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Liberty News ForumLNF Forums HereEconomics, Financial News › Fed Funds Rate, Historical Graph
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Very Hot Topic (More than 25 Replies) Fed Funds Rate, Historical Graph (Read 4,642 times)
wyattstorch2004
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Re: Fed Funds Rate, Historical Graph
Reply #10 - Oct 2nd, 2015 at 10:10pm
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Fiddler wrote on Oct 2nd, 2015 at 1:33pm:
Not that facts matter to you but .. .. .


Baby Boomers And The Labor Force

At 39.8%, the labor force participation rate for those 55 years of age and over is the lowest it's been since April 2009 (chart 1).

Millions of "baby boomers" — a generation typically defined as those born during the post-war baby boom that took place between 1946 and 1964 — have retired from the workforce over the past six years.

This is putting massive downward pressure on the total labor force participation rate, which currently stands at 63.0% (chart 2).




This is still pretty bad.  Any segment participating at a level on par with the depths of the recession is not good.

And the participation rate for folks between 25 and 54 (pretty key working years) is pretty close to the lowest since about the 80s.  Except the month of August of this year, the last time it was lower than the September of this year reading was1984.

https://research.stlouisfed.org/fred2/series/LNU01300060

  
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Rabbit_Reborn
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Re: Fed Funds Rate, Historical Graph
Reply #11 - Oct 2nd, 2015 at 10:35pm
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wyattstorch2004 wrote on Oct 2nd, 2015 at 10:02pm:
I heard someone on CNBC today put it pretty well.  The low rates, and thus low borrowing costs, accelerate planned spending.  That is, by making it cheaper to borrow, more folks will borrow and will carry out various economic activity that they might have waited to do.

The obvious problem is what happens when the rates go up or they run out of stuff to accelerate.

That's good. That helps.

wyattstorch2004 wrote on Oct 2nd, 2015 at 10:02pm:
Last year...   Wink

Da** your literalism! I meant before this current 7 year run! Smiley

wyattstorch2004 wrote on Oct 2nd, 2015 at 10:02pm:
That the fed cannot be as effective in boosting the economy as they think.  Especially when factoring the down side of the business cycle.

Agreed.

But what must the Fed be thinking about the state of the economy if the interest rates have remained at 0% for 7 years straight?
  

BowHunter wrote on Feb 3rd, 2017 at 5:08pm:
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wyattstorch2004
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Re: Fed Funds Rate, Historical Graph
Reply #12 - Oct 2nd, 2015 at 10:48pm
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Rabbit_Reborn wrote on Oct 2nd, 2015 at 10:35pm:
That's good. That helps.

Da** your literalism! I meant before this current 7 year run! Smiley


Then I believe the answer is never.

Quote:
Agreed.

But what must the Fed be thinking about the state of the economy if the interest rates have remained at 0% for 7 years straight?


They exist to think about maximizing employment and targeting a most desirable level of inflation (as measured by the CPI).  More recently they have been given a new mandate regarding systemic risk in the financial system with the various regulatory powers they have been given since they last ruined everything.

So, if they are targeting the goals they are paid to, they are probably thinking that inflation is less than they want it to be and/or employment is not as strong as it could be.  And that this problem is more of an issue than the potential, currently, for systemic/too big to fail, etc. risk.

If their goals are different than those stated, their purpose for keeping rates low might be to prop up federal spending that would be hampered by increasing interest rates, or prop up indebted students, homeowners or corporations that might see a much more costly borrowing environment -- one that they might not be able to withstand -- should rates rise, or prop up the stock market which might not see quite the inflows needed to keep the prices up and rising should it cost more to borrow that flow.
  
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Rabbit_Reborn
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Re: Fed Funds Rate, Historical Graph
Reply #13 - Jan 8th, 2016 at 10:33am
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Bumping a two month old thread in light of the first interest rate hike in 7 years.

Anything of note happen since the Fed decided this?

Still, the interest rates are remarkably low historically. Will the hikes continue?
  

BowHunter wrote on Feb 3rd, 2017 at 5:08pm:
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Queshank
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Re: Fed Funds Rate, Historical Graph
Reply #14 - Jan 8th, 2016 at 10:58am
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Fiddler wrote on Oct 2nd, 2015 at 2:21pm:
I think the article says that..

How is the Participation Rate calculated?  If we look at the chart below it seems something changed in the way it is calculated since the 60s..

http://static3.businessinsider.com/image/542eec70eab8ea39105c0cbd-1200-900/cotd-...


Actually I believe the sharp uptick at the end of the 60s had to do with women entering the workforce ... the largest uptick occurring between 1970 and 1980.

http://www.prb.org/Publications/Articles/2001/RecordNumberofWomenintheUSLaborFor...

While half the decline in the workforce is due to retirement, the other half isn't completely due to the economy.  I read in the Wall Street Journal awhile ago that many women were leaving the workforce as single income families were becoming a "thing" again, but in a quick search atm I can't find anything to back that statement up.  So take that with a grain of salt.

My main point is that a large influx of women entering the workforce in the 70's is the reason for the sharp uptick in labor force participation in that time period.

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Queshank
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Re: Fed Funds Rate, Historical Graph
Reply #15 - Jan 8th, 2016 at 11:06am
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http://equitablegrowth.org/declining-labor-force-participation-rate-causes-conse...

This isn't QUITE the article I read awhile ago but it alludes to many of the same things, women dropping out of the labor force to take care of families.


The labor force participation rate for men has been on a downward trajectory for nearly 60 years, almost from the moment the agency started keeping track of the statistic. In January 1948, male labor force participation was 86.7 percent. By April 2000, when overall labor force participation peaked, male labor force participation had fallen to 74.9 percent. For women, the trend has operated in precisely the opposite direction. In April 1948, the participation rate for women was 32 percent. Female labor force participation steadily increased for the next half century, peaking at 60.3 percent in April 2000. Over the second half of the 20th century, women moved into the labor force—and were increasingly likely to stay there, even after becoming mothers. This sea change in women’s labor force participation is what helped buoy the overall labor force participation rate, even as men were increasingly less likely to be in the labor force.

Since 2000, however, the growth in women’s labor force participation has stalled out. Men’s labor force participation has continued to decline. So the question remains: what is responsible for the decline beginning in 2000?

The clearest cause of the decline in the overall labor force participation rate is the aging of the population. The Baby Boom generation, born between 1946 and 1964, is a large cohort of workers whose retirement age coincides with decline in labor force participation that began in 2000. As these workers retired, they left the labor force and in turn pushed down the total labor force participation rate.

At the same time, the participation rate for younger workers  (age 16 to 24 years) has been on the decline for decades as well. The downward trend in labor force participation for younger Americans is explained by increased schooling: younger workers are more likely to stay in school longer, as college attendance has become substantially more common. So, a positive development—increased educational attainment—pushed down the labor force participation rate.

Yet the demographic shifts described above cannot explain the entire decline in the labor force participation rate. Prime-age workers’ labor force participation has also been on the decline. The rate of participation for workers ages 25 to 54 declined from 84.4 percent in April 2000 to 83.1 percent in December 2007, on the eve of the Great Recession.

Women’s labor force participation was driving the overall upward trend in labor force participation through 2000, so the plateau and then decline in women’s participation in the ensuring years is an important factor for explaining the national trend. Understanding why women’s labor force participation has stalled is key to reversing the downward trends in the national rate. In 1990, the United States had the sixth-highest female labor force participation rate amongst 22 high-income OECD countries. By 2010, its rank had fallen to 17th. Why have other high-income countries continued their climb while the United States has stalled? Research by economists Francine Blau and Lawrence Kahn suggests that the absence of family-friendly policies such as paid parental leave in the United States is responsible for nearly a third of the U.S. decline relative to other OECD economies. As other developed countries have enacted and expanded family-friendly policies, the United States remains the lone developed nation with no paid parental leave.


There's a lot more discussion at the link, I know I shared a lot but it goes on to discuss the 2007 Recession.

Queshank
  

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TowardLiberty
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Re: Fed Funds Rate, Historical Graph
Reply #16 - Jan 8th, 2016 at 11:08am
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Fiddler wrote on Oct 2nd, 2015 at 1:33pm:
Not that facts matter to you but .. .. .


Baby Boomers And The Labor Force

At 39.8%, the labor force participation rate for those 55 years of age and over is the lowest it's been since April 2009 (chart 1).

Millions of "baby boomers" — a generation typically defined as those born during the post-war baby boom that took place between 1946 and 1964 — have retired from the workforce over the past six years.

This is putting massive downward pressure on the total labor force participation rate, which currently stands at 63.0% (chart 2).



As long as facts are important we should note that younger workers, aged 25-55, have been leaving the labor force, while many new jobs have been filled by baby boomers.
  

"Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist." J M Keynes

"In the first place, the dichotomy between "theoretical" and "practical" is a false one. In economics, all arguments are theoretical. And, since economics discusses the real world, these theoretical arguments are by their nature "practical" ones as well." M Rothbard
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Queshank
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Re: Fed Funds Rate, Historical Graph
Reply #17 - Jan 8th, 2016 at 12:56pm
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TowardLiberty wrote on Jan 8th, 2016 at 11:08am:
As long as facts are important we should note that younger workers, aged 25-55, have been leaving the labor force, while many new jobs have been filled by baby boomers.


Where are they going? 

Queshank
  

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petep
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Re: Fed Funds Rate, Historical Graph
Reply #18 - Jan 8th, 2016 at 1:01pm
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the zero percent lending rate has more to do with trying to maintain capital investment by businesses and individuals (real estate as an example)...

our inflation rate has remained low for one reason only, that foreign investment is low due to their weak economies,,,

for example, if during our crash and even now, foreign investors were able to take advantage of the downturn, if they had cash, the price of good would go up, and ur dollar would go down.

it's actually quite scary that we are printing money like crazy, going deeper and deeper in debt, zero lending rate, and things are so anemic...

it'd be akin to always living within your budget, then getting 5 credit cards, and maxing them out each month, and still having the same lifestyle as you did before you got the cards...

  
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Rabbit_Reborn
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Re: Fed Funds Rate, Historical Graph
Reply #19 - Jan 8th, 2016 at 1:05pm
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petep wrote on Jan 8th, 2016 at 1:01pm:
it'd be akin to always living within your budget, then getting 5 credit cards, and maxing them out each month, and still having the same lifestyle as you did before you got the cards...

I like the analogy!
  

BowHunter wrote on Feb 3rd, 2017 at 5:08pm:
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