cheek

Real wages* have been roughly flat for quite some time. That statement covers 1 and 2 above, yet people often include both as if the second one represented a new problem in light of the first. You’ve included a third statement which restates/clarifies a portion of #2.

All of those statements are true, provided you’re talking about real wages, but then those are closer to 1.5 independent facts than 3.0.

https://www.pewresearch.org/fact-tank/2018/08/07/for-most-us...

You just cited a source from 2018. Are real wages still flat, right now in 2021, or are they down? Do you think wages hiked 6.2% with inflation over the past few months?

BLS says real wages at -1.2% over the last year, and thats probably conservative. Combined with my third point it sounds a bit scary dont you think?

https://www.bls.gov/news.release/realer.nr0.htm

I could easily combine points 1 and 2 to your point but imo it makes more sense to separate because inflation and how we measure it is at the heart of the issue.

To separate them in a logical fashion, you need to talk about nominal wages in #1 which have experienced growth roughly in line with inflation. Then, introducing nominal inflation in #2 builds on #1.

I cited a 2018 study because the time period in question was largely covered by it. I’m happy to review a 2021 study if you cite one.

I updated my reply with data showing real wage drop, shortly after you responded. In addition, id like to add opinion that the current cpi does not accurately reflect healthcare costs, which are continuing to skyrocket unchecked [1].

Housing costs will also lag as is standard. so we might not see that effect entirely now but we will in the next year or two.

I’m not sure where exactly the goalposts are in this conversation but as you can tell I’m extremely bullish on inflation and the wealth gaps between the poor and wealthy widening. I believe the government is past the point of no return on debt and will need to continue to print money indefinitely to stay caught up. If we were using 70s measures of inflation i suspect we would be hovering around 13%+. Peers who are experts and leaders in finance and economics are of the same opinion - and are currently making a killing off this money printing episode.

I would love to hear more dissenting opinion though and am definitely open to it.

[1]https://www.ncpssm.org/documents/social-security-policy-pape...

If you don’t need to be in a place with jobs, you can surely find a cheap place to stay. For a lot of Americans, it means they can find a free place to stay, like with relatives.

It's easy to forget, but housing is affordable for most people in most parts of the US. Here on HN it seems otherwise because we disproportionately live in California and other expensive metropolitan areas along the coasts.

Rising prices of gasoline are the most visible sign of inflation for ordinary US consumers.

The issue i take with this is that we’re using measures to define economic well being where we use terms like “most” and then leave behind the other 49% of people, and tell em, “hey, the economy is cookin!”

“In the nation as a whole, 70.3 percent of lowest-income households face severe housing cost burdens. ” [1] (2016)

[1]https://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/ha...

I'm surprised that nearly 30 percent of households earning under $15,000 a year don't face severe housing cost burdens.

Although, do we expect that group of people to be able to easily afford housing in a good economy? I would guess that this group has a tough time affording housing in any economy.

Yeah, agreed. I don’t know what the proper measure of a good economy is. I’m just critical that said measurement is “jobs”.

How many of those households are in remote or dying communities like those in Appalachia built around long closed coal mines? 2000 hours a year at minimum wage is roughly that amount so I suspect much of that group is concentrated in areas where houses could literally be bought for a few thousand bucks and there really isn't any work - think Detroit at the end of the 2000s when people were ripping copper out of the walls.

Depending on how they count households, a few people might also be providing for a large number of house holds, like in a trailer park. With social security/medicare/medicaid/disability, they might be relatively secure in their housing.

> do we expect that group of people to be able to easily afford housing in a good economy?

Yes. Of course we do. Housing is a basic human need (without which, you are homeless by definition). We should expect all people to easily afford housing in all economies, at all times.

We should expect housing to be as affordable as water or food or electricity is, at all times, in all economic conditions. It should never be "tough" for anyone to afford housing.

I agree, but I think that’s a social safety net question rather than an economic performance question.

>housing is affordable for most people in most parts of the US

this is not true.

https://nlihc.org/sites/default/files/oor/2021/Out-of-Reach_...

> but housing is affordable for most people in most parts of the US.

This is a enormously inaccurate. Speaking from experience, housing affordability is one of the top-5 concerns for most people in the vast majority of Midwestern cities right now (and even some Southern cities). There's crisis-level problems in housing in places like Minneapolis, Milwaukee, Louisville, Most of Urban Michigan (Grand Rapids, Traverse City, Ann Arbor, Detroit), etc, not to mention all the obvious issues in major places like Atlanta or Austin or such.

Housing is affordable in dying small cities with no jobs. Housing is expensive "for most people in most parts of the US". In the Midwest, a huge chunk of the 20-40yr-old aged folks here are literally begging for a entire nation-wide housing crash, so they might not have to rent for the literal entirety of their lives.

> Are jobs and employment rates really what we should be using to measure the economic outlook?

That was not the point I was trying to make. I'll try again:

* Self-identified GOPers (supposedly) think it is worse now than when economy was tanking and hemorrhaging 800K jobs per month. What planet are they living on if they honestly think this is true?

Inflation was under control in 2009. The reasons people are worried about today’s economy are very different than 2009.

Yeah, when an economy is losing 800K jobs per month inflation is usually not a problem, deflation is. In 2009 things went negative:

* https://fred.stlouisfed.org/series/FPCPITOTLZGUSA

Inflation is usually sign that the economy is running too hot. I think a lot of folks would say that's a 'nice problem' to have.

Point taken, but i suppose i don’t see it as incredibly unreasonable. They think the outlook is worse now than when we were basically at rock bottom. March 2009 is about when i threw all my money into stocks and purchased a home. When you’re at rock bottom is when your expectations should actually be higher.

When the economy is cooking and we have all these artificial props keeping us up with insane healthcare spending and inflation on the rise, is when I’m more likely to have lower outlook.

Unless I’m mistaken it’s a measure of where you’re trending not where you are in a point in time.

Brainwashing / mass influencing through mass media is real. If you read Fox News the US is collapsing, close to Weimar Republic hyperinflation, and crime and illegal immigration have reached third world levels.

<<Some people would be better off unemployed on government help, than employed full time at minimum wage in a city where housing is unaffordable and inflation is at 5%.

I mean it is true. It is virtually impossible to categorize the statement as false. And yet it is wrong in the context of existing society without some additional qualifications.

Looking only at unemployment rate is missing half the story.

* https://www.bls.gov/charts/employment-situation/civilian-lab...

* https://www.pewresearch.org/fact-tank/2021/04/14/u-s-labor-m...

I would assume theres a high correlation here (though complete conjecture) that GOP base may have fewer members who have graduated with non economically productive degrees and 10-200k of school debt. For every person that graduates shackled to their student debt, the fed has another willing tax-payer who appreciates high inflation.

Similarly i would assume the upper percentiles in both parties are happy to see high inflation as it reduces the cost of your multiple million dollar debts.

The people getting it the worst will be folks who work for a decent amount of money, have very little debt, and arent hedging / bitcoining their savings.

Im assuming the fact that consumers arent saving has to do with them trying to avoid watching their savings shrink 6%

When you and your friends get emails every day about how you're getting fired for not taking a drug that you're not going to take, you're going to have very little faith in the economy.

Even if you're against vaccine mandates, that's closer to "little faith in government" than "little faith in economy".

The questions are usually formulated to address:

1. Respondents’ appraisal of current business conditions.

2. Respondents’ appraisal of current employment conditions.

3. Respondents’ expectations regarding business conditions six months hence.

4. Respondents’ expectations regarding employment conditions six months hence.

5. Respondents’ expectations regarding their total family income six months hence.

Any respondent concerned with personal and widespread job losses from non-vaccination would likely score 4 and 5 low and that would show up in this type of survey.

After Trump was elected, economic optimism among Republicans went from 15% to 74%. Democrats economic optimism dropped by half.

The main thing that matters for perception is the person in charge.

https://www.cnbc.com/2016/12/09/optimism-on-economy-stocks-s...

That’s because faith requires (some) thinking.

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