The Atlanta Fed's macroblog provides commentary and analysis on economic topics including monetary policy, macroeconomic developments, inflation, labor economics, and financial issues.

Authors for macroblog are Dave Altig, John Robertson, and other Atlanta Fed economists and researchers.

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April 29, 2010

Consumer credit: More than meets the eye

A lot has been made (here, for a recent example) of the idea that banks have shown a surprising amount of reluctance to extend credit and to start making loans again. Indeed, the Fed's consumer credit report, which shows the aggregate amount of credit extended to individuals (excluding loans secured by real estate), has been on a steady downward trend since the fall of 2008.

Importantly, that report also provides a breakdown that shows how much credit the different types of institutions hold on their books. Commercial banks, which are the single largest category, accounted for about a third of the total stock in consumer credit in 2009. The two other largest categories—finance companies and securitized assets—accounted for a combined 45 percent. While commercial banks have been the biggest source of credit, they have not been the biggest direct source of the decline.


The chart above highlights a somewhat divergent pattern among the big three credit holders. This pattern mainly indicates that credit from finance companies and securitized assets has been on a relatively steady decline since the fall of 2008 while credit from commercial banks has shown more of a leveling off. These details highlight a potential misconception that commercial banks are the primary driver behind the recent reduction in credit going to consumers (however, lending surveys certainly indicate that standards for credit have tightened).

To put a scale on these declines, the aggregate measure of consumer credit has declined by a total of 5.7 percent since its peak in December 2008 through February 2010. Over this same time period, credit from finance companies and securitizations declined by 16.2 percent and 12.4 percent, respectively, while commercial bank credit declined by 5.5 percent. Admittedly, securitization and off-balance sheet financing are a big part of banks' activity as they facilitate consumers' access to credit. The decline in securitized assets might not be that surprising given that the market started to freeze in 2007 and deteriorated further in 2008 as many investors fled the market. Including banks' securitized assets that are off the balance sheet would show a steeper decline in banks' holdings of consumer credit.

A significant factor in evaluating consumer credit is the pace of charge-offs, which can overstate the decline in underlying loan activity (charge-offs are loans that are not expected to be paid back and are removed from the books). Some (here and here) have made the point that the declines in credit card debt, for example, reflect increasing rates of charge-offs rather than consumers paying down their balances.

How much are charge-offs affecting the consumer credit data? Unfortunately, the Fed's consumer credit statistics don't include charge-offs. However, we can look at a different dataset that includes quarterly data on charge-offs for commercial banks to get an approximation. We can think of the change in consumer loan balances roughly as new loans minus loans repaid minus net loans charged off:

Change in Consumer Loans = [New Loans – Loan Repayments] – Net Charge-Offs

Adding net charge-offs to the change in consumer loans should give a cleaner estimate of underlying loan activity:


If the adjusted series is negative, loan repayments should be greater than new loans extended, which would lend support to the idea that loans are declining because consumers are paying down their debt balances. If the adjusted series is positive, new loans extended should be greater than loan repayments and adds support to the hypothesis that part of the decline in the as-reported loans data is from banks removing the debt from their books because of doubtful collection. Both the as-reported and adjusted consumer loan series are plotted here:


Notably, year-over-year growth in consumer loans adjusted for charge-offs has remained positive, which contrasts the negative growth in the as-reported series. That is, the net growth in new loans and loan repayments shows a positive (albeit slowing) growth rate once charge-offs are factored in. Over 2009, this estimate of charge-offs totaled about $27 billion while banks' average consumer loan balances declined by about $25 billion. Thus, a significant portion of the recent decline in consumer loan balances is the result of charge-offs.

Nevertheless, in an expanding economy, little or no credit growth implies a declining share of consumption financed through credit. Adjusting consumer loans for charge-offs suggests that the degree of consumer deleveraging across nonmortgage debt is somewhat less substantial than indicated by the headline numbers.

All in all, the consumer credit picture is a bit more complicated than it appears on the surface. A more detailed look suggests that banks haven't cut their consumer loan portfolios as drastically as sometimes assumed. The large run-up in charge-offs has also masked the underlying dynamics for loan creation and repayment. Factoring in charge-offs provides some evidence that a nontrivial part of consumer deleveraging is coming through charge-offs.

By Michael Hammill, economic policy analysis specialist in the Atlanta Fed's research department

April 29, 2010 in Banking, Capital Markets, Financial System, Saving, Capital, and Investment | Permalink


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Very nice.

One can get a slightly broader data set by using FDIC statistics on all insured institutions (http://www2.fdic.gov/SDI/SOB/). It doesn't seem the results are substantially different: For end 2009 vs end 2008, an unadjusted drop of $29bn, vs an adjusted rise of $34bn.

Paul Kasriel recently did the same analysis for bank lending overall (full disclaimer - he mentions my website). http://web-xp2a-pws.ntrs.com/content//media/attachment/data/econ_research/1004/document/ec042910.pdf

Posted by: Jim Fickett | May 01, 2010 at 07:31 PM

you could have boiled off a lot of filler here and had quite a nice compact post
regardless well worth reading thanx

Posted by: paine | May 02, 2010 at 01:56 PM

A question: when there are charge-offs, do they include the late-payment penalties and other fees or only original principal?

Posted by: Daniil | May 03, 2010 at 10:21 AM

Two other general observations: First, although clearly implied by the post above, some readers commenting around the net have not noticed that we DON'T KNOW what the net growth in new consumer loans is, overall. Since charge-off data are available only for FDIC-insured institutions, we can't make the second graph above for the other categories of lending.

Second, and related, Felix Salmon did a post in March, linked to above, in which he concluded that consumers were not paying their cards down; in fact they were borrowing more. But the data he used, from CardHub, was mistaken -- it did not make the distinctions made in the post above, and applied the Fed charge-off rate, which is only for commercial banks, to the full revolving debt balance, from all sources. Many people are still under the impression of what Salmon wrote, but in fact we do not know whether it is true.

@Daniil: charge-offs are only principal. The accounting, in which the principal balance of loans outstanding is reduced by charge-offs, would not make sense otherwise.

Posted by: Jim FIckett | May 03, 2010 at 11:43 PM

@Jim My question is not about that. It's the following. There's a balance of $1000. I miss 3 payments and the bank assesses $200 worth of late charges and resets the interest rate after first missed payment so that after 3 months (let's say that's when the bank charges off the loan) my loan to the bank is $1300. So my total debt goes up. I don't know what's on banks books as a result of this. Do they discharge the 1000? 1300?
And even if 1300, then the total 'borrowing' might still be going up not because people are borrowing, but because they are falling behind.

Posted by: Daniil | May 05, 2010 at 04:54 PM

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April 20, 2010

Small firm contribution to job growth: An update

The U.S. Bureau of Labor Statistics (BLS) recently produced research that builds on a topic the Atlanta Fed earlier addressed: job creation and destruction rates by firm size. In our research, we identified a disproportionately larger impact on small firms (those with fewer than 50 employees) over the 2007–09 period than the 2001–03 period.

In the recent BLS study, Jessica Helfand finds that actually it looks like the 2001–03 period may be the odd man out in at least one respect when it comes to recessionary effects on small business. Using unofficial data for the 1990–92 period to supplement the official Business Employment Dynamics data, Helfand shows that the gap between job destruction and creation for large versus small firms (in this case firms with fewer than 100 employees) over the 2001–03 employment downturn was much larger than in either the 1990–92 or 2007–09 episodes.


In particular, for the period June 1990 to March 1992, firms with fewer than 100 employees shed on net 160,000 jobs versus 110,000 from firms with more than 100 employees—a small-to-large firm destruction ratio of 1.46. For the period March 2001 to June 2003, small firms shed 79,000 jobs while larger firms destroyed 324,000 jobs—a small-to-large firm job destruction ratio of 0.24. Using the latest available data that cover the period September 2007 to June 2009, small firms lost 467,000 jobs compared with 543,000 for larger firms—a small-to-large firm job destruction ratio of 0.86.

Interestingly, the latest observation (for March–June 2009) shows that job destruction actually declined for smaller firms relative to larger firms whereas job creation rates improved for both small and large firms. This performance matters because the key factor for a sustained recovery will be a continued improvement in job creation rates at existing firms and stabilization in the rate of new business formation.

By Ellyn Terry, a senior economic research analyst in the Atlanta Fed's research department

April 20, 2010 in Labor Markets, Small Business | Permalink


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The 'Interestingly' part seems quite common according to this

Posted by: Dan | April 21, 2010 at 12:05 AM

How well understood this much vaunted small firm thing? Heretofore, didn't most small firms exist as auxiliary to larger firms?

Posted by: ken melvin | April 21, 2010 at 08:34 AM

Hmm, what happened in 1990-1992 that didn't happen in the other recessions...yet? A tax increase.

I wouldn't be too bullish on small business projections going forward.

Posted by: Jeff | April 24, 2010 at 01:55 PM

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April 14, 2010

The inventory question

Mark Thoma asks a very good question:

"I hadn't looked at this for awhile—should I interpret the return of the inventory-sales ratio to near normal levels as good news?"

Here's the picture Thoma was looking at, updated to incorporate today's U.S. Census Bureau release on February manufacturing and trade inventory and sales:


Tim Duy has taken a look at these data and comes to this conclusion:

"Increasingly, the recovery looks sustainable—sustainable in the sense that a double dip recession looks unlikely. As Bloomberg reports, this is the message of the inventory cycle, which appears to have largely run its course. Inventories surged as the recession intensified, leaving firms scrambling to bring output in line with the new level of sales. Now, firms have inventories under control."

I have been pondering those data as well, ever since the advance fourth quarter gross domestic product report indicated that 3.4 percentage points of the then-reported 5.9 percent annualized growth rate was accounted for by a slowing in the pace of inventory decumulation. (The numbers have subsequently been revised to 3.8 percentage points of a 5.6 percent growth rate.) It certainly appears that inventory-sales ratios have reverted to the prerecession norm, justifying Duy's sense that inventories will not be a big part of the economic story as we move through 2010.

That conclusion does rest, of course, on the likelihood that a downward trend in the ratio truly did break in the middle part of the decade. As the chart shows, the same pause in the trend occurred in the mid-1990s, only to commence its southward trek on the other side of the 2001 recession.

But the situation is even more curious than that. If you dig a little deeper, you find that not all inventory-sales ratios tell the same story. In particular, inventory-to-sales ratios at the retail level look very lean relative to prerecession levels while manufacturer's inventories still appear to be relatively bloated.


What, exactly, is that chart trying to tell us? Does it represent some shift in supply-chain management, with inventory holdings being pushed down from the retail level to manufacturers? If not, can we expect some resurgence in retail inventories (as the Duy-cited Bloomberg article suggests), coupled with continued decumulation at the manufacturing level? And what would be the net effect of such developments on aggregate inventory levels?

Those are good questions, too. If you have any insights, I'd love to hear them.

By Dave Altig, senior vice president and research director at the Atlanta Fed

April 14, 2010 in Business Cycles, Data Releases | Permalink


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maybe its deflationary expectations...

Posted by: rjs | April 15, 2010 at 06:55 AM

I think there has been a shift. If you look at the i/s ratio for durable goods it looks like a return to normal. If you exclude IT, it looks like the durable i/s ratio has returned to a rising trend that began in 2006.

Posted by: Douglas Lee | April 15, 2010 at 09:35 AM

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April 07, 2010

Disinflation: Is it all housing? We think not—and we're not alone

Yesterday, the Federal Open Market Committee minutes contained this observation:

While the ongoing decline in the implicit rental cost for owner-occupied housing was weighing on core inflation, a number of participants observed that the moderation in price changes was widespread across many categories of spending. This moderation was evident in the appreciable slowing of inflation measures such as trimmed means and medians, which exclude the most extreme price movements in each period.

A few weeks ago, Laurel Graefe posted a nearly identical sentiment in this blog using data from the January consumer price index (CPI).

To that evidence we would add a recent issue of the Federal Reserve Bank of San Francisco Economic Letter. That article conducts a similar exercise using the personal consumption expenditure price index (PCEPI). The authors note that the "decrease in housing inflation only accounts for a small part of the overall disinflationary pressure on core PCEPI."

The authors included this chart as visual evidence of the broad-based nature of the recent disinflation:


Their chart is reproduced here for two reasons. First, we are suckers for a cool chart, and this one certainly qualifies. But this chart has the added benefit of being very informative. The size of the circles represents the weight of the items in the consumers' market basket. Circles under the dashed 45 degree line represent goods or services in the market basket that have shown less price pressure in the past 18 months than during the prior three and a half years. Note that the cost of housing is one of the goods under the 45 degree line. But the authors' point is that most of the consumers' market basket is under this line—a pretty clear sign that the disinflation we have been seeing extends well beyond the cost of housing.

At the risk of piling on, we'd like to add yet another chart to the mix. In the ordinary course of business, at the Atlanta Fed we compute diffusion indexes for the CPI on both a weighted and unweighted basis. A diffusion index is designed to gauge the breadth of change in some aggregate statistic (though it is silent about the magnitude of that change).

The diffusion index below is the 12-month diffusion index for the CPI. Specifically, it shows the proportion of the CPI market basket that rose more (+) or less (–) during the past 12 months than during the prior 12 months. So diffusion index values below zero indicate that the majority of the CPI is rising less rapidly than a year ago while values above zero indicate the opposite. On both a weighted and unweighted basis, the CPI 12-month diffusion index is below zero—and has been since last April. Conclusion? It's not just the housing sector that is driving the recent disinflation trend.


On a concluding note, we'd like to call your attention to a new Web page, The Inflation Project, that is intended to be a repository of information about inflation—from news reports to recent research. We find these reports useful in our daily work and thought you might find them informative as well. (Follow The Inflation Project using RSS.)

By Mike Bryan, vice president and senior economist, and Laurel Graefe, senior economic research analyst in the Atlanta Fed's research department

April 7, 2010 in Federal Reserve and Monetary Policy, Inflation | Permalink


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Great stuff. Please create an RSS feed for the Inflation Project!

Posted by: Ned Baker | April 08, 2010 at 01:47 PM

And you have to wonder is some if not most of it demand. It sure as heck is CA where those authors live, they got 20%++ unemployment in many places and housing costs (still) at $200-$400 sqft.

If they are our Cassandra, as has often been the case, then we can all look forward to a lower standard of living.

Posted by: FormerSSResident | April 10, 2010 at 09:51 AM

Sounds like the Fed is worried that the general public senses real world inflation. The ISM surveys provide a prices component and they both show very high readings.

Posted by: Les | April 10, 2010 at 11:34 AM

We need inflation in order to sustain a durable growth.
It provides an incentive for people to spend cash rather than saving it, because if they save it, the cash will lose value rapidly. In this way consumers start spending again pushing up inventories and production thus growth.
We must avoid to fall in the trap of no growth and deflation as Japan has done in the last decade.
Inflation also helps to solve the problem of the outstanding debts of individuals , corporations and sovereign states caused by the financial crisis of the last year.
In particular for the US, the more inflation we have, the less the dollar will be worth.
Because the debts are based on a specific number of dollars and not a specific value, the less is dollar is worth, the easier it will be to pay off debts.
So inflation is an important tool in getting the world out of debts.
Unfortunately this will be particularly unfair for those who have been saving money.
Ultimately they will pay the price for those who borrowed money, racked up huge debts, and spent more than they could afford.

Posted by: Gastone Ciucci Neri | April 12, 2010 at 04:29 PM

Inflation = good?

Insane nonsense. What made America a power was strong savings which created capital formation. This capital was invested into self liquidating capital goods...ie innovations, plants, machinery, info systems, etc...that paid for themselves.

We have been reduced to borrowing from the rest of the world to fund not investment in capital goods and innovation...but maintaining a lifestyle (ie consumption level) we can not afford.

So the solution is to inflate away our debts? Sorry but do you really think our creditors are so dumb as to keep loaning us money as we inflate away the debts we already owe them.

Sorry but this strategy of stealth inflation will fail for the US just as it has for other foolish powers that lost their way....

Posted by: Brant Williams | April 13, 2010 at 05:11 PM

Claim of deflation or disinflation in used cars is clearly wrong. Industry surveys have shown used car prices rising sharply in the last year, 15.6 percent year-over-year from January 2009. Greenspan has admitted in the past that the BLS survey understates vehicle inflation.

Posted by: Les | April 14, 2010 at 08:52 AM

There is inflation in everything I buy: where in this chart is:
insurance costs
health care costs
That's what I spend my money on, not luggage and jewelry! The real world is way inflationary.

Posted by: Jennifer Leathers | April 19, 2010 at 02:25 PM

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April 06, 2010

Breaking up big banks: As usual, benefits come with a side of costs

Probably the least controversial proposition among an otherwise very controversial set of propositions on which financial reform proposals are based is that institutions deemed "too big to fail" (TBTF) are a real problem. As Fed Chairman Bernanke declared not too long ago:

As the crisis has shown, one of the greatest threats to the diversity and efficiency of our financial system is the pernicious problem of financial institutions that are deemed "too big to fail."

The next question, of course, is how to deal with that threat. At this point the debate gets contentious. One popular suggestion for dealing with the TBTF problem is to just make sure that no bank is "too big." Two scholars leading that charge are Simon Johnson and
James Kwak (who are among other things the proprietors at The Baseline Scenario blog). They make their case in the New York Times' Economix feature:

Since last fall, many leading central bankers including Mervyn King, Paul Volcker, Richard Fisher and Thomas Hoenig have come out in favor of either breaking up large banks or constraining their activities in ways that reduce taxpayers' exposure to potential failures. Senators Bernard Sanders and Ted Kaufman have also called for cutting large banks down to a size where they no longer pose a systemic threat to the financial system and the economy.

…We think that increased capital requirements are an important and valuable step toward ensuring a safer financial system. We just don't think they are enough. Nor are they the central issue…

We think the better solution is the "dumber" one: avoid having banks that are too big (or too complex) to fail in the first place.

Paul Krugman has noted one big potential problem with this line of attack:

As I argued in my last column, while the problem of "too big to fail" has gotten most of the attention—and while big banks deserve all the opprobrium they're getting—the core problem with our financial system isn't the size of the largest financial institutions. It is, instead, the fact that the current system doesn't limit risky behavior by "shadow banks," institutions—like Lehman Brothers—that carry out banking functions, that are perfectly capable of creating a banking crisis, but, because they issue debt rather than taking deposits, face minimal oversight.

In addition to that observation—which is the basis of calls for a systemic regulator that spans the financial system, and not just specific classes of financial institutions—there is another, very basic, economic question: Why are banks big?

To that question, there seems to be an answer: We have big banks because there are efficiencies associated with getting bigger—economies of scale. David Wheelock and Paul Wilson, of the Federal Reserve Bank of St. Louis and Clemson University, respectively, sum up what they and other economists know about economies of scale in banking:

…our findings are consistent with other recent studies that find evidence of significant scale economies for large bank holding companies, as well as with the view that industry consolidation has been driven, at least in part, by scale economies. Further, our results have implications for policies intended to limit the size of banks to ensure competitive markets, to reduce the number of banks deemed "too-big-to-fail," or for other purposes. Although there may be benefits to imposing limits on the size of banks, our research points out potential costs of such intervention.

Writing at the National Review Online, the Cato Institute's Arnold Kling acknowledges the efficiency angle, and then dismisses it:

There's a long debate to be had about the maximum size to which a bank should be allowed to grow, and about how to go about breaking up banks that become too large. But I want to focus instead on the general objections to large banks.

The question can be examined from three perspectives. First, how much economic efficiency would be sacrificed by limiting the size of financial institutions? Second, how would such a policy affect systemic risk? Third, what would be the political economy of limiting banks' size?

It is the political economy that most concerns me…

If we had a free market in banking, very large banks would constitute evidence that there are commensurate economies of scale in the industry. But the reality is that our present large financial institutions probably owe their scale more to government policy than to economic advantages associated with their vast size.

I added the emphasis to the "probably" qualifier.

The Wheelock-Wilson evidence does not disprove the Kling assertion, as the estimates of scale economies are obtained using banks' cost structures, which certainly are impacted by the nature of government policy. But if economies of scale are in some way intrinsic to at least some aspects of banking—and not just political economy artifacts—the costs of placing restrictions on bank size could introduce risks that go beyond reducing the efficiency of the targeted financial institutions. If some banks are large for good economic reasons, the forces that move them to become big would likely emerge with force in the shadow banking system, exacerbating the very problem noted by Krugman.

I think it bears noting that the argument for something like constraining the size of particular banks implicitly assumes that it is not possible, for reasons that are either technical or political, to actually let failing large institutions fail. Maybe it is so, as Robert Reich asserts in a Huffington Post item today. And maybe it is in fact the case that big is not beautiful when it comes to financial institutions. But in evaluating the benefits of busting up the big guys, we shouldn't lose sight of the possibility that this is also a strategy that could carry very real costs.

By Dave Altig, senior vice president and research director at the Atlanta Fed

April 6, 2010 in Banking, Financial System, Regulation | Permalink


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I understand Krugman's argument, but doesn't it emphasise the importance of dealing with the TBTF problem for all types of financial institutions - whether deposit-taking or not? I agree that dealing with the TBTF problem only for depositary institutions is pointless - after all, the big failures of the current crisis were all non-banks (Bear Stearns, Lehman Brothers, AIG...) - but why should that be the end of the story? If PIMCO or Blackrock create systemic risk, that should be regulated - including structural remedies if necessary - just as it should if the culprit is Citi or Bank of America.

Posted by: Carlomagno | April 06, 2010 at 04:00 PM

Higher capital requirements might be one way to establish a driving force for reducing the size of a bank. Another one could be higher fees to pay for being a big bank, like an insurance premiums: because the damage of a bank failure would increase over proportionally with the size of the bank, the insurance payments should increase also with size and much more than linearly. If a bank wants to get bigger, to do some things better, it pays the price and is allowed to grow.

Posted by: Peter T | April 06, 2010 at 07:11 PM

The most obvious "economy of scale" associated with large banks is ability to influence the regulator. This is bad, not good, for the system even if it is good for bank profits.

The other key reason why banks might grow large is diversification -- but increased securitization should have reduced, not increased, the correlation between size and diversification. Computing power is even less plausible. Cross-selling never was plausible except to the extent that it involved the potential for profiting from breaches of client confidentiality.

Posted by: D Greenwood | April 08, 2010 at 09:07 AM

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April 02, 2010

Still a ways to go

The March employment report, as probably should have been predicted, was a mixed bag of pretty good news (fairly strong gains in private payroll jobs and upward revisions for January and February), some not-so-great news (a decline in average hourly earnings, long-term unemployment still on the rise, and an increase in people working part time "involuntarily"), and lots of data that are hard to interpret. In the hard-to-interpret category, I'd put the continuing rise in the temporary employment category (is it a leading indicator of further employment gains, as has been the case historically?), increases in construction employment (just the weather?), and strength in manufacturing employment (a blip in a sector that generally does not provide much job growth, or the early stage of a return to prerecession levels, implying we have about two million manufacturing job gains to go?).

What does seem clear is that the pace of net job creation is still well below the levels required to appreciably improve the unemployment rate or to make a sizable step toward regaining the eight million-plus jobs lost since the beginning of the recession. Updating a calculation referenced in a speech by Atlanta Fed President Dennis Lockhart on Wednesday, at a pace of 162,000 jobs added per month and at the current labor force participation rate, unemployment this time next year would still be just north of 9 percent.

Not great, but at least, to use President Lockhart's phrase, "we are, finally, moving in the right direction."

UPDATE: At Angry Bear, Spencer notes notes that the employment diffusion index, which is a measure of the breadth of job gains, is improving. Jim Hamilton puts the employment report in a class of several other pieces of good economic news. But Dean Baker emphasizes the weak gain in earnings (link courtesy of Mark Thoma).  Calculated Risk documents the historical correlation between housing starts and unemployment and highlights the unusually high levels of long-duration unemployment. So does Catherine Rampell, who also puts recent cumulative job performance in historical perspective.  David Beckworth breaks down the employment gains by industry (hat tip, Capital Spectator.)   Barry Ritholtz offers an array of interesting charts.  At Real Time Economics, highlights from the Bureau of Labor Statistics' first public chat session.

By Dave Altig, senior vice president and research director at the Atlanta Fed

April 2, 2010 in Data Releases, Labor Markets | Permalink


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Not great, but at least, to use President Lockhart's phrase, "we are, finally, moving in the right direction."

:).. sure... dream on...

in mar 2010 US GOV paid more 16 bln $ in unempl benefits .. all time record and almost 50% more than in mar 2009..


Posted by: alex west | April 04, 2010 at 01:26 AM

If you are a small business, why hire permanent employees? I would get by with temps as long as I could. Big tax increases next year, along with more uncertainty.

Generally big government programs benefit big business. The little guys get whacked. Job growth comes from the little guys.

Was with an international tax expert the other night. He said cash is building on US companies balance sheets. US companies are looking ripe for takeover by foreign companies that pay less corporate taxes. The tipping point in his opinion is here. Would not surprise him to see big conglomerates like Siemens start to buy up US companies that fit into their business.

Looking at income numbers in the US tells me that while we may have seen the depth of the recession, we have not seen the end of it. Will be awhile before we hit a strong uptrend.

Posted by: Jeff | April 04, 2010 at 10:15 AM

Household survey figures have been improving since the end of the year. That survey tends to lead the establishment survey at major turns.

The Birth/Death Model comes under considerable criticism. Why does the government not take advantage of private surveys such as the ADP employment survey? The B/D figures often require substantial adjustment well after the reported date.

Posted by: Les | April 05, 2010 at 10:32 AM

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