Sand
Footballguy
Anything but. This is the tale of the current report. A record increase in government workers while private payrolls decreased is an ouroboros, at best.
Color me not surprised by this October surprise.
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US economy thread (2 Viewers)
- Thread starter Jayrod
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Color me not surprised by this October surprise.
well yes but that is always true. And the churn rate of employment is quite low currently.
Stoneworker
Footballguy
Agreed. I was also positively surprised.
The Z Machine
Footballguy
Agreed. But if the changes in the global economy has hurt you since the 90s, maybe you still want to blow it all up.
Redwes25
Footballguy
Honestly, this is better than I would have suspected. Guess that is good news.
Chaz McNulty
Footballguy
shhhh! We're trying to keep this non-political.
Redwes25
Footballguy
Where are these numbers coming from? Link to Bureau of Labor Statistics release below that shows increase of 31K in govt. jobs with rest being private.
Employment Situation Summary - 2025 M08 Results
www.bls.gov
Max Power
Footballguy
Im sure it will be revised down. They all are.
Nugget
Footballguy
Reuters is using the 31k government jobs as well. Blowout US employment report reinforces economy's resilienceWhere are these numbers coming from? Link to Bureau of Labor Statistics release below that shows increase of 31K in govt. jobs with rest being private.
Employment Situation Summary - 2025 M08 Results
Max Power
Footballguy
I think the minimum wage hikes across the west coast were major contributors to the overall number. We took entry level jobs and turned them into low end careers.
NutterButter
Footballguy
Even in NJ. Went from $10 in 2019 to $15 in 2024. That's a huge jump for a lot of folks. What was total inflation over that stretch?
dkp993
Footballguy
That’s the theory. But as a west coast business operator the reality is just increased pricing and move to automation with many of those same jobs
FairWarning
Footballguy
This is true. I’ve seen food prices rising again also. My items haven’t, but my supplier has taken away most of my promotion money. My sales have dropped 10% over the last two months. Bartending-wise, that has been slow also, people ordering more take-out and drink at home.
FreeBaGeL
Footballguy
I was just reading the report and it looks like they actually revised up on the reports from the last 2 months (IE last 2 months were underreported).
ETA: Yep, July/August revised upwards by 70k.
Alex P Keaton
Footballguy
I don’t know a single person who rigorously tracks inflation for the “basket of goods and services” that they consume. In other words, I wouldn’t even know how you can possibly evaluate or trust others to evaluate their personal wage growth vs inflation.
Stoneworker
Footballguy
There are many ways that inflation stats are under-stated, which is why many Americans are feeling the inflation pinch much greater than what's being reported. And perhaps why most Americans believe their wages aren't keeping up.
1) People are buying more generics
More than half (55%) of consumers bought more private label brands over the past year. CPI is calculated based on the prices paid for a good. So, if I'm a Chips Ahoy consumer last year, and the price of Chips Ahoy went from $3.50 to $3.75 a bag (7.1%), which caused me to switch and buy the same quantity of generic cookies at $3.60, then the CPI will only record a 2.9% increase. Consumer suffers but this isn't captured in the stats.
2) Moving down the quality spectrum
Similar to buying generics. Maybe instead of previously eating at fast casual (e.g. Smashburger), I'm now eating at McDonald's. Now using two-ply instead of three-ply. Ragu instead of Classico. Still spending the same so price paid for CPI "basket of goods" doesn't change, but less gratification.
3) Shrinkflation/Cheaper ingredients
You can't tell me that the CPI measurement is so sophisticated that it can measure this. But how many times have we seen our favorite brand of beverage now being sold for the same price, but now in a slightly smaller container? Or maybe now they sell an 8-pack of 8 oz soda (64 oz) vs. previously a 6-pack of 12 oz cans (72 oz) for the same price? Gatorade from 32 oz to 28 oz. Soups with less meat in them. Breads with fewer nuts and seeds on top.
These are all very real declines in customer experience that have made the inflationary effects of the past few years worse than the reported numbers suggest.
1) People are buying more generics
More than half (55%) of consumers bought more private label brands over the past year. CPI is calculated based on the prices paid for a good. So, if I'm a Chips Ahoy consumer last year, and the price of Chips Ahoy went from $3.50 to $3.75 a bag (7.1%), which caused me to switch and buy the same quantity of generic cookies at $3.60, then the CPI will only record a 2.9% increase. Consumer suffers but this isn't captured in the stats.
2) Moving down the quality spectrum
Similar to buying generics. Maybe instead of previously eating at fast casual (e.g. Smashburger), I'm now eating at McDonald's. Now using two-ply instead of three-ply. Ragu instead of Classico. Still spending the same so price paid for CPI "basket of goods" doesn't change, but less gratification.
3) Shrinkflation/Cheaper ingredients
You can't tell me that the CPI measurement is so sophisticated that it can measure this. But how many times have we seen our favorite brand of beverage now being sold for the same price, but now in a slightly smaller container? Or maybe now they sell an 8-pack of 8 oz soda (64 oz) vs. previously a 6-pack of 12 oz cans (72 oz) for the same price? Gatorade from 32 oz to 28 oz. Soups with less meat in them. Breads with fewer nuts and seeds on top.
These are all very real declines in customer experience that have made the inflationary effects of the past few years worse than the reported numbers suggest.
But I thought this was going to lead to these employees getting laid off and businesses shutting down?
Inflation rates are supposed to account for all that stuff. I guess part of your argument is that they don't do so accurately and I don't really know about that but seems like you're just guessing
Stoneworker
Footballguy
Baloney. Show me where CPI keeps track of whether people buy Chips Ahoy or generic brand, or Ragu vs. Classico.
FreeBaGeL
Footballguy
But are people actually doing that? How does that 55% compare to the past? Because Chips Ahoy revenue is up 20% (stock is up 34%) since the inflation peak to now, so clearly people aren't stopping buying real Chips Ahoy in mass.
Which is kind of the point I've been making all throughout this thread. People SAY they're hurting, but they're not actually hurting so bad to make even small sacrifices like buying store brand coke instead of coca cola, or shopping at the discount grocer instead of the more expensive kroger brand, or cutting back on concerts, sporting events, travel, and other non-essentials.
IvanKaramazov
Footballguy
The CPI doesn't adjust for any of that stuff. It can't, and it's not designed to. Economic statistics aren't perfect.
When I used to teach this stuff, the examples that @Stoneworker mentioned were things I would highlight for why the CPI actually overstates the "true" rate of inflation. As he notes, for example, families can avoid some price increases by substituting generics for brand-name products, buying lower-quality items, etc. But he's right that while that dodges some of the price hikes, it still makes folks worse off since they're consuming second-best products. In other words, I would spin it a little differently, but neither of us are wrong. It's just a matter of how you frame it.
Regardless though, inflation is back to normal now. We should all be happy about that.
Stoneworker
Footballguy
I'm not sure how 55% compares to the past, but the salient point was that 55% bought more than the previous year. This was borne out in the stats, as private label dollar market share increased to a record 22% in 2023 (WSJ). As well as sales ($152B vs. $142B = 7%) (CNBC/Circana).
FreeBaGeL
Footballguy
Oh, well that seems even less relevant. Private label sales have increased every year since 2008 as perception of quality of them has continued to improve, so it makes sense that more people would buy more of them than last year. This is true of every year.
As I was searching for some of the metrics I came across a study about them where only 2% of people surveyed consider private label products to be inferior to name brand versions, which is significantly lower than it used to be, and why their market share was growing year over year every year long before inflation became an issue.
ETA: Found another article with some clarity on that survey. It was 2% said "inferior", 13% said "slightly inferior", and 85% said as good or better.
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Stoneworker
Footballguy
This from Investopedia just on the quality argument...the link also goes into shrinkflation (i.e. "hidden inflation")
One problem with the CPI that's been identified by economists, and which the Bureau of Labor Statistics freely admits, is that the index does not factor in the effects of substitution. The economic reality is that when certain goods become significantly more expensive, many consumers buy less expensive alternatives. For instance, they may buy the store brand instead of the name brand. Or they may buy regular gasoline instead of premium grade. The CPI can't take this common practice into account. Instead, it presents numbers that assume consumers are continuing to buy the same amount of increasingly expensive goods.
Limitations of the Consumer Price Index (CPI)
Despite being followed so relentlessly, the Consumer Price Index (CPI) has its limitations and is an imperfect measure of inflation and the cost of living.
Stoneworker
Footballguy
Agree to disagree on relevance. Personally, I would never have tried private label if not driven by inflation on name brands in the past few years. But once you try it for one product and don't die, you're more inclined to buy more (which is consistent with the survey results).
FreeBaGeL
Footballguy
But is it actually growing significantly faster than a typical year? It's really hard to find exact data on this pre-covid, but most of the articles from back then point to consistent, steady growth in market share.
I saw 6% per year over the preceeding 3 years in a 2017 article (but it didn't give the exact numbers so I don't know how accurate). We don't have final numbers on 2024 yet, but 2023 was 6.7%. So not really anything out of whack. I can definitely buy that more people have given them a shot due to inflation, but it doesn't appear to be an impactful difference if we're talking about private label market share growing at 6.7% last year compared to 6% pre-covid in a normal year.
ok guess it doesn't account for that but people should be buying generic goods anyway, they're the exact same product 90% of the time. but it still is measuring the prices of the other goods so not sure how relevant it is in terms of what the inflation rate is, maybe i'm missing something
Stoneworker
Footballguy
It's a good question. I'm sorry if you may not be able to access it (paywall), but below is a link from a WSJ article graphing the growth of private label from 2006-2023. To your point, it's a smooth ride from end to end to the current ~22%.
However, there was a sizable dip off the trend line from about 20.5% to 19.5% during the pandemic ('20-21) as people were flush with cash. From 2021 to 2023 (i.e. co-incident w/ inflation), the private label growth has spiked significantly above historical trend to get from 19.5% (ish) to the current record 21.8%.
They don't show the numbers in the graph, but visually it looks like 21-22 was a market share spike of about 13%.
Given how competitive supermarkets are, IMO that is significant. However, YMMV and I can respect that.
WSJ 5-29-24: Store Brands are Filling More of your Shopping Cart
Stoneworker
Footballguy
FYI, the WSJ article also charts 20 common categories where private label unit sales outgrew national brands 23 vs. '24 from a year earlier. For example,
Pet food: Private label (PL) +7.9%, National Brand (NB) -1.5%
Salty snacks: PL +4.4%, NB -1.4%
Eggs: PL +3.6%, NB - 8.1%
Cereal and Granola: PL +2.7%, NB -6.4%
Baking Supplies: PL +2.2%, NB -15.2%
Sand
Footballguy
Table B-1 from the report.Where are these numbers coming from? Link to Bureau of Labor Statistics release below that shows increase of 31K in govt. jobs with rest being private.
Employment Situation Summary - 2025 M08 Results
Redwes25
Footballguy
Table B-1 from the report.Where are these numbers coming from? Link to Bureau of Labor Statistics release below that shows increase of 31K in govt. jobs with rest being private.
Employment Situation Summary - 2025 M08 Results
That just shows total employment.
massraider
Footballguy
Set record in July in California for number of fast food employees.
Gained 7,400 fast food jobs since law went into effect.
At some point, people need to either look at data surrounding increased minimum wage, and admit the reality, or just admit they are sh!tty people who don't want anyone else to do better.
Jayrod
Footballguy
You think companies will move to automation or go out of business within 4 months?
Set record in July in California for number of fast food employees.
Gained 7,400 fast food jobs since law went into effect.
At some point, people need to either look at data surrounding increased minimum wage, and admit the reality, or just admit they are sh!tty people who don't want anyone else to do better.
Do you think 11,000 jobs in 4 months in a state with 39 million people is significant?
I mean yes, the number didn't go down, but I wouldn't be spiking the football on everyone and questioning everyone else's character just yet.
Dinsy Ejotuz
Footballguy
The case has already been made around Seattle.
IMO there are still some Qs about how far you can extend this -- like I'm not sure the same thing would happen if you tried it in Tupelo or somesuch. But in wealthy areas there's extensive proof that raising it doesn't reduce jobs.
IMO there are still some Qs about how far you can extend this -- like I'm not sure the same thing would happen if you tried it in Tupelo or somesuch. But in wealthy areas there's extensive proof that raising it doesn't reduce jobs.
massraider
Footballguy
This isn't some pilot program, where we are trying out raising the minimum wage, and everyone is trying to guess the results.
We've been reading the same doom stories about the damage raising the minimum wage will cause for as long as I have been able to read.
Jayrod
Footballguy
Well if it's a fix all and there's no negative, why is there even a fight over it?
And hell, why stop at $20/hrs, why not $100?
Yes, I'm being ridiculous but you are way oversimplifying it and literally villifying anyone who disagrees with you. There is more to it than number of fast food jobs and the data is hardly conclusive.
Stoneworker
Footballguy
But you bluster as if there are no negative implications whatsoever to the wage hikes.
Since April 1, fast food prices have gone up 10% (source KTLA, Datassential).
You may side (rightly or wrongly) with the workers, but the fact is that consumers also are taking it in the shorts.
massraider
Footballguy
Is no negative impacts whatsoever the goal? Seems a bit fanciful
massraider
Footballguy
Well, I didn't say it was a fix all, and I didn't say it had no negative, so.. anyhow.
If someone were to admit they were sh!tty and selfish, and just didn't want the minimum wage to go up for selfish reasons, I wouldn't call them a villain. At the very least, they would be self aware.
Dinsy Ejotuz
Footballguy
I think the debate @Stoneworker mentions is a good one -- what's the right balance between consumer prices, worker wages and corporate profits?
Unfortunately the anti-minimum wage increase folks typically have zero interest in that debate. It's the same discredited position from them every time -- that minimum wage increases always result in fewer jobs. Which is probably what @massraider is reacting to. It's pretty annoying.
Unfortunately the anti-minimum wage increase folks typically have zero interest in that debate. It's the same discredited position from them every time -- that minimum wage increases always result in fewer jobs. Which is probably what @massraider is reacting to. It's pretty annoying.
MAC_32
Footballguy
A $15/hr worker, $1 McDouble, and corporate fat cat settling for a yacht instead of a super yacht sounds good to me.
Jayrod
Footballguy
So would you admit that there are some problems with raising the minimum wage?
Because your earlier posts indicate otherwise.
Dinsy Ejotuz
Footballguy
From the exact same report: "The employment numbers for July and August were revised upward by a total of 72,000 jobs."
FreeBaGeL
Footballguy
I mean, even if this were the case (something fixes everything and has no negatives) the obvious answer is politics, right? Hopefully this is okay since I'm talking about politics in a broad sense of the field of politics, not any particular political sides/people.
If the constituents of a legislator perceive something as being bad for them, a legislator is less likely to approve it and more likely to fight against it to appease their constituents based on that perception, even if that perception is different than reality.
There is an endless list of things where people have invented a logic trap of how it will be a negative or a positive when we can see it born out in other states, other countries, or in history that it doesn't work out that way. But people will fall back on those logic traps regardless. We have a virtually endless history in this country of minimum wage increases and workweek decreases being good for not only the workforce, but the economy as a whole, yet people will still fight tooth and nail against them with the same logic traps that never bore out in the past when we did the same thing.
IvanKaramazov
Footballguy
"Does that sound like an argument that somebody would have rolled out in 1994, and how has that argument held up over the past 30 years?"
People our age should be asking ourselves that question all the time. I think one of the biggest divides right now (involving people who are middle-aged and up) is between people who have learned things since the early 90s and people who haven't.
dkp993
Footballguy
So I’m a sh!tty person who doesn’t want anyone to do better because I said raising the minimum wage would increase costs. Yeah, that seems reasonable.
* I worked fast food from the ages of 14 to 18 here in California, have been in the food and beverage industry my entire life, in California, and am a business operator overseeing 32 venues with over 100mil in revenue so understand the economics first hand. I guess the 12 wage increases I’ve given my teams over the last 3 years (27% aggregate, outpacing inflation) doesn’t override my belief in the fact it will raise costs and makes me a sh!tty person who doesn’t want anyone to do better. Sorry I’m so out of touch with reality.
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Sand
Footballguy
Maybe presented in a way that isn't optimal. Look here: https://realinvestmentadvice.com/technical-analysis-3-bullish-and-bearish-takes/Table B-1 from the report.Where are these numbers coming from? Link to Bureau of Labor Statistics release below that shows increase of 31K in govt. jobs with rest being private.
Employment Situation Summary - 2025 M08 Results
That just shows total employment.
The first couple graphs show the spike in government employment. It exploded. And I'd argue that really isn't such a good thing for an economy. (Barring the inevitable downward correction we'll see down the road - yes, I'm a big skeptic when it comes to this kind of October surprise.)
Stoneworker
Footballguy
Happy you weighed in here, dkp. Most people throw around "corporate" to paint all business owners as evil and soulless. When in fact most are small/medium size owners who are decent people and also have a right to make a living. Helps balance the "fat cats with super yachts" and other similar tropes that seem to always make their way into the conversation.
Stoneworker
Footballguy
Agree that it ultimately comes down to politics. Or more specifically the balance of power among employees, consumers and business owners (as @Dinsy Ejotuz adroitly pointed out) at any given time. And that balance is constantly evolving.
Disagree that the "studies" and "histories" have any tangible bearing at all. Perhaps only on the margin as PR tools.
If we look at unions and the port strike, that's all about timing (election year) and union solidarity and leverage. Bravo for the workers for a negotiation well played.
Nugget
Footballguy
Seems like there is a gap in the seasonally adjusted number vs unadjusted. The 31k adjusted number seems reasonable, especially with the increase in state and local.Maybe presented in a way that isn't optimal. Look here: https://realinvestmentadvice.com/technical-analysis-3-bullish-and-bearish-takes/Table B-1 from the report.Where are these numbers coming from? Link to Bureau of Labor Statistics release below that shows increase of 31K in govt. jobs with rest being private.
Employment Situation Summary - 2025 M08 Results
That just shows total employment.
The first couple graphs show the spike in government employment. It exploded. And I'd argue that really isn't such a good thing for an economy. (Barring the inevitable downward correction we'll see down the road - yes, I'm a big skeptic when it comes to this kind of October surprise.)
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