August 30, 2016
FIGHT IT? HOW DO WE FOSTER IT?:
How to Fight Secular Stagnation (Michael Spence, AUG 30, 2016, Project Syndicate)
A second condition supporting [secular stagnation]1 is rooted in the impact of heightened uncertainty - about growth, job security, policies and regulations, and the many developments that could affect any of those factors - on investment and consumption. People simply don't know whether their governments are going to start making progress in combating deflationary pressure, countering rising inequality, addressing social and political fragmentation, and restoring economic growth and employment.With future demand far from guaranteed, private investment has been declining in many countries, including, most recently, China. The same goes for household consumption, particularly in the advanced economies, where a larger share of consumption is optional (for example, replacing consumer durables, traveling, and eating out at restaurants).
It takes a second to process that worry--the deflationary epoch has produced a situation where, for the first time in human history, consumption is optional for most of us. And we're supposed to combat that?
Record Number of 401(k) Savers Increased Contributions in Q1 2016 (Rebecca Moore, 4/29/16, ASSETINTERNATIONAL.COM)
Total savings rate for 401(k) savers hit a record level in Q1 2016, Fidelity reports.Its quarterly analysis of Fidelity-administered 401(k) and individual retirement accounts (IRAs) finds the total savings rate for 401(k) savers, which combines individual contributions plus employer contributions, reached 12.7% in Q1, topping the previous record high of 12.5% in Q1 2008. In addition, a record 13.6% of 401(k) investors increased their savings rate in Q1, an increase from the previous high of 12.9% in Q1 of 2015.Even Fidelity's annual analysis of small business retirement plans found that for self-employed 401(k) accounts, self-employed (SEP) IRAs and Savings Incentive Match Plan for Employees (SIMPLE), contributions increased in every plan category.
Home prices have finally recovered from the housing crash (Kathryn Vasel, July 28, 2016, Money)
.The median home price in the U.S. was $231,000 last month, according to a report from ATTOM Data Solutions (formerly RealtyTrac). That's 9% higher than a year ago and 1% above the previous record of $228,000 hit in July 2005.
U.S. household net worth rose to $88.1 trillion in first quarter: Fed (Reuters, 6/09/16)
The net worth of U.S. households rose in the first quarter as a boost in real estate values offset a fall in stock market prices, a report by the Federal Reserve showed on Thursday.Families' net worth increased to $88.1 trillion over the quarter, up from a revised $87.3 trillion in the previous period.
Posted by Orrin Judd at August 30, 2016 11:57 AM
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