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Once again, the economic community is scrambling to find the reasons why they were suprised by the March 2012 jobs report. The monthly report from ADP had private sector jobs at 209K increase for March 2012 which apparently led many economists to predict a similar number for the official report from the Bureau of Labor Statistics that was released on Friday.
Oops. Wrong again.
We have been seeing stories such as this from today’s NY Times about the “strong” jobs growth from earlier this year:
Although signs pointed to a strengthening economy earlier this year, the jobs report on Friday came with a message: don’t get ahead of yourself.The country’s employers added a disappointing 120,000 jobs in March, about half the net gains posted in each of the preceding three months. The unemployment rate, which comes from a separate survey of households rather than employers, slipped to 8.2 percent, from 8.3 percent, as a smaller portion of the population looked for work.
120K jobs is not much more than is necessary to maintain the status quo of population growth (90K is the figure Dean Baker uses) and even 200K, while growing, does not appreciably put a dent in the long term un and underemployment rates. When there are 13M to 14M unemployed and 25M to 30M un and underemployed, 200K jobs is just not going to help all that much.
Surprisingly to me, the Benbernank may have been more realistic than many others (via Bloomberg.) Of course, the article goes on to quote Fed regional presidents as saying that the numbers, no matter how soft, probably won’t cause the Fed to actually, you know, do something to ease the un and underemployment problem. No matter that a primary part of the stated Federal Reserve Mission statement is to pursue “maximum” employment.
It does appear that the consensus being reported is to blame the warm weather from January and February for the lighter number for March. Here’s Dean Baker’s take:
The slower job growth shown in the establishment survey in March likely reflected the fact that good weather pulled forward a lot of hiring so that workers who might typically have been hired in March instead found jobs in January and February. This is most obviously the case in construction, which showed a loss of 7,000 jobs after showing an average gain of 13,000 in the prior three months. Weather may also explain the decline of 14,200 jobs in employment services (the broader temp category) after the sector added an average of 45,600 jobs the prior three months.
The Washington Post presented this perspective this way:
Economists say the mild winter has artificially inflated job growth. February alone stole as many as 72,000 positions from March and future months, according to Macroeconomic Advisers.Translation: The surge in hiring early in the year may not be as strong as it appeared.
The Post then goes on to “explain” things in an attempt to cushion the problem:
Typically, these bumps in demand are evened out through a process called seasonal adjustment. That allows researchers to compare one month’s economic activity with the next for a more accurate picture of the nation’s health. But this year’s weather was so abnormal that those models fell short, and economists are now scrambling to figure out how much of the growth over the past three months was simply due to a glitch in their systems.
Ah, just a “glitch in the system!” The Post ends their reporting with the rose-colored glasses firmly in place:
Typically, these bumps in demand are evened out through a process called seasonal adjustment. That allows researchers to compare one month’s economic activity with the next for a more accurate picture of the nation’s health. But this year’s weather was so abnormal that those models fell short, and economists are now scrambling to figure out how much of the growth over the past three months was simply due to a glitch in their systems.…snip…
And despite the hand-wringing over the weather, economists seem to agree that the fundamentals of the recovery are solid. Bob Baur, global chief economist for Principal Global Investors, said he believes that the second half of the year will pick up steam as state and local governments enjoy rebounds in tax revenue and layoffs slow down.
MSNBC is showing the pretty face of the jobs picture in a similar fashion as the Post with it all just being “quirks” in the data.
The NY Times did have a report on what they termed “permabears,” i.e., those economists who are skeptical of the strength of the US and global economies.
I’m on an email list from Monster.com and received one a couple of days ago on “Industry News.” It included a link to an article on “Five High-Paying, Low-Stress Jobs“:
1. Optometrist
2. Materials Scientist
3. Economist
4. Aeronautical Engineer
5. User Experience Designer
Since Economists seem to personify the old cliche, “Often wrong but never in doubt” it is no surprise at all that they are both highly paid and low stress. They suffer no repercussions for being wrong. Unlike the 25M to 30M long term un and underemployed who have to listen to their tap dances.
And because I can:
Cross posted from Just A Small Town Country Boy by Richard Taylor




21 Comments

The field of American economics is a joke as it is severely warped by the same influences that make most American establishment journalistic efforts jokes.
“Exxplain? But we’re almost always wrong! Why do you want us to explain now?”
Surely the jobs boom resulting from patent reform and the JOBS Act is just around the corner.
Nah, those have to wait in line behind all those jobs booms like the Corporate Tax repatriation in (I think it was) ’05, the last time the corps were given a huge tax break to bring profits back from overseas.
Surely that job boom is only weeks away at best.
I’m an expert and I will tell them why they were wrong;
they CONTINUE attacking public sector well paying jobs, the more people who can’t find work the more pressure on the jobs market
if you replace one well payed public service job with a private sector job you wind up with less money in the economy, fewer people spending money, fewer jobs available
What the White House told us to predict was wrong…
Until these reports fully account for and report on everyone who has been kicked off the “unemployment” rolls because they’ve reached the end of their term, and are still unemployed, they’re nothing but complete and total bullshit.
They do count more than just those collecting Unemployment as part of the overall Unemployment number. It is less than half and I think closer to 35% – 40% of the overall Unemployed who are eligible for and collecting Unemployment
What unusually warm weather?
These are the same bangoheads and their politicians who claim that the notion of climate change & global warming is as fake as pigeon shit. So, now, they can’t claim that there is something like unusually warm months messing up their economic data.
And those idiots who were praising the remarkable pace of economic growth must be asked if they have declared pay raise for their employees since, according to them, the economy has been blasting ahead.
Fact is all this talk of encouraging unemployment claims and economic recovery is nonsense. A large number of people are barely hanging by day to day income and a massive number are sitting alone and depressed, basically buried under avalanche and may never be able to come out of this financial devastation.
Agreed. Unemployment, interest rates, and inflation are all manipulated.
Ok this is how it works. When the incumbent is up for reelection, everything is great and going according to plan.
If the election is wide open, everything is going to hell in a handbasket and you need to vote for (……) to get it back on track.
I thought I saw a number the other day of seven and a half million collecting unemployment. So if the true unemployment is over twenty million, then less that a third are being paid anything at all.
This is why there has to be some other approach to unemployment. Here we are four or five years into this thing and no one has any answers. Hell, they have all just about given up.
I happen to think most of the world’s economists are jokes. Take the IMF, for example, they regularly predict all sorts of improvements and they have been universally wrong. The economists in Europe are probably the worst of the bunch. They actually believe austerity will make it all right. They’ve been preaching it for the last four years. So when an economist writes an article or book I take it with a whole shaker of salt. They are modern day fortune tellers with their crystal balls and fancy equations and not only can’t they predict anything, they have no worthwhile proposals.
The jobs report, as other econ news, is greeted with all seriousness on CNBC and by the investing public. If it exceeds the forecast, the market goes up and vice versa. But you have to listen to Rick Santelli to really get the drift of things. He is all knowing.
On Friday’s Marketplace, Sylvia Allegretto, economist at Berkeley’s Institute for Research on Labor & Employment, said:
That means all the under, un-, and DISemployed will only have to hang on for another 7-8 or 11 years.
Thank you, Obama et al and Ben Bernanke.
Wow, what did we do to deserve such wankers?
Dean Baker really hits at the heart of it here:
I wonder, what happens when people “leave the labor force”? That’s such a benign sounding little phrase, but I suspect the reality can be rather grim. These are like the forgotten people in our society, just gone, no longer tracked, disappeared.
Once you stop looking for a job and your unemployment benefits come to an end, you fall off the official rolls and are no longer counted. That means that the “official” unemployment total will decrease even when the jobs numbers are lower than predicted.
It also means that the current unemployment rate is far higher than the offical 8.2%.
What is also not included are those who are under-employed (working fewer hours for less pay than their “old” job)–many times with no benefits. The “new” jobs being created in no way are of the same type or quality as the “old” jobs they now replace.
Give them each a 20% pay cut and ask them how they like austerity?
People say what they’re paid to say and that’s when you have to ignore them.
I guess it was George W. Bush and the Republicans who created deregulation, higher gasoline prices and the biggest recession ever.
Wankers like Bernanke and Obama saved the economy from Republican malfeasance.
I’m still waiting for the ‘peace dividend’ and a Republican party apology, but I won’t hold my breath.
What worries me most in that post is the graph showing the different recessions. It shows the most recent three to be the worst by far. Does this portend a tremendous disaster when the next downturn hits?
Well, when you consider these three were all caused by the Bush family I have hope it won’t happen again as long as they’re out of politics. But, the Republican party hasn’t yet changed its economic policies and the rich of America haven’t lost their greed, so we might yet have to suffer ‘the big one’.
It also shows that what Liberals have been arguing about job outsourcing has been correct. You simply can’t send all the jobs overseas, pay Americans one-third their former pay, hold money in the bank instead of investing in America and get Republicans to lower your taxes, so the gov’t can’t spend and still expect America to remain unchanged and economically powerful.
Democrats have to convince/show Americans the recent Republican path has led us over a cliff and we absolutely have to go the direction toward a stronger middle-class which Democrats are promoting. We must!