Ben Bernanke spoke at the Jackson Hole Economic Symposium today, but he did not announce any new moves coming from the Fed. However, much of his speech reads as a defense of past quantitative easing moves. That does not mean more are coming any time soon, but it sure seems to leave the door open:
Early in my tenure as a member of the Board of Governors, I gave a speech that considered options for monetary policy when the short-term policy interest rate is close to its effective lower bound.31 I was reacting to common assertions at the time that monetary policymakers would be "out of ammunition" as the federal funds rate came closer to zero. I argued that, to the contrary, policy could still be effective near the lower bound. Now, with several years of experience with nontraditional policies both in the United States and in other advanced economies, we know more about how such policies work. It seems clear, based on this experience, that such policies can be effective, and that, in their absence, the 2007-09 recession would have been deeper and the current recovery would have been slower than has actually occurred.
As I have discussed today, it is also true that nontraditional policies are relatively more difficult to apply, at least given the present state of our knowledge. Estimates of the effects of nontraditional policies on economic activity and inflation are uncertain, and the use of nontraditional policies involves costs beyond those generally associated with more-standard policies. Consequently, the bar for the use of nontraditional policies is higher than for traditional policies. In addition, in the present context, nontraditional policies share the limitations of monetary policy more generally: Monetary policy cannot achieve by itself what a broader and more balanced set of economic policies might achieve; in particular, it cannot neutralize the fiscal and financial risks that the country faces. It certainly cannot fine-tune economic outcomes.
As we assess the benefits and costs of alternative policy approaches, though, we must not lose sight of the daunting economic challenges that confront our nation. The stagnation of the labor market in particular is a grave concern not only because of the enormous suffering and waste of human talent it entails, but also because persistently high levels of unemployment will wreak structural damage on our economy that could last for many years.
Read the full speech here.
Productivity rose in wholesale trade and retail, but was flat in food services for 2011, according to new figures released by the Bureau of Labor Statistics. The breakdown of annual change in productivity by industry is particularly interesting. Take a look:
From the report:
In wholesale trade, labor productivity rose 1.9 percent as output grew 4.8 percent and hours increased
2.9 percent. Productivity grew 6.3 percent in durable goods, but fell 1.1 percent in nondurable goods.
Output per hour increased in all but one of the durable goods industries but in only one of the
nondurable goods industries. Output grew in 13 of the 19 wholesale trade industries and hours rose in
15. Productivity increased most rapidly in machinery and supplies wholesalers, where output rose more
than in any other wholesale trade industry. Unit labor costs declined in 9 industries.
In retail trade, labor productivity grew 2.2 percent – faster than in the other sectors presented here – as
output increased 3.7 percent and hours rose 1.5 percent. Output per hour increased in 21 of the 27
detailed retail trade industries in 2011. Output grew in 23 industries and hours rose in 16. The largest
productivity increases were in florists and vending machine operators, both of which recorded rapid
declines in hours. Unit labor costs fell in 17 industries.
In food services and drinking places, labor productivity recorded no change, as output and hours both
grew 3.4 percent. Output per hour rose in three of the four detailed industries in this sector, but fell in
limited-service eating places, where hours grew at a rate nearly double that of output. Output increased
in three industries and hours grew in two. Unit labor costs rose in three of the four industries.
Read the full release here.
In a new video for Harvard Business, top product designer Tom Hulme--of IDEO--adds his voice to what seems to be a growing chorus calling for businesses to be more action driven. Instead of waiting until you feel fully comfortable with your finished product, just get it out there. Even in a beta form, or as a prototype. This, Hulme argues, allows you to fail fast and rebuild fast.
Household debt in the U.S. decreased continued to fall over the second quarter of 2012, according to The Federal Reserve Bank of New York. In its quarterly report, the New York Fed said debt fell by approximately $53 billion. Here's a look at the trend (note the peak in the third quarter, 2008):
From the release:
As of June 30, 2012, total consumer indebtedness was $11.38
trillion, 0.5% lower than its level at the end of the first quarter of 2012.
This reduction in consumer debt was driven by the continued decrease in loans secured by real estate. Mortgage
balances shown on consumer credit reports continued to fall, and now stand at $8.15 trillion, a 0.5% decrease from the level
in 2012Q1. Home equity lines of credit (HELOC) balances dropped by $23 billion (3.7%).
Household debt balances
excluding mortgages and HELOCS increased by 0.4% in the second quarter to $2.6 trillion, boosted by increases of $14
billion in auto loans and $10 billion in student loans.
Overall delinquencies improved in 2012Q2. As of June 30, 9.0% of outstanding debt was in some stage of
delinquency, compared with 9.3% at the end of 2012Q1. About $1.02 trillion of debt is delinquent, with $765 billion
seriously delinquent (at least 90 days late or “severely derogatory”).
Read the full report (and many useful charts) here.
Blind trusts are in the news these days, thanks to the Republican National Convention and questions about where GOP nominee Mitt Romney puts his money.
Sausages are on the brain these days, thanks to the coming Labor Day weekend grilling extravaganzas.
Who better to put these two things together to teach us a valuable lesson than Paddy Hirsch?
In his latest column for the New York Times Magazine, Planet Money's Adam Davidson welcomes us all back from summer vacations with a reminder that the Euro Crisis has not been solved. And he provides quick primers on seven key questions that are lurking. We were struck most by #4:
Is Europe a Lehman in waiting?
About 20 percent of U.S. foreign trade is with the E.U. That’s significant, but if the European economy collapses, it’s quite likely that China, India, Brazil and several gulf states will pick up much of the slack. And a truly collapsed euro would mean discounts on everything from French wine to Italian shoes to Greek yogurt.
More worrying is if a) the euro zone faces an abrupt financial panic, and b) it turns out that many American banks are overly invested in those suddenly defunct European banks. There is a general assumption that U.S. banks are prepared for the worst. But many in the financial world thought they were prepared for the collapse of Lehman Brothers too.
Read The Euro Crisis Is Back From Vacation here.
An interesting booking by Charlie Rose a couple of nights back. He brought in Jeffrey Lacker, president of the Federal Reserve Bank of Richmond. Lacker gave his brief take on the history of bank regulation and bank rescues. He cited two key time periods: the Seventies, and the 12 months between August 2007 and September 2008. He hits both in this excerpt:
Watch the full interview here.
Most Asian nations weathered the global economic crisis quite well. Exceptionally strong growth in China and India lifted economies throughout the region--the notable exception being Japan. But conditions have changed. At Project Syndicate, Lee Jong-Wha, a senior adviser to the president of South Korea and Professor of Economics at Korea University, outlines four key steps that Asian leaders must take to combat weakening global demand and slowing regional growth.
The most immediate challenge is to safeguard the financial system’s stability against external shocks. Policy reform should aim to promote market transparency, improve risk management, and strengthen effective supervision and regulations.
Second, emerging countries must develop more effective macroeconomic frameworks, including better macro-prudential regulation and a broader monetary-policy framework that takes into account asset prices and financial-market stability. A wide range of official measures could be employed to support domestic demand while protecting medium-term fiscal sustainability. And, to address volatile capital flows, countries should increase exchange-rate flexibility, maintain adequate international reserves, and implement carefully designed capital controls.
Third, emerging economies must further rebalance their sources of growth. Reducing dependence on external demand – for example, by promoting private-sector investment and encouraging household expenditure – is crucial. Supply-side policies that promote small and medium-size enterprises and service industries accommodating domestic demand are also critical to ensuring more inclusive and sustainable growth.
Finally, enhanced regional and global financial cooperation – including closer policy coordination at the G-20 and International Monetary Fund – would help countries to respond more effectively to shocks and crises. A key regional initiative is the $240 billion multilateral reserve pool of the ASEAN+3 (the Association of Southeast Asian Nations plus China, Japan, and South Korea), which can provide short-term liquidity to members when needed. Institutional arrangements in regional liquidity provision and economic surveillance must be enhanced.
Read Safeguarding Asia’s Growth here.
The last three months of the election season will bring countless speeches and debates over the cost of health care and the impact of those costs on the economy. Sadly, much of the public debate will provide citizens with a lot of heat and very little light. But Flowing Data pointed us to an interesting and enlightening animation put together by the California Healthcare Foundation. It tracks health care spending over the last half-century, and breaks down who has spent what on what. There have been some interesting shifts in the cost burden. Here's a glimpse of spending in 1972.
And here is 2010:
Click here to watch the full fifty years of health care spending.
On Thursday, the New York Fed announced that, after nearly four years, it had sold off all the securities in the Maiden Lane III portfolio, which had been set up to rescue AIG. And they did so at a profit of "approximately $6.6 billion." At Econbrowser, James Hamilton has taken this occasion to "review the various measures that the Fed implemented over the last 5 years." Hamilton:
I was surprised to see that the Fed ended up making a profit on AIG-- my understanding had been that the Fed's strategy had been to mark these down at a loss over time. I was unable to discover the details of how this ended up favorably for the Fed. Thursday's statement indicates that more information will be provided on November 23.
But the fact that the Fed ended up making a profit from these transactions is an important detail. The key uncertainty for policy makers at the time (just as it is the key dilemma for the ECB at the moment) was determining whether the crisis is one of illiquidity or insolvency. If the problem is just that assets are temporarily undervalued as a result of the financial panic (i.e., the assets are temporarily illiquid), the central bank can solve the problem by stepping in as a lender of last resort. If instead the problem is that the assets are correctly valued (i.e., the borrowers are fundamentally insolvent), all the central bank can do is transfer these losses from existing creditors to the taxpayer (possibly in the form of an inflation tax). A key indication that the central bank did exactly the right thing is if, as a result of their stepping in, the long-run value of the asset is restored, in which case the Fed would end up making a profit out of the transaction.
Some have criticized the Fed's emergency lending on the grounds that the Fed took all these extraordinary actions and yet the economy still performed very badly in 2008:Q4 - 2009:Q2. I think this misses the point. I don't believe that it was ever within the Fed's (or anyone else's power) to bring the economy quickly back to full employment. Instead, the purpose of the Fed's emergency lending was to prevent a very bad situation from becoming even worse than it needed to be. The evidence we now have suggests that the Fed indeed accomplished exactly this. See for example the recent post-mortems by Adrian and Schaumburg on the CPFF and the PDCF.
But let me now return to the first graph (below) to briefly discuss what I see as a very different strategy that the Fed has been following since winding down these emergency lending programs. The Fed replaced the emergency lending with significant growth in its holdings of U.S. Treasury securities, debt issued by Fannie Mae and Freddie Mac, and mortgage-backed securities guaranteed by Fannie and Freddie. These are fundamentally very different from the aggressive lending in the fall of 2008 in that they involved no new transfer of private risk to the taxpayers. The reason is that, before the Fed bought any agency debt or MBS, the U.S. Treasury had already assumed financial responsibility for these agency obligations. Rather than trying to serve as lender of last resort, these more recent measures (sometimes referred to as "QE1" and "QE2") were instead just intended to help keep long-term borrowing costs low and to make sure that the U.S. did not experience a Japanese-style deflation.
Read U.S. monetary policy since the financial crisis here.
Last year, Scotch sales got a surprising lift from consumers in Brazil, India and China. And now it appears some other liquors are reaping similar benefits. UK-based Diageo reported a 6% jump in U.S. sales yesterday. But Dow Jones's Simon Zekaria reports that the liquor maker's growth has been fueled by rising sales in emerging economies along with the U.S. recovery:
When growth in the U.S., the U.K., and basically all of the advanced economies dropped off a cliff four years ago, emerging economies continued to climb. And China set the pace. From the Dallas Fed:
So what is happening now? China's economy is slowing, but by how much? Dallas Fed economists Janet Koech and Jian Wang have been trying to find out:
Although China’s economic growth has slowed sharply in recent months, evidence suggests that the situation may be worse than reported. Several factors contributed to China’s slowdown. Demand for China’s exports in Europe and the U.S. has weakened amid the deepening European sovereign debt crisis and sluggish U.S. economic activity.
Additionally, China’s policy response following the global financial crisis is having unintended effects on its economy. China loosened monetary policy and undertook a massive fiscal stimulus program in response to 2008–09 developments. These policies, which cushioned the economy from the impact of falling demand for exports, had the unintended consequence of generating higher inflation and rising asset prices, particularly in the real estate sector. These developments forced China to reverse course and institute tighter monetary policy last year, creating another round of effects on the economy that continue this year.
China’s abrupt policy changes during the past two years are not historically unusual and have been criticized as a source of the country’s big economic swings, which hurt long-run growth. Future policymakers will need more, high-quality quantitative (as opposed to qualitative) economic research to avoid overshooting policy targets and to better stabilize the economy.
A critical first step is acquiring high-quality economic data, a process already in the works. China’s National Bureau of Statistics started a new data-collecting system under which businesses report industrial production data online directly to the national statistics agency in Beijing, reducing the chance of manipulation by local authorities. As the world’s second-largest economy, China plays an increasingly important role in the global economy. Acquiring accurate economic data is not only useful to China’s policymaking, but also helpful to other nations, allowing them to better understand China’s current economic conditions and design their policies accordingly.
Read China's Slowdown May Be Worse Than Official Data Suggest here.
GOOD and MTV are teaming up to produce some useful infographics aimed at younger voters. The latest is on jobs, and it puts together a lot of top-line information. Like where new jobs are being created most rapidly:
And the increasing importance of education:
Does the inforgraphic provide more data and context than an economic paper? No. But it does as well as many short articles out today--if not better. And if it allows for visual learners to pick up a better understanding of the issues, then we're all for it. Take a look here.
To the extent that faster recovery depends on consumer spending, it is important to watch trends in household debt. In a new Economic Letter, John Krainer, senior economist at the San Francisco Fed, unpacks some data on debt and the behavior of borrowers. And he ties household spending today to tighter lending for the people who were more likely to build up debt during the housing boom:
In the fourth quarter of 2011, of the nearly $12 trillion in total consumer debt, about 70% consisted of mortgages, according to the data sample. Home equity lines and home equity installment loans accounted for another 10%. In the nonmortgage category, auto loans represented 7% and bank credit card balances 6% of total consumer debt.
Analysis of the data uncovers a number of interesting patterns in the evolution of household debt. For example, as Figure 2 shows, borrowers who defaulted at some point in the sample period increased their nonmortgage debt loads during the housing boom at a much faster pace than did nondefaulting borrowers. To a large extent, this ramping up of nonmortgage debt levels occurred among younger borrowers and those with lower credit scores, that is, subprime borrowers. The reverse occurred once the housing boom ended. Mortgage borrowers who defaulted reduced their nonmortgage debt levels at a much faster pace than nondefaulters. This decline in debt most likely occurred because defaulters lost access to credit.
Read Consumer Debt and the Economic Recovery here.
Christopher Steiner has an interesting perspective on today's world. He helped bring rapid change to finance in the early days of high tech trading. Now, in his new book Automate This: How Algorithms Came To Rule Our World, he's trying to explain the world in which we now function. And judging from an interview with Planet Money, Steiner is not very comfortable with how algorithms have changed finance. Take a listen:
David Roche--president of Expedia Inc.'s Global Lodging Group and CEO of Hotels.com--seems to want to remove some anxiety from the hiring process. Trying to hire employees with no weaknesses is a foolish goal. If an employee is strong in one area, that same employee likely has a corresponding weakness, Roche argues. So instead of always thinking about the mix of strengths employees bring to a company or team within a company, make sure you have "a team with diverse weaknesses," as he says in this Harvard Business video:
When we think of companies as being risk averse, who do we think it setting that culture? We probably look to top executives. McKinsey analysts Tim Koller and Zane Williams, along with University of Sydney Business School professor Dan Lovallo, want to focus our attention on middle managers. They may not make the big decisions for a company. But they make a lot of smaller decisions. And there is a risk-reward calculation with those decisions as well. From McKinsey Quarterly:
Much of the typical risk aversion related to smaller investments can be attributed to a combination of two well-documented behavioral biases. The first is loss aversion, a phenomenon in which people fear losses more than they value equivalent gains. The second is narrow framing, in which people weigh potential risks as if there were only a single potential outcome—akin to flipping a coin only once—instead of viewing them as part of a larger portfolio of outcomes—akin to flipping, say, 50 coins. Together, these two biases lead to a distinctive set of preferences outlined in Daniel Kahneman and Amos Tversky’s prospect theory, which was largely the basis for Kahneman’s 2002 Nobel Prize in Economics.
Consider a simple example of a risk-averse manager5 weighing whether to invest $50 million today in a project that has an equal likelihood of returning either $100 million or $0 a year from now. If we were to ignore the time value of money, we would expect a risk-neutral manager to be indifferent to the project—because the potential gains are equal to the potential losses. If the upside were greater than $100 million, we would expect the same manager to make the investment. However, the upside would have to be almost $170 million to entice the typical risk-averse manager to make the investment. In other words, the upside would have to be about 70 percent larger in order for that manager to overcome his or her aversion to risk.
But what if we were to pool these risks across multiple projects? If the same manager faced not 1 decision but 10, the story would change. The manager’s range of outcomes would no longer be an all-or-nothing matter of success or failure, but instead a matter of various combinations of outcomes—some more successful, some less. In this case, the same manager would be willing to invest if the upside were only $103 million, or only 2 to 3 percent above the risk-neutral point. In other words, pooling risks leads to a striking reduction in risk aversion.
Read Overcoming a bias against risk here.
In a compelling speech at the PopTech Iceland 2012 conference this summer, Tim Harford presented an interesting way to prepare for, and ultimately prevent, financial disasters. And the approach has a lot less to do with studying the history of economic crises than you might think. Instead, Harford points to engineering failures and environmental disasters:
In a post at Digitopoly that focuses on debunking the conventional wisdom that anti-piracy laws are largely futile, Michael D. Smith makes a very interesting point about the Internet and pricing. Smith argues that online shopping has not wrought the end of brand power. Consumers may not, after all, simply shop based on price, even in the digital age:
Harken all the way back to 1998 where conventional wisdom said that the Internet would allow consumers to easily find the lowest price and therefore would inevitably lead to “fierce price competition, dwindling product differentiation, and vanishing brand loyalty.”This argument seemed plausible enough: Why would you pay more for something that you could get for less? Unfortunately, the argument ignored the power of product differentiation. Differentiate your product offering on things like reliability, convenience, service, quality, and timeliness and consumers will cheerfully pay more for a product they know they could get elsewhere for less. In joint research with Erik Brynjolfsson, we found that while Amazon’s prices were well above the lowest price online, they still retained a dominant share of the market in head-to-head competition with much lower priced alternatives from online retailers like altbookstore, booksnow, and musicboulevard. We also found that shopbot consumers, arguably among the most price sensitive consumers online, were willing to pay several dollars more to buy from Amazon.com even when lower priced alternatives were displayed on the same search page just one click away.What does this have to do with anti-piracy regulation? Possibly quite a lot if one views “competing with free” as simply a special case of price competition. Imagine competition in the digital media space where the media companies and their online distribution partners play the role of Amazon, and where pirate sites play the role of lower priced alternatives from the likes of altbookstore. The twist on this example is that while Amazon could only control the differentiation of their own offerings, media companies can use anti-piracy regulation to impact the differentiation of their pirate competitors’ offerings as well. Thus, media companies can use iTunes and Hulu to improve the convenience, quality, and reliability of their paid products, while also using anti-piracy regulation to reduce the convenience, quality, and reliability of the free pirate competition.
Read Anti-piracy regulation and competing with free here.
Hat tip Mark Thoma.
We're not with the Olympics, and lessons drawn from them for business and economics, just yet.
James Surowiecki kept track of how many Olympians from other countries train in the U.S. A lot (400). So in addition to the U.S.'s success in the medal tally, he thinks Americans should take some pride in the country's strength as a leading developer of highly specialized skilled workers. That is, of course, a strength for the U.S. beyond athletics. But Surowiecki argues that U.S. policy on getting skilled workers to work in the U.S. means that the country has been giving up a lot of ground to countries like Australia and Canada. From the latest Financial Page column at The New Yorker:
This is all to the good: just as the Olympics are more exciting when lots of countries have top-level competitors, the global economy is more dynamic when knowledge is more widely distributed. But there’s also a missed opportunity for the U.S.: many of these foreign students would prefer to stay and put their skills to work here after they graduate, but they can’t get work visas. What’s more, studies estimate that hundreds of thousands of highly skilled immigrants already working here find themselves stuck in immigration limbo for years, waiting for visa and green-card applications to be approved. These are well-educated, motivated workers who want to play for our side. Yet we’re making it difficult for them to do so.
Since the nineteen-sixties, U.S. immigration policy has been designed to encourage the immigration of family members rather than of skilled workers. In 1990, the number of employment-based permanent visas was capped at a hundred and forty thousand a year. Astonishingly, that number hasn’t changed since, even though the U.S. economy is now sixty-six per cent bigger, and, with the rise of India and China, the supply of global talent has grown sharply. We also cap the visa allocation for each country, regardless of size, at seven per cent of the total number of visas, so only a fraction of the applications from China and India get approved. (The number of temporary work visas is also capped, at eighty-five thousand a year.) As of 2006, according to one study, more than half a million highly skilled immigrants were waiting for permanent visas, and the backlog in some visa categories was decades long. Other countries, meanwhile, have positioned themselves to benefit from the talent we’re turning away. Australia allows in almost as many skilled workers annually as the U.S., despite having a fraction of the population, and Canada has aggressively courted the highly skilled, nearly quadrupling the percentage of permanent visas it grants for employment.
Read The Track-star Economy here.
Our instincts tell us that it is easier to manage innovative ideas at smaller companies with fewer moving parts and people. But the big guys have resources that little guys do not. And it is possible to seed a successful culture of innovation in very large organizations and corporations (think BASF). But can big energy companies manage disruption and change from within? Mandar Apte thinks so. He works at Shell, where he is a part of an internal innovation program called GameChanger. Apte discussed the program with Knowledge@Wharton's Mukul Pandya:
Consumer sentiment is up, according to the University of Michigan/Thomson Reuters consumer sentiment survey. From Reuters:
The preliminary reading on the index on consumer sentiment rose to its highest level since May at 73.6 from 72.3 last month, topping economists' forecasts for a slight uptick to 72.4.
Americans were also more optimistic about the state of the economy with the measure of current economic conditions rising to its highest level since January 2008 at 87.6 from 82.7.
Purchasing plans were bolstered by cheap prices and the measure of buying conditions for household durables rose to 140 from 130.
The survey revealed some trepidation about food prices in the future, suggesting consumers are expecting inflation to rear its head in the coming year. Read the full release from Reuters here.
Yesterday the Census Bureau reported that housing starts declined 1.1% from June, but were up 21.5% over July of last year. At Calculated Risk, Bill McBride jumps from housing starts to completions. An uptick in completions will always trail the uptick in starts (as it does in the below graph for multi-family starts homes). But McBride sees signs that housing has hit bottom and recovery is beginning.
Now we are starting to see a rebound for housing. And housing will have an even larger impact on GDP and employment growth than autos; and housing will probably double from here (more than the 50% increase for autos). Even with the downside risks from Europe and the fiscal cliff, this suggests more growth in the medium term (policy mistakes in the US and Europe are probably the biggest economic risk).Through July, single family starts are on pace for over 500 thousand in 2012, and total starts are on pace for about 730 thousand. That is up from 431 thousand single family starts in 2011, and 609 thousand total starts. Starts are running above the forecasts for most analysts (however Lawler and the NAHB were close).But even with the increase in starts, completions will be near record lows again in 2012. Here is an update to the graph comparing multi-family starts and completions. Since it usually takes over a year on average to complete a multi-family project, there is a lag between multi-family starts and completions. Completions are important because that is new supply added to the market, and starts are important because that is future new supply (units under construction is also important for employment).
Read Comment on Housing, and Starts and Completions here.
Why are we often so bad with our money? Noted psychologist Daniel Kahneman says it is because we make bad decisions when we are looking narrowly at a problem. That explains, he says, why we do things like borrow and save at the same time. From Big Think:
The folks over at The Big Picture are beginning a new series called Jobs 2012. Their first post in the series went up today, and it is clear this series will provides some good data analysis to balance out all the noise that comes with the election season. The focus of the first post is on the decline of "goods-producing jobs" as a share of all U.S. jobs. Here's a look at the long term trend:
From The Big Picture:
First, recognized by Iacono Research in 2010, total government jobs at the federal, state, and local level, now exceed total employment in the private goods-producing sector, including manufacturing, construction, mining and logging, which also includes oil and gas extraction. We didn’t expect this.Really? More government jobs than goods-producing jobs? In the United States?This is one data point, in our opinion, that embodies the U.S. zombie-like economic recovery and fiscal problems that the state and local governments are now experiencing. It also helps explain the record level corporate profit margins.We love our public sector employees, but also recognize wealth and sustainable demand are created in the private sector. Without asset inflation the conventional economic wisdom seems to be moving toward the view that quality goods-producing jobs are essential for a better economic future.
Read Jobs 2012: Government Jobs Exceed Goods-Producing Jobs here.