Making Sense of the Economics
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Making Sense of the Economics
The economic fundamentals that drive hiring, and careers
Curated by Bob Corlett
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The Jobs Report Is Even Better Than It Looks

The Jobs Report Is Even Better Than It Looks | Making Sense of the Economics | Scoop.it

"It’s always dangerous to read too much into any one jobs report. The month-to-month numbers are volatile and subject to revision. The margins of error are big, around 100,000 jobs for the main payroll count. Big surprises in either direction are more likely to be outliers than indications of a new trend.


What makes Friday’s report significant, then, isn’t that it suggests the job market has found a new gear. Rather, the October numbers are significant because they suggest that the previous two disappointing jobs reports were themselves outliers."

Bob Corlett's insight:

Many key measures were going in the right direction. The report showed: wage growth, labor force growth (although not labor force participation rate), unemployment fell, the involuntary part-time rate fell (best since 2008), and the "diffusion index" shows that more industries are gaining jobs than losing them-meaning it is a more broad based recovery. 

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The Problem with Stock Buybacks

Why high corporate profits aren't translating into widespread economic prosperity, as explained in William Lazonick's HBR article, "Profits Without Prosperity."
Bob Corlett's insight:

This video does a fascinating analysis of the impact of stock buybacks. I'm not sure I agree with his recommended solutions, but it always helps to understand the problem. 

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Fewer Layoffs, but Not Much Hiring

Fewer Layoffs, but Not Much Hiring | Making Sense of the Economics | Scoop.it

"The Bureau of Labor Statistics reported that ... fewer people are being let go, but the number of people leaving jobs of their own accord has been rising very slowly, and remains below pre-recession levels. That fact could help explain the difficulties faced by the long-term unemployed. With fewer lower-level jobs opening up as people get better jobs, there are fewer positions they can apply for."

Bob Corlett's insight:

In employment, "job churn" creates opportunity for people. Every person leaving a job for a better job also makes room for someone else to move up. When fewer people quit one job for a better jobs, the whole merry-go-round slows down. 

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The Middle Class Is Steadily Eroding. Just Ask the Business World.

The Middle Class Is Steadily Eroding. Just Ask the Business World. | Making Sense of the Economics | Scoop.it

As politicians and pundits in Washington continue to spar over whether economic inequality is in fact deepening, in corporate America there really is no debate at all. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away.

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The Geography of Jobs | Stanford Graduate School of Business

The Geography of Jobs | Stanford Graduate School of Business | Making Sense of the Economics | Scoop.it

"Why are some places more prosperous than others? A scholar explores the "brain hubs" phenomenon...Some places have always been more prosperous than others, but these differences have increased more rapidly over the last 30 years as the gross domestic product and patents for new technologies have concentrated in two to three dozen communities." 

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10 surprising economic trends that rule the world

10 surprising economic trends that rule the world | Making Sense of the Economics | Scoop.it

What’s going on in the world today? It’s hard to keep up. Some facts are familiar to anyone who reads the news."

Bob Corlett's insight:

I was surprised how many of these economic trends I was unaware of. And by that I mean I was dead wrong about 4 of them. 

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Colonoscopies Explain Why U.S. Leads the World in Health Expenditures

Colonoscopies Explain Why U.S. Leads the World in Health Expenditures | Making Sense of the Economics | Scoop.it
While the American medical system is famous for expensive drugs and heroic care at the end of life, a more significant factor in the nation’s annual health care bill may be the high price tag of ordinary services.
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Bob Corlett's comment, September 30, 2013 7:15 PM
Paying too much for everyday ordinary stuff is no way to budget. As a former boss used to tell me, "It's not the big expenses that are the problem, everyone pays attention to them, it's the everyday stuff that will kill you."
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Private Sector Employment Has Risen 42 Consecutive Months

Private Sector Employment Has Risen 42 Consecutive Months | Making Sense of the Economics | Scoop.it

Private sector employment has risen for 42 consecutive months, with businesses adding a total of 7.5 million jobs over that period. ...over the past three months, private sector employment has risen by an average of 158,000 per month

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America’s tech talent shortage is a myth

America’s tech talent shortage is a myth | Making Sense of the Economics | Scoop.it
So it turns out the United States is not, in fact, the educational wasteland tech industry lobbyists would have you think.
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Effectiveness of Tax Cuts on Lifting the Economy Is Unproved

Effectiveness of Tax Cuts on Lifting the Economy Is Unproved | Making Sense of the Economics | Scoop.it

".. there’s no clear evidence that lower tax burdens have helped the United States grow faster than other advanced industrial nations with higher tax rates and much heavier tax burdens. Economic growth per person in the United States was a little faster than in France or Australia over the last 40 years. But it was a little slower than in Austria, Germany and the Netherlands, according to data from the Organization for Economic Cooperation and Development, a research organization for the world’s richest countries.

While high taxes do have an effect on variables that affect growth, many other factors are much more significant and overshadow whatever taxes do."

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The C.B.O.'s New Budget Outlook Shows How U.S. Fiscal Policy is Upside Down

The C.B.O.'s New Budget Outlook Shows How U.S. Fiscal Policy is Upside Down | Making Sense of the Economics | Scoop.it
The U.S. is taking a big risk, to say the least, by turning to austerity policies, and for what end? Contrary to popular belief, the country is not facing an immediate fiscal crisis.
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Study Shows College Degree’s Value During Economic Downturn

Study Shows College Degree’s Value During Economic Downturn | Making Sense of the Economics | Scoop.it
A new study shows that college graduates didn’t lose as much ground as their less-educated peers during the recession and its aftermath.
Bob Corlett's insight:

Getting a degree is expensive, and it's not a guarantee of anything, but there is clear evidence of it's benefit during this recession. 

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Why Workers Are Losing the War Against Machines

Why Workers Are Losing the War Against Machines | Making Sense of the Economics | Scoop.it

"At least since the followers of Ned Ludd smashed mechanized looms in 1811, workers have worried about automation destroying jobs. Economists have reassured them that new jobs would be created even as old ones were eliminated. For over 200 years, the economists were right." ...but according to this article, that is no guarantee it will continue...

Bob Corlett's insight:

As technology continues taking on jobs and tasks that used to belong only to human workers, more jobs are more cheaply done by machines than humans. The wages of unskilled workers have trended downward for over 30 years, at least in the United States.


There are underlying forces that explain why High Skill Workers and Superstars are winning at the expense of everyone else. 

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‘Good Jobs’ Returning to the U.S. Economy

The labor market’s ongoing recovery—often described as steady, if unspectacular—still has its share of skeptics, but several recent reports provide some evidence that the job market is getting much healthier overall.
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Here's What's Really Going On With Baby Boomers And The Labor Force

Here's What's Really Going On With Baby Boomers And The Labor Force | Making Sense of the Economics | Scoop.it

The monthly Current Population Survey conducted by the U.S. Census Bureau and the U.S. Bureau of Labor Statistics (from which labor force participation data are derived) actually asks those leaving the labor force why they are doing so. In a recent article, Ellyn Terry, an economic policy analysis specialist in the research department of the Atlanta Fed, broke down the numbers.



Bob Corlett's insight:

This chart says it all 

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Here’s why the unemployment rate doesn’t matter anymore

Here’s why the unemployment rate doesn’t matter anymore | Making Sense of the Economics | Scoop.it
The unemployment rate used to be a pretty straightforward economic indicator. But the number has been acting in funny ways since the recession, and it just keeps getting weirder.
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Study: Upward Mobility No Tougher In U.S. Than Two Decades Ago

Study: Upward Mobility No Tougher In U.S. Than Two Decades Ago | Making Sense of the Economics | Scoop.it
But climbing the economic ladder is still much harder in the U.S. than in other developed countries.
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Despite Criticisms, Health Care Law’s Impact on Jobs Is Still Unclear

Despite Criticisms, Health Care Law’s Impact on Jobs Is Still Unclear | Making Sense of the Economics | Scoop.it
Critics say the law will suppress job growth, but economists say it is too soon tell whether businesses will cut hours or hire more part-timers to skirt the employer mandate.
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The U.S. Deficit Shrank, but Will It Come Back Bigger Than Ever? - Knowledge@Wharton

The U.S. Deficit Shrank, but Will It Come Back Bigger Than Ever? - Knowledge@Wharton | Making Sense of the Economics | Scoop.it
The U.S. deficit has fallen to its lowest level since 2008. Experts weigh in on how this will affect upcoming budget negotiations.
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Buffett Calls Federal Reserve History’s Greatest Hedge Fund

Buffett Calls Federal Reserve History’s Greatest Hedge Fund | Making Sense of the Economics | Scoop.it
Billionaire investor Warren Buffett compared the U.S. Federal Reserve to a hedge fund because of the central bank’s ability to profit from bond purchases while accumulating a balance sheet of more than $3 trillion.
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College Graduates Fare Well in Jobs Market, Even Through Recession

College Graduates Fare Well in Jobs Market, Even Through Recession | Making Sense of the Economics | Scoop.it
College graduates are the only group that has more people employed today than when the recession started.
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Why Technology Is No Longer Creating Jobs

Why Technology Is No Longer Creating Jobs | Making Sense of the Economics | Scoop.it

Can technology set off a new boom in job creation?

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Four prominent economists assembled for a recent panel discussion to explore the link between technology and job creation were, in large part, bearish in their outlook. Some went so far as to suggest that technology actually increases unemployment and adds to other problems in the U.S. economy, notably the growing wage disparities between an extremely elite group of earners and everyone else.

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The Deficit Hawk Delusion: What the Krugman-Scarborough Slugfest Is Really About

The Deficit Hawk Delusion: What the Krugman-Scarborough Slugfest Is Really About | Making Sense of the Economics | Scoop.it
If the debt debate still seems too abstract to follow, maybe that's because it's a debate over what we don't know about the economy
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1.8 Million New Jobs in 2012: Where Did They Come From?

1.8 Million New Jobs in 2012: Where Did They Come From? | Making Sense of the Economics | Scoop.it

" ...the economy is still generating work mostly at the high and low end of the pay spectrum, without a ton of opportunities in the middle. Much of the growth in business services, for instance, came from temp workers, followed by professionals in IT, management consulting, and architecture and engineering."  

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The Great Decoupling of the US Economy

The Great Decoupling of the US Economy | Making Sense of the Economics | Scoop.it
If you were in charge of the economy, you’d probably care that it could produce a lot, that it had high productivity, that it provided lots of jobs, and that these jobs offered decent pay on average.
Bob Corlett's insight:

Long held economic beliefs like "a rising tide lifts all boats" are coming into question. The national economy can grow without creating great jobs for everyone. If you want to build a geat career, you need to understand the underlying forces at work. 

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