Our Trade Deficit = $3.5 Trillion FDI in the U.S. Economy and 6 Million Jobs for Foreign Firms
Professor Mark J. Perry's Blog for Economics and Finance
DQ NEWS -- "A record-high portion of investor and all-cash purchases lifted Phoenix-area February home sales to a four-year high for that month. The median sale price dropped year-over-year for the eighth consecutive month as sales of existing homes priced below $100,000 remained strong and sales of newly built homes, which are typically more expensive, held at a record-low."
Steve Moore tells a story about Milton Friedman traveling to Asia in the 1960s and visiting a worksite where a new canal was being built. Friedman was shocked to see that instead of modern tractors and earth-mover equipment the workers instead were using small shovels. Milton asked a government bureaucrat why there were so few machines, and the bureaucrat replied: 'You don't understand. This is a jobs program.' To which Milton Friedman replied: 'Oh, I thought you were trying to build a canal. If it's jobs you want, then you should give these workers spoons, not shovels.'"
SF Chronicle -- "Novella Carpenter (pictured above) took over a vacant lot on a hardscrabble corner of West Oakland eight years ago and turned it into a working farm of vegetables, goats, rabbits and, sometimes, pigs. Carpenter milked goats, made cheese and ate much of the produce. She also wrote a popular book, "Farm City," about the experience and became an icon of the Bay Area's urban farming movement.
Here are a couple of interesting items in today's Employment Report:
Housing affordability reached another new record-high in February at 192.3, rising slightly from 192.2 in January, according to data released today by the National Association of Realtors. A household with the median family income of $61,566 has 192.3% of the qualifying income needed to purchase the median priced single family home of $157,000, assuming a 20% down payment and a 30-year mortgage at 4.91%. In the Midwest region of the U.S., the housing affordability index reached 243.8 in February, meaning the typical household has almost 2.5 times the income necessary to qualify for the median-priced home of $121,700.
Today's BLS employment report shows that 1.904 million jobs (civilian employment, household data here) were created over the last 15 months through March since the cyclical low of 137.96 million jobs in December 2009 (now at 139.864 million total employment), see chart above. That's the greatest number of total jobs created over a 15-month period since November 2007, the month before the recession officially started, and implies that job growth has returned to its pre-recession levels.
The chart above shows that U.S. sugar prices have averaged twice the world price (28.1 cents per pound vs. 14.4 cents) since 1980 (data here), because of tariffs and quotas that restrict the amount of foreign sugar allowed to enter the U.S. and thereby protect domestic beet sugar producers against more efficient foreign producers of sugar cane. I've estimated before that our sugar policy cost U.S. consumers of sugar $2.5 billion in 2009 and $4.5 billion in 2010.
This is from an article in today's WSJ titled "Save a Forest: Print Your Emails":
National Restaurant Association -- "Driven by improving same-store sales and customer traffic levels as well as growing optimism among restaurant operators, the outlook for the restaurant industry improved in February. The National Restaurant Association’s Restaurant Performance Index (RPI) – a monthly composite index that tracks the health of and outlook for the U.S. restaurant industry – stood at 100.7 in February, up 0.4 percent from its January level (see chart above). In addition, February represented the fifth time in the last six months that the RPI stood above 100, which signifies expansion in the index of key industry indicators.
The U.S. Monster Employment Index was released today, here are some highlights:
|Average Salaries, 2007-2008|
|40 to 44||$84,900||$54,800||54.93%|
|45 to 49||$86,000||$55,000||56.36%|
|50 to 54||$88,100||$59,500||48.07%|
|55 or over||$91,500||$63,700||43.64%|
The Conference Board reported today that online advertised vacancies rose in March to 4,454,500, which is the highest number of job openings since May 2007, almost four years ago. The March increase of 208,800 online jobs advertised follows a 437,600 increase in January, and brings the total increase in online job openings in the first quarter of 2011 to 619,000.
Home price indexes for January were released this week for the U.S. (Case-Shiller) and Canada (Teranet), see chart above. Both home price indexes for both countries equal 100 in January 2000 in the graph. U.S. home prices more than doubled between 2000 and 2006 and peaked at 206.52 in July 2006 when the real estate bubble burst and home prices plunged by 32.4% before hitting bottom in April 2009 at an index level of 139.26. Canadian home prices have more than doubled between 2000 and 2010, and peaked at 204.59 in August 2010, before flattening out over the last six months.
According to the California State Teachers’ Retirement System 2010 Summary Report to Members, the average retired California public school teacher receives an annual pension of $51,072 (see chart above). According to Department of Education data, that's more in retirement pay than the average current salary for active elementary and secondary public school teachers in 28 states, and almost as much as the national average for active public school teachers of $55,350.
The 2011 edition of my book Free Trade Doesn’t Work is now available! Thiis edition has updated statistics, political analysis revised to include the events of 2010, and a few minor sharpenings of its economics.
The book is on Amazon, but you can get it at a 60 percent discount if you go to this page and enter discount code UU2N84E6. If you want to help without buying anything, please go to the book’s Amazon page and give it a favorable review, as the reviews from the original edition do not automatically carry over.
Best Regards,Ian Fletcher
Coalition for a Prosperous America
225 Bush St., 16th Fl.
San Francisco, CA 94104 USA
The chart above (click to enlarge) is based on data from the Panel Study of Income Dynamics that follows the same households over time, and was reported in a recent study by economists at the Minneapolis Federal Reserve Bank titled "Facts on the Distributions of Earnings, Income, and Wealth in the United States: 2007 Update."
In another sign that the U.S. economy has made a full recovery from the 2007-2009 recession, state and local tax collections reached a new record high in the fourth quarter 2010 of $378.3 billion, according to data released today by the Census Bureau. Compared to the fourth quarter of 2009, state tax collections were up overall by 1.64%, helped by increases of more than 10% for individual income taxes, 14.3% for corporate income taxes, and 2.3% for sales taxes. Property tax collections fell by almost 3% over the year, most likely due to falling home values.
Both after-tax profits and after-tax profit margins (profits/sales) for U.S. manufacturing corporations soared to record-high levels in the fourth quarter of 2010, according to data released today by the U.S. Census Bureau. Profits for U.S. manufacturing firms reached $135.3 billion in QIV last year, the highest amount of profits ever recorded in a single quarter for America's manufacturers, and surpassing the previous record of $127 billion in QII 2007 before the recession started (see top chart above). The after-tax profit margin for U.S. manufacturers also reached an all-time time of 9.1%, at least for the data the Census Bureau has available going back to 1999 (see bottom chart above).
Real consumption expenditures reached a record-high of $9.459 trillion (seasonally adjusted, annual rate in 2005 dollars) in February, according to today's BEA report on Personal Income and Outlays. Consumer spending is now 1.1% above the pre-recession level of $9.355 in December 2007, and almost 4% above the cyclical low of $9.114 trillion in April 2009 (see chart above).
The Conference Board Leading Economic Index (LEI) for the Euro Area increased 0.9 percent to an historical high of 108.9 in February (2004 = 100), following a 0.7 percent increase in January and an 0.8 percent increase in December. The February increase in the Euro Area LEI was the fifth straight monthly gain, and starting with a sharp upturn in April 2009, the LEI has increased in 21 out of the last 23 months (see chart above).
From a front page story in today's Detroit Free Press, "Amid Tougher Times, Spending on Payroll Soars at Michigan Universities":
Here's a good case study of occupational licensing, with economic lessons in barriers to entry, contestable markets, and government regulation vs. market competition: