McDonalds and the $15 minimum wage

$15 Minimum Wage – The Cost of Going Out of Business

The $15 minimum wage is all the new buzz in the political realm today. Given the income rate versus the cost of living I understand the argument so I wanted to dig a little deeper to find out where we really are and what I found scares me. First of all, the raise to $15 an hour as a new minimum wage is like the Dutch Boy putting his fingers in a dyke to stop the leaks from pouring through.

This is a typical government response to fixing problems – put a bandaid on a severed limb and kick the can down the road. CA Governor Jerry Brown was hailed as a hero in the eyes of minimum wage earning adults while being viewed as the devil by all business owners and those who understand the true impact of a $15 minimum wage. First of all, with the exception of a few cities who have already adopted a $15 per hour minimum wage, the wage goes up on a gradual scale until it reaches $15 per hour in 2023.

I understand the argument from both sides, I have been a business owner and have written the payroll checks from my own pocket. I also understand the income increase over the years vs the cost of living increase. A new minimum wage however, is just another nail in the coffin for small biz owners, but it is only one nail. Between the state and feds (especially in CA), honestly the nails no longer matter because they put the coffin in the ground a long time ago.

While Entrepreneur Magazine shows that small business failure rate has actually declined since 1977, if you look at the numbers closely, you will notice that, hidden in the details, so has the ratio of small business creation. Entrepreneurs understand that it is harder to start a small business and survive in today’s economic environment so fewer people start their own company. On the opposite side of this factor is the micro-business explosion. These one to two person operations are the result of the economy and people trying to survive. Participants in this market have driven down the small business failure rate because many of these float in and out of business with little or no tracking. So how do we get an accurate picture? We look historically and according to the SBA, about 33% of small businesses will survive 10 years and only about 25% will survive past the 15 year mark. Not the best odds, but guess what, we just made them worse.

Here is where the primary disconnect between proponents and opponents of the $15 minimum wage exists. When you step in and ‘subsidize’ the minimum wage, what the population may or may not realize is that for every dollar the wage goes up, people receiving that dollar are affecting the supply / demand curve of labor. So if an employee costs $15 plus SS and FICA, I have raised the COGS by that labor cost and rule of free market says that I will naturally find a way to lower that cost, whether it is by replacing humans with automation (today’s technology makes it pretty easy to do) or by determining that my costs outweigh my minimum acceptable profit margin so then it makes no sense for me to be in business.

We are looking at two diametrically opposed forces moving against each other – the cost of living vs the survivability of businesses in the USA. From the viewpoint of the wage earner here is the part that is truly scary, we have to feed our families and, although the unemployment rate shows that it is low (currently hovering around 5%), everyone knows that this is a fictitious number that has little meaning. Under-employed and non-reporting far exceed the rate whose only objective is to make the administration look good. Because we allow it, government is once again stepping into our lives and regulating how we should live – on $15 minimum wage. That is, if we can get a job.

Will $15 Minimum Wage Even Help?

Okay, here is the really scary part and it is already happening in parts of our country. $15 minimum wage does nothing because adults still cannot survive or feed their families on minimum wage, but the government keeps trying to impose their means of making minimum wage survivable. It will never happen and until we attack the true problem we will continue in the opposite direction of where we should be headed. The only thing that will increase is the propensity to poverty and you can see the numbers that are already moving in that direction below.

Small business and enterprise is the backbone of our economy and, until we quit penalizing capitalism and entrepreneurial activity, our gap will continue to grow. Wage earners – If you are working class America (the forgotten middle class), ask yourself, “Is my life better or worse than it was five years ago? Ten years?” The answer is obvious, but the choice not so much so. Without going into depth on growing class inequalities and the disappearance of the middle class, we can safely surmise that manufacturing, mid-level and management jobs (the backbone of the middle class) are disappearing at an alarming rate while lower class and upper class continue to grow.

$15 Minimum Wage - PEW Research - Middle Class Losing Ground

Still a proponent of the $15 minimum wage? Talk about shooting yourself in the foot. What happens when there are no more jobs?

Still an opponent of the $15 minimum wage? Don’t worry, you won’t be for long because those will be the only jobs that exist as the socialization of our country continues. Unless we shed the burden of imposed expense on our small and medium-sized businesses, until we actively and aggressively promote entrepreneurship and unless we become business friendly and entice our companies to come back home from overseas, we are on a doomsday path to a socialized destiny. Why do we think the Bernie Sanders movement has become so popular? Same for Trump. Americans are fed up and have nowhere to turn.

It is time for us as citizens and as leaders to take responsibility, to become accountable once again for our destiny and that of our children. We are in the middle of a peaceful, but serious revolution. It is time to listen and time to take decisive action to recapture our greatness as a country.

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Currency Projections and Forecast - TownSpeaks

2016 Currency Projections

Global Currency Trends and 2016 Currency Projections

2016 has not started off great for currencies around the world given the free fall of the China market and given that their volatility is supposed to continue throughout the year. This will prove a challenge to currency values and will make 2016 currency projections difficult, but will provide tremendous opportunity to trade volatility. The market itself is an issue with regard to economic stability in China as their growth continues to slow, but there is potentially an underlying issue that may shape trends and projections in both the equity and currency markets.

All economies slow, but the depth of impact is based on the size of the economy and the reach it has in global markets. China is #2 so the impact has the potential to be severe. Similar to that of the Great Recession in the United States, China’s economic stability is on the verge of collapse into a mirror image of our own financial crisis. Alone, this is bad due to the economic impact, but is at least predictable for purposes of trading.

Where there is potential for dramatic difference between the illusion of China’s slowing and what is reality lies in their currency policies. Specifically, the renminbi has been devalued multiple times by the government and this is cause for warning signs in both the currency and equity markets. Any time a country attempts to stave off financial crisis by manipulating its own currency, things are usually worse than they appear.

By devaluing currency, the government is working to pump money into the system and to provide liquidity to starving markets. Sound familiar? The currency manipulation is not necessarily the issue since most governments use this as a tool to provide liquidity. Where the real issue lies is that we do not know the depth of China’s difficulties and, given the size of their economy and the global weight that it carries, unknown is not good. We won’t know how far down the rabbit hole we will have to go to get to the bottom. Equity markets understand this and the result is 400 point slides.

The problems arise when you combine fiscal weight abroad with overaggressive interest rate hikes here at home coupled with extremely low inflation rates and stagnant growth. Add in a dash of unknown presidential candidates and you have the recipe for potential disaster.

For currency markets and currency projections, 2016 will be highly volatile with a propensity for the dollar to climb against most other currencies due to flight to safety. Additionally, currency manipulation will continue to hamper trade deficits as our trading remains purposefully unbalanced. Bond interest rates are already decreasing as the demand for investor safe haven climbs. Should the pattern continue as expected, traders will see growth in the value of the dollar with downward pressure on the Euro and related currencies. Also, should this trend continue, expect to see government intervention along the way working to inject liquidity, especially if the downward trend on China’s economy continues.

If you would like to learn more about our currency programs, contact us.

Repercussions of San Bernardino

San Bernardino, CA
For us here in the States, the tragedy in Paris hit a nerve that was extremely painful and one which resulted in grief and a sense of loss as we endured the fanaticism of jihadists close enough to feel the pain, but far enough away that the impact was a little less severe. My heart goes out to all of those who lost innocent lives from all countries and all walks of life. Senseless.

In Southern California, it is in our face and the horror of San Bernardino reminds me of 9/11, not in the scale but in the irrefutable hatred towards the West held because of faith. My heart and prayers go out to those families in San Bernardino impacted by this horrific act. This community is about an hour or so away from where I live, but it could have been on the other side of the country and the pain would still run as deep. How can the senseless murder of innocent lives be a call to action for any religion?

Out of the pain and suffering by the families of those lost and those whose lives are forever changed, especially in San Bernardino where the pain is fresh, out of the tolerant and giving nature of the American people and out of the fact that our nation was born Christian, it is time we take a stand. I predict that the repercussions of recent heinous actions will negatively impact peaceful Muslims around the world, but make no mistake, we are at war and unless we wake up this battle will be fought without us and we will lose either way.

On the one hand, we will lose if we allow the jihadists to gain any type of foothold where they can continue to wreak havoc through these ‘lone wolf’ attacks and other cowardly acts against innocent people. At some point we will either have to stand up and fight or we will lose a far more important battle – our freedom.

Listen to the Democrats, including our ‘leader’, who assail the Constitution at every corner by crying out for gun control. San Bernardino is just the tip of the iceberg if we continue to let the government usurp our rights one-by-one. Do we really think that criminals and jihadists will pay attention to gun control laws? Really? They pay attention and laugh as we give our rights away. The problem we have is that people don’t look two to three moves ahead of what happens when they tout gun control as the answer to our problems, but this is a symptom of a far larger problem.

As an aside, law abiding citizens who want to carry a firearm and be responsible for keeping the peace in this nation are not adversaries of the police, but rather allies for our outnumbered men and women in blue. There are multiple case studies that prove this model. Texas and Florida are just two. Google ‘concealed carry weapons and crime rate’ and you will find a plethora of information on how crime rate drops significantly in proportion to the number of concealed weapons permits.

The far larger problem in our nation however, is that we are willing to give up our freedoms in order to be ‘protected’ by our government. This is short-sighted but is also prevalent as we burden our legislative and judicial system with more laws and more regulations that make it impossible to keep up with our legal system.

Don’t get me wrong, I am all for societal order and the amazing job 99.9% of our law enforcement performs on a daily basis, but they are getting overburdened and the bad guys are starting to understand this. So what do we do as a nation? More legislation? That doesn’t seem to work as we have the highest per capita inmate population in the world. Take away the rights of the many to control the deeds of the few? That doesn’t seem to be working, but they keep trying. So then what is the answer? The old adage rings true, ‘An ounce of prevention is worth a pound of cure’.

We stand up as individuals and take responsibility for our actions. We hold others, including officials accountable, but more importantly, we hold ourselves accountable. We plug God back into the system. This is how we were founded and what makes our country work. We take pride in our work and we strive for greatness once again. The world doesn’t owe us anything.

This is America. We are a nation built on Christianity and if you don’t like it, leave. I will not kowtow to people who are offended anymore. Get over it. I will not give in to those who want to tear down this nation. I will defend it. I will not fear evil, I will face it with the knowledge and truth that I am saved. I will not settle for a second-rate, entitled nation. I will strive to do my part to make it great again.

God Bless the families of souls lost to terrorism around the world, regardless of whose hand was involved. This is a point in time where we either rally and take a stand against the atrocities or we let them continue uninterrupted and live life fearfully letting our government be our protector, eliminating our freedoms slowly, one-by-one.

TownSpeaks War on Small Business

Government Wages War on Small Business

Goodbye America!

The increased minimum wage will do a lot of damage to small business, but many owners will replace people with automated systems which, in the long-run will do more harm than good. That is overt war on small business and business owners expect this type of hostile treatment even though it should be a symbiotic relationship, but at least they can see it coming. There is another battle going on though behind the scenes and it is a life or death battle in the covert war government wages against entrepreneurs.

Fox News just announced that San Fransisco city officials have finally succeeded in legislating the last gun store in San Fransisco out of business as the city wages war on small business. City Supervisor Mark Farrell claims that the gun shop, High Bridge Arms, has ‘long been a thorn in the side of the city’s aggressive advocates of gun control’.

This is a perfect example of what happens when government begins to listen to special interest groups and we the people do nothing to fight back. According to the story, High Bridge Arms has done everything legally and above board to comply with ever-increasing requirements imposed by the city. The most recent legislation would require the shop to now film delivery of any gun to the purchaser, even after they have passed the background check and not taken delivery until after the waiting period.

The gun shop, around for 50 years in the Mission District, is not willing to take it anymore. Officials claim the gun shop has made it too easy for people to obtain guns even though the owners follow the letter of the law, have 17 cameras on location and tape nearly every aspect from sales to purchase. Now they want delivery on camera and the gun shop said enough is enough. The owners implied that they are not treating their customers, many of them law enforcemnt, like criminals.

Spokesman for the Coalition to Stop Gun Violence, Ladd Everitt, obviously has the ear of the City Supervisor and places his interests above the State Law, “If High Bridge Arms is so scared of implementing such a practice, my first question would be, ‘What do you have to hide?’.” What he fails to mention is that the store implemented measure after measure on city request to the point where the straw has broken the camel’s back.

It has gotten so pervasive in our political system that these special interest groups have begun to gain control and influence over governmental officials at all levels which continues to increase the impact and influence of governmental control over our personal lives. All you have to do is look at the lobbyists and special interest groups at every tier of government from municipal to state to federal.

The special interest epidemic has reached a point where it directly opposes our Constitution, including our right to bear arms. The time has come for Constitutional Americans to stand up for our rights and to protect American’s and their right to be entrepreneur’s without bullying tactics by municipal, state or federal government.

We at TownSpeaks strongly urge you to contact the City of San Fransisco Board of Supervisors to voice your concerns regarding the influence special interest groups have over city legislation. Their contact information;

San Francisco City Hall
Address: 1 Dr Carlton B Goodlett Pl #244
San Francisco, CA 94102
Phone:(415) 554-5184

Also, please reach out to the Coalition to Stop Gun Violence and let them know that criminals don’t obey the law and will purchase weapons with or without regulations in place. It is time we quit legislating our citizens to death. Where was the Coalition to Stop Gun Violence when Kate Steinle was shot to death by an illegal immigrant on the pier with a gun not obtained legally. As you can see by their address, they are a DC lobby group. Ladd Everitt is their Director of Communications and here is their contact information;

Coalition To Stop Gun Violence
805 15th Street NW, Suite 700
Washington, DC 20005
(202) 408-0061

Magical Economy - TownSpeaks

The Magical Economy

As in life, we always look for miraculous events along with rainbows and unicorns. The state of our nation is no different and most importantly, we rely on our magical economy to keep us afloat. $20+ trillion (with 12 zeroes) in debt but no problem. In our magical economy, we can just print more money. Need a boost in the stock market? Let’s send it soaring in our magical economy by printing so much money that we can pay our own debt with the money we print. How magical is that?

The Magical Economy and Football

I am a big fan of football. I am giving away my age but my team used to be the Houston Oilers. In fact, the last year Earl Campbell played for the University of Texas was my first year at my old Alma Mater. Then the unthinkable happened. Bud Adams moved the Oilers to Tennessee and renamed them the Titans. That was a sad day for me and basically left me teamless since, as a diehard Oiler fan I was not able to switch to the Dallas Cowboys.

Fortunately, or unfortunately depending on how you look at it, I moved to the San Diego area and was able to change my allegiance to the San Diego Chargers (sigh). I will admit thought that, since they hired Mike McCoy, the seasons have looked a bit more promising, but if we are looking at the economy the we are off topic. Or are we?

After football (and being the gracious husband that I am) my wife and I watched a little of the 2015 Emmy’s. I have to admit that I was moved by Tracy Morgan’s speech, his down to earth approach and his determination to work at rehabilitation. The Emmys 2015 version was littered with the political rhetoric and innuendo that I am not fond of, but I do recognize there is a great deal of entertainment value and comedy in the current political environment. Where it departs from entertainment however, is in the promotion of one ideological value over another which has no place in either the 2015 Emmys or in the entertainment industry as a whole.

So what does all of this have to do with our economy? Pittsburgh Steelers, San Diego Chargers, Green Bay Packers (Aaron Rogers looked great by the way), New England Patriots, Emmys 2015, Scorch Trials vs Black Mass. What do any of these have to do with our economy and the general health of our nation? Answer: They are distractions from reality. Just like any good magician, he or she takes our focus off of what is going on in the right hand so that we do not see what is happening in the left. Let’s take a closer look at our magical economy.

The Magical Economy and Minimum Wage

Football salaries. Venture to guess what the minimum salary is for an NFL rookie? If you guessed almost a half a million dollars then you would be right, that is minimum wage. Being a fan of football, I get the entertainment value, but as fans, we support salary levels for people who play sports while the educators of our children don’t typically make enough to live on individually and they even get attacked with little to no recourse for the aggressors? To me, this is short-sighted and inexcusable. Even our college professors have been herded into the adjunct space which means that they are transient for the most part and less likely to get tenure track. But football is shiny so let’s focus on that.

We have become a nation of distracted individuals working harder and harder to keep up with the pace of life to the point where we only have time to react. In fact, millennials have gotten so ingrained in the immediacy approach to life that they find it rude if they text and don’t receive a response back right away. It is ridiculous that others, including our bosses, now have 24/7 access and expectancy.

The same is true in business. Once the world’s technology powerhouse, companies in the US and even the US government have reduced R&D spending year over year for at least the last 10 years. How can we be expected to innovate when we decrease the budget for research? A perfect example of the shift in ideology is portrayed by this Harvard Business Review article ( which points out that Cisco is better off utilizing exploitation and acquisition as primary innovation strategies rather than actually innovating.

The chart that they present for Cisco clearly shows a drop in patents based on a 3 year lag time, yet the authors argue in the first half of their article that exploit based R&D yields better returns. Fortunately, in the latter half of the article the authors back-peddle and concede that a mixed approach between exploitation and exploration is necessary for R&D growth. They further acknowledge that exploitation is a means to acquire and monetize innovation rather than create long-term value by innovating. So then we have to ask why.

Why shift focus from longer-term R&D benefits to a shorter term, bottom line approach to innovation. Simple answer is that CEO’s are now only as good as this year’s net profits. There is no longer any room for R&D as CEO’s raid this business segment in hopes of squeezing every drop of revenue from operations and sales so they can continue to show improved performance in the bottom line to keep their jobs and get their bonuses. Why? Because stockholders demand it. In fact, with diminished regard for future value, R&D along with long-term employment appears to now be the first to go. Because we have decided to put all of our eggs in a short-term basket, we have become a transient, service-based and immediacy focused economy depending on short-term results rather than long-term growth. The magical economy.

This is true in business and it is true in government and politics as well. Stock prices rise with no basis, national debt is a bank account that we don’t have to pay for, politicians are focused on re-election rather than health of the economy and strength of our nation. We are a country whose entire political system is based on Judeo-Christian values, but that doesn’t serve our politics today so we discard them without a second thought. Why? Because those in power don’t want you looking at the left hand. They wave the right hand harder and harder to get you to look at it, but there is change in the air and hopefully, the middle class will wake up before it is too late. It is time to open our eyes and look behind the curtain at the travesty and damage this magical economy has inflicted on us individually and on our nation.

The magical economy is short-term and our focus must swing back to a longer-term view and we have to quit kicking the can down the road. Single term limits for politicians, pay them what the average American makes and forget the health care and perks. The magical economy creates establishment politics and career politicians, but if they are going to be a career politician, then they can work 40 hours a week at their job. Let them clock in and out.

I am thankful for those who serve our nation as public servants and who are working toward a better America. Those people do exist but they are few and far between in our political system. History has proven one thing – we can change voluntarily or we can continue to abuse the system until it is no longer bearable and change happens whether we like it or not. Time to put the distractions aside and remember how to be the greatest country in the history of mankind.

European Migration Crisis

European Migration Crisis

The people fleeing Syria in the recent days, weeks and months has reached a flash point in the European Union, but what does the European Migration Crisis have to do with the United States and should we get involved? From a humanitarian perspective, we have performed our courtesy gesture of accepting 10,000 Syrian refugees into the US with the Dems wanting more and Obama pushing for the increase to 10,000, but this is not the real issue and is yet another deflection by the US government in our abysmal foreign policy tactics and efforts worldwide.

Why Are Syrians migrating to Europe?
Under our current administration, few can argue that we have been weak and reactionary. Once again we are dealing with fallout rather than being proactive and doing what is necessary to protect our interests around the globe.

A Brief Timeline of the Syrian conflict and what is happening in Syria;

  • 1979 – List created and Syria added as a State Sponsor of Terrorists. US creates a list of state sponsors of terrorism and Syria is characterized as providing safe haven to multiple terrorist groups as well as providing political and tactical support such as arming Hezbollah force with SCUD missiles.
  • 1990 to 2000 – Syria improved relations with the US by securing the release of hostages in Lebanon and by opening bilateral negotiations with Israel. President Hafez al-Assad sought accord with Israel, the US and the multi-national community.
  • 2000 – President Bashar al-Assad takes power and reverses progress made by Syria. As a Shia, al-Assad operates as a dictator to enforce his regime including torture, abduction and murder.
  • 2010 – Obama appoints Ambassador and resumes political relations with Syria.
  • 2011 – Arab Spring protests. Sunni’s begin to protest on a large scale against the al-Assad regime. Conflict escalates and force is used in violent crackdowns against protestors.
  • 2012 – Protests turn into civil war and government begins military assault on civilians focusing on the Sunni population.
  • 2013 – Sunni states Saudi Arabia, Qatar and others back Sunni fighters in Syria. Iran, as a Shia country, backs al-Assad in his war on the Sunni population.
  • The Syrian government, under Assad, has targeted its own civilians and estimates are between 200,000 to 300,000 innocents have been killed while an estimated 3.5 to 4.5 million have fled the country. This is the source of the refugee exodus into Europe.

    So where is the risk for the US?
    Flashback to the Ukraine and the Crimean peninsula where Russia invades utilizing military disguised in plain clothes and with equipment and weapons that they don’t even bother to hide. The purpose? To acquire and maintain a strategic foothold in a port that is critical to supply lines for both Europe and Russia. This is an overt land grab with little resistance other than lip service by the US and the United Nations. What were the consequences to Putin and the Russians? Nothing.

    With little challenge from the West, Putin is now more emboldened to reach out and lay claim where other opportunities exist. The primary deterrent in the past has been the US and threat of military action to keep aggressionist tactics in check, but now there is no counter balance and these acts will become more and more aggressive.

    Fast-forward and we have the Arctic Circle land grab with zero challenge and we now have the Syrian push by Putin with the political and military backing pledge from Russia to Assad. Make no mistake, Russia has zero interest in the Sunni / Shia conflict. Russia is after Syria for strategic purposes and if you examine all of their movements into external sovereignty, you will see that their targets are highly tactical. Their focus appears to be strategic points should the need arise to control points of entry or have access to resource rich environments in times of conflict.

    This is most likely on the radar screen of the intelligence agencies and, if it is not already, should be a priority for the intelligence community. Is there a risk for the US with the most recent events in Syria? Absolutely there is, but we also need to keep focus on the European migration crisis at the same time.

    How do we resolve this? There is no magical answer, but when the Syrian citizens feel safe in returning to their homeland, then the migration crisis will be over. If that is not the primary focus of the international community, then it should be. We have to deal with the immediate needs at hand, but we have to look beyond that into the longer-term resolution of replacing the dictatorial regime in Syria. The alternative is that both Iran and Russia will have a strategic foothold in the Middle East that will be nearly impossible to retake in the future.

    Finally, while there are implications for the US, including our foreign policy and strategic footprint in areas around the world, this is not just a US problem. Left unchecked, these incursions have the potential to become more aggressive and will impact other nationalities directly. Examples so far include the countries of Ukraine and Syria with a severe indirect economic impact on many of the European countries.

TownSpeaks on Birthright Citizenship

Birthright Citizenship

One of the critical flash points of the 2016 Presidential Campaign is Birthright Citizenship where any child born in the US, no matter the citizenship status of the parent, automatically is born a US citizen. This has become a contentious point in the election. Some feel it is a valid argument and that it should be eliminated while others feel that this is a drafted component of the 14th amendment and, as a constitutional protection, that it should not be altered.

While it may appear impossible to resolve, both camps are right, but they are looking to the wrong source for correction. Birthright citizenship was originally designed to allow children born of legal immigrants the ability to become citizens automatically so that the government was not burdened with the need to naturalize all of the children born of immigrants in the country legally.

So the reasoning behind keeping birthright citizenship is valid and the mechanism should not be eliminated, but then how is the other camp right? Worst case scenario, the mechanism needs to only be altered to allow children of immigrants or visitors in this country legally, the ability to access birthright citizenship. We do not want to deter legal access to our great nation, but we also must be vigilant in controlling our borders.

A final aspect of birthright citizenship that deters us from eliminating it altogether is that the focus should not be on the mechanism, rather the source. If there are no illegal immigrants in the country to have children, then there is no need to delete birthright citizenship. Follow the logic and you find that it becomes moot when you control the source – illegal immigration. Additionally, the need to utilize birthright citizenship diminishes and usage reverts back to the intended purpose.

Joel Phillips

TownSpeaks Real Estate US Housing Supply and Demand

Economic Indicators

Courtesy of our friends at Trading Economics
The following economic indicators represent a snapshot of our economic health at any given point in time. Economists utilize varied economic indicators to track metrics such as GDP, Debt to GDP and more to determine not only where we are, but statistically where we are headed as the world's largest economy. If you would like to look at other economic indicators, please visit

One item worth note is that economic data in the past held fewer variables so it was, by its simplistic nature, more factual. When evaluating data today, you have to take into consideration the many variables that have been introduced to measure these economic indicators. The most prevalent example is the data on unemployment. Currently, values are not provided for underemployed and even those who have given up on looking for work and are not collecting unemployment. Adding these relevant statistics can often double the real numbers. What we are looking for in the data presented are trends in equal measurements, so take care when forming your opinion from these economic indicator snapshots.

United States GDP Growth Rate 1947-2015
The Gross Domestic Product (GDP) in the United States expanded an annualized 2.30 percent in the second quarter of 2015 over the previous quarter. First quarter GDP, previously reported to have contracted at a 0.2 percent pace, was revised up to show it rising at a 0.6 percent rate. GDP Growth Rate in the United States averaged 3.26 percent from 1947 until 2015, reaching an all time high of 16.90 percent in the first quarter of 1950 and a record low of -10 percent in the first quarter of 1958. GDP Growth Rate in the United States is reported by the U.S. Bureau of Economic Analysis. The United States has one of the most diversified and most technologically advanced economies in the world. Finance, insurance, real estate, rental, leasing, health care, social assistance, professional, business and educational services account for more than 40 percent of GDP. Retail and wholesale trade creates another 12 percent of the wealth. The government related services fuel 13 percent of GDP. Utilities, transportation and warehousing and information account for 10 percent of the GDP. Manufacturing, mining, and construction constitute 17 percent of the output. Agriculture accounts for only 1.5 percent of the GDP, yet due to use of advance technologies, the United States is a net exporter of food. This page provides the latest reported value for - United States GDP Growth Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.


Interest Rates
The Federal Reserve left its target range for the fed funds rate at 0 to 0.25 percent on July 29th, 2015. “The labor market continued to improve, with solid job gains and declining unemployment,” and “The housing sector has shown additional improvement” the Federal Open Market Committee said in a statement. The Fed will tighten policy when it sees “some further improvement in the labor market,” and is “reasonably confident” inflation will move back to its 2 percent goal over the medium term. Interest Rate in the United States averaged 5.95 percent from 1971 until 2015, reaching an all time high of 20 percent in March of 1980 and a record low of 0.25 percent in December of 2008. Interest Rate in the United States is reported by the Federal Reserve. In the United States, the authority for interest rate decisions is divided between the Board of Governors of the Federal Reserve (Board) and the Federal Open Market Committee (FOMC). The Board decides on changes in discount rates after recommendations submitted by one or more of the regional Federal Reserve Banks. The FOMC decides on open market operations, including the desired levels of central bank money or the desired federal funds market rate. This page provides the latest reported value for - United States Fed Funds Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.


United States Inflation Rate 1914-2015
The inflation rate in the United States was recorded at 0.10 percent in June of 2015. Inflation Rate in the United States averaged 3.32 percent from 1914 until 2015, reaching an all time high of 23.70 percent in June of 1920 and a record low of -15.80 percent in June of 1921. Inflation Rate in the United States is reported by the U.S. Bureau of Labor Statistics. In the United States, unadjusted Consumer Price Index for All Urban Consumers is based on the prices of a market basket of: food (14 percent of total weight), energy (9.3 percent), commodities less food and energy commodities (19.4 percent) and services less energy services (57.3 percent). The last category is divided by: shelter (32.1 percent), medical care services (5.8 percent) and transportation services (5.5 percent). This page provides - United States Inflation Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news.


United States Unemployment Rate 1948-2015
Unemployment Rate in the United States remained unchanged at 5.30 percent in July from 5.30 percent in June of 2015. Unemployment Rate in the United States averaged 5.83 percent from 1948 until 2015, reaching an all time high of 10.80 percent in November of 1982 and a record low of 2.50 percent in May of 1953. Unemployment Rate in the United States is reported by the U.S. Bureau of Labor Statistics. In the United States, the unemployment rate measures the number of people actively looking for a job as a percentage of the labor force. This page provides the latest reported value for - United States Unemployment Rate - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.


United States Government Debt to GDP 1940-2015
The United States recorded a Government Debt to GDP of 101.53 percent of the country's Gross Domestic Product in 2013. Government Debt to GDP in the United States averaged 60.81 percent from 1940 until 2013, reaching an all time high of 121.70 percent in 1946 and a record low of 31.70 percent in 1974. Government Debt to GDP in the United States is reported by the U.S. Bureau of Public Debt. Generally, Government debt as a percent of GDP is used by investors to measure a country ability to make future payments on its debt, thus affecting the country borrowing costs and government bond yields. This page provides - United States Government Debt To GDP - actual values, historical data, forecast, chart, statistics, economic calendar and news.


United States Balance of Trade 1950-2015
The United States recorded a trade deficit of 43840 USD Million in June of 2015. Balance of Trade in the United States averaged -12987.51 USD Million from 1950 until 2015, reaching an all time high of 1946 USD Million in June of 1975 and a record low of -67823 USD Million in August of 2006. Balance of Trade in the United States is reported by the U.S. Census Bureau. The United States has been running consistent trade deficits since 1976 due to high imports of oil and consumer products. In recent years, the biggest trade deficits were recorded with China, Japan, Germany and Mexico. United States records trade surpluses with Hong Kong, Netherlands, United Arab Emirates and Australia. This page provides the latest reported value for - United States Balance of Trade - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.


TownSpeaks Real Estate Indicators

Residential and Commercial Real Estate Indicators

Residential and Commercial Real Estate Indicators of Economic Health

Utilizing real estate trends to understand the economy is no secret. Given the size and scope of the real estate industry, there is little doubt that a fundamental shift in real estate pricing and sales statistics can reasonably communicate the direction markets and economic health are headed.

Housing starts directly impact home sales, construction jobs and real estate related employment are key metrics used by many economy experts, but there is a great deal more to the picture as we look at how we can use residential and commercial real estate indicators to measure economic health. In fact, we can use residential and commercial real estate indicators to project or predict economic events or shifts in fundamental investment strategies.

Commercial construction and sales are possibly even better predictors of where we are headed financially and, at a minimum, you need to look at a holistic view of the real estate industry. Historically, standard commercial is a trailing indicator following the residential market. As a general rule, commercial follows residential by about 2 years. This isn't quite the crystal ball surprise you were looking for, so let's dig in a little deeper.

Opening an office or expanding offices is a result of how businesses are performing over time. Perform well and the business grows to the point where it expands beyond existing capacity. Through difficult financial times, companies will fire and layoff. These trends, while slower in the commercial arena, almost immediately impact employment and housing which carries much higher volatility.

Businesses are simply more stable and smooth transitioning by their very nature. Commercial real estate is less immediate due to the slower, wider nature of business cash flow versus personal cash flow. So when we see residential real estate go up or down, there is a fairly strong likelihood that commercial will follow in the same direction. By the same token, if we see commercial real estate expand, then we have to factor in the 2 years prior where the market was already in the process of changing.

Once we understand the nature of this complex cycle, then it is relatively straightforward to identify where we are from an economic outlook standpoint. Add to this the historical approximation of a ten-year top-to-top / bottom-to-bottom cyclical pattern and we get a pretty good idea of the economic landscape. It is worth noting however, that current economic and political conditions have greatly destabilized our cyclical patterns to the point where they are less recognizable, but the patterns still remain. To find out why is outside the scope of this article, but we cover it in the newsletter so signup now.

So standard commercial overlaps residential. Another commercial segment is multi-family consisting of 5 units or more per building. This tells us a similar but different story. Apartments fall into the commercial category because they represent rental rather than purchase. If we factor this rental component in with the overall commercial and residential models, we not get a 360 degree view of our economy all wrapped up in the housing market.

Given that we have a relatively predictable model in the real estate industry, we can surmise that the extrapolation of data is relevant and significant enough in weight to apply with confidence as a projection of economic condition. Loosely translated, this means that not only can you use a real estate model as a gauge of economic condition, you can use it as a tool for prognosticating the real estate market itself to determine investment direction and depth.