News

In its new Report on the Economic Well-Being of U.S. Households, the Federal Reserve Board provides a snapshot of the self-perceived financial and economic well-being of U.S. households and the issues they face, based on responses to the Board’s 2013 Survey of Household Economics and Decisionmaking. The report provides insight into numerous topics of current relevance to household finances, including: housing and living arrangements; credit access and behavior; education and student loan debt; savings; retirement; and health expenses.

But today, after decades of expanding property ownership, the middle orders—what might be seen as the inheritors of Jefferson’s yeoman class—now appear in a secular retreat.  Homeownership, which peaked in 2002 at nearly 70 percent, has dropped, according to the U.S. Census, to 65 percent in 2013, the lowest in almost two decade.  Although some of this may be seen as a correction for the abuses of the housing bubble, rising costs, stagnant incomes and a drop off of younger first time buyers suggest that ownership may continue to fall in years ahead.

States with high and low homeless rates are all over the country. The highest rates of homelessness among states are in Hawaii (465 per 100,000), followed by New York (399) and California (367).

Four in 10 U.S. households are straining financially five years after the Great Recession — many struggling with tight credit, soaring education debt and profound issues related to savings and retirement, according to a new Federal Reserve survey.

Today, the U.S. Bureau of Economic Analysis released prototype estimates of personal consumption expenditures (PCE) for states for 1997-2012. These new estimates provide insight into household spending patterns across states that can be used together with other regional data to gain a better understanding of regional economies.

According to the CalNonprofits organization, California nonprofits generate $260 billion in total economic activity every year, producing more jobs than the real estate, finance or construction industries. The groundbreaking report, titled “Causes Count: The Economic Power of California’s Nonprofit Sector,” was commissioned by the California Association of Nonprofits (CalNonprofits), the statewide policy alliance of more than 10,000 organizations.

And yet, the latest census bureau report says that California is both the wealthiest state and has the highest poverty rate in the country at 24 percent — meaning almost a quarter of Californians live in poverty. In a big state like California that’s a lot of people — almost 9 million — or about the number of people living in New York City.

Personal income increased $56.7 billion, or 0.4 percent, and disposable personal income (DPI) increased $51.5 billion, or 0.4 percent, in June, according to the Bureau of Economic Analysis.  Personal consumption expenditures (PCE) increased $51.7 billion, or 0.4 percent.  In May, personal income increased $57.4 billion, or 0.4 percent, DPI increased $55.0 billion, or 0.4 percent, and PCE increased $39.8 billion, or 0.3 percent, based on revised estimates.

The U.S. economy surged in the second quarter, more than offsetting a first-quarter contraction and putting growth back on an upward trajectory in 2014.

In spite of a long-term decline in manufacturing employment, California maintains a large base of manufacturing capabilities and strengths in a diverse set of manufacturing industries, from food processing and furniture to aerospace and medical devices.

Economic activity in the Twelfth District continued to improve moderately during the reporting period of mid-May through June. Overall price inflation remained quite modest, and wage pressures were well contained on net. Most contacts indicated that retail sales growth was unchanged from the previous Beige Book. Demand for business and consumer services ticked up. Manufacturing activity improved. Drought conditions contributed to reduced production of some fruits, vegetables, and livestock products. Activity in real estate markets advanced, although growth in the residential sector slowed somewhat. Loan demand increased overall.

The news symbolizes to many, particularly those in politics, that California has completely weathered the worst recession since the Great Depression and is once again leading the nation, if not the world, in economic progress.

That interpretation, however, does not comport with the decidedly mixed bag of what’s really happening in our economy.

A higher minimum wage raises wages of low-wage workers, and even though most evidence points to job losses from higher minimum wages, the evidence doesn’t point to widespread employment declines. Thus, consistent with a recent Congressional Budget Office report, many more low-wage workers will get a raise than will lose their jobs. But that argument is about low-wage workers, not low-income families. Minimum wages are ineffective at helping poor families because such a small share of the benefits flow to them.

California’s economy has overtaken Russia and Italy’s, with the state now ranked as the world’s eighth largest economy.

Why has the labor market contracted so much and why does it remain depressed? Major subsidies and regulations intended to help the poor and unemployed were changed in more than a dozen ways—and although these policies were advertised as employment-expanding, the fact is that they reduced incentives for people to work and for businesses to hire.