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May 2014 Jobs Reports: Good News, Bad News

10:36 am in Economy, Financial Crisis, Jobs, Unemployment by dakine01

Unemployment Report

Unemployment Report

According to this article this morning from CNN Money, the official BLS Jobs Report for May, due this Friday morning, will show that the US economy will finally have recovered all the jobs lost in the Great Recession:

Set your sights on this number: 113,000.

That’s how many jobs the U.S. economy needs to hit its break-even point, to finally recover all the jobs lost in the financial crisis.

Get ready, because we’re about to get there this Friday.

That’s when the U.S. Department of Labor will release its May jobs report, and the outlook is rosy. Economists surveyed by CNNMoney expect the U.S. economy added 200,000 jobs in May.

I guess that’s the good news. But as the article also notes, it is a purely symbolic measure:

Breaking even is a key milestone, but was a long time coming. It took just two years to wipe out 8.7 million American jobs, but it took more than four years to recover them all, making this the longest jobs recovery on record since the Department of Labor started tracking the data in 1939.

Plus, the jobs that have returned are not necessarily the same ones we lost, nor are they in the same regions.

Here’s the key – through all these four plus years of job growth to get back to where we were at the start of the Great Recession, we have been falling behind as it takes roughly 90,000 new jobs each month just to keep up with the new people entering the job market each month. If we take it back to the beginning of the Great Recession in December 2007, we are still in the hole on needed jobs by a bit over 7M (6.5 (years) x 12 (months per year) x 90K (jobs per month) = 7,020,000.)

The current month report from ADP continues the good news/bad news. The good news is 179K new jobs in the private sector (though fewer than “economists predicted.”) The bad news (although painted as good news by Reuters):

U.S. companies hired far fewer workers than expected in May, but an acceleration in services sector growth supported views the economy was regaining strength after sagging early this year.

While other data on Wednesday showed the trade deficit hit its widest point in two years in April, a rise in imports to record highs underscored the economy’s resilience.

Why is the increase in service sector jobs bad news? Because service sector jobs tend to be lower wage.

This blog post from the Washington Post’s Wonkblog from 8/31/2012 covers this:

The United States lost about 8.1 million jobs after the recession began in late 2007. The economy has since recovered about 3.3 million of those jobs, starting in early 2010. That, in itself, should alarm policymakers. The labor market is still in a deep, deep hole.

But in some respects, the situation is even bleaker than that. The types of jobs that have come back so far don’t seem to be paying as well as those that were lost.

A new report from the National Employment Law Project finds that low-wage jobs, paying $13.83 per hour or less, have dominated the recovery to date. In many cases, they appear to be replacing higher-paying jobs that were lost in the first place.

That article was not the first time the Post had noticed the low wage aspect of the “recovery” as I noted in this blog post from April 2011.

The CNN article linked at the top of the page also showed a little “moving of the goalposts” in the world of economic and jobs reporting. Buried way down at the bottom of the page were these two paragraphs:

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There are no magic wands.

12:47 pm in Economy, Financial Crisis, Government, Media by dakine01

Occupy Wall Street sign

Occupy Wall Street sign

Yesterday afternoon, I stopped by Mr Pierce’s joint and saw he had a post up and the video of Senator Elizabeth Warren’s appearance on CNBC’s Squawk Box this past Friday (July 12), talking about her proposed legislation to reinstate the Glass-Steagall Act from the 1930s. I made it almost to the end of the video snippet Mr Pierce had posted when I heard a preposterous question (Columbia Journalism Review identifies the questioner as one Joe Kernen – and accurately identifies the question as a straw-man):

Sullivan’s dumb question is followed by a straw man question from Joe Kernan about how Glass-Steagall—all by itself—wouldn’t have prevented the financial crisis. Warren has amiably knocked that one down before (not coincidentally, it came from CNBCer and NYTer Andrew Ross Sorkin), and she does here as well.

As I was writing this diary, I came across an article from Fortune Magazine on Monday where the author first claims:

Last week, the unlikely political pair introduced a bill aimed at recreating the 1933 law. The effort is welcomed, but the protections of Glass-Steagall aren’t a cure-all for bank risk today — its repeal didn’t cause the financial crisis. And reinstating the law likely won’t protect Americans from another one.

Then immediately follows this first paragraph with this:

This isn’t to say a law like Glass-Steagall isn’t needed. Warren and McCain’s proposal would separate traditional banks that offer your standard checking and savings accounts insured by The Federal Deposit Insurance Corp. from riskier institutions, such as those involved in investment banking, the sale of insurance products, hedge funds, private equity, and the like.

When did we reach the point where proposed legislation like Glass-Steagall is being presented as a miracle cure/magic wand that will cure all the ills? We do not live in a binary world where the options are all-or-nothing. Senator Warren maintained her composure and pointed out to the Wall St Shills Squawk Box hosts this exact point.

Yet this is no where near the first time we hear Beltway Village Idiots Pundits, Politicians, and Courtiers use the argument that X legislation won’t totally solve a problem in-and-of itself so we should not do anything at all. I’m thinking right now specifically of the opposition to even the most basic expansion of background checks at gun shows. Background checks alone will not solve the problems with the proliferation of guns but they just might keep them out of the hands of some folks who should not be allowed to carry (criminals for example.) Will someone who is intent on obtaining a weapon going to be stopped? Probably not. But what is wrong in making it a tad more difficult for them?

We do not live in a binary world, so let’s stop trying to pretend that the solutions are only binary. Oh, and Jim Cramer? When you have to protest that Senator Warren did not make an impact on the issue of Glass-Steagall with her appearance? You pretty much confirm that she DID make an impact.

And because I can:

Cross posted from Just A Small Town Country Boy by Richard Taylor
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Jobs and Social Security

8:44 am in Economy, Financial Crisis, Jobs, Media, Politics, Social Security, Unemployment by dakine01

Job forms

Unemployment is up a fraction of a percent.

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.

…snip…

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:

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And the Occasional Truth Gets Spoken

6:12 am in Economy, Financial Crisis, Jobs, Unemployment by dakine01

Every now and then, I seem to run across news articles and/or headlines that seem to be just a bit of an understatement even as they are quite factual. Usually it seems, we get things like this one from NBC News yesterday:

New jobless claims take surprise jump

New claims for unemployment benefits took an unexpected jump in the latest week, raising more concerns about the struggling job market and providing further incentive for the Federal Reserve to jump in and help the economy.

As I have written before, it surely does seem as if the economist are ALWAYS surprised. Which still makes me wonder how they manage to keep their jobs as in most career fields, if you are always surprised by what happens, pretty soon you’re looking for a new career.

A couple of days ago, I saw this piece from Alison Linn at the Today show with the headline:

Many in middle class say they are doing worse financially

The Great Recession and weak recovery have left slightly fewer Americans feeling like they are part of the middle class, and many who do still identify themselves as such say they are now worse off.

A new and comprehensive survey on how the middle class feels, released Wednesday by Pew Research Center, finds 42 percent of people who identify themselves as middle class say they are in worse shape financially than before the recession began. About 32 percent are in better shape, and the rest either don’t know or see no difference.

I am part of that 42% though in fact, I have been forced to accept that by income, I am no longer remotely close to “middle class.” I am poor.

NBC News had this piece last night that is very much a companion to the Linn piece:

Stronger economy delivers smaller paystubs for most of us
With recoveries like this one, who needs recessions?

The average household income has fallen steadily for nearly everyone since the start of the economic expansion in June 2009, with average income dropping 4.8 percent in the three years since the upturn began, according to a report released Thursday.

High unemployment, outsourcing of jobs and generally slow economic growth have restrained income for households during one of the weakest and most prolonged recoveries on record, according to the report from Sentier Research.

Last summer, I wrote this post about the interconnectedness of the global economy. Today, the NY Times has this article on how China is now having to deal with surplus inventory:

GUANGZHOU, China — After three decades of torrid growth, China is encountering an unfamiliar problem with its newly struggling economy: a huge buildup of unsold goods that is cluttering shop floors, clogging car dealerships and filling factory warehouses.

The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home.

This actually does make me wonder how long this headline from CNN will be true:

Romney: ‘Big businesses are doing fine’

It is a global economy and eventually what happens to one piece of that global economy WILL trickle down to the rest of the globe. Meanwhile we get to see pics of Prince Harry acting like a single, 27 year-old man visiting Las Vegas.

And because I can:

Cross posted from Just A Small Town Country Boy by Richard Taylor

I Was Right, the “Experts” Were Wrong, So Why Am I the Underemployed?

11:11 am in Economy, Financial Crisis, Government, Jobs, Unemployment by dakine01

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

Yesterday in this post, I predicted today’s Jobs Report from the BLS would show a far smaller increase in jobs for May than was being predicted by the ‘economists’ interviewed by the various media organizations. The ‘experts’ were predicting 170k private sector jobs with 150k increase overall. My prediction was for 42.5K jobs overall. Guess who was closer to being correct? (via Reuters):

The U.S. economy may be in for a prolonged period of soft growth as employers hired the fewest number of workers in eight months in May and the unemployment rate rose to 9.1 percent.

Nonfarm payrolls increased 54,000 last month, the Labor Department said, fewer than the most pessimistic forecast in the Reuters survey and just over a third of what economists had expected.

…snip…

The private sector, which has shouldered the burden of job creation added just 83,000 jobs, the least since last June, while government payrolls dropped 29,000.

Adding to the gloomy labor market picture, about 39,000 fewer jobs were created in March and April than previously estimated.

…snip…

Payrolls had been expected to rise 150,000, with private employment gaining 175,000.

This is not the first time I have been more accurate than the “experts”. How is it possible for someone like me to be more accurate in predicting the numbers than the so-called expert economists? Well, I’ll take a WAG and say it might be because I’m not trying to force reality into a pre-conceived computer model designed to reinforce an ideological position based as much on wishful thinking as anything else. Plus, I am actually living the life of the long term un and underemployed.
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May Economic/Jobs News Will Not Be Good

10:29 am in Economy, Financial Crisis, Government, Jobs, Media, Unemployment by dakine01

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

The economic reports are starting to come out for May and while there are those economists and Beltway Village Idiots Pundits who are making “gee, everything is just fine” predictions, the verifiable numbers easily refute this attitude.

First up is the monthly report from payroll processor ADP on the private sector jobs creation for May (via Reuters):

The ADP report showed private employers added a scant 38,000 jobs last month, falling from a downwardly revised 177,000 in April and well short of expectations for 175,000. It was the lowest level since September 2010.

The report boded poorly for the key U.S. non-farm payrolls report at the end of the week. Credit Suisse lowered its estimate for Friday’s employment number to 120,000 from its previous forecast of 185,000 and its private payroll estimate to 135,000 from 200,000.

ADP’s number has been weaker than the government’s private payrolls figure for 12 of the last 14 months, making Friday’s government numbers likely to come in above ADP’s report, Credit Suisse said.

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Is There Possibility Of A Glimmer Of A Clue?

1:55 pm in Economy, Financial Crisis, Government, Jobs, Media, Unemployment by dakine01

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Clue Game 1960

Clue Game 1960 by Thrift Store Addict, on Flickr

No. It probably isn’t. Probably just some more wishful thinking on my part. Nevertheless, I was quite surprised this morning to see a few pieces around the web pointing out that a “new Republican Jobs bill” was just another tired rehash of the same failed policies of the last thirty years. Ezra Klein at the Washington Post, Paul Krugman at the NY Times, Steve Benen at Washington Monthly all pounded on the Republican “Plan” and for good reason. From the Klein link:

The best evidence that Washington has forgotten about the jobs crisis is to look at the plans emerging to address it. Yesterday’s House GOP plan was a perfect example. It was, as MIT economist David Autor told me, a classic case of “now-more-than-everism”: Everything on the agenda was also on the GOP’s agenda in 2006, in 2002, in 1987, etc. It’s lower taxes, less spending, fewer regulations, more trade agreements, more domestic oil production. You can argue about whether these proposals are good for the economy. But as Autor says, there’s “no original thinking here directed at addressing the employment problem.” 

Actually, you can argue whether those “proposals” are good for the economy as we have thirty years of evidence that they are not good for the economy.

Krugman points to how foolish it is to try to negotiate with the Republicans on these issues (as does Blue Texan at FDL this afternoon). Krugman said:

Anyway, the new “jobs plan” illustrates, once again, the foolishness of believing that we can reach any real bipartisan agreement on economic policy. The GOP stopped thinking a long time ago; all it knows how to do is parrot Reaganite rhetoric over and over. And there’s so little there there that the document — look at it! — has to rely on extra-large type and lots of pointless pictures to bulk it out even to 10 pages. 

Benen is even less forgiving than both Klein and Krugman:

As we discussed yesterday, the jobs agenda, such as it is, is practically a conservative cliche: the GOP wants massive tax cuts for the wealthy, deregulation, more coastal oil drilling, and huge cuts to public investment. Republicans are confident this will work wonders, just as they were equally confident about the identical agenda in the last decade, and the decade before that, and the decade before that. 

Indeed, the most glaring problem with the GOP jobs agenda is that it won’t work, but nearly as painful is the realization that it’s already been tried, over and over again, to no avail. They either don’t care or can’t understand the famous axiom: “Insanity is doing the same thing over and over again and expecting different results.”

The agenda is the agenda: tax cuts for the wealthy, deregulation, cut public investments. Good times and bad, deficit or surplus, war or peace, it just doesn’t matter.

It’s as if someone bought an iPod, uploaded one song, and hit “shuffle.”

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Wishful Thinking Is Not a Good Policy Foundation

11:51 am in Economy, Financial Crisis, Jobs, Unemployment by dakine01

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

I had to laugh (albeit ruefully) when I saw this opening from Jon Walker at FDL Action this morning:

Almost any national health care debate in this country is almost entirely disconnected from real-world examples, which is tragic given that facts have a well-known liberal bias.

My bold. Why did I find this worth laughter? Because the bolded part is applicable to just about every policy issue written or talked about by the DeeCee Political crowds and their Beltway Village Idiots Courtiers in the TradMed. Pick the issue, any issue, and the discussion emanating from DeeCee sounds like it is coming straight out of an alternate universe.

By now, most folks reading me know that I write frequently about the (lack of) jobs and the problems facing folks looking for employment; whether they are like myself and among the long term un and underemployed or the folks just entering the workforce with newly minted college degrees.

Today, we have the Initial Unemployment Claims (via Bloomberg) report from last week, and guess what? The economists are once again “surprised.” From the Bloomberg article:

Jobless claims increased by 10,000 to 424,000 in the week ended May 21, Labor Department figures showed today in Washington. The median estimate of economists in a Bloomberg News survey called for a drop to 404,000. The economy grew less than forecast in the first quarter, a separate report showed.

…snip…

Estimates in the Bloomberg survey of 47 economists ranged from 390,000 to 420,000. The Labor Department revised the prior week’s figure up to 414,000 from the 409,000 initially reported. There were no special factors behind last week’s increase, a Labor Department official said as the figures were released.

IMNSVHO (In my not so very humble opinion) I think the economists are making it all up as they go along. I’m not sure any group of people can be so consistently wrong on so many levels.
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The Spin Begins To Lessen

1:21 pm in Economy, Financial Crisis, Government, Jobs, Media, Unemployment by dakine01

 

Author’s Note: Please take a few minutes and Join the Firedoglake Membership Program today. FDL provides the tools that help me and others extend our reach with our rants so we need to support FDL when we can.

spin cycle

spin cycle by Robert Couse-Baker, on Flickr

After having bounced up to 474K a couple of weeks ago, the Initial Unemployment Claims for last week dropped for the second week in a row, falling back down to 409K after falling last week to 434K (revised back to 438K today). From Reuters:

First-time claims for state unemployment benefits fell 29,000 to 409,000 last week, the Labor Department said. 

The bigger-than-expected drop eased fears that a large increase last month reflected a fundamental deterioration in the jobs market, buttressing the view that the run up was due to auto plant shutdowns and other one-time factors.

…snip…

While the initial claims decline was more than economists’ expectations for a fall to 420,000, they remained anchored above the 400,000 level that is normally associated with stable job growth for a sixth straight week.

While any drop in Initial Unemployment Claims is a positive, it is only a faint ray of light within otherwise dismal economic news. Tuesday, CNN had an article on new graduates struggling to find jobs in their chosen career fields, even when coming “highly credentialed.”

NEW YORK (CNNMoney) — The brutal job market brought on by the recession has been hard on everyone, but especially devastating on the youngest members of the labor force. 

About 60% of recent graduates have not been able to find a full-time job in their chosen profession, according to job placement firm Adecco.

And for those just entering the workplace, a bout of long-term unemployment can affect their career plans for years to come.

The NY Times follows CNN and does their version of this today:

The individual stories are familiar. The chemistry major tending bar. The classics major answering phones. The Italian studies major sweeping aisles at Wal-Mart. 

Now evidence is emerging that the damage wrought by the sour economy is more widespread than just a few careers led astray or postponed. Even for college graduates — the people who were most protected from the slings and arrows of recession — the outlook is rather bleak.
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News from Around the Economy

2:43 pm in Economy, Financial Crisis, Government, Jobs, Media, Unemployment by dakine01

While there hasn’t been a lot of economic news for me to rant about today, there have been a few articles I came across in my search of news sites that help to continue to paint the not-so-pretty picture of life in the US these days. First up is this from today’s (Wednesday, May 11) Hartford Courant about layoff notices for Connecticut state employees:

HARTFORD—
On a somber day in state government, the first employees started receiving layoff notices Tuesday in a process that could eventually reach more than 5,000 state workers under a worst-case scenario.

Gov. Dannel P. Malloy ordered the layoffs of 4,742 employees in more than 40 agencies, but that number could increase by hundreds if more cuts in state programs are approved by the legislature.

Because many of the employees are being notified individually and in person, the process of notifying all of them could take weeks. Tuesday was marked by confusion among state employees as many did not receive a notice and they remained unsure if they would have a job in the coming months.

I and many others have concentrated mainly on the actions of the Republican governors but the reality is, most all of the states are struggling to balance their budgets and have been forced to cut jobs. Probably the biggest difference between states with Democratic governors and legislatures and those run by Republicans is the Democrats aren’t (at least outwardly) aren’t cutting the jobs while simultaneously cutting taxes for their campaign contributors.

The Hartford Courant’s Rick Greene offered five reasons why the layoff notices are a good thing. I find the first reason quite telling in itself:

1. Republicans will be forced to admit they actually do like some aspects of government when they realize services they want will be eliminated — like teachers or actually finding someone to answer the phone at the DMV.

Of course, I also have no belief that any Republicans anywhere will actually admit to there being valid government services. It does highlight one of the aspects of the US political systems where (theoretically) there are negotiations between the two dominant parties with compromises and all folks working toward the common good. Yeah, I know, but I still have to believe it is possible for the system to work as otherwise, it means we are all wasting our time and I refuse to give in to that belief.

MSNBC’s Alison Lin had this report from the government on job openings in March:

The government reported Wednesday that there were 3.1 million job openings in March, up slightly from the previous month. About 4 million people were hired in March, also a slight increase over the previous month.

Still, the Economic Policy Institute reports that there continues to be more than four jobseekers for every job opening.
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