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Today’s report of Initial Unemployment Claims from last week is out and once again, the economists are “surprised” at the figures reported (via Reuters):
The number of Americans filing new claims for state unemployment aid rose unexpectedly to 428,000 in the week ended September 10 from a revised 417,000 in the prior week, the Labor Department said.
It was the second straight weekly increase and took initial claims to their highest level since the week ended June 25. Wall Street analysts expected a modest dip in new claims.
Once again, that is an upwards revision from the previously reported figure. I’m feeling a tad too lazy to go back through all my blog posts to find the last week when there wasn’t an upwards revision from the previous week’s report but I know that it has been months since there has been anything but upward revisions. At best there might have been a week when the numbers reported were not revised at all a couple of months ago but that’s it.
Realistically, I have to admit that the continual ‘surprise’ by the economists is just a continuation of the overall cluelessness shown by the financial elites as evidenced by this yesterday from the World Bank head (also via Reuters): Read the rest of this entry →
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The weekly report of Initial Unemployment Claims is out today (via Reuters):
Initial claims for state unemployment benefits dropped 24,000 to a seasonally adjusted 398,000, the Labor Department said.
Economists polled by Reuters had forecast claims falling to 415,000. The prior week’s figure was revised up to 422,000 from the previously reported 418,000.
I do hope the Beltway Village Idiots Pundits, Politicians, and Courtiers don’t make too much of this news however. The 400K figure does seem to be a magic line for most but my guess/prediction is that after revision (which may or may not be reported), it will wind up back over 400K for the week. The upward revision of the numbers from the week before has seemingly become a staple on the reporting of this metric.
While the DeeCee folks do their Debt Ceiling/Deficit/Austerity Danse Macabre, there have been a few reports in the TradMed to remind the clueless of the realities being faced by millions of people who are not cocooned within the fog of life in the Beltway. Not that these articles penetrate the consciousness of most Villagers, given how they seem to always like to double down on the policy while “improving the messaging,” but we can still hope they might see the light at some point, if only to protect their careers.
First up is this from the NY Times’ Catherine Rampell from Tuesday (July 26), pointing out once again that many employers refuse to hire the unemployed, serving only to make things that much worse for the millions of long term un and underemployed:
A recent review of job vacancy postings on popular sites like Monster.com, CareerBuilder and Craigslist revealed hundreds that said employers would consider (or at least “strongly prefer”) only people currently employed or just recently laid off.
…snip…
Legal experts say that the practice probably does not violate discrimination laws because unemployment is not a protected status, like age or race. The Equal Employment Opportunity Commission recently held a hearing, though, on whether discriminating against the jobless might be illegal because it disproportionately hurts older people and blacks.
…snip…
Government incentives for companies to hire unemployed workers have met with limited success. One such tax incentive from last year was poorly publicized, so most employers did not know about it. Better publicity may not suffice, either. An experiment from the 1980s found that telling companies that the unemployed were eligible for generous wage subsidies actually made employers less likely to hire such workers.
I’m not sure if this blog post from Rampell at the NY Times Economix from Monday (July 25) was intended as a companion to the Tuesday article, but there is some reinforcement of the themes:
One of many reasons blamed for (Western) Europe’s stagnant growth in recent decades has been that so many European adults are not working, and are effectively not employable because they have been out of jobs for so long. The United States, on the other hand, has had a much higher share of its population in gainful employment. In fact, between 1980 and 2000, the percent of adults working was on average about 10 percentage points higher in the United States than in Europe.
…snip…
It’s not clear whether the gap between employment-population ratios in the United States and Europe will continue to shrink. Certainly it does not help that the United States has been accumulating a huge underclass of long-term unemployed workers. As we’ve noted before, the longer people are out of work, the harder it is to find them a new job.
Which is exactly the experience Europe had seen, and that the United States hadn’t learned from, in decades past.
Amazing! US politicians not learning from all the previous economic problems across the world. Hoocoudanode? Of course, one glaringly large difference between Western Europe and the US is that Western Europe has a far more robust social safety net protecting its citizens.
Tuesday’s Washington Post had this article on polling showing dissatisfaction with President Obama’s handling of the economy. Of course, in a slightly buried lede, the polling shows even more dissatisfaction with Congressional Republicans:
More than a third of Americans now believe that President Obama’s policies are hurting the economy, and confidence in his ability to create jobs is sharply eroding among his base, according to a new Washington Post-ABC News poll.
But Americans’ discontent does not stop there. The survey also found that Americans harbor negative feelings toward congressional Republicans. Roughly as many people blame Republican policies for the poor economy as they do Obama. But 65 percent disapprove of the GOP’s handling of jobs, compared to 52 percent for the president.
Now whatever could the elected officials do that could improve their standing with their nominal constituents? Well, this article from the Washington Post just might offer a small clue:
As Congress debates how to meet the nation’s long-term transportation needs, decaying roads, bridges, railroads and transit systems are costing the United States $129 billion a year, according to a report issued Wednesday by a professional group whose members are responsible for designing and building such infrastructure.
Complex calculations done for the American Society of Civil Engineers indicate that infrastructure deficiencies add $97 billion a year to the cost of operating vehicles and result in travel delays that cost $32 billion.
…snip…
Thomas J. Donohue, president of the U.S. Chamber of Commerce, said the necessary spending was “not just transportation for transportation’s sake.”
“Without more robust economic growth, the U.S. will not create the 20 million jobs needed in the next decade to replace those lost during the recession and to keep up with a growing workforce,” he said.
Ultimately, Americans would get paid less, the ASCE report says. The economy would lose jobs, and the paychecks of those who are able to find work would be cut by nearly 30 percent.
It is not often that I find myself even remotely close to agreeing with Mr Donohue but in this instance he is correct. I’m sure we would not be remotely close on how to go about fixing things but still, it’s a start. And in reality, it’s not as if this should be coming as a surprise to people. The collapse of the I35 bridge in Minneapolis a few years ago brought the infrastructure issue to the fore but as seems to be the norm these days, even if there is agreement on an issue, the solution(s) seem to defy agreement.
It does seem to me though that an investment in repairing the US infrastructure (bridges, roads, dams, sewers, etc) could go a long way to repairing the US economy. Yes, it would require a $2T – $3T investment by governments at all levels. But this investment would start to be recouped immediately by the taxes paid by the newly hired workers and by the further economic ripple of jobs throughout local economies all over the country. Not to mention the savings of the $129B in not having to cover vehicle repairs and lost time from the decaying infrastructure.
It is such a simple solution isn’t it? So very simple that we can pretty much guarantee that nothing like it will be done since it would benefit millions of people without necessarily bringing immediate partisan benefit to one party or the other.
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In the year plus that I have been writing about the economy and life as one of the long term un and underemployed, I’ve mentioned a few times how difficult it is to catalog all of the stupidity, cupidity, and overall cluelessness of the Beltway Village Idiots Politicians, Pundits, and Courtiers (here, here, here, and here for example). A few weeks ago, I predicted that we will have a “double-dip” recession, even though reality for many millions is we have been in a depression and there has been no recovery that would be necessary for there to be a “double-dip” in the first place. Nevertheless, over the weekend, there were a few articles premised on how the deficit/debt is the worst thing going on right now in the economy. This one from CNN yesterday (July 4) starts things off:
CNNMoney surveyed 27 economists and asked them to choose from a list of possible threats facing the economy. What scares them most? A sovereign debt default by a European country such as Greece. More than half of those surveyed ranked it as one of their top two concerns, with 10 choosing it as their number one worry.
…snip…
Relatively few of the economists surveyed were worried about the other risks they had to choose from — a slowdown among emerging economies such as China, or budget cutting by federal, state and local governments.
“Austerity is a short-term risk, but will help long-term,” said David Wyss, former chief economist at Standard & Poor’s, now visiting fellow at Brown University. “The odds of too big a budget cut seems small.”
My bold and there we have it. What’s a little austerity to those who have no fear of the consequences of that austerity. Given the propensity of economists polled by news organizations to be wildly and incredibly wrong in their predictions while then expressing their continual “surprise” at being wrong, I think we can safely say that the budget cuts that are coming will be both too big and soon followed by economists chanting “Hoocoudanode?” when the negative impact becomes obvious even to the most obtuse of the Beltway Villagers.
“It sounds as if the package is going to be all spending cuts with a few symbolic revenue increases,” said Isabel Sawhill, an economist who studies fiscal issues at the Brookings Institution and worked in the Clinton administration.
…snip…
Sawhill said the cuts are likely to be focused on non-security discretionary spending, a small section of the budget that includes funding for food inspectors, the FBI and education grants, among many other programs and services people associate with government.
Economists at Northeastern University have found that the current economic recovery in the United States has been unusually skewed in favor of corporate profits and against increased wages for workers.
According to the study, between the second quarter of 2009, when the recovery began, and the fourth quarter of 2010, national income rose by $528 billion, with $464 billion of that growth going to pretax corporate profits, while just $7 billion went to aggregate wages and salaries, after accounting for inflation.
The share of income growth going to employee compensation was far lower than in the four other economic recoveries that have occurred over the last three decades, the study found.
Nice to have some empirical evidence to back up the anecdotal evidence so many of us have experienced first hand.
As a companion of a sorts, the Washington Post and Bloomberg each have this Bloomberg article up from Sunday, although with differing headlines. While Bloomberg’s headline is, “Payrolls in U.S. Probably Rose at Pace That Failed to Reduce Jobless Rate” the Washington Post headline is just a tad bit misleading to say the least (as the cheerleader paper of record I guess it is to be expected though), “Employment Probably Increased in June: U.S. Economy Preview.” From the article itself:
Employers in the U.S. probably expanded payrolls at a pace that failed to reduce the unemployment rate in June as companies sought to contain costs amid slower growth, economists said a report may show this week.
Payrolls climbed by 100,000 workers after a 54,000 increase in May that was the smallest in eight months, according to the median forecast of economists surveyed by Bloomberg News ahead of Labor Department data due July 8. The jobless rate held at 9.1 percent. Another report may show growth in services cooled.
…snip…
The Labor Department employment report will also show private payrolls, which exclude government agencies, increased by 125,000 after rising 83,000 in May, according to the survey median.
Now this article is phrased as definitive but it actually is speculative as the BLS Jobs Report for June for the entire economy will be issued Friday (July 8) while the ADP report on private sector jobs will be released tomorrow (July 6). My guess is that the private sector jobs (the ADP number) will be in the 50K range while the overall economy will be 20K to 25K max. The layoffs in the states with their new budgets will be starting to come in and the weekly Initial Unemployment Claims Report is still running well over 425K per week. I hope I am wrong in my predictions. I don’t think I will be off very much. Unlike the economists who keep getting polled against all evidence of their errors.
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