March 29, 2024

Europe to Propose a New System to Allocate Airport Slots

PARIS — The European Commission on Thursday is expected to propose a new market-based system for allocating takeoff and landing slots at airports to help increase efficiency and reduce travel delays.

The draft legislation also calls for stricter rules for the use of existing airport slots, requiring airlines to use at least 85 percent of their allocated positions in a given year — up from 80 percent — or risk forfeiting their unused capacity to other airlines.

The latest proposal does not include an expected provision to enable the auctioning of new airport slots, a plan that had been strongly opposed by airlines.

According to Siim Kallas, the European Union’s commissioner for transport, the proposed measures on slots would allow airports across the union’s 27 member states to handle 24 million more passengers a year by 2025, generating 5 billion euros (about $6.67 billion) in additional economic activity and creating up to 62,000 jobs.

“Europe’s airports are facing a capacity crunch,” Mr. Kallas said in remarks prepared before the official announcement of the proposals at midday Thursday in Brussels. “If business and the traveling public are to take best advantage of the air network, we have to act now.”

Current European Union law does not expressly allow for the trading of airport slots among airlines, and so far Britain is the only member state where a secondary market has developed. Elsewhere, slots have tended to change hands informally, with terms negotiated privately.

The commission argues that the existing system is inefficient and hinders competition among airlines. By creating a market that would assign a financial value to slots, Brussels hopes to create incentives for airlines to sell underused slots to other carriers that could make better use of the capacity.

Five European airports are already operating at or near full capacity: Heathrow and Gatwick near London; Frankfurt and Düsseldorf in Germany and Linate airport in Milan. According to the commission, that number could nearly quadruple by 2030 — and include major hubs like Charles de Gaulle in Paris — if air traffic continues to grow at its current pace of 4 percent to 5 percent a year.

“The resulting congestion could mean delays for half of all flights across the network,” Mr. Kallas said.

The commission backed down from proposing that new airport capacity be allocated by auction. Currently, when an airport expands, additional takeoff and landing slots are allocated by an independent coordinator, which sets aside 50 percent of them for new entrants. The other 50 percent goes to incumbent airlines on a first-come-first-served basis.

The airline industry has successfully fought against slot auctions in the past, arguing that they amount to a tax on the industry, because airlines do not now pay for new slots. A similar plan to auction slots at Kennedy and La Guardia airports in New York and Newark Liberty International Airport in New Jersey was abandoned in 2009 because of opposition from airlines and the airports.

Airlines have generally supported the creation of a secondary market for slots, as well as penalties for airlines that hold on to slots that they do not use. But they are critical of the so-called use-it-or-lose-it approach, which they say creates perverse incentives that are harmful to the environment.

“Increasing the threshold to 85 percent will only encourage airlines to fly empty planes to preserve their slots,” Tony Tyler, secretary general of the International Air Transport Association, an airline lobby group, said at briefing in Paris last month.

The draft legislation also includes measures aimed at increasing competition among providers of baggage handling and other ground services at airports. It also seeks to give Brussels a right to more closely scrutinize measures taken by member states to restrict airport noise, to ensure that the economic effects of such curbs are taken into account.

The commission’s proposals would need to be approved by the European Parliament and all 27 member states before they could become law, which could take a year or more.

Article source: http://feeds.nytimes.com/click.phdo?i=f1d3793cf00ee55cf201f948c6db3e6a

U.S. Retail Sales Rose 0.5% in October

WASHINGTON (AP) — Americans spent more on autos, electronics and building supplies in October, pushing retail sales up for a fifth straight month, the Commerce Department said Tuesday. The report suggests the economy maintained solid growth at the start of the fourth quarter.

Retail sales increased 0.5 percent from the previous month, the Commerce Department said.

Healthy auto sales helped. But even without them, sales rose 0.6 percent — the best showing since March. And when excluding autos and sales at gasoline stations, sales rose 0.7 percent, also the biggest increase since March.

Sales increased even though department stores and specialty clothing store sales fell in October.

The retail sales report is the government’s first look each month at consumer spending, which accounts for 70 percent of economic activity.

A rebound in consumer spending was the key reason the economy expanded at an annual rate of 2.5 percent in the July-September quarter, the best quarterly growth in a year.

Stronger economic growth helped calm fears that the economy could slide back into a recession. Still, growth would need to be nearly double the third-quarter rate — consistently — to make a significant dent in unemployment.

Another concern is that the growth came after consumers spent more while earning less, a trend that economists fear can’t be sustained.

Without more jobs and higher pay, consumers may be forced to cut back on spending.

The outlook for hiring is mixed. The economy added just 80,000 jobs last month, the fewest in four months. But the government also said employers added more jobs in August and September than it had initially reported and the unemployment rate dipped to 9 percent.

And employers advertised more jobs in September than at any other point in the past three years, a hopeful sign that hiring will pick up.

Americans are buying more cars. The auto industry had its best October in four years. Purchases of S.U.V.’s and trucks offset a loss in momentum for car sales.

Sales have rebounded from the earthquake and tsunami in Japan, which disrupted distribution of parts to American factories and made it harder to obtain some popular models.

Retailers hope consumers will keep spending during the all-important holiday shopping period.

The National Retail Federation, the nation’s largest retail group, predicts revenues in November and December will rise 2.8 percent this year compared with last year. That would be smaller than last year’s 5.2 percent increase. But it would be higher than the average increase over the past 10 years.

The uptick in retail sales came as the Labor Department reported that wholesale prices declined in October for the first time since June, as companies paid less for gas, new cars and other goods. The report indicates inflation pressures are easing as the cost of oil and other commodities has declined.

The Labor Department said the Producer Price Index, which measures price changes before they reach the consumer, dropped 0.3 percent in October, after a rise of 0.8 percent in September. Excluding the volatile food and energy categories, the core index was unchanged for the first time in 11 months.

Falling energy prices drove the overall decline. Wholesale gas prices dropped 2.4 percent, while home heating oil fell 6 percent, the most in over a year.

Food prices ticked up 0.1 percent, after four months of much larger increases.

Article source: http://feeds.nytimes.com/click.phdo?i=f38199c9811083c685c91dbc62f74f06

Americans’ Savings Rate Drops Again, Puzzling Experts

But the surge has not been sustained. In September, the nation’s savings rate dropped for the third consecutive month, the Commerce Department said Friday. It is now at 3.6 percent of personal disposable income, its lowest level since the month the recession began.

The latest decline raises the question of whether consumers are returning to their old spendthrift habits or were temporarily relaxing budget restrictions to make long-awaited purchases.

Real personal after-tax income declined in September, just as it did in July and August. Even so, consumers spent more, for an increase of 0.6 percent in September.

The increase in consumer spending was widely embraced as good news, a sign that consumers might be helping to propel the economy forward. Consumers account for roughly two-thirds of economic activity.

Economists warn, though, that increases in spending will be hard to sustain if Americans are doing it by simply putting a little less away every month.

Some of the spending increase was to cover necessities like medical bills and gasoline. Consumers also spent more on furniture and goods like televisions.

Scott Hoyt, an economist at Moody’s Analytics who specializes in consumer spending, said there were two competing hypotheses as to why the savings rate had dropped. “One is that consumers have just decided that they need to spend — they need to replace the car, the appliance, they want a new wardrobe.” The other, he said, is that the data, which is often revised months down the road, is simply incorrect.

“There have been several times where we spent a year or more talking about a negative savings rate” — meaning consumers spent more than they took in — “only to get benchmark revisions to the data,” Mr. Hoyt said. “The savings rate’s never been negative.”

Mr. Hoyt said he leaned toward the second explanation, in part because more spending was less likely with credit tight and consumer confidence at recession-level lows. But, with appliances and cars aging, there is pent-up demand for replacements.

In the decade leading up to the recession, Americans socked away an average of only 3.1 percent of their income, a much lower rate than in Europe, China, India and Japan.

After the crisis began, Americans raised their savings rate to above 5 percent. It slipped briefly below 4 percent in mid-2009 before climbing again.

Paul Ashworth, chief United States economist at Capital Economics, offered a partial explanation for the latest change. With interest rates so low, people who have money are earning lower returns, while people who owe money can service their debts for less. In effect, this has resulted in a transfer of wealth from people who are more likely to save — say, someone nearing retirement age — to someone more likely to spend — say, a young couple with a mortgage and a car loan.

But that would not account for the whole shift from saving to spending, he said. “Maybe households were desperate and didn’t know what else to do,” he said. “You can put off some discretionary spending, but there is a level of spending that you have to follow through on.”

Article source: http://feeds.nytimes.com/click.phdo?i=fe9f1723ce7098fc03110cd9842a549b

Second-Quarter G.D.P. Grew at 1.3% Rate

The United States economy grew slightly more than previously reported in the second quarter, helped by consumer spending and export growth that was stronger than earlier estimated, according to a government report on Thursday that pointed to slow growth rather than a recession.

The nation’s gross domestic product grew at an annual rate of 1.3 percent, the Commerce Department said in its third and final estimate for the quarter, up from the previously estimated 1.0 percent.

The revision was a touch above economists’ expectations for a 1.2 percent pace and took G.D.P. growth back to the government’s original estimate of 1.3 percent. The economy expanded at a 0.4 percent rate in the first three months of the year.

  Separately, new claims for jobless benefits fell sharply last week to their lowest level since April, although a Labor Department official said government statisticians had problems seasonally adjusting the data. 

 Applications for unemployment benefits fell by 37,000 to a seasonally adjusted level of 391,000 claims in the week that ended Sept. 24, down from an upwardly revised 428,000 the prior week, the Labor Department said on Thursday.  

Analysts polled by Reuters had expected new claims to total 420,000 last week.

The Commerce Department report also showed that while the expenditure side of the economy showed severe weakness in the first half of the year, economic activity as measured by income fared a little better. Gross domestic income rose at a 1.3 percent rate in the second quarter after increasing 2.4 percent in the first quarter.

After-tax corporate profits rose at a 4.3 percent rate in the second quarter, the largest increase in a year, instead of 4.1 percent. Profit ticked up 0.1 percent in the first quarter.

Political haggling in Washington over budget policy and a deepening debt crisis in Europe have eroded confidence, leaving the American economy on the brink of a new recession.

There is cautious optimism the economy will skirt another downturn as factory output continues to expand, although at a slower pace than earlier in the recovery, and businesses maintain their appetite for spending on capital goods.

Details of the G.D.P. revisions also were consistent with an economy that is on a slow growth track rather than sliding back into recession.

Consumer spending growth was revised up to a 0.7 percent rate from 0.4 percent. The increase in spending, which accounts for more than two-thirds of economic activity, was still the smallest since the fourth quarter of 2009.

Export growth was stronger than previously estimated, rising at a 3.6 percent rate instead of 3.1 percent. Imports increased at a 1.4 percent rate rather than 1.9 percent.

That left a smaller trade deficit, and trade contributed 0.24 percentage point to G.D.P. growth.

Businesses accumulated less stock than previously estimated in the quarter, which should support growth in the July-September quarter. Business inventories increased $39.1 billion instead of $40.6 billion, cutting 0.28 percentage point from G.D.P. growth during the quarter.

Excluding inventories, the economy grew at a 1.6 percent pace instead of 1.2 percent.

Business spending was revised to a 10.3 percent rate from 9.9 percent rate as investment in nonresidential structures offset a slight slowdown in outlays in equipment and software. Spending on nonresidential structures was the fastest since the third quarter of 2007.

The G.D.P. report also showed inflation pressures remaining elevated during the quarter, with the personal consumption expenditures price index, or P.C.E., rising at a revised 3.3 percent rate. That compared to 3.9 percent in the first quarter.

The core P.C.E. index, which is closely watched by the Federal Reserve, advanced at a 2.3 percent rate, the largest increase since the second quarter of 2008. It was revised up from 2.2 percent.

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Greek Economy Will Shrink More Than Expected, Finance Minister Says

THESSALONIKI, Greece (Reuters) — Greece’s economy will shrink by more than 5 percent this year, topping earlier projections, the country’s finance minister told business people in this northern Greek city where the prime minister will speak about the economy later on Saturday.

A deep recession is making it harder for Athens to increase tax revenue and meet deficit-reduction goals under a bailout plan agreed to with its euro zone partners and the International Monetary Fund. Without corrective action the continued flow of aid may be at risk.

“The recession is exceeding all projections, even the troika’s forecast,” the finance minister, Evangelos Venizelos, said, referring to the European Union, the International Monetary Fund and the European Central Bank. “The projection in May was that recession would be at 3.8 percent, now we are exceeding 5 percent.”

The Greek economy shrank at an annual 7.3 percent clip in the second quarter, after an 8.1 percent contraction in the first three months of 2011.

Austerity measures, including higher indirect taxes and cuts in public sector pay and pensions, have hurt economic activity.

Mr. Venizelos was keen to send a message to Greece’s euro zone partners, who are growing frustrated with its backsliding, that Athens is fully committed to carrying out agreed economic reforms.

Chancellor Angela Merkel of Germany reiterated on Saturday that Greece had to meet conditions laid out by the European Union, European Central Bank and International Monetary Fund to receive the aid it is seeking.

Athens is expecting to get 8 billion euros, or $11 billion, in its next installment of emergency financing under the bailout plan, without which it would default down the line.

Greece’s financial troika, which suspended talks with Athens last week in frustration at Greece’s struggle to stick to its deficit-reduction plan, is expected to come up with a form of words in its next report to allow the next tranche of bailout funds to be paid.

“The most clear message Greece is sending right now,” Mr. Venizelos said, “is that we are absolutely determined, without weighing any political cost, to fully meet our obligations versus are institutional partners.”

“We must prove all those who say that Greece can’t, or doesn’t have the will, is a pariah or does not deserve to be in the euro, wrong” he said.

He also said that holders of Greek government bonds were warming up to a debt-swap plan Greece aims to conclude next month, a crucial part of its new rescue package agreed in July.

Article source: http://www.nytimes.com/2011/09/11/business/greek-economy-will-shrink-more-than-expected-finance-minister-says.html?partner=rss&emc=rss

As Plastic Reigns, the Treasury Slows Its Printing Presses

The meaning seems clear. The future is here. Cash is in decline.

You can’t use it for online purchases, nor on many airplanes to buy snacks or duty-free goods. Last year, 36 percent of taxi fares in New York were paid with plastic. At Commerce, a restaurant in the West Village in Manhattan, the bar menus read, “Credit cards only. No cash please. Thank you.”

There is no definitive data on all of this. Cash transactions are notoriously hard to track, in part because people use cash when they do not want to be tracked. But a simple ratio is illuminating. In 1970, at the dawn of plastic payment, the value of United States currency in domestic circulation equaled about 5 percent of the nation’s economic activity. Last year, the value of currency in domestic circulation equaled about 2.5 percent of economic activity.

“This morning I bought a gallon of milk for $2.50 at a Mobil station, and I paid with my credit card,” said Tony Zazula, co-owner of Commerce restaurant, who spoke with a reporter while traveling in upstate New York. “I do carry a little cash, but only for gratuities.”

It is easy to look down the slope of this trend and predict the end of paper currency. Easy, but probably wrong. Most Americans prefer to use cash at least some of the time, and even those who do not, like Mr. Zazula, grudgingly concede they cannot live without it.

Currency remains the best available technology for paying baby sitters and tipping bellhops. Many small businesses — estimates range from one-third to half — won’t accept plastic. And criminals prefer cash. Whitey Bulger, the Boston gangster who lived in Santa Monica for 15 years, paid his rent in cash, and stashed thousands of dollars in his apartment walls.

Indeed, cash remains so pervasive, and the pace of change so slow, that Ron Shevlin, an analyst with the Boston research firm Aite Group, recently calculated that Americans would still be using paper currency in 200 years.

“Cash works for us,” Mr. Shevlin said.  “The downward trend is clear, but change advocates always overestimate how quickly these things will happen.”

Production of paper currency is declining much more quickly than actual currency use because the bills are lasting longer. Thanks to technological advances, the average dollar bill now circulates for 40 months, up from 18 months two decades ago, according to Federal Reserve estimates.

Banks regularly send stacks of old notes to the Fed, which replaces the damaged ones. Until recently, notes were simply stacked facedown and destroyed, as were dog-eared notes, because the Fed’s scanning equipment could not distinguish between creases and tears. Now it can. In 1989, the Fed replaced 46 percent of returned dollar bills. Last year it replaced 21 percent. The rest of the notes were returned to circulation where they may lead longer lives because they are being used less often.

The futurists who have long predicted the end of paper money also underestimated the rise of the $100 bill as one of America’s most popular exports.

For two decades, since the fall of the Soviet Union, demand has exploded for the $100 bill, which is hoarded like gold in unstable places. Last year Treasury printed more $100 bills than dollar bills for the first time. There are now more than seven billion pictures of Benjamin Franklin in circulation — and the Federal Reserve’s best guess is that two-thirds are held by foreigners. American soldiers searching one of Saddam Hussein’s palaces in 2003 found about $650 million in fresh $100 bills.

This is very profitable for the United States. Currency is printed by the Treasury and issued by the Federal Reserve. The central bank pays the Treasury for the cost of production — about 10 cents a note — then exchanges the notes at face value for securities that pay interest. The more money it issues, the more interest it earns. And each year the Fed returns to the Treasury a windfall called a seigniorage payment, which last year exceeded $20 billion.

To meet foreign demand, the Fed has licensed banks to operate currency distribution warehouses in London, Frankfurt, Singapore and other financial centers.

In March, largely because of the boom in $100 notes, the value of all American notes in circulation topped $1 trillion for the first time.

Article source: http://www.nytimes.com/2011/07/07/business/07currency.html?partner=rss&emc=rss

DealBook: Goldman Sachs Trumps Expectations, As Revenues Fall

Goldman Sachs on Tuesday reported first-quarter net income of $2.74 billion, down 21 percent from the period a year earlier, as the investment bank took a big one-time hit to pay back the billionaire investor Warren E. Buffett.

The results, $1.56 a share in the quarter ended March 31, represent a big step backward from a year earlier when Goldman earned $5.59 billion. But the investment bank handily beat analysts’ expectations of 82 cents a share, according to Thomson Reuters.

Excluding the big payment to Mr. Buffett, the company posted a per-share profit of $4.38, with key businesses like investment banking and investment management experiencing a pickup.

Revenue from investment banking, for example, rose 5 percent, driven by a significant rise in bond and stock underwriting. But institutional client services, the largest unit, saw revenue decline 22 percent, to $6.65 billion.

“We are pleased with our first-quarter results,” Lloyd C. Blankfein, chief executive officer, said in a statement. “Generally improving market and economic conditions, coupled with our strong client franchise, produced solid results. Looking ahead, we continue to see encouraging indications for economic activity globally.”

The bulk of Goldman’s earnings decline reflected the cost of the lifeline extended to the investment bank by Mr. Buffett during the depths of the financial crisis. The government gave approval for Goldman to repay the money earlier this year as part of the second round of bank stress tests.

It was critical cash, but costly. Mr. Buffett’s Berkshire Hathaway pumped $5 billion into Goldman in 2008, and the bank paid back $5.64 billion — not including the hefty dividends it had previously coughed up.

Putting the Berkshire Hathaway deal aside, Goldman’s results were mixed, with some businesses showing signs of improvement and others continued weakness.

During a call with investors firm the firm’s chief financial officer David Viniar said Goldman saw increased client activity in quarter, despite continued economic concerns. Still he noted that business volumes were “subdued.”

Net revenue for investment banking came in at $1.27 billion, 5 percent higher than in the first quarter of 2010. Much of that growth came from stock and debt underwriting, while financial advisory was down 23 percent.

Investment management, too, was a strong point. Overall revenue rose 16 percent, to $1.3 billion.

Much of the firm’s weakness was centered on its largest division, institutional client services. Revenue for the unit dropped 22 percent, which helped drag Goldman’s total net revenue down 7 percent.

Revenue in the largest segment of institutional client services, which trades bonds, currencies and commodities, fell to $4.33 billion. That was 28 percent below results in the first quarter of 2010, a particularly strong period for Goldman. The division is a big money center for the bank, accounting for roughly 36 percent of all revenue generated in the first quarter.

In a nod to just how difficult the environment has become, Goldman’s annualized return on equity, a measure of profitability, fell to 12.2 percent in the quarter from 20.1 percent in the period a year earlier. In 2006, return on equity was 32.8 percent.

There has certainly been a lot of pain to go around. On Monday, Citigroup reported earnings of 10 cents a share, down from 15 cents a share in the period a year earlier, as it dealt with mortgage woes and sluggish economic growth. Similar factors hurt the results of Bank of America and JPMorgan Chase last week.

The lackluster economy and global uncertainty has weighed on financial stocks, too. Goldman closed on Monday at $153.78, down about 8 percent for the year. Shares of Goldman were down modestly in early trading on Tuesday.

There was some good news for shareholders in the earnings release. Goldman declared a dividend of 35 cents a common share, to be paid in June.

For the quarter, Goldman set aside $5.23 billion in compensation, down 5 percent from the period a year earlier. This represents almost 44 percent of the bank’s net revenue and is inline with how it previously compensated employees.

Goldman will not decide what it will pay out until the fourth quarter. There were also more people on the payroll — 35,400 at the end of quarter — up 7 percent from the period a year earlier.

Article source: http://feeds.nytimes.com/click.phdo?i=545097e2438bf2353dd57b03a3726a57

Brazilian Criticizes Wealthy Nations’ Economic Policies

The minister, Guido Mantega, said wealthy countries were attempting “to export their way out of difficult economic situations” by printing money and keeping interest rates low. Those policies are driving up the prices of food and oil, causing particular pain for the world’s poorest people, Mr. Mantega told the policy-making committee of the International Monetary Fund.

His strong remarks highlight the challenges the United States and Europe face as they try to change their economic relationship with the developing world. In place of unsustainable borrowing to fuel consumption of imported goods, they would like to sell more goods and services to those countries. The problem is that developing nations, losing business from their best customers, hope to replace sales by increasing domestic consumption — selling to the same customers developed nations are trying to reach.

It is a dispute that plays out largely in terms of exchange, with both sides charging that their rivals are boosting exports by artificially suppressing the value of their currencies.

The two sides spoke past each other over the last week, during the annual meetings of the major forums for international economic coordination — the monetary fund, the World Bank and the Group of 20.

The United States says that higher prices are not a necessary consequence of American policies, but instead have resulted from the efforts of developing countries to hold down the value of their own currencies in the face of the capital inflows from developed countries.

The treasury secretary, Timothy F. Geithner, said Saturday that developing nations should allow the value of their currencies to be determined by open-market trading. The United States believes that the exchange rates set by the market will contribute to a more sustainable allocation of economic activity among nations, and increased international growth.

“Major economies — advanced and emerging — need to allow their exchange rates to adjust in response to market forces,” Mr. Geithner said.

Rising concerns about inflation shadowed the debate. Commodity prices and asset values are already rising sharply in the developing world, and there is concern that those pressures could contribute to inflation in developed countries.

Economic development in China and other emerging markets has long been felt in the United States largely in the form of lower prices. As those countries absorb a larger share of the world’s raw and finished goods, the impact instead may be felt in the form of rising prices.

“Interest rates rising in the emerging world could drive up interest rates in the developing world,” said Tharman Shanmugaratnam, the finance minister of Singapore and the new chairman of the International Monetary and Financial Committee. “We’ve learned from very painful experience during the last few years that nothing is isolated.”

Economic policy makers in the United States have played down the impact of commodity prices on domestic inflation. European policy makers, by contrast, are increasingly concerned.

Didier Reynders, the Belgian finance minister, warned in a statement that “one should not underestimate” the possibility that food and oil price inflation could travel from the developing world to Europe and the United States. He noted that those pressures would pass through the same financial and trade channels that helped to lower global inflation in the past by holding down prices. “Central banks everywhere should be highly vigilant,” Mr. Reynders said.

Article source: http://feeds.nytimes.com/click.phdo?i=2b8060090fc648129d00143767a7e38d

Economix: Measuring Jobless Families

Today's Economist

Casey B. Mulligan is an economics professor at the University of Chicago.

New data from the Census Bureau show that the frequency of families without employment was sharply higher during the recession — but still fairly rare.

Many indicators of economic activity, like the poverty rate and consumer spending, are measured at the family level, but widely cited labor market statistics like the unemployment rate are measured at the level of individuals.

The unemployment rate, for example, is the fraction of people who are actively seeking work (or on layoff) and are not employed. It is the fraction of people working — not the fraction of families working — that is one of the primary indicators used by the National Bureau of Economic Research to declare a recession.

These standard personal labor market indicators are incomplete and potentially misleading, because they do not put labor market activity in a family context. Among other things, a majority of working-age adults live with a spouse and apparently share their income. More than 85 percent of people live in families.

Presumably, it’s less traumatic for a family to have one of its two employed members out of a job than to have all its employed members out of a job.

For these reasons, it would be interesting to know what percentage of families have somebody working, as opposed to the percentage of people who have a job. The two measures could be more or less the same if each family had at most one worker but could be quite different when many families have two or more people who could potentially work.

In a study that Yona Rubinstein of the London School of Economics and I published in 2004, we calculated such measures for the years 1965 to 2000. We focused on prime-age families -– that is, families headed by an adult (or adults) 25 to 54 and therefore not expected to be in school or retired (two activities that interfere with working).

On average, all but 5 percent of people lived in a family with at least one person working (this includes one-person families). By comparison, almost 20 percent of prime-age adults were not employed.

In other words, it is much more common for a person to be without a job than for a family to be without a job.

As Catherine Rampell wrote in a post on Economix on Monday, the Census Bureau has released family employment statistics through 2010. The Census statistics are a bit different from those I cite above, because they include households headed by retirees and exclude people who live by themselves.

Not surprisingly, Professor Rubinstein and I found that the family nonemployment rate increased during recessions, like those of the early 1980s and of the early 1990s. The nonemployment rate increased by almost a third during those recessions, although even at their peak nonemployment was rare for families.

The latest Census Bureau release includes the most recent recession but needs some adjustment for its inclusion of retirement-age people. As a rough adjustment, I estimated the number of elderly people who live in families of more than one and the number of elderly people who live in families (of more than one) and have jobs.

The results are shown in the chart below (the Census Bureau technical notes and my paper explain why a more precise adjustment requires a lot more work).

The severity of this recession is obvious in the data, with the series reaching new highs in 2010. Still, it is relatively uncommon for a family to have nobody who is either working or retired.

Article source: http://feeds.nytimes.com/click.phdo?i=d47cbfa429f89a25a6274fb45c9cfd37