A constant them in this blog is the unreliability of economic indicators due to their being skewed by the top of the income distribution. Earlier in the week, I compared and contrasted the confidence levels among different consumer income groups, and you can read that here:
That chart basically compares the top half of the U.S. income distribution to the bottom half segmented into four groups. I would like to the top half divided in a similar fashion in order to learn exactly how much of this “confidence” is being reported by the upper echelons.
I wonder why consumer spending and the economy are still weak. Could it have anything to do with this chart?
Today’s award for the most misleading headline of the day goes to the Wall Street Journal. Eurozone unemployment did fall slightly; about 24,000 less people were unemployed in July than in June. The reason why the headline is not accurate is because a shift in 24,000 in a population of close to 20 million should not be considered as a change either way, because the number is too small to be significant. Basically, a decrease of one-tenth of one percent is probably within the error range for the survey.
Moreover, the real story of the Eurozone’s employment picture is right here:
the number of people working declined 668,000 or about 0.5%. This was the steepest monthly drop in the workforce since the beginning of the Eurozone recession. Perhaps the GDP recession is over in the Eurozone, but the labor recession wears on.
Deadheads were a cult that followed folk rock group the Grateful Dead around on tour living a hand-to-mouth existence relying on the kindness of others. When the tour ended, Deadheads tended to just stay wherever they were until the next touring season began. This leads to the old joke from the 80’s:
Q. How can you tell that a Deadhead crashed on your couch?
A. He’s still there.
So, how can the Germans tell that they once bailed out Greece? Because they are still bailing out Greece.
Greece has devolved into a permanent ward of the Eurozone. The Greeks need to attain economic growth rate of 5% for several years in a row in order to end their nightmare, but this growth will never come. While the Germans are loathe to admit it, they are now the guardians of Greece and will be paying a few billion euro a year for years to maintain the integrity of the eurozone. These payments will continue until either the Germans get tired of handing over the cash or the Greeks grow weary of what will be increasingly draconian conditions attached to the aid.