After the price drop in oil consumers have not spent their gas savings. would spend most  According to a survey of 4,500 consumers by Visa Inc. in early January, consumers are saving half of their newfound wealth from lower gas prices—using 25% to reduce debt and spending the remainder on small purchases like groceries, clothing and fast food. The personal savings rate jumped from 4.3% in November to 4.9% in December, according to the Commerce Department. These statistics help explain why retail spending, after excluding gas purchases, were flat in January after falling 0.2% in December.

Since October, the Institute for Supply Management’s (ISM) overall purchasing managers index (PMI) of manufacturing has fallen from 57.9 to 53.5 in January, with each successive month showing more slowing. Readings above 50.0 indicate expansion, so while January’s tally is still positive, it was the lowest level since January 2014 when the polar vortex chilled the economy. As we expected, the stronger dollar is progressively slowing exports.  Business investment fell 0.6% in December, marking four consecutive months of decline for the first time since 2012.  Consumer spending and income, manufacturing activity and business investment ended 2014 on a soft note and showed no signs of picking up during January. Although the Commerce Department will revise its initial estimate of fourth quarter GDP, it is unlikely the economy grew faster than 3%, and it likely won’t in the first quarter either.

The suspension of the EUC program might have accounted for most of the increase in jobs, possibly reflecting the unintended consequences of the extended EUC program.

An alternate measure of the labor market, probably provides a better measurement of the actual amount of slack in the labor market. This rate iincludes those working part time who would prefer full-time employment. In January, there were 6.8 million workers who fit into this category—a significant group. The rate also includes those who are marginally attached to the labor market, since they still want to work but have become discouraged. In January there were 6.5 million discouraged workers who were still looking in from the outside of the workforce. When these 13.3 million workers are included in the calculation, the amount of slack in the labor market soars from the 5.7% official January U3 unemployment rate to 11.3%—a spread of 5.6%.

While a further decline in the U3 unemployment rate is sure to make some Fed governors uncomfortable that the pressure is on to raise rates, we think a majority of the Federal Open Market Committee (FOMC) members will take a more holistic view of the labor market that includes the U6 unemployment rate and the absence of solid wage growth.

Andy Langenkamp writes: Troubles on the road ahead in Europe:

• Creditors are probably hoping that growth in Europe will pick up enough in the coming years to allow them to write off Greek debt without the public taking much notice. However, if European growth continues to underperform for a length of time, the moment may arrive when Europe and Athens can no longer pretend that Greece is solvent without having the political and economic cover to implement a huge haircut.

• Most experts doubt the sustainability of the current Greek coalition – the two parties are far apart on the left-right political continuum. A government collapse would usher in a new period of political and economic instability that may be too much for the Greek economy to handle, resulting in the much-feared Grexit.

• European politicians often have little political room for maneuver in negotiations as a result of the growing populist, nationalist electoral threat.

• Europeans have increasingly discovered that globalization, aside from being a force for prosperity and progress, can also cause political and economic havoc. Greece has experienced firsthand the ways globalization undermines democracy. It’s an illusion to think that economic policy can be decided on a national level. Nationalism and focus on sovereignty will impede Continental cooperation right at the time when economic risks and geopolitical dangers make it essential.

• In France, President Francois Hollande and his government are trying to circumvent democracy in order to push through economic reforms. This will probably please markets. It doesn’t help that Hollande and opposition leader Nicolas Sarkozy are both very unpopular.

• Inside and at the edges of the European Union, we are witnessing the maturation of authoritarian tendencies in Hungary, Ukraine, Turkey, and Russia, to name a few. This illiberal trend can only be countered by a united front, and that unity is nowhere to be found right now.

Dutch journalist Caroline de Gruyter recently wrote that the Greeks have been the first to discover that globalization and democracy make uneasy partners. They won’t be the last nation to discover this, and this will cause big troubles in the years ahead.

The events of recent weeks have done absolutely nothing to improve the personal ties between the Greek government and its European counterparts. Grandstanding, mutual accusations of bad faith, and needlessly confrontational politics have eroded much political goodwill. This is likely to make the coming talks even thornier than those that recently concluded.

In the end, a choice will be made between the amputated leg theory (the view that cutting off the gangrenous Greek limb will save the body of the euro) or the domino theory (the idea that a Grexit would cause other vulnerable economies to follow, destroying the monetary union). We subscribe to the latter, but some of our financial analysts are starting to doubt this. We all do agree with the analysis of Eurasia Group that “the politics of Europe” is the number one global risk this year, and it will remain so if Europe keeps playing these political and economic games.

Bruce Thornton writes:  The slow-motion crisis of the European Union is the big story that rarely gets the attention it deserves. On the economic front, the E.U.’s dismal economic performance over the last six years was summed up in a December headline in Business Insider: “Europe Stinks.” The 2008 Great Recession exposed the incoherence of the E.U.’s economic structure, particularly its single currency, which is held hostage by the diverse economic policies of sovereign nations. The data tell the tale. The E.U.’s GDP grew 1 percent in 2013, anemic compared to the U.S.’s 2.2 percent. In December 2014, unemployment in the E.U. averaged 11.4 percent, while in the U.S. it was 5.6 percent. We are troubled by our labor force participation rate of 62.7 percent, a 36-year low. But in the E.U., it was 57.5 percent in 2013. Our recovery from the recession may be slow by our historical standards, but it is blazing compared to the E.U.’s.

The E.U.’s economic woes have many causes, but intrusively regulated economies and outsized government spending on generous social welfare transfers are two of the most important. Despite the rebuke of such policies delivered by the recession, government spending as a percentage of GDP has actually increased in the E.U., from 45.5 percent in 2007 to 49 percent in 2013, even as many Europeans decry the harsh “austerity” measures called for by countries like Germany. Greece, the E.U member increasingly in danger of being forced to exit the monetary union and thus risk its unraveling, has nonetheless raised its government spending from 46.8 percent in 2007 to 59 percent in 2013.

Socially, the E.U. is troubled by two trends: demographic decline and the presence of concentrated populations of unassimilated and disaffected Muslim immigrants. Europe is an aging people; by 2030, one in four Europeans will be 65 years or older, reflecting the Europeans’ failure to reproduce. Not since the 1970s have European women averaged 2.1 children, the number necessary to replace a population. It means fewer workers, a factor in the influx of immigrants into the E.U. over the last several decades.

The result has been large concentrations of immigrants segregated in neighborhoods like the banlieues of Paris or the satellite “dish-cities” of Amsterdam. Shut out from labor markets, plied with generous social welfare payments, and allowed to cultivate beliefs and cultural practices inimical to liberal democracy, many of these immigrants despise their new homes and find the religious commitment and certainty of radical Islam an attractive alternative.

All these economic, social, and political problems are no secret. But the proposed solutions to them usually focus on policy changes or technical adjustments to the structure and functioning of the E.U. Yet this begs the fundamental question that has troubled European unification ever since it began with the Treaty of Rome in 1957: What comprises the collective beliefs and values that can form the foundations of a genuine European-wide community?

A shared commitment to leisure, a short workweek, and a generous social safety net is nothing worth killing or dying for. Neither is the vague idea of a transnational E.U. ruled by unaccountable Eurocrats in Brussels and Strasbourg..

We American should not indulge the schadenfreude aroused by watching our sometimes-condescending older cousins slip farther and farther behind us in global importance and power. Europe is still collectively the world’s largest economy, and its travails will impact the whole globe. More importantly, many of the trends weakening Europe today are active in the US too.

Roughly 2.5 billion adults in the world don’t have access to banks, which means somewhere in the order of 5 billion people belong to households that are cut off from a financial system that the rest of us take for granted. They can’t start savings accounts. They don’t have checking accounts. They can’t get credit cards. They live in places where banks don’t want to go, and because of this, they remain effectively walled off from the global economy. They are called the unbanked. But they are not unreachable, not by a long shot, and one of the biggest and most exciting prospects bitcoiners talk about is using their cryptocurrency to bring these billions of people roaring into the twenty-first century, Foreign Affairs points out.

The Caribbean is an area of the emerging-market world where a strong case can be made for locals to use bitcoin to get around a restric­tive financial system.

Should women in developing countries use bitcoins?