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U.S. economic history will be broken next year


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2018 Apr 22, 7:51am   5,409 views  28 comments

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Just a friendly reminder....

By July of next year the U.S. is about to accomplish something it has never done

A. Longest Job expansion ever recorded in U.S. history

Already done .... 90 straight months and still counting .... previous record was 48 months back in the late 1980's

B. By July of 2019 it will have the longest economic expansion ever recorded in U.S. history

This has never happened in the same economic cycle

Now, the prime age labor force is growing again




and we are still producing double the jobs needed to account for population growth!

The last economic cycle only had 5 years of job growth avg running at 132K per month .... even today we are still above 180K per month with the longest job expansion ever in terms of consecutive months.

Comments 1 - 28 of 28        Search these comments

1   _   2018 Apr 22, 9:02am  

Logan Mohtashami says
Nobody knows except those that think they know.


This is a valid question and a good one since one my economic calls for 2018 was for an inverted yield curve which would indicate that a recession should start at some point 2019.

However, since it is almost May, it practically makes it impossible to have a negative 2 quarter GDP leading to job losses by next July once you account for these data lines added together.

- LEI ( Leading economic indicators)
- Claims
- JOLTS


2   steverbeaver   2018 Apr 22, 12:55pm  

Thanks for the post. I always have appreciated these.
3   lostand confused   2018 Apr 22, 1:14pm  

Logan Mohtashami says
and we are still producing double the jobs needed to account for population growth!

Does that account for immigration-legal and illegal?
4   _   2018 Apr 22, 1:41pm  

lostand confused says
Does that account for immigration-legal and illegal?



The U.S. does have the great advantage over other developed countries in the sense that we do have a replacement workforce but the rate of growth of population has been falling for decades .

Over 327,000,000 Americans in the U.S.

Over 155,000,000 working

But we have the biggest job openings ever at peak was 6,300,000

I personally thought peak job openings would be 6,210,000 but if job openings grow toward 7-8 million and job growth slows to 80K-100K

Then we need a wall to keep people from leaving the country

5   _   2018 Apr 22, 8:42pm  

Feux Follets says
Any charts that go into detail about the type, quality and wages of those wonderful jobs numbers ?


Real wages have had their best decade in a long time

6   _   2018 Apr 23, 5:16am  

Feux Follets says
If "real wages" are having their best decade



Retail sales are at all time highs

7   _   2018 Apr 23, 5:21am  

Feux Follets says
If "real wages" are having their best decade


Over 40 million homes have been bought in 9 years and over 120 million cars have been bought and all this in a light demographic patch as well.

Prime age labor force only came back to par this year from 2007

In fact the last 3 years have been the only time ever recorded in U.S. history where car sales stayed above 17 million even with car age fleet data at all time highs



8   _   2018 Apr 23, 5:24am  

Feux Follets says
people working two and three jobs to make ends meet ?


Less than 5% of the work force

Multiple job workers are
9   _   2018 Apr 23, 5:25am  

Feux Follets says


Feux Follets says
why are all of the figures in the charts "adjusted" ?
10   _   2018 Apr 23, 5:29am  

Before anyone says the part time America workforce.

Prime age labor force full time work force is running really at 90% full time jobs. If you take ages 16-24 and 65 and above out of the data line.

So the part time American worker was also a strange thesis as well



11   WookieMan   2018 Apr 23, 6:13am  

Logan Mohtashami says
Less than 5% of the work force

Multiple job workers are


When did you become Yoda Logan? Lol, not sure if that was intentional or not, but gave me a good laugh this morning. Thanks.
12   _   2018 Apr 23, 6:16am  

WookieMan says
Yoda Logan?
13   joshuatrio   2018 Apr 23, 7:58am  

Logan, what are you thought on housing/real estate for the next few years? What about auto sales/subprime auto bubble?
14   _   2018 Apr 23, 8:33am  

joshuatrio says
What about auto sales/subprime auto bubble?


This should create enough withdrawal from lenders to prevent car sales from having its record breaking 4 straight year of 17 million sales. However, in scale terms vs the banks leverage it's not a big deal. Low quality credit has been showing stress for some time now with this long economic expansion.

However, even myself I would be surprised if we end the year above 17,000,000 for car sales again, the Hurricanes gave a boost to car sales and that will fade if it already hasn't already

joshuatrio says
Logan, what are you thought on housing/real estate for the next few years?



Which aspect of housing are asking about, sales, prices, housing starts, construction workers?
15   Goran_K   2018 Apr 23, 8:36am  

Logan Mohtashami says
Which aspect of housing are asking about, sales, prices, housing starts, construction workers?



I'd like to see information about housing starts if possible.
16   _   2018 Apr 23, 8:37am  

Goran_K says

I'd like to see information about housing starts if possible.



Housing Starts, Supply, Construction workers, breakdown of starts all here based on last week's report

https://loganmohtashami.com/2018/04/17/housing-starts-grow-with-monthly-supply-growth/
17   joshuatrio   2018 Apr 23, 8:39am  

Logan Mohtashami says


Which aspect of housing are asking about, sales, prices, housing starts, construction workers?


Housing/real estate prices... A 1, 5 and 10 year outlook. Thanks!
18   _   2018 Apr 23, 8:51am  

joshuatrio says
1, 5 and 10 year outlook. Thanks!


1 up

5 years, that depends more and less on when the next recession comes into play creating more supply.

National supply is still to low for prices to go down and we won't have any forced distress sales coming before the recession

10 years, too long out

With home prices we all have to be mindful that real home prices aren't back to 2006 levels so until mortgage rates hit 5.875% or higher the real affordability factor toward home buyers isn't as bad as it seems



When you see monthly supply starting to get over 5.8 months that would be your first red flag on possible future price declines but demographics for housing actually get better years 2020-2024, they're light from 2008-2019.

If rates stay low real home prices have legs to go on for a while as long as monthly supply is under 6 months
19   _   2018 Apr 23, 8:55am  

Big difference in this cycle vs the last ... That selling equity thesis I brought in 2015... = Housing Tenure

Bigger and bigger home thesis... well, a lot people have bought their main home already and this creates housing tenure to expand




20   Strategist   2018 Apr 23, 9:09am  

Logan Mohtashami says


This chart tells me Real Estate agents are eventually gonna start making a killing. Homeowners are forced to stay in their homes for now, but eventually will move.
21   _   2018 Apr 23, 10:26am  

Strategist says
but eventually will move.


Not so fast!

Now come years 2020-2024 you should get some more mobility that is when I am forecasting to see some cooling down on this data line.

However...

If a new home buyer has a 2,500 sq ft home with 4 beds and has 2 kids, why would he or she ever move up unless they had more kids or job relocation.

Housing community completely missed this massive change in housing but come years 2020-2024 if we don't get more mobility it isn't because of lack of nested equity it is because people just don't want to move

22   _   2018 Apr 23, 10:29am  

Real home prices matter... but what nobody ever talks about and I get a blank stare sometimes when I say this... Nested adjusted to inflation equity isn't as high as people think even though nominal equity is high.... so this is why selling equity is an issue outside the bigger home ownership thesis

Both together make for a complicated future outlook but by years 2020-2024 we should be having more married couples, more kids and people ready to be able to move more.

However, I would like to see some front line data on that before I am convinced
23   Strategist   2018 Apr 23, 11:31am  

Logan Mohtashami says
Strategist says
but eventually will move.


Not so fast!

Now come years 2020-2024 you should get some more mobility that is when I am forecasting to see some cooling down on this data line.

However...

If a new home buyer has a 2,500 sq ft home with 4 beds and has 2 kids, why would he or she ever move up unless they had more kids or job relocation.

Housing community completely missed this massive change in housing but come years 2020-2024 if we don't get more mobility it isn't because of lack of nested equity it is because people just don't want to move


They don't want to move, or they find it too difficult to move? Moving over 5 years or so is the American lifestyle. Lifestyles in a society don't change so drastically in 10 years. It's the inability to find a new home to move into due to a shortage of homes, and still tight credit conditions that prevent homeowners from moving. It will eventually change. There is a reason why Warren Buffett purchased Prudential realty and turned it into Berkshire Hathaway. He is expecting a massive jump in real estate transactions.
That chart you presented was very insightful. It opened up my eyes to something I did not realize. Thanks for posting it.
@Patrick its information like this in addition to all the fun that keeps me on Patnet.

Logan Mohtashami says
24   _   2018 Apr 23, 12:54pm  

Feux Follets says
Savings rates are dismal,





Why would people save money into a checking account when interest rates are falling when their DPI income is either vested in their home or 401K plan

96 trillion dollars in net asset wealth

25   _   2018 Apr 23, 12:56pm  

Feux Follets says
Perhaps a speaking tour is in order to convince those below the 50% quintile how well they are doing


If you want to make a case that uneducated and unskilled Americans can't make a cost of living wage I would agree with that as the data has show this for a long time

26   _   2018 Apr 23, 12:59pm  

Feux Follets says
Plenty of categories to pick from and then select profitability, growth, performance etc. for each sector.




Let me get this straight you're actually complaining about the only time in U.S. history that we have had the longest job expansion on record and the longest economic expansion on record when real wage growth is basically at a 5 decade high in the same cycle too.
27   _   2018 Apr 23, 1:10pm  

Feux Follets says
As for housing you yourself have stated numerous times on the forum the bar was set so low any numbers showing an increase would appear more positive than they actually are


This is very true, in fact I am looking for flat to negative growth in existing home sales even though purchase application data is up every week this year on a year over year basis at cycle highs with mortgage rates basically near cycle highs and nominal home prices above 2006 levels.

Today the report came in Nicely at 5,600,000 existing home sales

Data charts here ... cash buyers down, mortgage buyers up, housing tenure high... it doesn't warrant growth in 2018

https://loganmohtashami.com/2018/04/23/a-solid-existing-home-sales-report/
28   joshuatrio   2018 Apr 23, 1:50pm  

Logan Mohtashami says

https://loganmohtashami.com/2018/04/23/a-solid-existing-home-sales-report/


Very nice and thank you for the read. I'm bookmarking your site. Thanks Logan.

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