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I'd like to understand how record employment affects 401k contributions and thereby, fuels the already heady stock market. And what's happening with home owner

I'd like to understand how record employment affects 401k contributions and thereby, fuels the already heady stock market. And what's happening with home ownership and real estate prices across the nation? For example, my development has 115 homes. Zero are for sale, and the last sale was nearly 1 year ago. There is no inventory. Does it constitute a virtuous cycle for the economy? Next up, inflation and increasing interest rates as the fed works to keep the economy from overheating.

tartuffe78 9y ago
It's not record high employment, its record low unemployment.
- adventured 9y ago
  It is in fact record high employment. It hit 155.2 million in February. The highest number of people that have ever been employed in US history. By comparison, that number was 143 million just five years ago. The prior peak before the great recession ten years ago, was 146 million. It's not the record for labor force participation rate obviously. That will never be hit again, thanks to the US aging.
  - dv_dt 9y ago
    > It's not the record for labor force participation rate obviously. That will never be hit again, thanks to the US aging. Maybe, but not necessarily. The Labor force is defined as those of "working age", so if they age out of the tracked range, then they no longer accounted for in the labor force participation rate calculation. There may be a general population participation rate (not sure if I have the right term here) for which your comment could be projected if current demographic trends hold, but that can be shifted by things like shifting immigration or fertility rate trends.
    - adventured 9y ago
      It'd be theoretically possible, however the rate at which the US is aging, puts a very low likelihood on it happening. We'd need an extraordinary burst of immigration, or perhaps to start counting robots as workers and taxing them accordingly (which we may yet do). This was a big headline the other day: "People over 65 years old would outnumber children by 2035, a first in U.S. history, according to updated projections released by the Census Bureau on Tuesday." https://www.wsj.com/articles/elderly-in-u-s-are-projected-to-outnumber-its-children-for-first-time-1520967362 https://www.wsj.com/articles/elderly-in-u-s-are-projected-to...
opportune 9y ago
I'm pretty sure inflation under these circumstances occurs independently of further fed intervention, the classical economic theory being that competition for labor (under low unemployment) drives an increase in salaries unaccompanied by an increase in productivity, resulting in inflation
- sjg007 9y ago
  Right but traditional inflation fears might be overblown... everything is basically manufactured in China or other low wage countries now. Food production is highly mechanized. And most jobs are in the service sector. All I can think of is that inflation manifests in insurance, healthcare, and housing costs.
  - opportune 9y ago
    Productivity can still be measured in service, although in certain cases abstractly, but for example a barber is a service worker with pretty measurable productivity. I think inflation can still occur within the classical model wrt the service sector. An example being that a restaurant has trouble keeping dishwasher positions filled, incentivizing them to increase dishwasher wages, requiring higher menu prices to compensate. As long as the US continues to maintain a comparative advantage in certain industries (e.g. software) I see no reason why they will be immune to wage inflation either. In fact this is arguably already occurring
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tartuffe78 9y ago

It's not record high employment, its record low unemployment.

adventured 9y ago
It is in fact record high employment. It hit 155.2 million in February. The highest number of people that have ever been employed in US history. By comparison, that number was 143 million just five years ago. The prior peak before the great recession ten years ago, was 146 million. It's not the record for labor force participation rate obviously. That will never be hit again, thanks to the US aging.
- dv_dt 9y ago
  > It's not the record for labor force participation rate obviously. That will never be hit again, thanks to the US aging. Maybe, but not necessarily. The Labor force is defined as those of "working age", so if they age out of the tracked range, then they no longer accounted for in the labor force participation rate calculation. There may be a general population participation rate (not sure if I have the right term here) for which your comment could be projected if current demographic trends hold, but that can be shifted by things like shifting immigration or fertility rate trends.
  - adventured 9y ago
    It'd be theoretically possible, however the rate at which the US is aging, puts a very low likelihood on it happening. We'd need an extraordinary burst of immigration, or perhaps to start counting robots as workers and taxing them accordingly (which we may yet do). This was a big headline the other day: "People over 65 years old would outnumber children by 2035, a first in U.S. history, according to updated projections released by the Census Bureau on Tuesday." https://www.wsj.com/articles/elderly-in-u-s-are-projected-to-outnumber-its-children-for-first-time-1520967362 https://www.wsj.com/articles/elderly-in-u-s-are-projected-to...

opportune 9y ago

I'm pretty sure inflation under these circumstances occurs independently of further fed intervention, the classical economic theory being that competition for labor (under low unemployment) drives an increase in salaries unaccompanied by an increase in productivity, resulting in inflation

sjg007 9y ago
Right but traditional inflation fears might be overblown... everything is basically manufactured in China or other low wage countries now. Food production is highly mechanized. And most jobs are in the service sector. All I can think of is that inflation manifests in insurance, healthcare, and housing costs.
- opportune 9y ago
  Productivity can still be measured in service, although in certain cases abstractly, but for example a barber is a service worker with pretty measurable productivity. I think inflation can still occur within the classical model wrt the service sector. An example being that a restaurant has trouble keeping dishwasher positions filled, incentivizing them to increase dishwasher wages, requiring higher menu prices to compensate. As long as the US continues to maintain a comparative advantage in certain industries (e.g. software) I see no reason why they will be immune to wage inflation either. In fact this is arguably already occurring

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