Nothing makes a gay economist happier than having an iconic female muse to use for his economic report of the week. That’s not entirely true, but it fits a stereotype and stereotypes are totally funny because they’re partially true.
On Tuesday, Gallup released its U.S. Consumer Spending Measure for August. This is an interesting survey because it simply asks, “Barbie, how much did you spend yesterday?” Her answer for August was $94, the same as July 2014 and close to August 2013’s $95 answer. Barbie’s been suffering like Gisele Bundchen with Tom Brady the attention whore. In 2008, Barbie’s average answer was $100. While last month’s answer was higher than recent lows, there’s considerable improvement needed to reach recent highs. Clearly Barbie (the U.S. consumer) feels good enough to shop again, but probably just at Nordstrom Rack and not Nordstrom.
Gallup’s U.S. Job Creation Index, released on Wednesday, was the yawner Gallup’s Consumer Measure was on Tuesday. August maintained July’s 28 points. This index has remained pretty flat since May, but overall job creation was at its highest in six years, to which hard to find Black Barbie said, “Oh Lord Jesus, it’s a fire! Ain’t nobody got time for that!”
Thursday was all about Working Barbie. First the Challenger Job Report, by Challenger, Gray & Christmas, showed August layoffs dropped 6,877 (down 15 percent) from July and down 10,452 (down 21 percent) from last August. This made Barbie as happy as her morning coffee after a night with a bottle of wine. Then the ADP Employment Report dumped water in Barbie’s coffee when it showed August private payroll growth was 204,000, down from July’s downwardly revised 212,000. Any gains were led marginally by small business. Then Gallup’s U.S. Payroll to Population showed little change from July to August, 45.2 to 44.9 respectively. Workforce participation saw its first increase in three months.
The most important news on Friday was the Department of Labor’s Employment Situation report that failed to bring the week to a positive close, but succeeded with making Barbie pass out like a topless Dodger’s fan. Nonfarm payrolls increased only 142,000 for August. That’s 67,000 less jobs than those produced in July and 88,000 less than expected. Barbie will cut someone.
The job market performance sucks, contrary to recent history. Jobs, as we’ve been saying, are one of our top three economic concerns followed by wages and the stock market heroin, QE3. Wages remain stagnant for Target Barbie and Dollar General Barbie, but are super for Neiman Marcus Barbie. Barron’s did a scathing review of QE3 last week and suggest that any talk about its unwinding already being factored into the market is rubbish. No one other than You Can’t Believe a Thing She Says Barbie has participated in such a falsely inflated economy than what we have these few years last. This rough patch could continue through the end of 2014 with an imaginary calmness leading into November 2nd. Hold onto your hat, Barbie!
The Fed put Barbie’s panties in a wad on Wednesday when it announced that consumers have decided to hoard rather than spend cash, contrary to the assumed human behavioral response to its low interest rate policy. Low interest rates severely affect cash savings accounts, as well as every other interest rate, and even penalize Money Market Barbie when inflation is factored into the equation.
Barbie has been leasing the Barbie Convertible, Barbie Jeep and even the Barbie Horse and Carriage by a greater margin month to month. Unfortunately, this is a bad money management decision. When leasing a car, Barbie pays for the inherent deprecation up front, when it’s still brand new. When Barbie purchases a new car, also not the best option, she pays deprecation when the car is resold. When she purchases a used car, she assumes a fraction of the car’s deprecation.
Read June 21st’s #MoneyConscious Mash Up: National Cuckoo Day Edition
Labor force participation has crept back into the nation’s lexicon this week with many claiming it’s skewing unemployment numbers. The drop in labor participation and the slower than normal pace of worker productivity suggest a dismal future. Fortune Teller Barbie cries in her sleep at night.
That’s what we think is important to know this week in the world of economics and personal finance. Come back every Saturday for more of the Debt Free Guys #MoneyConscious Mash Up. It’s our, hopefully, humorous take on all things money you must know.