The January Jobs reports are out and for once, there is a modicum of (somewhat) good news. The Labor Department reported 157K new jobs for January 2013 and significantly revised both November and December 2012 numbers upwards:
Employers added 157,000 jobs in January, the Labor Department said, which was right in line with analyst expectations. The best news, though, was that revised estimates put job creation in November and December much higher than earlier estimated; the nation added a whopping 247,000 jobs in November and 196,000 in December, revisions that place those numbers a combined 127,000 jobs above earlier estimates.
The unemployment rate ticked up to 7.9 percent, from 7.8 percent, however, as both the number of people reporting having a job and the number looking for one edged up.
I’m sure we will hear a lot about how the January figures were “…right in line with analyst expectations” given how they are usually “surprised” that their predictions are wrong.
The .1% uptick in the unemployment rate (from 7.8% to 7.9% is not all that much of a surprise – or shouldn’t be – if the economy truly is improving after all these years. The BLS U6 figure for the un/underemployed and marginally attached folks was unchanged at 14.4% (a figure that I believe is low but can’t prove). Bloomberg reported the jobs news as:
Sustained hiring gains will give incomes a lift, buffering American workers from the sting of higher payroll taxes and helping them keep spending. At the same time, bigger employment advances are needed to drive down a jobless rate that Federal Reserve officials say is too high.
We can but hope Bloomberg is correct in this analysis that incomes will be lifted.
This past Wednesday, ADP reported 192K private sector jobs for January (versus 166K reported by BLS – see Bloomberg link).
One of the areas that seems to escape a lot of notice is how the jobs reports impacts the Social Security Trust Fund. Bloomberg touches on this with the mention of higher wages offsetting “…the sting of higher payroll taxes” but still seems to miss how higher employment will provide more funds to keep Social Security running without needing to be “fixed.”
Of course, this in no way will stop people like Robert Samuelson of the Washington Post from offering up his fantasy of cutting Social Security as part of a “sequestration”:
To be effective, a sequester has to hit millions of Americans so hard that, if it took effect, mobs of outraged voters would storm Capitol Hill.
Here’s my modest proposal to do that. Unless congressional negotiators agreed on at least $1 trillion in deficit cuts over a decade — personally, I’d go higher — then the desired amount would be raised in two ways: half from across-the-board income-tax increases and half from across-the-board Social Security cuts. People would see their take-home pay and retiree benefits reduced. There would be no mystery.
It won’t happen. Truth in journalism: I have proposed this before. There were no takers. It would astonish me if there were any now. But the point is that there is a path to agreement. The fact that our so-called leaders don’t take it reflects their calculation that disagreeing is better politics.
Thankfully, he has had no takers so he has a sad
Allison Linn at NBC News offers a counter to Samuelson and his gibberish with this report of a survey with results that fly in the face of so much Beltway Conventional Wisdom:
Most Americans think it’s important to preserve adequate Social Security benefits for younger generations — and they may even be willing to pay more taxes to get that assurance, a new survey finds.
The survey, released Thursday by the nonprofit National Academy of Social Insurance, found that about eight in 10 Americans think it is critical to support Social Security even if it means that working Americans have to pay more in taxes. A slightly higher percentage of the 2,000 people surveyed said they think it’s critical to save Social Security even if wealthy people have to pay more.
But here’s the thing: Many Americans also want something in return.
The study found broad-based support among both younger and older Americans for a plan that would gradually increase the amount of payroll taxes everyone pays and also eliminate the cap on the amount of income that can be taxed for Social Security. In return, that plan would call for raising minimum benefits and increasing cost-of-living-adjustments.
Raise minimum benefits, remove the cap on wages subject to Social Security, and increase cost-of-living-adjustments! Whocoodanode? Just the opposite of what Samuelson and the Washington Post (read: Pete Peterson) have pushed to get. It is only inside the beltway, with people who do not need Social Security, do we see the push to eviscerate it. Out in reality land, people understand the value of Social Security.
Now if we can just stop electing people who want to operate in Bizarro World.
And because I can:
Cross posted from Just A Small Town Country Boy by Richard Taylor
Photo by Tax Credits released under a Creative Commons license.