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Well, instead of being “surprised” by the June (lack of) Jobs Report, it seems the economists were “stunned” by the numbers (via Bloomberg):
Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said he was “stunned” by today’s U.S. employment report.He wasn’t the only one.
Not a single economist among 85 surveyed by Bloomberg News correctly forecast the 18,000 increase in payrolls in June reported by the Labor Department. Estimates ranged from a low of 60,000 to a high of 175,000. The median was 105,000 — almost six times the actual number.
…snip…
It’s not unusual for payroll figures to fall outside of the range of economists’ forecasts. The same thing happened last month, as well as in October, November and December of last year.
That last paragraph should become a mantra for economists looking for excuses, but it most likely will not. As I’ve mentioned in earlier posts, there are always extraneous reasons for things happening within the economy. Like bad weather. And there will always be extraneous impacts that should be accounted for in any economic forecasting.
There have been a number of other articles/opinion pieces from yesterday and today that I have found interesting. While Bloomberg reported here that Warren Buffett is betting ‘very heavily’ against a “double-dip” recession (and that kinda scares me a little as I’ve predicted that there will be an official double-dip), the Wall Street Journal seems to be considering a double-dip quite possible.
Washington Beltway Villagers are still in the austerity mode with all the talk of the debt ceiling increase needing drastic cuts to accompany the increase. At least officially, although CNN points out that the GOP is once again claiming tax cuts as the route to employment Nirvana. But there are a few signs that the problems faced by millions just might be penetrating the consciousness of a few folks inside the Beltway. Today’s Washington Post had this opinion piece from Pete Peterson himself pointing out:
Immediate spending cuts and revenue increases could be counterproductive in the context of today’s grim employment outlook, but we need to reach a grand bargain fast to prove to the world that America is back in business.
Mr Austerity “how can we destroy save Social Security” himself recognizes that government does have a role and unfettered and unconstrained slashing is the worst thing that can be done.
Dave Leonhardt in the NY Times Economix points out the austerity trap by invoking Hoover, Roosevelt, and Japan:
In all kinds of ways — consumer demand, the federal deficit, even the weather — the medium-term future is highly uncertain. But this uncertainty, while the main problem, is not the only problem. We are also committing an unforced economic error. We’re cutting government at the same time that the private sector is cutting.It is the classic mistake to make after a financial crisis. Hoover and even Roosevelt made a version of it in the 1930s. The Japanese made a version of it in the 1990s. Now we are making it.
Reuters has an analysis reaching the same conclusion:
Data on Friday showed hiring ground to a near halt last month, driving the jobless rate up to 9.2 percent and casting doubt on whether a sluggish U.S. recovery would soon pick up steam.This all but ensures the Federal Reserve will keep interest rates at record lows well into 2012. But help probably won’t be as forthcoming from Congress and the White House, which are locked in battle over cutting a $1.4 trillion budget deficit.
The problem is one of timing: Economists and investors fear that with weak labor and housing markets causing consumers to tighten their own belts, the last thing the economy needs is an aggressive dose of austerity from the federal government.
Ezra Klein at the Washington Post had this blog post on long term effects of unemployment including:
It makes you permanently poorer: In 2009, Till von Wachter, Jae Song, and Joyce Manchester released a study on what happened to the long-term earnings of laid-off workers after the 1982 recession. Immediately, laid-off workers experienced annual earnings 30 percent lower than those of workers who hadn’t lost their jobs. But even 15 to 20 years on, these workers experienced 20 percent lower wages than people who had kept their jobs decades previous…snip…
It makes you sicker: Being laid off has serious long-term health effects. William Gallo of Yale Medical School has found that people who are laid off near retirement are twice as likely to have a stroke or heart attack. Gallo, along with Jennie Brand and Becca Levy, have also found that being laid off or part of a branch closing increases one’s likelihood of depression.
So here we sit with more than 14M unemployed and between 25M – 30M (at least) un and underemployed, watching as the White House and Congress continue to dance in their stylized way around the real economic needs, here are a few other articles, pointing out some rather obvious things. However, as one who has seen obvious points be ignored by the folks in the bubble, it can’t hurt to point things out for even the most willfully obtuse politicians. Things such as “Wages fall in sagging job market.” Or “Job seekers get left out of the recovery.” “More consumers getting behind on their bills” and “After ‘mancession,’ women getting left out of recovery.”
The recovery has rolled into Wall Street and corporate profits. It has lifted the financial industry which created much of the original problem. But for those who aren’t MOTU or Members of Congress able to pop for a $350 bottle of wine, we keep falling further and further behind. Which I guess, just means we get to sacrifice more rather than those poor poor rich people.
And because I can:
Cross posted from Just A Small Town Country Boy



43 Comments

Dakine, more fodder for you:
http://www.investorsinsight.com/blogs/thoughts_from_the_frontline/archive/2011/07/09/what-happened-to-the-jobs.aspx
T’anx
Any predictions as to when the double -dip thingey will officially start? Always enjoy your posts.
If I had to make a WAG, it would be by the end of the year.
Is anyone keeping a list of names of those economists who are “stunned”, “shocked”, or “surprised” by the jobs reports, mortgage fraud, or other economically important issues?
Unfortunately, the articles usually just group them all together as “of the XX economists surveyed” type deal. They may occasionally offer a quote from one or two as the Bloomberg article does but that’s about it.
Hopefully more than “economists” are on the list. The list of plutocrats that are deserving of accountability in the future would be a long one.
Is it just me, or is that analysis kind of looney. FDR’s economic advisors understood pump-priming–well the one guy who wasn’t from Wall Street and ran a manufacturing company did. And yet you have this silly accounting of $266,000 per job. That number is so high because the private money never came off the table when demand rose. And that was because (1) the infrastructure spending was not sufficient, (2) Congress refuse to backfill state budgets adequately, which would have prevented state layoffs, (3) too much of the $800 million was in tax cuts that went straight to bottom lines.
This article confirms my belief that the US has the dumbest business class in the world. Had the stimulus been adequate, where would employment and the stock markets be sitting right now? What happened to the good old “V-shaped” recovery?
The rich as my rich pal says simply are not well trained in sacrifice and suffering and that prefer these tasks be left to those ( everyone else , especially the poor) who are more able to cope with these circumstances. He likes to say this with a smirk on his face. He thinks he’s being funny.
While Bloomberg reported here that Warren Buffett is betting ‘very heavily’ against a “double-dip” recession (and that kinda scares me a little as I’ve predicted that there will be an official double-dip), the Wall Street Journal seems to be considering a double-dip quite possible.
My vote is for the recession never ended.
Not a single economist among 85 surveyed by Bloomberg News correctly forecast the 18,000 increase in payrolls in June reported by the Labor Department. Estimates ranged from a low of 60,000 to a high of 175,000. The median was 105,000 — almost six times the actual number.
It’s not unusual for payroll figures to fall outside of the range of economists’ forecasts. The same thing happened last month, as well as in October, November and December of last year.
And these economists still have jobs predicting the economy why?
They’re very serious people. I would have been surprised if 60,000 to 175,000 jobs had been created and I’m not an economist.
this opinion piece from Pete Peterson himself pointing out:
Immediate spending cuts and revenue increases could be counterproductive in the context of today’s grim employment outlook, but we need to reach a grand bargain fast to prove to the world that America is back in business.
Pete Peterson said that? Just how bad is the economy if Pete wants a Grand Bargain? The GOP never surrenders never talks about surrender. I give them cred for that.
The economy must be Doooomed! If Pete is talking compromise.
Is there any merit in the idea that the oligarchs might want to forestall the second dip until after the election? I understand that the GOP wants things to be awful, whereas the Demos would prefer the opposite. I also understand that, given how badly the economy has been (mis) managed for the past however long, the whole thing may well be out of their control at this point.
Sunday nights are such a sad time for me. Staring down the barrel of a week with no job, no income and no hope is just so overpowering some weeks I can’t do more than cry. How did everything turn to shit? That’s hypothetical of course. All I know is two years without a job means not only lost income but lost self esteem, lost chances and the hope is long gone. Not exactly what I had hoped for in 2008.
Someone might wipe that smirk off his face one of these days, then he can drink his vichyssoise through a straw.
And Hey Mods: I have an off-topic question:
Why does it sometimes happen that a user can be logged in to the Lake, and then be involuntarily ejected / logged off / blown out? That happened to me (again) today. Admittedly, it’s not a really big deal, although it can be a nuisance, and I would like a good explanation for it. Is there some system maintenance reason for doing this?
If someone makes a comment on a thread, and there is no response to that comment…
Does that person really exist?
Just sayin’…
Some things to keep in mind about Warren Buffett:
He endorsed Ben Bernanke’s reappointment as Federal Reserve Chairman, saying “you couldn’t do better.” He also praised Treasury Secretary Tim Geithner.
He was against the Employee Free Choice Act (EFCA).
Warren Buffett has stated, “I made lots and lots of investment mistakes, and I will make more in the future.”
Not that it will make you feel any better but there are a few million of us in roughly the same position.
I think it takes a non-economist to actually be able to see more clearly the problems since non-economists don’t have the ideological blinders to attempt to force numbers in unrealistic computer models
No idea why it happens but sometimes I have to login first thing in the morning after weeks of being auto logged in. Occasionally I get bumped moving from one post to another. No real pattern to it that I’ve been able to see but haven’t had any problems logging back in as you note.
I think they are bought and paid for economists paid to make investors keep their cash in the stock market.
I agree Twain is better than all of them but is it ideological blinders meaning they believe the lies they tell us to keep people happy or are they just getting paid is an interesting question?
To answer that we should look at their stock investments
Me I’m living with my Mom now thats pretty stressful.
Warren made a fortune off McDonald’s minimum wage workers note not Living Wage Workers.
Well according to this article from Reuters, economists aren’t very interested in having an ethics code.
The recovery has rolled into Wall Street and corporate profits. It has lifted the financial industry which created much of the original problem. But for those who aren’t MOTU or Members of Congress able to pop for a $350 bottle of wine, we keep falling further and further behind. Which I guess, just means we get to sacrifice more rather than those poor poor rich people.
2 $350 bottles of wine produce what for the economy? Compared to roads and bridges which help boost our countries economic out put?
An $80 tip for a waiter we are suppose to believe helps the economy more than what $700 would do for a construction worker making $20 an hour for 35 hours.
If Ryan drinks 2 bottles of wine with his friends a week we can employ 1 construction worker at $20 an hour a living wage for 35 hours a week.
All it would take is for Ryan to buy a $5 six pack of Miller Beer instead of 2 bottles of $350 wine.
He’d prefer no revenue increases.
They need an ethics code or we will keep laughing at them.:) I remember all the TV economists Ben Stein comes to mind saying the Bush economy before the banking crisis was Great and after the banking Crisis we should invest now.
Banks with their still funny books and insurance companies last I checked were the main reason the stockmarket is up. Notice not companies that make stuff for actual consumers.
Gotta go
Agreed, it hasn’t ended, so ya no DD. IIRC didn’t obomba the dronemeister say (around) two years ago that he “wouldn’t rest” until un was below 8%? That’s along time with no rest…..or did it drop below 8% sometime in the last 2 years? Wouldn’t want to falsely acuse the poor fella./s Zero for 85 tells me they just function in group-speculation mode knowing they will all be right or all wrong, which kinda defeats the purpose of a sample of 85.
Here is Buffett’s current bets:
Berkshire Hathaway Holdings
Burlington Northern Santa Fe
Marmon Group
Mid-American Energy Holdings – an interesting Global Climate Change Statement
Sure looks like bets in high-speed rail, infrastructure, renewables, manufacturing — hedged with jewelry stores, auto/property/casualty insurance, and a bunch more.
Not a group that is betting on paper trades by the looks of it. I would take him at his word that he does not see a double dip (and that he has made mistakes).
And not surprised that he would oppose the Employee Free Choice Act (EFCA)
What? Ryan give his money to the Coors family and not to those French surrender monkeys?
Me, too, 3+ years unemployed after 38 years in electronics. But we’re still in good shape thanks to the missus, her nursing management career & our lack of children. After the ‘lack of income’ thing (duh) the self-esteem thing might be the hardest…
Actually, it does make me feel less lonely and isolated. That’s why I come over hear because I know it is not just about my personal faults or something stupid that could be inferred by the haters. I know we are struggling and today my food stamps got renewed so I could get bread.
In the last year I had a heart issue come up causing me to get a couple of stents. That was quickly followed by a gall bladder attack followed by surgery. Those episodes occurred within a week of each other.
This morning I got up to a court summons from one of the credit card companies for non-payment. I am a 99er so no income doesn’t go far. Right now I am in limbo with disability, waiting for an answer from the feds about whether they will let me collect the money I have already earned because I cannot walk or stand for very long.
This all sucks, obviously. but there is hope here at FDl so I just keep coming back to hang with my peeps. thanks to all for being here.
Oh and the US women’s soccer team gave me some hope today too!
Oops, I come over here, not hear.
“the US has the dumbest business class in the world”
Ahh, but we have some of the smartest sociopaths in the world. Decreased wages, more productivity, less to no benefits, and everyone still with a job willing and able to do whatever and anything they can to keep their jobs, no matter how immoral or destructive to their fellow Americans. Ie. “just following orders”.
They have done a great job for their bottom lines. Couldn’t have done it better if they had planned it? Oh, it was planned. And execution done so well, both branches, D and R, of the Corporatist party on board, “serious” about austerity (for us, not them), ready to gut SS and Medicare (already started), and most people calm as sheep lined for the slaughter house.
Bad business? Well ya. But we don’t do business anymore. This is gambling/theft/fraud. And thus perfectly done.
Remember, evil not stupid.
I’m going to disagree on a semantic basis.
First, most of America is still in the depression. It never went anywhere. Only Wall Street/corporations/the rich are doing well, and they never had a recession. Only the fear of one, and since they bought all the politicians, who literally colluded in the massive theft of taxpayer dollars straight up, it wasn’t that much of a fear.
That’s reality.
Now for the perception of reality – I don’t think it will be called a double dip because once again Wall Street/corporations/the rich will continue to do well no matter what main street experiences. We can all start dying on the streets, and they will still be raking in the money. And probably make money from our deaths somehow. They will call it innovation.
The only reason I see that they even call it a double dip is if they somehow benefit from it, ex. maybe another bailout to “save us all”.
Hey Dakine01, thanks for the great references to those studies about the impact of unemployment. At least I can explain why I feel so bad, or have at least one reason that does not point back at who I am as a person. I hope that the mental health community and the health care community get serious about taking care of the suffering of the long-term unemployed. Maybe we could develop groups for mutual support along the lines of self-help groups. Usually these kinds of groups form out of shared interests, but when everyone is hurting very badly, it is hard for them to make common cause with each other. Once we get a bead on the structural reasons for our unemployment, we will be able to turn the self-blame off and get angry at those responsible for allowing the economic pain to continue. In my opinion, a big economic dead weight are all of the resources which are going for defense, wars, HS spending and unnecessary ‘rents’.
Millions and millions.
And the 99ers forgotten.
What a country.
Apparently we are not our brother’s keeper.
And then they pile on the shite that we are deserving of our fate. That we are bums and lazy.
These things have never even met a bum. Surviving on the streets ain’t easy.
Not accurate.
Ever seen the info on the Italians in the African campaigns?
Of course I agree with their sentiment – lovers not fighters. You can call me a surrender monkey too.
Being an economist must be the best job ever.
Make as many mistakes as you want, and then just shrug your shoulders.
Geithner was head of the NYFed when the crisis/scam happened. And his reward … Treasury Sec.! WTF?
Incompetence, amorality, and outright fraud. And they are hailed as geniuses? Bloody scary stuff.
A mugger will steal your wallet, your valuables (ex. watch), and then probably let you be.
A “businessman”/lawyer/economists will steal everything you have, everything you will ever have, your home, your future, your children’s future, cause permanent and irreversible harm to millions (and in the world billions), and call it “good business”.
what is MOFU (as you said:But for those who aren’t MOTU…)?
Is it something like MotherF*****?
Y’know, if any of these assclowns had a regular job, they’d be fired. Why on earth are “economists” exempt from this discipline?