TIME Economy

The World’s Mania for Economic Data Is Pretty Silly

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Want to double your GDP? That's easy. Just calculate it differently

In early April, Nigeria achieved an amazing feat. Overnight, its economy swelled by 89%. Just like that. The West African giant has been posting pretty impressive growth rates recently. But it wasn’t fresh investment, surging consumer spending or high oil prices that generated the GDP windfall. Nigeria can thank its statisticians.

Nigeria’s bookkeepers made a few changes to how they calculate GDP, updating the base year for determining prices and improving data collection. And voila! GDP almost doubles with a few clicks on a spreadsheet. This isn’t an economic magic trick or some kind of corrupt shell game. Economists have more confidence in the new figure than the old. Nigeria had not been refreshing the way it measures GDP as it should have been.

Confused yet? Global financial markets thrive upon data. Every new figure or percentage gets analyzed, reanalyzed, debated, discussed, dissected and analyzed some more. The reality, though, is that many important economic statistics aren’t as hard and fast as we tend to treat them to the point where we have to wonder how much use they are to understanding the world economy.

Take a look, for instance, at China. Much praise (or concern, depending on where you sit) has been lavished on China’s rapid ascent. But the Chinese data we use is riddled with question marks. Its GDP figures, for instance, just don’t add up. A recent report from Bank of America Merrill Lynch commented that the sum of the GDPs of China’s provinces doesn’t match national GDP, though the investment bank also noted that the discrepancy has narrowed recently, “perhaps due to less data rigging.”

China’s current trade data is also screwed up because companies were caught last year fabricating exports as a way to evade the country’s capital controls. Perhaps we should take the advice of China’s Premier, the No. 2 policymaker in the nation, who, earlier in his career, said Chinese GDP figures are “man-made” and “for reference only.”

Nevertheless, these statistics are taken as official. Then they are put through another round of numerical aerobics. Headlines turned heads in April when new figures from a World Bank report estimated that China’s economy was much larger than originally thought. The data suggested that China would overtake the U.S. as the world’s No. 1 economy as early as this year, much more quickly than anticipated. This prompted all sorts of talk about the decline of the West and a new world order led by China.

But again, we find ourselves in a statistical conundrum. To compare GDPs from country to country, the figures are usually converted from their national currencies into U.S. dollars using exchange rates. But some analysts believe that this method is flawed. Exchange rates, the thinking goes, fail to properly measure GDP since they fluctuate and can’t fully account for different prices in varied countries. So the International Comparison Program, coordinated by the World Bank, offered an alternative using “purchasing-power parity” (PPP), which adjusts for the prices of goods and services across economies.

The result: China’s GDP practically doubles, from $7.3 trillion in 2011 using exchange rates, to $13.5 trillion based on PPP. How’s that for different? (China’s economy is far from the only one inflated in this way. India’s tripled by the ICP’s calculations, to nearly $5.8 trillion.)

Which number is right? Derek Scissors of the American Enterprise Institute blasted the ICP, saying the PPP method “makes no sense.” PPP comparisons were devised to better understand personal incomes and consumption, and using them to compare economic size “stretches the idea of PPP beyond the breaking point.” Instead, Scissors recommends comparing economies not on GDP at all, but on a measure of national wealth.

Obviously, the experts don’t agree on which statistics to believe. That would be of purely academic interest if data weren’t taken so seriously. Economists and investors make all sorts of choices based on statistics that can change radically depending on who is doing the calculating.

It isn’t just GDP data that suffers in this way. U.S. financial markets gyrate wildly based on jobs data released by business-services firm ADP, since it is widely seen as an indicator for the official report from the U.S. government released at a later date. Yet ADP has proved a poor forecaster, even after an overhaul of its methodology, inspiring one economist to call the report “a joke.”

Policymakers are also stuck trying to make decisions based on conflicting data. William Galston, once an adviser to President Bill Clinton, recently argued for action to ensure workers are properly rewarded for their increased efficiency. Based on the stats he was using, workers were producing more, but wages haven’t been rising to properly compensate them for that extra contribution and that was widening inequality and creating a major economic headache.

“For the sake of economic growth, social mobility and political stability, we must think more boldly about reforging the connection between compensation and productivity,” he wrote. That led the Cato Institute to condemn Galston for employing “statistical fog” to promote “the worst economic policy idea of the past 40 years.” Cato argued that data upon which Galston based his argument was faulty, and by using supposedly superior methods, the imagined gap between wages and productivity vanishes.

What can we do? Economic statistics are what they are imperfect numbers based on imperfect data and twisted further by contending methods of analysis. Just keep that in mind next time you dip into a database.

MONEY Economy

What’s Your Money State of Mind?

Money magazine's exclusive poll reveals both improved confidence and lingering anxiety about our financial well-being.

Money's exclusive survey reveals mixed emotions when it comes to our personal economy: We're feeling pretty good today, but worried about our prospects for the long run.

At first glance the Brough family of Dallas seems to have emerged from the tumultuous economic events of the past six years unscathed.

Sole earner Richard, 44, a project manager in software consulting, worked steadily throughout the financial crisis — even landing a new job that pays $45,000 a year more than his old one, which pushed his salary comfortably into six-figure territory. The value of the home he shares with wife Kelley, 46, and two of their four children (ranging in age from 15 to 27) has rebounded to pre-2007 levels, and so has his 401(k).

Yet five years after the official end of the downturn, Brough feels anything but confident about his finances.

“I’m more obsessed with security and worried about the future than I was during the recession,” he says. “Even though I was making less then, our money seemed to go further. I’m anxious about being able to pay for everything we need, anxious about our savings, anxious about staying out of debt.”

The results of MONEY’s new national survey of more than 1,000 Americans age 18 and older reveal that most people share Brough’s concerns: The Great Recession may be over, but a Great Insecurity seems to have emerged in its wake.

True, the majority of respondents acknowledge that their finances are better now than they have been in some time. About three-quarters report that their situation has stabilized or improved compared with a year ago; less than half felt that way when MONEY posed that question in 2009.

Indeed, in that earlier survey, only about 10% said they were doing better than the year before, vs. 30% now. And far fewer folks seem to feel as if they’re teetering at the edge of a financial cliff: Just 24% say their circumstances have gotten worse over the past year, vs. 51% in 2009.

Meanwhile, people are even more optimistic about the year ahead: Almost nine out of 10 expect that their finances will be the same or better 12 months from now.

Yet while the outlook for today and tomorrow has brightened, the day after tomorrow appears decidedly grayer. Six out of 10 respondents own up to being worried about their family’s long-term economic security, and even greater numbers register anxiety when getting down to specifics; they’re really worried about having enough money for retirement, how they’d manage if a financial emergency arose, whether safety net programs such as Social Security and Medicare will be intact when they need them, and how they’ll pay for health care.

Moreover, that undercurrent of anxiety cuts across virtually all groups: Young and old, men and women, married couples and singles, even the affluent — all shared the same concerns.

Related: How we feel about our finances

Some of the fretting may be the result of a lingering hangover from the financial crisis. “People are influenced by what is more recent and most vivid, and that is still the recession,” says behavioral finance expert Meir Statman, a professor at Santa Clara University in California. “We fear that what happened in 2008 will happen again.”

The current state of the economy is also cause for continuing concern. “The unemployment rate is still pretty high, and there are a lot of questions about what the government is going to do,” says Olivia S. Mitchell, a Wharton economics professor who has studied the impact of the financial crisis on U.S. households. “We’re in an environment of pervasive uncertainty that’s not going to go away for years.”

What is causing the most agita about our financial future — and why? How has that affected the way we manage money? And what are the best steps to alleviate our anxiety and move forward? The answers follow, along other insights from the 2014 Americans and Their Money survey.

We’ve regained some stability — and faith

When MONEY polled Americans about their finances in 2011 and 2009, the nation was hunkered down and wrestling with post-recession panic. Families had pulled back drastically on spending, postponed vacations and major purchases, and even curtailed giving to charity. People were deeply worried about losing their jobs or getting a pay cut, concerned about the eroding value of their homes, and anxious about big losses in the financial markets.

Five years ago, when asked whether they’d be better off putting money under the mattress or in stocks, half of the respondents chose the bed.

Now that home values and stock prices are up and unemployment is modestly down, a lot of that fear has abated. This year, for instance, 71% of those surveyed opted for stocks instead of the mattress. Folks are once again comfortable tuning out the daily movements of the market: Only about a third of those surveyed said they were laser focused on financial news, vs. two-thirds in 2009.

There’s also a greater willingness to stretch for risk: In the most recent poll just over half of Americans said it was more important to keep investments safe than to aim for a higher return. While that’s a substantial number, it’s down from 64% three years ago. In general, concerns about losing money in the market, declining home values, and being laid off have dropped to close to the bottom of the collective worry list.

Related: 5 ways to reduce your financial anxiety

Other signs bolster the notion that Americans are backing away from the financial bunker mentality that swept the nation after the recession. A Challenger, Gray & Christmas analysis of employment data, for instance, found that more Americans are quitting their jobs, reflecting growing confidence in their ability to find a better position elsewhere.

After years of relative frugality, Americans are loosening the purse strings a little. Sales of big-ticket items such as cars and new homes recently hit six-year highs, and the fourth quarter saw the largest quarterly increase in outstanding credit since before the recession.

Among those feeling calmer is Ralph Schmitt, 69, of Fortson, Ga., whose savings fell by a third in the crash.

When the recession arrived, Ralph, who had planned to retire in 2008, decided to postpone that step. He and his wife, Kathleen, did not sell any investments, however, and by late 2009, with their portfolio growing again, Ralph felt confident enough to quit for good.

“I was still worried about the uneven recovery and our retirement savings,” he admits, “but I believed in the resilience of the U.S. economy and the momentum of the stock rebound.”

Besides, he says, he and Kathleen, 67, who stopped working in 1993, felt they could live on less, having drastically cut back on their spending for travel, fine dining, and theater.

Today the Schmitts’ portfolio is back to where it was in 2007, and the couple have “kicked up” their spending accordingly. “I wanted to travel extensively with my wife while we still had our health,” says Ralph.

Good habits have held

We may be opening our wallets again, but that doesn’t mean we’ve abandoned the fiscally prudent practices adopted after the crash. Nearly three-quarters of those in the MONEY poll reported that over the past three years they’ve been cutting back on luxury purchases and eating at home more often — a modest drop from 2011, when consumers were still shell-shocked from the financial crisis, but a big increase from the 2009 survey.

Nearly six in 10 say they feel guilty about buying something they don’t need, virtually unchanged from three years ago. And six in 10 say they’re trying to beef up their emergency cushion, a huge jump from 2009, when less than a quarter said the same. Indeed, the national savings rate, while down from its post-crash peak, is now 4%, about where it’s been for much of the past three years and substantially above the 1% rate of the pre-crisis boom years.

Whether we’ll be able to maintain that restraint for good, however, is unclear. “We’re not back to a status quo environment that would allow you to make those kinds of judgments,” says Scott Hoyt, senior director of consumer economics at Moody’s. He thinks consumers will let loose eventually: “Underestimate the desire to spend at your own peril,” he says.

It’s particularly tough to assess the long-term trend while the recovery is still so uneven, notes Caroline Ratcliffe, a senior fellow at the Urban Institute, pointing out that some groups, such as high-income baby boomers and retirees whose wealth is tied to the stock market, are feeling more flush than others these days.

Jim Durkis says the improving economy has not changed his habits — yet. The government lawyer and his wife, Deborah, an elementary-school teacher, both 50, were looking to buy a bigger house near where they now live in Albuquerque but decided against the move when housing values in the area declined.

Since the recession, the family, which includes Jason, 22, and Kaja, 21, have switched insurance companies, delayed vacations, and cut cable — though they signed up again last summer after Deborah, a former-spender-turned-bargain-hunter, found a good deal.

Though both spouses are working and he has a solid pension plan, Durkis says he’s still focused on saving. “I’m not convinced there’s been a true recovery,” he says. “I’d rather have extra money, just in case.”

Additional reporting by Kerri Anne Renzulli.

Part 2 of Money magazine’s survey: The long term still looks uncertain

MONEY Economy

Americans Still Worried About Their Financial Future

Six out of 10 people surveyed by Money magazine own up to being worried about their family's long-term economic security.

Most Americans believe that the Great Recession is over, according to MONEY magazine's new national survey. But a Great Insecurity seems to have emerged in its wake.

Many of us are sticking to the good financial habits we adopted after the crash — a trend explored in Part 1 of this story. One reason for that: Once you look beyond the immediate future, optimism fades and it becomes clear that Americans remain deeply worried about their long-term economic prospects.

Consider: In the MONEY survey, nearly two-thirds of those earning less than $100,000 and roughly half of those making six figures said they were worried about their family’s economic security; roughly six in 10 Americans were anxious about how they would pay their health care costs.

The majority fell behind on their savings, given their stage of life, and almost three out of four were concerned that their money wouldn’t last through retirement. Other recent studies have found similar concerns: New research from the Consumer Federation of America, for instance, found that only a third of Americans feel prepared for their long-term financial future.

Why does the outlook seem so scary? Some experts think the events of the past six years have shaken the belief in our ability to accumulate wealth over the long haul.

“When the housing market fell, that really scared people,” says Michael Hurd, a senior researcher at Rand, who studied the effect of the recession on household finances. Hurd found that a decline in home values caused people to cut back on their spending more than a similar drop in the stock market.

In addition, the erosion of trust in our financial system will have a lasting effect, says Tyler Cowen, professor of economics at George Mason University.

“If you don’t believe that your environment will persist, you’re not willing to stake out plans,” Cowen notes. “For example, you won’t buy a home based on the premise that in five years you’ll be earning more money. The volatility of the stock market and the government shutdown have only made it harder.”

Speech pathologist Janel Butera, 47, is one who isn’t counting on anything. A divorced mom of two sons, ages 12 and 13, from Corona, Calif., Butera has made reducing spending and boosting savings a priority over the past five years. Out went the gym membership and vacations; packed lunches and day trips to the beach are the new norm.

“The economy as a whole — I don’t put a lot of faith in it,” she says. “I’m not counting on getting any retirement help, not even Social Security.”

Butera is proud that she’s managed to rebuild her finances after suffering the twin hits of divorce and the recession but is still anxious that she might one day become a burden to her boys. “I worry about them having to provide for me when I’m older,” she says.

Her concern is shared by many: In the MONEY poll, one in five Americans with children said they would probably need their kids’ financial support someday.

We’re living close to the edge

One reason we’re not feeling so hot: While our 401(k)s may be flush again, our emergency savings are not. Half of the respondents in the MONEY poll confessed to living paycheck to paycheck; roughly six in 10 felt they didn’t have enough money set aside for emergencies and didn’t think the family’s breadwinner would find it easy to get another job if laid off.

And almost all people, it seemed, felt like they’d need a higher income than they now earn to really be financially secure — even those who currently bring home a six-figure income. No wonder that anxiety about how we’d cope with a real financial emergency tied with concerns about outliving retirement savings as the most prevalent money worry.

In fact, money has gotten tighter for many lately. Household income, adjusted for inflation, has dipped 4.7% since the recession, economist Cowen points out.

One thing’s for sure: All this stress isn’t helping our love life. The MONEY poll found that finances are both the most frequent source of spats between couples and the cause of the most serious arguments — far ahead of the second-place finisher, household chores, and snoring, which came in third.

Edward Martinez of Tyler, Texas, is one of the many who are worried about not having an adequate cushion. Though Martinez, 44, made $140,000 working for a military contractor in Iraq after the recession, he now earns less than six figures as a technical specialist with the Smith County appraisal district.

He and his wife, Jennifer, 38, a professor at the University of Texas, have an 18-year-old daughter living at home and also help support Martinez’s 22-year-old daughter from his first marriage.

Right now the family has only about a month’s worth of savings, which could easily be wiped out by a run-of-the-mill financial emergency, Martinez acknowledges. He’s in the process of getting a pharmaceutical degree, which he hopes will boost his earning power a few years from now.

Like Martinez, many parents these days are helping grown kids, making it even harder to save. More than a third of the parents of children 22 and older in the MONEY survey are helping out at least one of their brood; of those, three in 10 are shelling out $5,000 or more a year. And that’s not likely to change anytime soon: In the survey, parents providing such support believed their adult child wouldn’t gain full independence until age 30; adult kids supported by a parent put that age at (gulp) 32.

The kids may be all right in the end after all

Such findings are in keeping with alarms many experts have sounded predicting that young adults would bear the most lasting scars from the Great Recession, just as the Depression had a lifelong impact on the way people who came of age at that time managed their money.

Certainly millennials have had a tough slog so far: The job market for this youngest generation of workers is grim (nearly half of those unemployed are under 34, a Demos study has found), and the average student-loan debt for recent college grads is $30,000.

Atlanta resident Courtney Clemons, 25, has a typical millennial story. The Georgia State University grad interned at a travel agency while in school and was hired there full-time after she got her degree. But her earnings, ranging from $25,000 to $35,000, depending on bonuses, aren’t enough for her to get by on her own. So her parents provide about $500 a month to cover her car and health insurance, cellphone bill, and some spending money. Contributing to the problem: She has $90,000 in student loans.

“The jobs you get after graduation aren’t conducive to living on your own,” she says. Morley Winograd, co-author of Millennial Momentum: How a New Generation Is Remaking America, agrees. “Millennials are a very economically stressed generation, and that stress will last for their lifetime,” he says.

Yet MONEY’s survey, among others, shows a more mixed picture. Today’s younger folks do seem at least as value-conscious as their elders, and maybe even more so: A greater percentage of millennials say they are eating at home these days than they were in 2011, for example, while the numbers had dropped slightly for the general population. And for now at least, younger investors also seem more nervous about the stock market, keeping a greater percentage of their portfolios in cash than older people do.

When it comes to other attitudes about spending and saving, however, millennials seem to be pretty much like everyone else. They are just as likely to covet new, innovative products. And they aren’t cutting back on luxury spending or postponing vacations with any greater frequency than their elders either. Nor do they place more importance on saving; almost everyone, young and old, affluent or not, says that saving money is more important to them now than it was a few years ago. And for all the lamentation about how dim the prospects are for this generation, younger folks are surprisingly upbeat about their future: The vast majority (86%) expect to live as well as or better than their parents.

For now, though, while millennials may be having difficulty leaving the nest, no one seems particularly unhappy about it.

“Boomers created a helicopter parenting style and went out of their way to be friends with their kids,” says Winograd. “Many are delighted to have their adult children home.” The kids apparently don’t mind either. A recent Pew study found that 78% of adults ages 25 to 34 who were staying with their parents said they were satisfied with their living arrangements.

Some experts believe this turn toward family may be one recession-induced change that truly lasts. Reality is causing more people to let go of the postwar expectation that living standards will naturally just keep getting better, says Stephanie Coontz, a professor of history and family studies at Evergreen State College in Olympia, Wash.

Many may end up caring less about keeping up with the Joneses and more about being with the people who matter the most to them as a result. And indeed, almost 80% of the respondents to the MONEY survey say spending time with family is more important than ever to them, an increase of 10 percentage points over the past five years.

Janel Butera is one of them. The speech pathologist and mom felt her financial situation was secure enough last year to cut back her workweek from five days to four, so she went for it. “Sure, I could use the money,” she says, “but spending time with my kids is more important.”

Additional reporting by Kerri Anne Renzulli.

 

TIME health

The Medieval Black Death Made You Healthier—If You Survived

Plague killed millions in Europe
The Black Death killed as much as half of Europe's population Photo by Science & Society Picture Library/SSPL/Getty Images

The plague was horrific, could hit without warning and killed tens of millions in 14th century Europe. But paradoxically, the population that survived ended up better off, with higher wages, cleaner living conditions and healthier food

Game of Thrones doesn’t tell you the half of it. Life during the medieval ages was nasty, brutish and short. That was especially true during what became known as the Black Death. The widespread outbreak of plague struck between 1347 and 1351, killing tens of millions of people, resulting in the loss of 30 to 50% of the region’s population. The disease itself was horrific. “In men and women alive,” wrote the Italian poet Giovanni Boccaccio, “at the beginning of the malady, certain swellings, either on the groin or under the armpits…waxed to the bigness of a common apple, others to the size of an egg, some more and some less, and these the vulgar named plague-boils.” And it seemed to strike indiscriminately and without warning. People could be healthy in the morning and dead by evening.

The upside, if you can call it that, is that the plaque left in its wake populations that were healthier and more robust than people who existed before the plague struck, according to a new study published today in PLOS ONE. “The Black Death was a selective killer,” says Sharon DeWitte, a biological anthropologist at the University of South Carolina and the author of the paper. “And after the Black Death ended, there was actually an improvement in the standard of living.” The plague was natural selection in action.

In a way, that’s a marker of how brutal the medieval era was. It took a serial killer of a plague to actually bring about an improvement in living conditions. If that sounds counterintuitive, think about how life might have changed after half of Europe’s population died off. Suddenly there was a dramatic drop in the number of able-bodied adults available to do work, which meant survivors could charge more for their labor. At the same time, fewer people meant a decreased demand for foods, goods and housing—and as a result, the prices for all three dropped. By the late 15th century, real wages were three times higher than they were at the beginning of the 14th century, before the plague struck. Diets improved as employers were forced to raise wages and offer extra food and clothing to attract workers. As a result, the money spent per capita on food in the wake of the Black Death actually increased. “People were able to eat more meat and high-quality bread, which in turn would have improved health,” says DeWitte.

But the clearest evidence that people were healthier after the Black Death than they were before it comes in the bodies themselves. DeWitte looked at skeletal samples taken from medieval cemeteries in London both before the plague and after it. She found that post-Black Death samples had a higher proportion of older adults, and that morality risks were generally lower in the post-Black Death population than before the epidemic. In other words, if you were strong and lucky enough to survive one of the deadliest epidemics in human history, you were probably strong enough to live to a relatively ripe old age. And since the Black Death was so widespread, that was true for the surviving population as a whole.

Earlier studies looking at historical documents like diaries, letters and wills from the time period had shown conflicting results, but that kind of data only covers the very small part of the population that was literate, male and relatively well off. The advantage of DeWitte’s grave-combing bioarchaeological research methods is that they encompass a much more representative swath of the medieval population. “This provides information about the people who are missing from historical documents, including women and children,” says DeWitte. Not everyone in medieval London left a will behind—but everyone left a corpse.

So for survivors, life after the Black Death would have been at least a little less nasty, brutish and short than life before it. But that doesn’t mean the survivors were really the lucky ones. The Black Death was a period of unremitting horror and terror, the likes of which we can’t imagine. No one knew how the disease spread, or how to treat it. Popular but gruesome methods like blood-letting or boil-lancing would have been counterproductive at best, assuming victims could find anyone to treat them. Doctors abandoned their patients for fear of infection, and priests even refused to give last rites to the dying—an appalling dereliction given medieval fears of eternal damnation. Even animals like sheep, cows and pigs fell victim to the disease. “The people who survived the Black Death would have lost everyone they knew,” says DeWitte. “They’re the people I feel sorry for.” If the Black Death really was natural selection at work, it was the cruelest form imaginable.

TIME Economy

The Bad News About the Good Job Numbers

Newly released jobs data shows things are getting better—but not much

Spring finally arrived in the job market. The U.S. Bureau of Labor Statistics reported that nonfarm payroll employment rose by 288,000 and the unemployment rate fell by 0.4 percentage points to 6.3% in April. That’s a strong number, reflecting both a rebound from the weather-challenged first quarter of the year, which curtailed industries such as construction and retailing. Job growth has averaged 190,000 per month over the last 12 months, according to BLS. April’s overachievement was widespread, led by gains in professional and business services, retail, restaurants, and construction.

But if the economy is blooming with the improving weather, it is certainly not booming. “The view from the outside is very positive, but there are an usual number of caveats in the report to suggest the inside picture of the labor markets is less pretty than that juicy +288K might otherwise suggest,” wrote Guy LeBas, Janney Montgomery Scott’s chief fixed income strategist.

The biggest of those caveats is the drop in the civilian labor force. The number of people in the workforce declined by 806,000 in April, after increasing 503,000 in March. It’s a disappointing drop, and lowered the labor force participation rate—the proportion of the adult population that is working or looking for work— by 0.4 percentage points to 62.8 % in April. Having fewer people active in the economy is not a recipe for growth.

That’s why the drop in the unemployment rate, while encouraging, is also distracting. “This one number is clearly not telling policymakers what it’s supposed to. It’s become a bad measure of the job market,” LeBas said. The unemployment rate dropped because people left the work force, not because they found work.

Another weakness: Job growth did not do much for wage growth. Hourly average wages for April were unchanged, and the average workweek held steady at 34.5 hours. So even though consumer spending rose last month—another spring rebound tied to the weather—workers aren’t getting the higher wages they need to increase spending. Remember, consumer spending is roughly two-thirds of the economy.

That weakness in workforce participation will continue to hold the attention of Federal Reserve Chair Janet Yellen and the Federal Open Market Committee (FOMC) as it wrestles with interest rates. Yellen is scheduled to report on the economic outlook to the congressional Joint Economic Committee next week. Part of the broader debate centers on whether keeping long-term interest rates low will help the long-term unemployed, or whether there’s a need to keep inflation on a leash as the economy expands. In other words, is there still slack in the labor market? The April data suggests there is.

Yet according to Rick Rieder, CIO of fundamental fixed income for investment firm BlackRock, companies remain risk averse and cost conscious despite the low rates, which will keep a ceiling on hiring. So will other problems, such as mismatches in skill sets and education levels. In fact, there are some economists who believe that many of the longterm unemployed will never rejoin the workforce, meaning there may not be as much slack in the labor market as you’d expect—and that rates should go up more swiftly to combat the risk of future inflation.

These factors signal a slow but steady growth in employment, but nothing like previous expansions. “Looking ahead, we continue to anticipate a trend of reasonable growth in the U.S. within a global economy whose growth rate can best be described as uninspiring, but growing nonetheless,” Rieder said.

In other words, while it’s been a warm spring in the labor market, don’t expect a hot summer.

TIME career

Leaning In at Work, Traditionalist at Home: Women Who Hide Their Success

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Retro housewife Bojan Kontrec—Getty Images/Vetta

Why we need to stop worrying about emasculating men

I once hid my raise from my live-in boyfriend for a full year before he found out. I was already the decision-maker in our relationship, and I didn’t want him to feel bad that he made less than I did.

It’s the kind of scenario we hear often: ambitious, hard-charging women purposely shaving off a couple digits when talking about money with their partners. Women who subtly downplay their accomplishments in order to protect their boyfriends’ egos. Those who play the damsel in distress to cater to some caveman-like need to save. Even toning down an online dating profile – deleting accolades and advanced degrees – to sound less “intimidating” to potential suitors.

“I would let him make the decisions even when I knew they weren’t the right ones,” one friend told me recently, of her (not coincidentally) now ex-husband.

“I never reveal where I got my PhD on a first date,” said another, who is an Ivy League grad.

“I think my biggest fear in a relationship,” a New York editor quipped over brunch recently, “is emasculating the guy and ending up alone.”

It’s a feminist by day, traditionalist by night way of life, and it would make our Second Wave mothers cringe. By day, these women are successful and self-assured – part of a cohort dominating the working world and outpacing their male peers in college and advanced degrees. The under 30 set are outearning their male counterparts in nearly every major city in America. And when it comes to married couples, the number of female breadwinners has been steadily rising: 24 percent of wives now make more than their husbands.

And yet when it comes to their romantic lives, these women are unabashedly shrinking violets, their behavior influenced by age-old stereotypes about men, women and power that have simply not shifted as quickly as the working world. They’re also being influenced by a bevy of advice books – including a new one, When She Makes More: 10 Rules for Breadwinning Women, by financial advisor and journalist Farnoosh Torabi.

One part financial manual and two parts primer in retro-femininity, the book is a guide, she says, for single women whose success may intimidate potential suitors. Rule No. 1: Face the Facts. And the facts, she explains are clear. “When a woman makes more than her man, the odds are stacked against her in many ways: she’s less likely to get married, more likely to be unhappier in marriage, and there are many psychological and sexual costs,” writes Torabi.

Torabi is wrestling with the contradictions of a particular cultural moment: women are less dependent and passive than ever before. And yet, as Ronald Levant, the editor of the journal Psychology of Men and Masculinity, put it recently, “men are stuck” – caught between caveman-like desires to protect and provide, and the fact that more and more women are the ones doing the providing. One recent study found that men subconsciously suffer a bruised ego when their wives or girlfriends excel — regardless of whether they are in direct competition. Another survey, from Pew, found that 28 percent of Americans believe that it is “generally better for a marriage if the husband earns more than his wife.”

Where that leaves us? If you believe Torabi, with a complicated set of rules to follow – lest we end up, as the Princeton Mom warned, a “spinster with cats.” Not only must we achieve at work, we must stroke our partner’s ego. We can land the big deal, but we still must play the damsel in distress. We can go to Pilates, but might still consider asking him to lift that box – to make him feel like a man. Oh, and we may be the primary breadwinner, but we should still let him pay in public (as Torabi often does with her own husband) – even if it’s coming out of a joint checking account.

“Calling it stroking his ego can sound controversial, but money is a huge source of power and self worth for a lot of people,” she says. “So you have to understand that.”

Or better yet: you can reject it altogether.

Yes, men have been breadwinners for 10,000 years. They’ve been conditioned to be dominant. Hunters, gatherers … you know the drill. But let’s give dudes some credit.

College-aged men and women almost universally say they desire unions in which housework, child-rearing, ambition and moneymaking will be respectfully negotiated and shared. There are plenty of men – as a recent Cosmo survey on the topic helped made clear — who would happily date a woman who made more money than they did (and like it). (Of more than 1,000 straight men ages 18 to 35, nearly half say they’ve dated a woman who made more money than they did. Fifty seven percent say they are “more attracted” to a woman who is ambitious at work.)

We are, as the biological anthropologist Helen Fisher recently told me, “in a time of tremendous transformation.”

So here’s a rule for when you make more than your male partner: Don’t believe everything you read.

TIME Economy

Unemployment Rate Dips as Job Gains Beat Expectations

New data show employers added 288,000 jobs in April, beating expectations by analysts and pushing down the unemployment rate to 6.3

Employers added 288,000 jobs in April, according to government data released Friday, beating expectations and pushing the unemployment rate down to 6.3%, the lowest level in more than five years.

The latest drop in the unemployment rate, which has steadily ticked down in recent months, marks a more significant drop from 6.7% last month.

Jason Furman, who chairs the White House Council of Economic Advisors, called the employment growth “solid,” but said President Barack Obama “continues to emphasize that more can and should be done to support the recovery, including acting on his own executive authority to expand economic opportunity, as well as pushing Congress for additional investments in infrastructure, education and research, an increase in the minimum wage, and a reinstatement of extended unemployment insurance benefits.”

Republicans said the numbers weren’t as good as they appeared and continued to hammer Obama’s economic policies.

“We’re happy that more Americans were able to find work last month, but more and more people are dropping out of our workforce—giving up on finding a job,” Republican National Committee chair Reince Priebus said in a statement. “These are men and women who desperately need work and want work, but with the same labor force lows from the Carter economy, there are simply no jobs for them.”

Analysts were hopeful Friday’s numbers would show strong growth after a long, cold winter kept the slow economic recovery sluggish in recent months. Analysts had predicted about 200,000 jobs added, reflecting positive private-sector growth. The payroll-processing firm ADP said Wednesday private employers added 220,000 jobs in April, up from 209,000 added in March.

The Bureau of Labor Statistics also revised the March jobs report to show that 203,000 jobs were created that month, up from the 192,000 originally reported.

TIME europe

The European Economy Needs Another ‘Whatever It Takes’ Moment

Belgium EU Daily Life
A homeless man rubs his eyes as another man passes by outside the E.U. Council building in Brussels on Monday, Nov. 18, 2013 Virginia Mayo—ASSOCIATED PRESS

European Central Bank president Mario Draghi's 2012 promise to do "whatever it takes" to save the euro was a turning point in the E.U.'s financial crisis. The same resolve is needed now

In July 2012, Mario Draghi, president of the European Central Bank, stood before investors at a London conference and made a proclamation that changed the fate of Europe. Fear in financial markets about the unsustainable debt mounting on euro-zone governments was threatening to tear apart the beloved monetary union. But Draghi would have none of that. His central bank “is ready to do whatever it takes to preserve the euro,” he stated bluntly.

That moment is widely regarded today as the turning point in Europe’s financial crisis. Since then, the turmoil that could have crushed the dream of European integration has receded. The yields on the sovereign bonds of Spain and Italy, which had risen to levels at which they would likely have required expensive bailouts, returned to normalcy, and the risk to the survival of the euro dramatically decreased.

Draghi’s strong statement worked because it showed a degree of resolve that had until then been lacking in efforts to quell the debt crisis. But ironically, the resolve that ended one stage of that crisis has only perpetuated the next stage: fixing the damage inflicted on the average European family.

The fact is that Europe has grown complacent in confronting its problems. The region’s political leaders are going about their business as if the crisis is over. It isn’t. Sure, the euro zone has climbed out of recession and, after six years of trauma, appears to be on the mend. The countries that required European Union-backed rescues are beginning to exit from them. But it’s hard to call what is happening a recovery.

The latest forecast from the International Monetary Fund estimates GDP in the euro zone will expand a mere 1.2% in 2014, compared with 2.8% for the U.S. Some of the most important European economies aren’t even moving at that lackluster pace. The IMF expects France to grow a mere 1%, and Italy only 0.6%. Meanwhile, with prices barely rising, concerns have arisen that the euro zone could plunge into debilitating deflation, which would make the debt burden of Europe’s weakest economies even heavier.

Europe has also made almost no progress in solving its gut-wrenching unemployment problem. The latest euro-zone jobless rate is a woeful 11.8% — a year earlier, it was 12%. For some countries, unemployment remains almost incomprehensible. Spain’s rate is 25.3% and Greece’s 26.7%. Youth unemployment, meanwhile, stands at 23.7% in the euro zone. On top of that, nearly 10 million people in the European Union lucky enough to hold at least part-time jobs are underemployed.

If this isn’t a crisis, what is? In the U.S., such depressing statistics would probably spark political and social upheaval. Yet Europe’s politicians don’t seem particularly alarmed. No one is scrambling to urgent leadership conferences as they had during the old stage of the debt crisis. Two years ago, there had been a push for a strategy to boost growth and ease the pain for the euro zone’s weakest economies. That has remained mere talk. Italy’s Finance Minister recently complained that the E.U. paid no more than “lip service” to creating growth and jobs.

The reforms that could aid the millions of jobless and restore better growth are moving at a crawl. In Italy, newly installed Prime Minister Matteo Renzi (the country’s fourth leader since 2011) is attempting to restart an effort to liberalize the over-regulated economy after two years of minimal progress, but it is far from certain the country’s politicians, beholden to special interests, will act with the urgency required.

Even those measures that have been implemented often fall short. The Organisation for Economic Co-operation and Development recently praised Spain’s labor-market reforms, which allow firms to hire and fire workers more easily, for helping to create jobs. But the report then went on to say that more was needed, especially to assist young workers. (Youth unemployment in Spain is a staggering 53.9%.)

Nor has there been a big rush to press ahead with the integration within Europe that could give the region’s economy a boost. The German government is reviving a push for more centralized governance in the euro zone, including a budget commission that would have the power to veto national spending plans – the type of measure many economists see as critical to stabilizing the monetary union. But efforts to use integration as a tool to boost growth and jobs remain sidelined. A recent report from the European Parliament showed that by reducing remaining barriers to cross-border business in sectors like e-commerce, the E.U. could add a badly needed $1.1 trillion onto its GDP.

There are other ways, too, in which the varied nations of the union can help each other, if they so chose. A promising initiative from Berlin to offer young people across Europe language and job training to work in Germany has been a wild success – so much so that the program got overwhelmed.

We need to see more such efforts. But the problem in Europe today is the same that has plagued the region’s efforts to fight its economic crisis from the very beginning. Despite lofty talk of “more Europe,” each country’s national politics get in the way. That continues to undercut the intra-Europe cooperation that would produce long-term benefits but requires short-term sacrifice. Germany angrily rebuffs criticism that its export-led growth model – which produces a larger current account surplus than China’s – hurts its euro-zone partners, when changing that model, by, for instance, liberalizing its own tightly wound domestic service sector, would ultimately benefit everyone.

Back when Draghi made his now famous pledge, many bankers (especially in Germany) worried that when pressure from markets receded, Europe would slip back into its usual do-nothing mode and lackadaisically allow the region’s problems to persist. The trials of millions of European families don’t seem to be sufficient to stir the continent’s leaders to action. Europe needs another “whatever it takes” promise – this time to do “whatever it takes” to create growth and jobs. Though apparently, nobody has the guts to make it.

TIME Economy

U.S. Economy Slows to a Crawl in First Quarter of 2014

A trader works on the floor of the New York Stock Exchange at the end of the trading day in New York, April 25, 2014.
A trader works on the floor of the New York Stock Exchange at the end of the trading day in New York, April 25, 2014. Justin Lane—EPA

Cold weather froze the U.S. economy in its tracks during the first quarter, with GDP falling to just 0.1 percent to mark the slowest quarter since 2012

The U.S. economy slowed dramatically in the first quarter of 2014, as severe winter weather across much of the country depressed business investment and home construction.

The economy’s meager 0.1% GDP growth in January, February and March represented the slowest three-month growth in the economy since the end of 2012, and a sharp deceleration from growth in the second half of 2013, when the economy grew at a 3.4% rate.

The data reported by the Commerce Department early Wednesday fell far short of the expectations of Wall Street economists, who had predicted a 1.2 percent rate of growth this quarter, the New York Times reports.

Consumer spending, the biggest driver of economic growth in the United States, actually grew 3.0 percent in the first quarter, nearly consistent with 2013’s fourth quarter growth of 3.3 percent. But nonresidential investment decreased dramatically, as did did exports of goods and services.

Republicans were quick to blame the Obama administration for the first quarter’s measly growth. “This report is more than a low number,” said Brendan Buck, the spokesman for Speaker of the House John Boehner. “It is a reflection of the real economic despair that persists in the sixth year of the Obama presidency.”

Economists said the figures were disappointing, but expect the economy’s growth rate to return to between 2.5 and 3 percent in 2014, the Times reported. Analysts were in agreement that much of the hit in the first quarter was due to inventory growth in the end of 2013 and seasonal factors.

“We do not take this report as a serious representation of the state of growth in the economy,” John Ryding and Conrad DeQuadros of RDQ Economics said, according to the Wall Street Journal. “We believe that real growth will run ahead of 3% over the balance of the year.”

Tim Hopper, chief economist for the financial services company TIAA-CREF said the “recovery is still on track” despite the poor quarter. “While the 0.1% increase in first quarter GDP does not look very good at first, a deeper dive into the report shows that the underlying economic fundamentals are still relatively positive,” Hopper added.

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