Wednesday, July 02, 2014

Dow hits new all time high - Record numbers of young adults living with parents

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US stocks close at records; Dow near 17,000

U.S. stocks jumped on Tuesday as Wall Street started the second half of the year with the Dow rising to within two points of 17,000, as data showed expansion in U.S. manufacturing and better-than-expected sales for major U.S. automakers.
"The message continues to be, we had a really rough first quarter, and the second quarter is going to be better," said Andres Garcia-Amaya, global market strategist at J.P. Morgan Funds.
"These numbers are reassuring us that the first quarter was the outlier, not the other way around," Garcia-Amaya added of Tuesday’s economic reports, which had the Institute for Supply Management’s manufacturing index coming in at 55.3 in June, nearly unchanged from May’s 55.4 reading. New orders rose to a six-month high.
hmmm…things are great

A Rising Share of Young Adults Live in Their Parents’ Home

36% of the nation’s young adults ages 18 to 31—the so-called Millennial generation—were living in their parents’ home, according to a new Pew Research Center analysis of U.S. Census Bureau data. This is the highest share in at least four decades and represents a slow but steady increase over the 32% of their same-aged counterparts who were living at home prior to the Great Recession in 2007 and the 34% doing so when it officially ended in 2009.
but, but but… NRO
According to a major new report from the Center for Immigration Studies (CIS), net employment growth in the United States since 2000 has gone entirely to immigrants, legal and illegal. Using data from the Bureau of Labor Statistics, CIS scholars Steven A. Camarota and Karen Zeigler found that there were 127,000 fewer working-age natives holding a job in the first quarter of 2014 than in 2000, while the number of immigrants with a job was 5.7 million above the 2000 level.
The rapidity with which immigrants recovered from the Great Recession, as well as the fact that they held a disproportionate share of jobs relative to their share of population growth before the recession, help to explain their findings, the authors report. In addition, native-born Americans and immigrants were affected differently by the recession.
Other significant findings include:
  • Because the native-born population grew significantly, but the number working actually fell, there were 17 million more working-age natives not working in the first quarter of 2014 than in 2000.
  • The share of natives working or looking for work, referred to as labor force participation, shows the same decline as the employment rate. In fact, labor force participation has continued to decline for working-age natives even after the jobs recovery began in 2010.
  • Immigrants have made gains across the labor market, including lower-skilled jobs such as maintenance, construction, and food service; middle-skilled jobs like office support and health care support; and high­er-skilled jobs, including management, computers, and health care practitioners.
  • The supply of potential workers is enormous: 8.7 million native college graduates are not working, as are 17 million with some college, and 25.3 million with no more than a high school education.
According to the study, 58 million working-age natives are not employed.
Camarota and Zeigler report three conclusions:
  • First, the long-term decline in the employment for natives across age and education levels is a clear in­dication that there is no general labor shortage, which is a primary justification for the large increases in immigration (skilled and unskilled) in the Schumer-Rubio bill and similar House proposals.
  • Second, the decline in work among the native-born over the last 14 years of high immigration is consis­tent with research showing that immigration reduces employment for natives.
  • Third, the trends since 2000 challenge the argument that immigration on balance increases job oppor­tunities for natives. Over 17 million immigrants arrived in the country in the last 14 years, yet native employment has deteriorated significantly.
The Center for Immigration Studies is a non-profit research institute. Founded in 1985, the organization is regularly consulted by policymakers, the academic community, and the media on matters of immigration policy.
Now I am not saying stop immigration (LEGAL), I am saying there is something FUNDAMENTALLY WRONG both with the economy and with the way we measure the economy.

Corporate profits (DOW) no longer reflect the true state of the middle class disposable incomes.

2 comments:

Anonymous said...

I'm sorry but nobody is looking at the 800 lb. gorilla in the room. Call the beast "QE".

You cannot create a shitload of money out of thin air without triggering inflation. It is not possible.

To temporarily mask the effects of this money creation you must: 1)maintain artificially low interest rates and
2) Keep this money out of the hands of the consuming public for as long as possible.

So you lend the money to the bailed-out "too big to fail" banks who in turn invest in the stock market despite a nowhere near worthy rate of return. This creates a massive asset bubble on Wall Street (DJ average 17K and rising).

These banks report huge "profits" on their investments which they use to repay their bail-out loans using fake money to pay off real debt.

That (decreasing) percentage of the consuming public that still has disposable income is lured back in to the real property and durable goods markets by the artificially low interest rates blowing another asset bubble at this level.

The feds are stuck. They cannot raise the interest rates without knocking down this whole stack of cards. They are playing Russian Roulette with the economy and a lot of brains are going to get blown out. It's only a matter of time and there ain't much of that left.

Pastorius said...

Yep. You're correct.