US LEI, Jobs Data calculations, Staying Connected and who was Richard Barancik?
Economic Update
Again, the only consistent part of the economic reports this past week was the fact that the numbers, once again, did not really follow a trend.
Except for an index called the U.S. Leading Economic Indicators – US LEI, as opposed to the Hawaiian kind.
It fell for the 15th month in a row.
The US LEI fell again in June, fueled by gloomier consumer expectations, weaker new orders, an increased number of initial claims for unemployment, and a reduction in housing construction. These are a few of the 7 indicators that fell in June.
The leading index is a gauge of 10 indicators designed to show whether the economy is getting better or worse. Usually by this time, you are in recession mode. Or close to it.
No matter how hard people look, they can’t find one. A recession that is.
This is like Game of Thrones. “Winter is Coming”, and the role of Jon Snow is played by the Fed.
Do you realize that series started 12 years ago? Sorry, ADHD.
So, let’s dig into something else a little deeper.
How are the jobs data calculated?
One of my readers asked about the source of the jobs report, specifically job openings, and how do we know there are 9.8 million openings? The reader thought that some folks just post jobs they never intend to fill. Are those counted? Are those included? It seemed simple enough to research, so I jumped into it.
That was a mistake. However, I did commit to the reader, so here we go.
Initial Jobless Claims – that’s easy. That number is taken from unemployment insurance claims and can be an indicator of where the job market is going. More claims, more layoffs. This is cut and dry, but if you got laid off and did not file an unemployment claim, you are not counted.
Unemployment Rate – this is actually derived from a survey. Yep, the Bureau of Labor Statistics surveys about 60,000 households which equates to about 110,000 people. If you are really curious, click here.
They really spread it out: 50 states, urban and suburban, over 800 geographic areas.
Every month, one-quarter of the households are changed and rotated out, and a new sample is brought in.
Each of these households is surveyed for four months, leaves the sampling for 8 months, and then is surveyed for another four months when it is finally dropped and not surveyed again.
Who interviews each of these households? Census employees. Yep, this is what they are doing when they are not taking the census every 10 years.
You have to keep them busy somehow, and you don’t expect someone to work every ten years, do you?
There’s a bunch more information, but I don’t have the time, and you probably don’t either. Regardless, they use the statistics from the survey to extrapolate the figures for the entire country. It’s really pretty impressive.
Job Openings – this is the category that drew me down this rabbit hole. This is a statistically estimated number derived from a random sample of about 21,000 nonfarm business and government establishments taken from two sources:
Bureau of Labor Statistics Quarterly Census and the Federal Railroad Administration. Wait, what? Evidently, the railroad folks keep their own numbers to themselves.
It’s all about adding this and subtracting that, dividing by the square root, and it seems even more complicated than determining the unemployment rate.
Like business opening and closings, seasonal adjustments, annual revisions, and taking into account sampling errors and on and on and on.
I was kidding about the square root part. Click here to cross your eyes, though.
And by the way, one of the criteria is that the job opening is intended to be filled within 30 days by the business surveyed.
If you are a statistician, you will be enamored with the detail these folks go through.
Seriously, to really understand how all of this comes together, you really need to be an Econ professor and have one of your graduate assistants work this stuff through to validate it all.
In the meantime, it’s really clear as mud.
Stay connected with your Industry
You have heard me preach about staying connected to your industry and your service area by attending seminars, mixers, webinars, etc.
One lunchtime conference this past week was put on by the CFMA – Construction Financial Management Association.
The CFMA teamed up with a local accounting firm – Wilson Ivanova – to host a panel of three CFOs from construction companies in the Inland Empire.
Wilson Ivanova is well-integrated with the construction industry in the area.
Some key takeaways from these CFOs:
They expect the economy will continue to stay strong based on bidding activity and job backlog.
Margins have gotten tighter.
Keep great relationships with your vendors to secure lower prices when you need them.
Supply chain is getting better.
Train your second in command for easier succession planning.
Health insurance and benefits have been increasing by double digits; some members have gone to captive insurance options to mitigate the cost.
These get-togethers maintain connections and keeps your ear close to the ground.
Who Was Richard Barancik?
He was an architecture student when World War II interrupted his studies, and in December 1942, he enlisted.
After the war, he completed his architecture studies at the University of Illinois in 1948.
Barancik enjoyed a long and successful career as a Chicago architect from 1950 to 1993. His firm - Barancik, Conte, and Associates, specialized in high-rise apartment buildings, office campuses, shopping centers, and hotels. A member of the American Institute of Architects, he was a trustee for the San Francisco Asian Art Museum Foundation, among many other organizations he was involved with.
That’s all fine and dandy, but what about the space between 1942 and 1947?
In 1943, he attended the Army Specialized Training Program (ASTP), studying basic engineering at the University of Nebraska.
In 1944, Pfc Barancik was sent to Camp Rucker to join the newly-formed 263rd Infantry Regiment of the 66th Division and was soon transferred to England.
In 1945, the 66th Division replaced the division surrounding nearby St. Nazaire, France.
Hold on, I’m getting to the point.
Following the German surrender, Barancik and his division were sent to Marseilles, France, to wait for deployment to Japan. However, the Japanese surrendered, and Barancik joined the 232nd Infantry Regiment of the 42nd Division in Austria.
In Austria, Barancik first learned of the MFAA and immediately applied for duty. He was given a temporary assignment with the Education, Religion, Fine Arts, and Monuments Office in Salzburg, Austria. For several weeks, Barancik assisted in the movement of stolen art treasures to the central repository of the Property Control Branch. He later remarked that “When I arrived in Salzburg, I was not only overwhelmed by the beauty of the town but the quality of the men in the Fine Arts Section. They were typically older and very well educated in the Fine Arts.” During his service with the MFAA, Barancik worked under Monuments Man Capt. Charles Sattgast.
And now you know the rest of the story…
The MFAA is the Monuments, Fine Arts and Archives program of the Allied Forces. The people involved were known as Monuments Men.
Mr. Richard Barancik was the last living Monuments Man. He died July 14, 2023, at the age of 98.
It’s my turn to take a vacation, so there will be no Russell Report for July 31 or August 7. Summer is half over, so go see a movie. Or stream one, like The Monuments Men.
