Weekly Indicators for February 1 - 5 at XE.com

 - by New Deal democrat

My Weekly Indicator post is up at at XE.com .  The big news this week was what happened to the US$.

Ed Morrissey Should Really Stop Writing About Economics

     Y'know ... Ed Morrissey of Hot Air is consistent.  For the last 8 years (which, interestingly enough, corresponds with the Obama presidency) Ed has reported that the economy has been terrible -- just terrible.  Ed will take any statistic that has the potential for negative spin, and do just that -- spin it as negatively as possible.  I knew when the headline employment number came out, Ed would be all over it. And, sure enough, he printed "Meh: US added 151,000 jobs in January" within hours of the BLS release.

     First of all, let's look at Ed's actual qualifications to write about this topic.  Does he have any meaningful economic background or is he simply a blogger with a strong political angle?  Here's a link to his Wikipedia page, and the answer is "no" on the qualification question.  There is no mention of a college major or minor in econ (in fact, there is no mention of any higher education), nor is there any mention of a job in finance.  Econ isn't something you can teach yourself.  Most of the people at the Federal Reserve and in financial services are at least econ minors.  Most, in fact, are CFAs and Ph.Ds.

     Most of Ed's story is your standard "cut and paste" job, meaning there is little actual self-produced analysis.  What is "original" is this specific mentions of "underemployment:"

Numerous news services heralded the a drop in U-3 rate of unemployment to 4.9%, but the number of people not in the workforce also rose by 360,000 people from last month (table A-16). That follows an increase of 284,000 the previous month. Those not in the labor force who want a job increased by 461,000, and that follows an increase of 379,000 in the previous month. The latter measure had been falling in 2015, but has reversed itself by 840,000 in two months — both in the 0.7%-growth-rate Q4.

Ed is one of the many people who, over the last few years, found the labor force participation rate. More specifically, he noticed it was dropping.  However, let's take a look at the longer trend:

     
Somehow I doubt this graph was even on Ed's radar during the Bush years when it started dropping. However, the pace of acceleration has increased since the end of the recession.

This leads to two questions: why did it increase and why is it decreasing?  It started to rise for two reasons: women entered the labor force and the baby boomers hit their peak earnings years.  Why is it declining now?  Well, there's actually been a ton of research on the topic (done by people who actually have a background in econ).   Interestingly enough, Ed has yet to link to any solid research on the topic.  Invictus over at the Big Picture blog has got a great set of links on the topic here.  Here's the general conclusion:

At least 50% (and probably more) is caused by retiring baby boomers.

Then there's the huge drop in working teenagers, largely because they're in school (which is a good thing -- y'know -- they're learning):

The increase in life spans means some people keep on working because they like it.

There is a percentage of people ages 24-54 (the prime working age) that have left the labor force.  Most of them are people with a high school or less educational level who used to work in blue collar industries who have been left behind due to globalization and automation.  
   
These data points aren't on Ed's radar screen.

So, here's the real story.  Economists and demographers have known about the LFPR drop for some time.  There has been a ton of scholarly, well-researched articles on the topic.  And their general conclusion is most of the drop can be explained through reasoned analysis and explanation.

In addition, Ed Morrissey is completely unqualified to discuss or write about economics.  There is nothing in his background to indicate he understands the nuances of the science and he's obviously more interested in creating negative political spin than actionable intelligence.  He has yet to post any link to a scholarly article on economics or the markets, instead posting excerpts from news storiees.

This of course won't stop him from writing on econ.  He (unfortunately) suffers from the Dunning Kruger effect.  And his readers will certainly learn nothing meaningful from his "analysis."  All we can do is keep a public record of his gross incompetence in the hopes he will eventually discontinue his efforts.

January jobs report: an hours, wages, and participation surge under the headlines

- by New Deal democrat

HEADLINES:

• 151,000 jobs added to the economy
• U3 unemployment rate down -0.1% to 4.9%

With the expansion firmly established, the focus has shifted to wages and the chronic heightened unemployment.  Here's the headlines on those:

Wages and participation rates

• Not in Labor Force, but Want a Job Now: up 87,000 from 5.886 million to 5.973 million
• Part time for economic reasons: down 34,000 from 6.022 million to 5.988 million
• Employment/population ratio ages 25-54: up +0.3% from 77.4% to 77.7% 
• Average Weekly Earnings for Production and Nonsupervisory Personnel: up $.06 from $21.27 to $21.33,  up +2.-%YoY. (Note: you may be reading different information about wages elsewhere. They are citing average wages for all private workers. I use wages for nonsupervisory personnel, to come closer to the situation for ordinary workers.)

November was revised upward by 28,000.  December was revised downward by 30,000, for a net change of -2,000. 

The more leading numbers in the report tell us about where the economy is likely to be a few months from now. These were generally positive.

• the average manufacturing workweek rose from 41.6 hours to 41.7 hours.  This is one of the 10 components of the LEI and will be a positive.
 
• construction jobs increased.by 18,000.  YoY construction jobs are up 264,000.  
 
• manufacturing jobs increased by 29,000, and are up 45,000 YoY.

• Professional and business employment (generally higher-paying jobs) increased by 9,000 and are up 620,000 YoY.


• temporary jobs - a leading indicator for jobs overall decreased by -25,200.


• the number of people unemployed for 5 weeks or less - a better leading indicator than initial jobless claims - decreased by -156,000 from 2,405,000 to 2.249,000.  The post-recession low was set 5 months ago at 2,095,000.

Other important coincident indicators help us paint a more complete picture of the present:

• Overtime was unchanged at 3.3 hours.


• the index of aggregate hours worked in the economy rose by 0.4 from  104.9 to 105.3. 
 
• The broad U-6 unemployment rate that includes discouraged workers was unchanged at 9.9%.

•  the index of aggregate payrolls rose by 0.9  from 126.9 to 127.8.

Other news included:      

• the alternate jobs number contained in the more volatile household survey increased by 615,000  jobs.   This represents an increase  of 2,440,000  jobs YoY vs. 2,665,000 in the establishment survey.  
 
• Government jobs fell by -7,000.  

• the overall employment  to  population ratio for all a ges 16 and above rose by .1 to 59.6  m/m and +0.3% YoY.  The labor force participation rate rose  0.1% from 62.6%  to  62.7%  and is down -0.2 % YoY (remember, this incl udes droves of retiring Boomers).  

 SUMMARY:  

The headline employment number was a little light this month, but look at the great internals:

• average wages rose smartly
• aggregate hours also rose smartly
• wages and hours for December were revised upward.  This means that real aggregate wages had a big increase, probably over 1% in just one month.
• part time for economic reasons declined
• the employment population ratio for prime working ages 25 54 rose by 0.3% and has finally made up more than 1/2 of its loss from the Great Recession

There were only a few negatives:

• the broad U6 unemployment rate did not fall
• those not in the labor force who want a job now rose
• temporary jobs fell

Bottom line:  January was a great month for workers' paychecks. Finally!

Forecasting the 2016 election economy: it turns out consumers really do vote their wallets

 - by New Deal democrat

For the last 7 months, I have been engaged in a real-time experiement to see if I could use economic indicators to forecast the outcome of the 2016 Presidential election well in advance.

In previous installments,

• I've examined the best coincident measures of the Election Day economy found by Nate Silver.
• I've examined the correlation between housing permits, a long leading economic indicator, and those coincident indicators.
• I've examined the "Bread and Peace" model which makes use of real disposable personal income as a decisive economic indicator (in the past 20 years, it has not fared so well, especially in 2012).
• I've compared 160 years of election returns with NBER recession dates to conclude that whether or not the economy is in recession in the 3rd Quarter of the election year has forecast the outcome of the popular vote 75% of the time.   
• I have made a preliminary forecast that the democratic nominee is likely to win the election, based on the general positivity of the long leading indicators through October 2015.

One of my favorite economic indicators, however, is real retail sales, measured in the aggregate and per capita.  And lo and behold it has one of the best correlations of all with Presidential election results.  It turns out consumers really do vote with their wallets. It is considerably better than using income, probably because it is the acid test of the level of confidence average people have about the economy. As a result, how much of what is in their wallets they are wiling to spend is an excellent predictor of their voting preferences in Presidential elections.

Specifically, during the last 60 years, the following statements have always been true and have collectively always accurately predicted the outcome of the Presidential elections.

1. If there is no consumer spending recession, defined as at least 2 consecutive quarters' decline in real retail sales per capita, during a Presidential term, the candidate of the incumbent party wins the Presidential election.
2. If there is a consumer recession, and consumers are spending less per capita at the end of the third quarter of the election year than they were 3 years previously, then the candidate of the incumbent party loses the election.
3. If there is a consumer recession during the final two years of the Presidential term, the candidate of the incumbent party loses, even if consumers are spending more at the end of the third quarter of the election year than they were 3 years previously.
4. If there is a consumer recession during the first two years of the Presidential term, but the consumer has completely recovered (which has always happened), the candidate of the incumbent party wins the election.

Here is a table giving the breakdown of real retail sales per capita, ranked in order of strength from Q3 of the first year of the Presidential term through Q3 of the final year of the term, a total of 12 quarters.  I begin with the third quarter of the President's first year in office since voters historically excuse the President for responsibility for the economy until s/he has been in office at least 6 months.

The last two columns indicate whether or not a spending recession, defined as two consecutive quarters of a decline in real consumer spending per capita, occurred during the Presidential term.  If so, I indicate whether that spending recession ended, and if so, when:

Year	Real  retail sales per capita	Incumbent  party vote %	Spending recession?	Recovery from spending recession?
1964	11.8	61.3	None	---
1972	11.4	61.1	Yr1 m10	Yr3 m1
2012	7.7	52.0	None	---
2000	7.4	50.3	Yr4 m3	No
1996	6.6	54.7	None	---
1956	5.1	57.8	Yr1 m3; Yr 3 m10	Yr3 m3, No
2004	4.8	51.2	None	---
1984	4.8	59.3	Yr1 m8	Yr3 m6
1988	4.6	53.9	None	---
1968	2.2	49.6	Yr2 m3	Yr4 m11
1960	-2.1	49.9	None	---
1976	-2.8	49.0	Yr1 m7	No
2008	-5.9	46.3	Yr2 m1	No
1980	-6.1	44.7	Yr2 m12	No

 In general, the stronger the growth in real consumer spending during the 3 year period leading  up to the Presidential election, the higher the percentage of votes for the candidate of the incumbent party.  Further, every time consumer spending growth was negative, the incumbent party's candidate lost.  Every time the consumer spending growth was over 4%, the incumbent party candidate won.

At present were are 9 quarters into the 12 quarter period for the 2016 election.  Real retail sales per capita are up 3.2% since Q3 2013.  If they continue at that pace through Q3 of 2016, they will be up 4.3%, forecasting a win by the Democratic candidate.

Secondly, when consumer spending growth during the three years leading up to the Presidential election was weakly positive (i.e., 4% or less), there was always at least 1 consumer spending recession.  Whether and when the recovery from the downturn happened is vital. If it happened early in the term, the candidate won.  If it happened late in the  term, specifically including the last year before the election the candidate lost.  [Note that while in 1956, such a recession was ongoing at the time of the elction, the overall spending increase for the term was +5.1%.] Probably a weighted average where periods closer to the election get more weiighting than earlier periods would be an improvement in the model, but it is beyond my scope.

In 2015, real retail sales per capita did decline ever so slightly from Q3 to Q4 in 2015.  A one quarter decline is not unusual at all.  If, however, it continues to decline, that will be consistent with a scenario similar to that in 2000, where the candidate of the incumbent party, Al Gore, lost the election although he eked out a slight victory in the popular vote.

To summarize, if consumers vote their wallets this year,  the democratic nominee is likely to win, provided there is no spending recession over the next 8 months.  

My forecast for the 2nd half of 2016

 - by New Deal democrat

My forecast for the 2nd half of this year is up at XE.com.  US$ permitting . . . .

Another sign the industrial recession is bottoming: ISM inventories vs.new orders

 - by New Deal democrat

The overall most important economic question this year is whether the industrial recession caused mainly by the strong US$ will end, and if so, when?

I have suggested that there are signs of a bottoming out in the spot price of the trade wieghted US$ and industrial commodity prices.  Yesterday we got a third indication in the ISM manufacturing report.

As an initial matter, the inventories component of the ISM index is an excellent coincident indicator for YoY real GDP.  Here are three graphs covering the last 70 years to show that:

Besides being a more timely sign of a Quarter's GDP,  as you hopefully can see in those graphs, the ISM inventories index also  bottoms out sometime between the middle of a recession to a few months after its end.  Most often the bottom is wihin one month of the bottom of the recession.

The inventory index in 2015 made a bottom in October.  Usually - but not always - there is no lower bottom.

Just as important is the relationship between the ISM new orders index and the inventory index. As you can see in the below graphs covering the last 70 years, typically late in a recession the new orders index spikes higher, into expansion,  while the inventories index is still contracting, near the index's ultimate low:

The same pattern holds true for downturns that do not sink all the way into recession.  Here is 1966:

and here is 1985-86, which was also associated with a steep decline in gas prices:

Now here is a close-up on the last few years:

In January the ISM new orders index spiked higher, into expansion,  while the inventories index remained near its low, showing continued contraction in inventories.

Typically both new orders and inventories make V-shaped bottoms.  While it is only one month's data, January is most consistent with new orders exiting the industrial recession, with inventories continuing to contract, but perhaps less intensely, in the next few months.  In short, more evidence of an approaching bottom to the industrial recession .

Consumers have spent about 20% of their gas savings

 - by New Deal democrat

Real personal consumption expenditures rose 0.1% in December, positive but something of a disappointment  compared with the big YoY increase evident in Gallup's consumer spending measure:

This means that personal spending slowed down considerably in the 3rd and 4th quarters compared with the previous 4 quarters (blue in the graph below), particularly as compared with the increase in real personal income (red):

But a longer term comparison shows that it has been the first 3 quarters of 2015 which were the exception:

Over the last 10 years, real personal spending increased on average about 0.15% monthly.  In the first 3 quarters of 2015, it increased by closer to 0.3% monthly.  This was one of the best rates in the entire 10 year period:

Real personal income (red in the above graph) also was above average throughout 2015.

So how much of their gas savings have consumers been spending?  The big decline in gas prices began in summer 2014.  If we norm both spending and income to 100 just prior to that decline, we can compare how much each has increased:

Real income has grown by 6%, while real spending has grown by 4.5%.  In other words, consumers have spent about 3/4 of their increase in income.

But how much of that is gas savings?  In the bar graph above, we can see that in the 12 months before the big decline in gas prices, real income increased by 2.4%, and real spending by 2.7%.  The average annual increase in income has been 3.9%, while spending has averaged 3.0% annualized.  This means that consumers have spent about 20% of their gas savings (+0.3% vs. +1.5%), relatively more in the first half of 2015 vs. the last half.

John Hinderakar Continues His Long Period of Economic Incompetence

Update: Let's think about this:  As I show below, Minnesota is at full employment with solid, state-wide wage gains above the national average.  And Hinderaker thinks that's bad.  What an idiot.  

John Hinderaker is now the President of the Center of the American Experiment, a think tank.  First, it's obvious his new bosses didn't even look at his past work.  As I've documented, his economic analysis was 100% wrong for an entire year (2014) .

Over at his website, he has a 30 second video up, arguing that Minnesota is actually 30th in job creation.  However, there's a big problem with Hinderaker's cute little video: he's using 2004-2014 as the basis for comparison.  No reputable economist would use that time frame instead, opting for the period of expansion as determined by the NBER.  Why?  Because that's the standard time unit we use in the profession.  Hinderaker's time period is simply pulled out of thin air, probably because it offered a the worst possible performance to "bolster" his claims.

Now, let's go the FRED system to get the data for Minnesota:

The Minnesota unemployment rate peaked a little above 8% at the end of the last recession.  It currently stands below 4%.  Economists generally consider 5% as full employment, which means Minnesota is doing very well, especially considering the the slower pace of this expansion.

As a result, wages and salaries are increasing at a strong rate, rising between 2.5% -5% on a Y/Y basis for the entire expansion.

Above is the annual Y/Y percentage change in Minnesota GDP.   It's slowest pace was 2.9% in 2014.

So, the state is at full employment, wages are growing far above the national average, and total growth is very strong.

As usual, Hinderaker has no idea what he's talking about.

Weekly Bond, Equity and International Round-Up

International Week in Review

Bond Market Week in Review

Equity Market Week in Review

Weekly Indicators for January 25 - 29 at XE.com

 - by New Deal democrat

My Weekly Indicator post is up at XE.com .

The trend of some poor data becoming "less worse" continues.

Three positive takeaways from 4th Quarter GDP

 - by New Deal democrat

Aside from the fact that it was positive, there were at least three particularly nice positives in the GDP report for Q4 2015:

1.  Real residential investment itself, and as a share of GDP, increased:

This typically turns down a year or more before the next recession.

2.  Proprietors' income increased.

No graph available yet, but income increased +0.6%.  Typically, but not always, corporate profits follow in the same direction.  Again, these tend to turn at least one year out from a recession.  I also suspect this series is more attuned to domestic consumption that corporate profits is.

3. Median wages increased:

These increased +0.6% and they are up over 2% YoY.  Since this is a median, this is a better measure than average hourly wages.  The worker at the 50th percentile is doing better.

Holy Cr*p!!! Apartment rents soar 5% in Q4 2015

 - by New Deal democrat

What happened to apartment rents in the 4th quarter was jaw-dropping.  My take is up at XE.com .

Meanwhile housing inventory remains very low, harming sales, as buyers simply cannot find affordable dwellings.  And homebuilders tout in their earnings conference calls about deliberately holding back supply in order to profit more.

Oligopoly market power, anyone?  Here is an apparent horrible example of average Americans suffering because of the complete abondonment of antitrust enforcement.

The big trends of 2015 look like they are abating

 -  by New Deal democrat

It's a slow week, with the big news coming on Friday with the release of Q4 GDP.

In the meantime, here are a few things to consider:

1.  In 2015, 5 things moved in lockstep: Chinese stocks, US stocks, oil prices, industrial commodity prices, all down, and the US$, up.  Those trends may be abating.

First of all, the Chinese stock market, which has been unwinding a bubble, has given back about 75% of its gain:

That's 2400 points down from the peak, about 800 left to give back the entire 2014-15 surge.  There's no guarantee the bottom will arrive at 1999, but that's not a bad target.

2.  Industrial commodities haven't retreated nearly as much as Oil:

These have gone more or less sideways since November.

Yesterday I pointed out that the spot index for the US$ is also up less than 5% YoY, for the first time since late 2014.

2.  Yay new home sales, but don't get too excited:

This series is heavily revised, usually away from an extreme high or low reading.  I suspect last February's high is going to hold for this cycle.

3.  While we might get a negative GDP print, the weakness in the economy is very concentrated.  The broader economy is holding up pretty well.  That's not a recession.

So says Prof. Tim Duy.  It's nice to have someone of such high status and academic credentials agree with my point of view.

Mixed news on the US$

 - by New Deal democrat

The strength of the US$ is the biggest reason why the US economy has been slowing down.  In general, any YoY increase of 5% or more in the US$ is a big negative for the economy in the following several quarters.

At the YoY peak, the broad US$ was up over 20%.  As of the Fed's update yesterday, the broad US$ is still up 10% or more last week, and it actually rebounded a little:

The good news is, as of today, the US$ spot index against major currencies fell slightly below 5% YoY to 4.8%:

Hopefully the broadly weighted US$ will follow suit, but we'll see.  For now, there is continued pressure on US exports.

A simple question: who is more likely to be right?

 - by New Deal democrat

Mom and Pop investors:

From April through Dec. 30 last year, mutual fund investors yanked money from mutual funds focused on foreign and domestic stocks, according to the latest estimates from the Investment Company Institute.

Corporate Insiders:

Weekly International, Bond Market and Equity Market Round Ups

International Week in Review

Bond Market Week in Review

Equity Market Week in Review

Weekly Indicators for January 17 - 21 at XE.com

 - by New Deal democrat

My Weekly Indicator post is up at XE.com .

There has been a rebound to "less bad" readings in a number of indicators, that may or may not be an artifact of year end - start of year seasonality.

Hoarding in plain sight 2016: the importance of Chinese stockpiling

 - by New Deal democrat

Back in 2008, I wrote an article called Hoarding in Plain Sight, making the argument that the tightness in oil supplies was crucially augmented by the decision of the Bush Administration to double the amount of Oil secreted in the Strategic Reserve, at the same time as other countries such as China also decided to start their own such storage facilities.

I suspect an opposite trend is in play now.  After all, very few analysts are taking the position that China's economy is actually contracting, rather than just growing at a lower rate.  If it's still growing, why wouldn't it be using even more commodities, increasing global demand?  A change in stockpiling behavior is an answer that fits the data.     

  

Let me give an example.  Suppose I am a user of commodity Q.  In Year 1 I made use of 1 million tons of Q, *and* stockpile another 250,000 tons.  In Year 2, with my economy growing, I make use of 1.05 million tons of Q, but I cut back on my stockpiling to 100,000 tons. 

What happens to the "end demand" for Q?  It falls.  In Year 1, I demanded 1,25 million tons of Q.  In year 2, I demanded 1.15 million tons of Q -- a decline of 100,000 tons.  

Something like this has happened to the world economy in the last few years.  From 2009 through 2013, China wasn't just growing strongly, it was stockpiling all sorts of commodities.  Here are some examples:

Metals

When metals warehouses in top consumer China are so full that workers start stockpiling iron ore in granaries and copper in car parks, you know the global economy could be in trouble.....China's refined copper imports have surged over 70 percent so far this year to 1.1 million metric tons, while demand from Chinese manufacturers was forecast to rise by up to 7 percent. Meanwhile, iron ore shipments have risen 6 percent, with traders reckoning that local demand growth is much lower.

Coal 

If you are looking for an example of China's economic slowdown, visit the country's biggest coal port.The huge stockpiles of coal are growing ever higher as factories and power plants cut back.

Fuel

CHINA, the world's largest coal producer and consumer, plans to build stockpiles of the fuel in the eastern province of Shandong to ensure supplies and help stabilise prices, the nation's top economic planner says.The province would complete the construction of four to six coal stockpile bases within the next three to five years, the National Development and Reform Commission said.The bases would each have a capacity to store more than 20 million tonnes of coal.

Aluminum

Majo r Chinese aluminium smelters met last Thursday in the city of Kunming, Yunnan Province, to agree on how to save the industry.While base metal prices all tumbled in the past year – with copper dropping 26% and nickel 40%, aluminium’s 20% decline means the industry is being hit hard by losses, whereas copper prices are still much higher than the cost of production. At the meeting, the Chinese smelters discussed plans for supply-side reform, production cuts and stockpiling, according to market participants. .... Rumours about stockpiling have been circulating widely in the market, with some saying that 2 million tonnes of aluminium will be stockpiled this time. According to the market talk, major aluminium producers, as well as some large-scale state-owned trading...

More on coal

 China and India [ ] from 2008 to 2013 accounted for 98% of the increase in world coal trade. In the rest of the world, exports and imports of the commodity declined over the same period.

The Chinese economy is opaque.  I do not know  whether it actually has declined, or slowed down, or simply cut back on stockpiling.  But to go back to the example I gave at the beginning of this article, "end demand," which includes both use *and* stockpiling, almost certainly declined.

This doesn't simply mean that suppliers now had to compete for reduced demand.  Because of the vast increase in Asian, primarily Chinese, demand, increased supply was also called forth.  The combination of increased supply and decreased end demand is a recipe for a commodity crash.

And all commodities, not just oil, crashed.  Here for example is the 5 year chart of the Bloomberg Industrial Metals Index:

That not just oil, but all commodities, crashed, pretty much in unison, is strong evidence that the causation went from weakened final demand to a decline in commodity prices, not the other way around.

The aforesaid is all speculation.  But a slowdown in Chinese stockpiling, if true, is a good explanation for why commodities are crashing in the face of a still-growing Chinese economy

A mixed report on December housing permits and starts

 - by New Deal democrat

Housing is the single most leading sector of the economy.  The record warmth in the Northeast in December just added to the difficulty in making a clean interpretation. My post sorting through the mess is up at XE.com .

The consumer is alright

  - by New Deal democrat

The negative deflation report for consumer prices in December confirms that the US consumer is alright, and workers' paychecks in real terms continue to grow.

In nominal terms, retail sales declined -0.1% in December. After adjusting for inflation, we now know they were flat: 

Further, December's decline of -1.0% in general merchandise sales, the 3rd worst in the last 5 years:

was almost certainly weather related, since nobody east of the Mississippi was buying winter goods as they basked in September-like warmth.

The average American is a worker as well as a consumer, and since nominal wages grew +0.1% in December, real wages grew +0.2% to a new 35 year high:

Aggregate real wages also grew,  and are now up +18.7% for this expansion:

[NOTE: That means that, 74 months from the bottom, aggregate real wages have increased more than either expansion in the 1970s, and also the 2000s.  This expansion lags the very strong 1960s and 1990s economies by a fair stretch, and is only slightly behind (by about 1%) the 1980s expansion.]

If there is a fly in the ointment, it is that YoY CPI inflation has gone from 0 to +0.7% in the last 3 months, meaning that YoY real wage growth decelerated in the second half of 2015:

So I don't want to overstate this.  We still have real problems with underemployment and sluggish wage growth.  But the average American is doing better now than they have in nearly a decade, and the consumer economy - 70% of the total - is simply not rolling over.