Quality of Life Indicators in Context by Hazel Henderson
USA Update: July 2016
Total nonfarm payroll employment in June rose by 287,000 smoothing out the May number 38,000 with its downward revision to only 11,000 jobs. April was revised up from 123,000 to 144,000 jobs. The Verizon strike which lopped 35,000 off the May job totals was added into June’s 287,000. The labor force participation rose to 62.7%, and as people returned to looking for jobs, this brought the unemployment rate back up to 4.9%, but 8.6% for African Americans. First quarter GDP increased by only 0.5%. The recovery is still on track according to the 3-month averaged jobs added of 147,000. Labor market statistics are notoriously subject to revision. The number of unemployed now is counted at 7.8 million people. There still were 502,000 discouraged workers while the employment-population ratio changed little at 59.6%. Markets worldwide and in the USA sold off on the unexpected “Brexit” vote by Britain to leave the European Union, so we now expect the Fed to keep interest rates unchanged. Wall Street absorbed the Fed’s long-awaited rate increase from zero in 2015 but markets in 2016 are still jittery due to global weakness, Europe’s refugee crisis, Brexit, US elections, still-turbulent oil markets and losses in fossil fuel stocks along with growing number of bankruptcies. Wall Street still misunderstands China’s Shanghai stock market – even though as in the USA, these markets resemble casinos and are not reflective of the real economies in China or the USA. Payrolls for average hourly earnings rose by 2 cents to $25.61 while the average for non-supervisory private sector increased by 4 cents to $21.51. Market players now focus more on the need for wage growth, recognizing that this is key to maintaining aggregate demand.
Wall Street is still focusing on the Fed and other central banks, China, oil prices and global GDP–measured growth, avoiding real world risks of water shortages and climate change as I reported in Risks! What Risks?. Central banks’ tools are exhausted as I discussed in Ben Bernanke and Milton Friedman Were Right: Helicopter Money or Qualitative Easing? and many calls for governments to step up with fiscal spending, particularly on infrastructure were echoed by the OECD. Financiers and media reporting daily roller-coaster volatility are still ignoring the destabilizing role of computers, algorithms and high-frequency trading’s many “flash crashes” and the need for Reforming Electronic Markets and Trading, now an official UN document. This Inquiry will now follow up for two more years on these issues and the disruptions to traditional finance by fintech and IT startups in which Ethical Markets continues to participate (see my forthcoming “FINTECH: The Good and Bad News for Sustainable Finance”). GDP increased at an annual rate of 1.4% in the fourth quarter of 2015 after a 3.9 percent increase in the second quarter and 2.0 percent increase in the third quarter. The USA recovery is still unevenly shared as I note in “Facing Up to Inequality”. Polls found the economy still the top worry of voters as well as the growing inequality gap between Wall Street and Main Street, with these anxieties driving much of the election debate. For example, they are concerned as to what extent corporations are fair as found in the survey by JUSTCapital. Read more