Posted on 12/09/2013 11:31:31 AM PST by whitedog57
There are cheers from the media about the latest jobs report. While some speculated that it was so good that The Fed would begin tapering their assets purchases, few noticed that the 10 year Treasury yield actually fell on the jobs report.
But let’s look at the longer term picture. House prices are rising rapidly despite declining real median household income.
Problem 1: Labor’s share of nonfarm business have been falling for decades, but it’s decline has been accelerating since 2000.
laborsharelt
No problem, many economists say. The U.S. has been moving towards a service economy for decades. But, …
Problem 2: Real median household income has been falling pretty much along with the decline in labor share of nonfarm business.
medianhilaborshare
To be sure, real median household income has been increasing slightly since mid 2010, it isn’t even close to 2000 levels.
household-income-monthly-median-since-2000dec
Problem 3: Nonfarm labor real compensation per hour reamins below 2007 levels and remains at below the level at the end of the Great Recession.
fredgraph (1)
Problem 4: House prices have recovered nationally at a faster rate than the rise during the housing bubble. Even though real median income has been declining since 2000.
csrealinc
Oh, we got trouble, right here in Bubble City.
Perhaps The Fed and Congress could create a national boy’s band to solve the income and housing problem like in River City.
Trouble-Music-Man
Instead of trying to keep interest rates low and pushing “affordable” housing.
The Fed keeps printing while real wages still haven’t recovered to 2000 levels. And won’t.
I think many of these home purchases are by investment groups as rentals. It’s liquidity in search of hard assets financed at bargain rates.
Carlye (certainly some of the “smartest” money and most politically connected in DC) is buying trailer parks.
That tells you where the US economy is headed long term.
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