Donald Trump, Hillary Louis Clinton, Jed Cocoa discussed on The Indicator from Planet Money
Yes okay we got this from the economist Jed Cocoa of indeed. And here's what he did. He built this model that tried to figure out the growth in earnings for people who likely voted for Hillary Clinton in two two thousand sixteen and then compared them to the earnings growth of people. Who'd likely voted for Donald Trump in two thousand sixteen okay so he used the ones like demographic combinations like racial and ethnic background where you live all that stuff to determine the likely voter behavior? It's like salary wise investments in everything. Just how much you get paid for your your job okay. Weekly basis paycheck. Exactly here is fact number one ready for this okay. People who likely voted for Donald Trump. I've been twenty sixteen in the past year. Their weekly earnings have grown by about two point. Nine percent okay okay people who likely voted for Hillary Louis Clinton you know how much their earnings have gone up in the past year. No five point nine percent twice as fast. That's interesting why so. This is all a bit speculative effective but I had a little tweet discussion with Jed. There's a few possibilities. One is that manufacturing has really suffered this year right the regions that that have a lot of manufacturing activity so that not just people who work in manufacturing but also people who work in industries in those places that have a lot of manufacturing activity might might also have suffered. That's a possibility. And the sort of difference between goods making sectors and services sectors might also account for some of the distinction right goods making sectors could have been hit by the trade war. That's exactly right. Sort of the irony of this is that the trade war might be one of the things it's keeping down the earnings growth of people people who likely voted for Donald Trump. I think that's really interesting. Yes off to a great start. I love it. I'm super interested. Okay number two is one of both of our favorite indicators okay. It's the prime age employment to population ratio. Yet right okay. Yeah take all. The people in their prime working. Age is so that's between the ages of twenty five and fifty four right so people in that age group. How many of those people have job? That's the Prime Age employment to population appellation ratio. The fact is this last month. It's at eighty point three percent and that is the first month in which this this ratio has gotten back to where it was before the recession started. Oh to go in that ratio has only you just now arrived. Wow that a slow. That's a slow recovery. It's bad it's a really slow recovery and I think it goes along because like it's it feels like the economy's been doing well for a long time. Yeah for a few years. At least I think this is has to do with. How awful and severe that recession was you know like the economy economy was in such a horrible place? I mean you and I remember this but like I don't know younger people people in like their twenties or whatever like they might not know just how awful it was was but it was terrible. It was awful. Yeah exactly A bit of a subject here by the way came across in a Bloomberg article by the writer Justin in Fox in recent years. There's been a lot of progress in that exact ratio for women all across that age spectrum so from from twenty five to fifty four women have been getting jobs right to pay at a at a pretty fast pace in fact for them. Eighty s yet for them that employment to population elation ratio for the prime ages is higher than it was before the recession started. I UH-HUH FOR MEN. They are still a little bit below their their peak from before. The recession started. Well women tend to be a little cheaper to hire because they get paid less so it could be that you know. Yeah these are getting some deals in overall terms. There's still a gap between men and women. Men still have those jobs than women. Yes yes so but I just thought thought it note that that's kind of an interesting little subplot that's interesting right to add a two. I'm impressed this last one's a little bit tough. I gotTa tell you this. This might be the thing that stinks it. Okay okay. Are you ready for this. Yeah two weeks ago the yield curve uninvited. It's back to a normal looking yield curve the weights. Wait wait wait okay so that would seem to be good news. Because an inverted yield curve has been linked to moments of recession. Yes right like it has a very very very good track record of this right exactly right so listeners. To our earlier episodes we'll know that for the last six decades. Okay seven out of the seven past. Recessions sessions were preceded by an inverted yield curve an inverted yield curve means short-term interest rates on government bonds are higher than long term interest rates on government bonds and typically means that economic growth is going to slow and tip into recession. Okay here's the interesting thing. The yield curve is now uninvited which does mean that. The outlook is better for the economy. Now but didn't you tell me the other day that ever like before recession start. The yield curve does unimpressed. I did the recession con so this is not good news. Well it might be though. I know. Here's the thing. So for the last three recessions. It is true that the a yield curve uninvited before the recession started anyways. But thinking about it this way when the yield curve on invert it does mean that. The outlook has gotten better in part because policymakers have taken steps to alleviate the damage from the oncoming recession. And so the way to think about this is policy. See makers will respond sometimes to the inverted yield curve and they'll try to do things to stimulate the economy but sometimes things they do arrive too late and so you get the recession anyways. The Federal Reserve has been lowering interest rates this year and so the question is did they get there in time. Have they acted unleash. The economy fast enough to avoid the recession. That might have arrived in the absence. Right like did they feel the cold coming on. took a ton of ECHINACEA vitamin ADAMANCY and got a good night's sleep and they're fine. That is that's the question really right and we don't know we won't find out until another year or so. I'll be honest. Yeah I am actually increasingly optimistic. Really that this might might be the time that finally the yield curve Stops acting as a recession predictor. Why what makes you think that in part because there was a lot less dismissive nece about the yield curve? This time I. I think there's a chance that the Federal Reserve now recognizes that the economy was in a dangerous place it has acted to stimulate the economy and it might just be enough to to get us through this time. I'm hoping the little canary in a coal mine and like the powers that be paid attention and maybe it saved us from a recession. I mean we're hoping that's that's the case right. Of course. Yeah so So what do you think Fun Fact Friday or Stacy's not impressed well. The last thing that could qualify defies is fun. I think we're GONNA have to make this thing. No I really like it because all I have to do is gauge my level of being impressed. Which is actually you know as a New Yorker something that I I like to do anyway? Today's episode of the indicator was produced by Jared Marcel. Our fact checkers Nadia Lewis. Our Editors Patty Hirsch and the indicator is a production of of N._p._R..