Exchange rates on buying stuff

My friend told me that when you buy something in a foreign place with your card, and the machine offers you to pay on the local currency or on your currency, you should choose the LOCAL one. Basically when you do that, your card is the one doing the exchange, while if you choose your currency, they do the exchange and you pay that on your currency. Their exchange is likely to be worse than your card's exchange.

So, I just tested this. I purchased a flight ticket on Cathay's website and the default was HKD. The total was 2638 HKD. They give you the option to pay with USD, but when I selected that it said 348 USD. Google exchange rate was giving actually 338 USD. So, I did what my friend suggested and picked HKD. Later checking my credit card bill, sure enough, I had actually paid 338 USD! :)

Great!

How jobs will do in US from 2017 and later?

I am realizing these days that you don't have to think in finances... Well, that is a bit of an exaggeration, but if you look hard enough, you can find somebody who spent a lot of time researching the question you are trying to answer, finding the angle that you are looking for, refuting one or other idea that you question, etc... As an example, yesterday I found out that people have been tracking the number of times that the word "optimism" shows up across all the CEO's earning reports to see how economy is going to do in the future. Geez!! They look for every indicator possible! This other article questions the pick-up in stock prices (reflecting technically a good economy) while commodities have not moved (which should be the result of increased demand for goods).

Anyhow, continuing with my analysis of US jobs that I did here, today I learnt:

1. That you don't need to try to speculate what jobs will do... The congressional budge office will do the Labor Market Projections for you :). By the way, if you are interested to know, they predict that basically all the slack left on the labor market to deal with future job openings will run out in the next 2 years. "Everybody" will be employed with wages going up...
2. Also learnt what the Beveridge curve is. Basically a plot of job openings rate vs unemployment rate. Very interested to anticipate where the economy is heading. 
3. The #2 link gives the curve in 2012 and predicts that things are just going to get really good in the next 4 years. We all know they nailed it. For an updated Beveridge curve these days, check out this very recent (2/17) and nice article from the Bureau of Labor Statistics. It includes also other graphs like number of unemployed persons per job opening. 

Cheers!

Has the economy in US really recovered for everybody during the Obama administration?

Frequently I hear folks on both sides either praise or complain about the employment figures in US. The argument from the anti-Obama folks is that the figures do not reflect the reality. It is also an argument of why Trump was elected. So, I try to figure what is really happening. Did folks recover from the recession or are there certainly groups that are worse than they were pre-recession?

We should probably start by looking at how the government measures unemployment. Their last number was 4.8% seasonally adjusted as of January 2017, which is 7.6M out of 159.7M (labor force) out of 254M (civilian non-institutional population) our of 325M (US population). Note: The difference between the last two is the addition of folks in institutions (penal, mental facilities, homes for the aged), folks who are not on active duty in the Armed Forces, and of course, folks less than 16 (22M).

The critics of this index point to the fact that the government does not count as unemployed in the official figures: 

1. Discouraged workers: a subset of persons marginally attached to the labor force. The marginally attached are those persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months, but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, discouraged workers were not currently looking for work specifically because they believed no jobs were available for them or there were none for which they would qualify. It is also important to say that to be accounted as discouraged worker, one should have tried to actively find a job in the previous 12 months. Planning what to do or browsing through ads doesn't count. This trend can partially be extracted from the labor force participation rate (labor force to total population older than 16) and from the employment population ratio (employed to total population older than 16). Interesting enough the government does track this too! Check U5 here. Including those, rate goes up to 5.8%, again, seasonally adjusted as of January 2017.
2. People that partially work a tiny bit (>15 hours) of the week when the survey was done are counted as employed. So, sure, they worked, but how much money did they really make? Government also tracks part time workers (+ discouraged). See U6 here again. In this case, we are at 9.4% seasonally adjusted as of January 2017.

Note: Just not to rely entirely on the survey which yields the above numbers, the government itself reports also the number of nonfarm payrolls. This stands at 145.55M (slightly lower than the 159.7-7.6 = 152.1). That is actually higher than pre-recession levels (138M).

We could look at those too, but let's look first at some other interesting links. Wikipedia (as usual) has a nice explanation/graph showing what happened:

Somehow, with the crisis, the percentage of employees respect to the full population dropped by about 4.5%. Similarly, the unemployment rate went up by about 5%. During this time, the first nevertheless has barely improved 1%, while the second (the statistics used by the government) is actually back to pre-crisis levels. So, there may be some truth to it.

The other point to look at is the complain that although people may have work, pay is actually lower than used to be. Again on the same Wikipedia link we can see that being the case:

I am not sure how the wages and salaries are obtained (got to go back to this) but overall, there seems to be some truth to the statement that although for many the crisis is behind and they are thriving (they may have never been hit, actually), there is a segment of the population that didn't recover and are actually worse than pre-crisis levels. In fact, it is probably this inequality who accentuates social unrest and could trigger even more dangerous consequences.

Cheers!

PS.: I did a follow up on future job trends here.