The ECONOMIST published this article “The Federal Reserve -- Easy, now’, Jul 11th 2015, 11:57 BY D.D. | LONDON and cited the PCE standard used by the Federal reserve as the basis for its manipulation of interest rates and other economic actions.
Using old standards like the Personal Consumption Expenditures (PCE) index, and comparing it to past recoveries is a fallacious comparison.
Last year, the first of the Baby-Boom generation turned 70 and thus hit full retirement -- something not factored in to, or even a factor in, past recoveries.
Over the next few years America will see the Baby-Boom-Baby-Peak retire and that process will continue for the next two decades. Thus we have a change in the peak earner investment focus and objectives.
Consumption should be on the decline for those entering, or above their, 50's.
The depressed and sun-poverty minimum wages paid to those just beginning their careers, along with the sub-poverty Social Security being paid to current elderly, combine to enhance dependence of Public Assistance [PA] and decrease consumption.
For the PCE to grow, Minimum Wages will have to exceed $15/hour, and the current average Social Security payment of $800/month will need to be raised to $1400-$1600.
Since Jeb Bush has stated -- indicating the Republican approach -- that workers should work more hours at current pay, he clearly has indicated that depressing consumerism is the Republican objective.
Working more hours to get a poverty level income does NOT enhance consumerism (which creates jobs) but it does deprive other workers the opportunity to work the hours the already employed would command as either overtime, or a second job. Thus ensuring prolonged dependence on PA for those already dependent, a depression of tax revenues due to lack of consumer expansion, and a total collapse of the American Economy -- which would take with it several other economies.
This pattern, which seems to be the basis of political debate and objective for 2015/16, then ensures that Washington will fall as a global leader, and the book "Death Over Life: A Prophecy of America's Destruction" will have properly identified the nation standing in for Babylon.
NOTE, were America to become rational, Greece seems primed to fulfill the role -- with far less global impact.
The American distribution version of "Death Over Life: Secret of Revelation: A Prophecy of America's Destruction" is at this link.
The ECONOMIST article carried this chart series:
Nothing in the chart data allows for the Baby-Boom – yet the B-B reality is reflected in the data – look at the sharp drop (reflected in the lower right chart) compared to previous periods – 36 months ago, the first of the B-B were in their 60’s; they have since left the work force and therefore are not counted. Thus the drop would be sharp, as would the apparently peak unemployment as they transition from being “laid off” – thus gaining the ability to receive unemployment while making room for new hires or permanent termination of their position, as they enter the retirement phase of their lives.
Note the middle-right chart: Wages apparently have been intentionally depressed – a fact matched by the call for an above poverty minimum wage.
Were that wage doubled to the poverty and above level, the 2 would be 4 and on track with prior wage gains.
The lower left chart simply reflects the aging population and the fact the elderly are retired, or have no reason to work prior to their entering retirement qualification age ranges – that is, reflecting population born around or before 1954-1952 (36 months ago).