Tag Archives: unemployment

Real Household Incomes: How Goes the Recovery?

Doug Short has written a great article on median U.S. household income through time.  He shows that the median household income in the U.S., adjusted for inflation, has fallen by 7.2% since 2000 and is 7.9% below the peak reached near the start of 2008, as we entered the last recession.  How do we reconcile this with the notion of an economic recovery? Continue reading

The X-factor for Unemployment Rates

With unemployment staying fairly high and steady, despite massive economic stimulus, many are wondering what it will take to create more good jobs in America.  One explanation is simply that the fastest growing and most innovative American firms simply don’t need all that many employees.  Even industries that have historically needed lots of workers are becoming automated.  An excellent book that explores this theme is Race Against the Machine, by two professors at MIT.  An article that provides a summary of the book’s thesis is available here. Continue reading

Choosing and Paying for Higher Education

I am now at an age at which many of my friends have kids preparing for, or going to, college.  I have a few more years to figure out the details, but this is an issue that I have followed for a long time.  My local in-state university, the University of Colorado at Boulder (CU), estimates the all-in cost of attendance at $26,000 per year.  This varies a bit, based on which program you choose.  Tuition, fees, and books cost about $14,000 per year (though this varies by program) and the estimated cost of room and board is about $12,000 per year.  Continue reading

A Picture is Worth a Thousand Words: The State of the Economy

Availability of timely data is at the core of effective financial and economic analysis.  The Federal Reserve Economic Database (FRED) provides a vast array of economic time series via an intuitive graphical interface.  If you want to get a read on the U.S. economy, FRED is an outstanding resource.  The ability to quickly create customized charts makes it quick and easy to examine a wide range of data.  In this article, I am going to show a number of these charts, while  exploring the overall economic U.S. economic picture. Continue reading

The Changing Universe of Public Companies

A new article in Knowledge@Wharton highlights a body of research that suggests that the universe of public companies is very different than in the past.  There are, for example, 44% fewer publicly-listed companies on U.S. exchanges than there were only fifteen years ago.  The Wharton article is a review of a range of work, including both experts who believe that we are seeing a decline in the role and significance of public firms and those who conclude that we are seeing a natural part of the business cycle.  In the late 90’s, it seemed as though every small company, with or without a proven product of earnings, was rushing to cash in on IPO fever.  Many of these companies subsequently failed.  Today, after a decade of weak market performance and with individual investors increasingly skeptical of the stock market, it is not surprising that fewer firms are going public.  The Wharton article also cites increased oversight and regulation of public companies as encouraging firms to remain private. Continue reading

Unemployment: Part of the Economic Cycle or Secular Shift?

Bob Huebscher just published an outstanding article on the sustained high level of unemployment in the United States.  The question that he seeks to address is whether we are in the recovery phase of a major recession or we are actually in the midst of a long-term shift in the economy.  The article calls these two possible explanations ‘cyclical’ and ‘structural.’  It is worth understanding the key factors that have resulted in the current persistent unemployment levels in order to put the recent modest reduction in unemployment into context.  Are we seeing signs of the long-awaited recovery that will bring us back to full employment or is the recent growth in employment simply variability around a long-term shift in the U.S. economy in which unemployment will remain well-above historical levels? Continue reading

Saving and Investing for Retirement: Part Five

Effective Actions in an Uncertain World: Part Five of Our Special Five Part Series

There are a number of factors that we need to predict in order to come up with saving and investing strategies for retirement.  The values that we assign to these factors will have a huge impact on whether or not we will be able to meet our goals.  First, there is the expected return that investors will make on their retirement savings.  Second, there is the common estimate that people will need about 85% of their pre-retirement income to support them once they stop working.  Finally, there is the potential impact of behavior on savings rates, investing, and spending.  Continue reading