Construction workers dig during a sewer and water line project

Construction workers dig during a sewer and water line project Thursday, July 3, 2014, in Philadelphia. 

In 2014, a City of Philadelphia Water Quality Report contained this reassuring message: "We are committed to reducing the corrosive effects of plumbing and lead levels in water." The report's authors encouraged readers to distribute the findings widely to apartment complexes, businesses, nursing homes, and schools.

This week, a group of Philadelphia residents filed a class action lawsuit against the city, alleging that for years municipal officials knew about the city's lead-contaminated water supply and did nothing to warn residents.

Philadelphia is just the latest city to be hauled into court over post-Flint water contamination and testing issues, and it is probably not the last. An investigation by TheGuardian found that at least 33 cities, including Boston, Chicago, Detroit, and Philadelphia, used faulty water testing protocols, similar to the ones identified in the Flint debacle.

The Guardian also identified potential major contamination issues in in 17 states. Two states, Michigan and New Hampshire, gave municipal officials specific instructions to take additional time with testing in order to produce results that meshed with federal guidelines. The NAACP filed a federal class action lawsuit last month against the state of Michigan and others in the Flint water crisis.

The Philadelphia lawsuit, filed in the Philadelphia County court system, charges that city construction projects and water main repairs caused lead to seep into residential water supplies and that city officials neglected to implement recommended corrective measures or advise residents of water contamination. Moreover, it alleges that officials concealed the problem by manipulating testing procedures to increase the likelihood of results that complied with federal water regulations.

The lead plaintiff in the lawsuit, Eleni Delopoulos, a Philadelphia actress, pursued the action against the city. City workers who were replacing water mains near the 37-year-old mother's home told her not to let her toddler son play in the dirt, since the soil was contaminated by lead. The city did not notify the family in advance about the work or any associated risks, according to the suit.

The city has been faulted for the tiny sampling of homes at highest risk for lead contamination. About 50,000 homes are connected to the city's water supply by lead pipes. To conduct the survey on which it based its 2014 report, the city sent out 8,000 requests for volunteers: 334 replied and 134 were finally selected. A larger sample size would have likely provided a more accurate picture of the extent of the contamination risks.

Philadelphia officials no doubt believed that the sample size was more than adequate: Pennsylvania regulations require a minimum sample size of 50 homes.

Another Guardian investigation found a comparable problem in the Philadelphia public schools: District officials never informed parents or the public about lead-contaminated school drinking water.

The disregard for public health across a wide swath of the country raises serious questions about the training and integrity of officials entrusted with water quality and treatment.  

Despite ongoing questions about water testing in the city, Philadelphia officials doubled down on a mystifying public relations strategy, calling at least one earlier news investigation "inaccurate." In February, questions about the city's variance from Environmental Protection Agency protocols prompted one city official to tell Philly.com, "It's guidance. It's not regulation. We are following what we know is good science for Philadelphia," as if good water testing science varies from city to city.

The lawsuit against the city called the city's explanations "insincere and illogical." A spokesman for Philadelphia Mayor Jim Kenney declined to comment on the lawsuit.  

Several cities have pushed back on The Guardian report. A Rockford, Illinois, official told a local newspaper that the city had revised its testing procedures and that the Guardian used out-of-date information. Officials in Buffalo and Boston also raised questions about news outlet's story and said that they intend to revamp testing protocols in future rounds of testing.

The crux of the problem may lie in netherworld between guidelines and regulations, as The American Prospect noted in a February article on local governments and federal water testing and treatment standards. The EPA issues guidelines to help state and local officials understand and comply with federal regulations. But guidelines do not pack the punch of regulations that carry specific penalties for violations.

Instead of prodding officials towards best practices in the federal regulatory regime, guidelines have become optional steps that some municipalities appear to be content to ignore even though lives are at risk.

The American water treatment crisis is the logical outcome of an anti-regulatory political climate that values pruning back regulations and eliminating the people needed to oversee the ones that remain in force. It allows state and local officials to ignore both good science and the public good.

In recent decades, some commentators have argued that "nudging" gets better results than regulation. It sure hasn't improved the safety of the water we drink. 

John Case
Harpers Ferry, WV

The Winners and Losers Radio Show

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May’s seriously downbeat jobs report puts kibosh on Fed rate hike; underscores need for deep infrastructure dive [feedly]

May's seriously downbeat jobs report puts kibosh on Fed rate hike; underscores need for deep infrastructure dive
http://jaredbernsteinblog.com/mays-seriously-downbeat-jobs-report-puts-kibosh-of-fed-rate-hike-underscores-need-for-deep-infrastructure-dive/

In an unexpectedly downbeat jobs report, employers added only 38,000 jobs last month, the worst month for job gains since employment started recovering in 2010. Downward revisions trimmed the employment gains for the prior two months by 59,000, and the labor force participation rate fell again in May, as it had in April. That drove the unemployment rate down to a recovery low of 4.7 percent, but for the wrong reason: not because of people getting jobs but because of people leaving the job market.

Given the volatility in these monthly reports, I have been appropriately cautious in suggesting that the US job engine has truly downshifted. However, a look at JB's monthly smoother now at least tentatively supports that conclusion. Going from 12, to 6, to 3 month averages of monthly job gains shows a steady deceleration from 200,000 to 116,000.

Source: BLS, my calculations.

This new, slower trend could, of course, reverse if growth picks up and part of May's very low topline number is due to the strike at Verizon, a one-off event which, according to the Bureau, reduced the payroll count by about 35,000. But even adding those information workers back into May's tally, the three-month bar in the smoother would rise to 127,000, still well below the 200,000 trend over the last 12 months.

The negative report surely puts the nail in the coffin of a Fed rate hike at their meeting later this month. Prior to the report, the futures market probability of a June hike was about 20 percent. After the release, it quickly fell to 4 percent.

Weak job creation is weighing on the labor force participation rate, which is down 0.4 tenths of a percent over the last two months. At 62.6 percent, the LFPR is back to where it was last December. While retiring baby-boomers have been correctly cited as a structural—vs. cyclical—factor lowering participation, the recent decline has also occurred among "prime-age" workers, those 25-54. In other words, what we're seeing here is more than a benign, demographic trend; it's a trend that is also a function of weak labor demand failing to pull people into to the job market.

Most goods-producing industries shed jobs in May, including durable manufacturing, down 18,000. Over the past 12 months, this important manufacturing sub-sector has shed 80,000 jobs, a sharp reversal from the addition of 120,000 jobs in the prior 12 months. The stronger dollar, which makes our exports less price-competitive, is a major factor in this unfortunate turnaround.

Another sign of weak labor demand was the increase in involuntary part-timers – i.e., those who would prefer full-time jobs – by 470,000. Again, the monthly series is noisy, so we should discount the large jump, but the underemployment rate, which includes these workers, remains stuck at 9.7 percent, at least a point above where it would be in a full-employment job market.

There were some bright spots in the report. Job creation in health care continues to churn along, with employment up 46,000 last month and about 490,000 over the past year. As we've shown, this favorable trend coincided with the advent of health care reform's premium subsidies and Medicaid expansion; it's unlikely that's a coincidence. The unemployment rate for workers with at least some college attainment held at lower than average rates of about 4 percent for those with some college and 2.4 percent for those with college degrees, and their LFPRs did not fall in May.

Finally, wage growth rose a mild 0.2 percent over the month, but is up 2.5 percent over the past year. That's an acceleration over the 2 percent growth rate that prevailed last year at around this time.

The lower trend in job creation that appears to have taken hold could, as noted, reverse. Real GDP growth in the first quarter of the year was less than 1 percent, and current forecasts for the second quarter are tracking well above that. Then there's the strike, and weather issues could also be adding noise to the data.

But it would be a mistake to write off these dour numbers. Moreover, while the Fed can certainly do no harm by holding rates steady, that's not the same as helping. Fiscal policy is looking more and more like an essential, missing ingredient in labor demand, and with borrowing costs still as low as they are, a smart move by policy makers would be to quickly start up an infrastructure program, perhaps in the critically important areas of water safety or our long-ignored public school facilities.

Clearly, in the midst of both political dysfunction and a contentious election, this would be a heavy political lift. But it's still the right thing to do.

 -- via my feedly newsfeed

Alan Krueger on the Minimum Wage (Video) [feedly]

Alan Krueger on the Minimum Wage (Video)
http://economistsview.typepad.com/economistsview/2016/06/alan-krueger-on-the-minimum-wage-video.html

https://youtu.be/VtjnxtHAis8?list=PLZo4iBEgQ8bxwqeJi0KRlmV4VVYehUnLS

 -- via my feedlyjnewsfeed

Jobs report suggests last month’s blip may be turning into an unfortunate trend [feedly]

Jobs report suggests last month's blip may be turning into an unfortunate trend
http://www.epi.org/blog/jobs-report-suggests-last-months-blip-may-be-turning-into-an-unfortunate-trend/

his morning's jobs report showed that the economy added a disappointing 38,000 jobs in May. While this number is depressed by the 35,000 Verizon workers who were striking during the reference period, even adding those workers back into the mix gives us a total number that's lower than recent trends.

Payroll job growth has averaged only 116,000 jobs the past three months, and 150,000 this year so far. This is a noticeable slowdown compared to the growth in jobs last year (which averaged 229,000 per month). While the pace of job growth is expected to slow as the economy approaches full employment, May's rate of growth was not even strong enough to keep up with growth in the working age population.

The unemployment rate fell to 4.7 percent—typically a sign of a strengthening economy, but in this case, the fall is almost entirely due to would-be workers dropping out of the labor force. This is especially troubling for the prime-age workforce, those 25-54 years old (shown in the figure below). After hitting a low-point of 80.6 percent in September 2015, the prime-age labor force participation rate (LFPR) has been on the rise, reaching 81.4 percent in March. I expected the downward blip in April to be followed by a return to the recent upward trend. Unfortunately, it appears that the "blip" continued, with the LFPR falling 0.2 percentage points two months in a row down to 81.0 percent.

Read more

 -- via my feedly newsfeed

Trade Deficit at $37.4 Billion April [feedly]

Trade Deficit at $37.4 Billion in April
http://www.calculatedriskblog.com/2016/06/trade-deficit-at-374-billion-in-april.html

Earlier the Department of Commerce reported:

The U.S. Census Bureau and the U.S. Bureau of Economic Analysis, through the Department of Commerce, announced today that the goods and services deficit was $37.4 billion in April, up $1.9 billion from $35.5 billion in March, revised. April exports were $182.8 billion, $2.6 billion more than March exports. April imports were $220.2 billion, $4.5 billion more than March imports.

The trade deficit was smaller than the consensus forecast of $41.0 billion.

Note: There were major revisions in this report, mostly exports were revised up for the last several years.

The first graph shows the monthly U.S. exports and imports in dollars through April 2016.

Click on graph for larger image.

Both imports and exports increased in April. 

Exports are 11% above the pre-recession peak and down 5% compared to April 2015; imports are 5% below the pre-recession peak, and down 5% compared to April 2015.  

The second graph shows the U.S. trade deficit, with and without petroleum.

The blue line is the total deficit, and the black line is the petroleum deficit, and the red line is the trade deficit ex-petroleum products.

Oil imports averaged $29.48 in April, up from $27.68 in March, and down from $46.47 in April 2015.  The petroleum deficit has generally been declining and is the major reason the overall deficit has declined a little since early 2012.

The trade deficit with China decreased to $24.3 billion in April, from $26.8 billion in April 2015.  (Note that there were labor issues last year, and the ships were unloaded in March and April - pushing up imports from China).  The deficit with China is a substantial portion of the overall deficit.

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 -- via my feedly newsfeed

May Employment Report: 38,000 Jobs, 4.7% Unemployment Rate [feedly]

May Employment Report: 38,000 Jobs, 4.7% Unemployment Rate
http://www.calculatedriskblog.com/2016/06/may-employment-report-38000-jobs-47.html

From the BLS: 

The unemployment rate declined by 0.3 percentage point to 4.7 percent in May, and nonfarm payroll employment changed little (+38,000), the U.S. Bureau of Labor Statistics reported today. Employment increased in health care. Mining continued to lose jobs, and employment in information decreased due to a strike. 
... 
The change in total nonfarm payroll employment for March was revised from +208,000 to +186,000, and the change for April was revised from +160,000 to +123,000. With these revisions, employment gains in March and April combined were 59,000 less than previously reported. Over the past 3 months, job gains have averaged 116,000 per month.
...
In May, average hourly earnings for all employees on private nonfarm payrolls increased by 5 cents to $25.59, following an increase of 9 cents in April. Over the year, average hourly earnings have risen by 2.5 percent.
emphasis added

Click on graph for larger image.

The first graph shows the monthly change in payroll jobs, ex-Census (meaning the impact of the decennial Census temporary hires and layoffs is removed - mostly in 2010 - to show the underlying payroll changes).

Total payrolls increased by 38 thousand in May (private payrolls increased 25 thousand).

Payrolls for March and April were revised down by a combined 59 thousand.

This graph shows the year-over-year change in total non-farm employment since 1968.

In May, the year-over-year change was 2.39 million jobs.  A solid gain.


The third graph shows the employment population ratio and the participation rate.

The Labor Force Participation Rate decreased in May to 62.6%. This is the percentage of the working age population in the labor force.   A large portion of the recent decline in the participation rate is due to demographics. 

The Employment-Population ratio was unchanged at 59.7% (black line).

I'll post the 25 to 54 age group employment-population ratio graph later.

The fourth graph shows the unemployment rate. 

The unemployment rate declined in May to 4.7%.

This was way below expectations of 158,000 jobs.

I'll have much more later ...

 -- via my feedly newsfeed

NYTimes: Sharp Fall in U.S. Hiring Lowers Chance of Rate Increase by Fed

Here's a story from The New York Times I thought you'd find interesting:

The slowdown could delay a decision by the Federal Reserve to raise interest rates. The unemployment rate dipped after workers dropped out of the labor force.

Read More: http://nyti.ms/22C0mvR

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