Posted on 03/04/2011 9:52:04 AM PST by FromLori
Pretty much precisely what noted earlier today: "A couple of behind-the-scene facts: from October to February, an epic 700k people have left the work force. If you actually adjust for the fact that the labour force participation rate has plunged this cycle to a 27-year low the unemployment would be sitting at 12% today. Moreover the employment-to-population ratio — the so-called “employment rate” — stagnated in February at 58.4% and is actually lower now than it was last fall when “double dip” was the flavour du jour."
PAYROLL REVIEW – NICE JOB, SHAME ABOUT THE PAYCHEQUE, from Gluskin Sheff
The widespread reaction to the jobs report today is uniformly positive. I think a dose of reality is really needed here. It may as well come from this pen. The headline print of +192k was in line with published estimates but following the slate of ISMs and the ADP report, the “whispered” number was closer to +250k. Of course, there were the upward revisions to the back-data that showed net gains of +58k so one could easily respond that adjusted for these, the topline did indeed meet these “whispered” estimates. The employment diffusion index jumped to a 13-year high of 68.2% from 60.1% in January, but beware of peaks and troughs in this index (i.e. it would have been a mistake to extrapolate the 17% low in this job dispersion measure at the March 2009 market trough).
Here is what I think is important: because of the winter storms, we really have to average out the past two months. So the January-February average for payrolls is +128k. Allowing for a similar reading in March that we received in February would generate an average increase for the first quarter of around 150k. That is little changed from what employment gains averaged on a monthly basis in the fourth quarter. So while we are seeing positive job growth, it is not accelerating even though we are coming off the most intense impact of the fiscal and monetary easing that was unveiled late last year. In other words, we are disappointed with what is still a lacklustre trend in net job creation, particularly in view of the peak stimulus we are currently experiencing.
What if Q1 is the peak for job growth? If you remember, we ended up with sub-3% GDP growth in the fourth quarter, which is about half of what we should be seeing at this stage of the cycle. And if we are generating jobs at a similar rate in the current quarter, barring a re-acceleration in productivity, growth again will be below 3% at a time when the consensus is closer to 3.5%. But more to the point — what if this represents the peak for the year? Because if there is one thing we do know, it is that this quarter contains all the incremental policy easing impact on the macro data.
What was particularly discouraging was the fact that both the wage number and the workweek were flat. Nominal wages, in fact, have been stagnant in three of the past four months. Weekly average earnings have also been flat or negative in three of the past four months. How on earth can these statistics possibly be viewed as bullish for the economy? The year-over-year-trend in average weekly earnings in the past three months has softened from 2.6% to 2.5% to 2.3% today. At the same time, it is probably reasonable to assume that surging food and fuel costs will bring headline inflation to, and possibly through, 3% in coming months. In other words, the growing risk of falling personal income in real terms, even with the positive growth in payrolls, is a glaring yellow light as far as the consumer spending outlook is concerned.
Aggregate hours worked only managed to tick up 0.2% in February after a flat January. That is total labour input — bodies and hours. So assuming a trend-like productivity performance, we are talking yet again about sub-3% GDP growth, which by itself is okay but considering the peak impact of all the fiscal and monetary steroids being administered this quarter, it is actually disappointing.
Yes, the unemployment rate dipped again to a 22-month low of 8.9% from 9.0% in January and the nearby high of 9.8% in November. This reflected a 250k risein Household employment — the third increase in a row — and a flat participation rate. A couple of behind-the-scene facts: from October to February, an epic 700k people have left the work force. If you actually adjust for the fact that the labour force participation rate has plunged this cycle to a 27-year low the unemployment would be sitting at 12% today. Moreover the employment-to-population ratio — the so-called “employment rate” — stagnated in February at 58.4% and is actually lower now than it was last fall when “double dip” was the flavour du jour.
All that matters in these employment reports is what the jobs environment means for income, because workers generally spend in the real economy. With credit harder to come by, and with fiscal policy soon to become more focussed on austerity, it is the income that the labour delivers that will prove to be the critical determinant of the economic outlook. So while the “spin” may be over near-200k headline payroll gains, another dip in the headline unemployment rate, the organic income backdrop can really only be described as tentative, at best, especially in real terms as gasoline prices make their way to $4 a gallon by the time Memorial Day rolls around.
>>The widespread reaction to the jobs report today is uniformly positive.<<
I heard that sort of talk on the radio this morning on my way to work. It immediately made me think of this:
1 Thessalonians 5:3
While people are saying, “Peace and safety,” destruction will come on them suddenly, as labor pains on a pregnant woman, and they will not escape.
Please don’t slam FromLori ,, her posts are usually excellent..
The problems with the economy go back to the incestuous relationships between Federal Gov’t , the FED , GS and the banksters in general .. until we start letting failures like GS fail the economy will not recover ,, they failed so spectacularly that even Bernanke can’t print enough paper money to fix their errors,, and his efforts thus far have enslaved us all for generations... Do you want a 20+ year long deflationary recession? That’s the path we’re headed down ,, using Japan as a model.
The opposition to bailout corporatism is, and has been, neither a “liberal” or “conservative” stand IMO. Some liberals support the bailouts, as do some conservatives. The issue is not by any means a litmus test for conservatism.
Not I - but I'm left to wonder why on earth a moderator would suggest debating a personal attack? That's just not right.
What the *(^&*%*( is going on. If some neanderthal doesn’t get it. Move on. Your postings are important. Obama and his corporatist agenda with his fellow traveler bankers is not something that should be swept under the carpet.
Keep up your postings.
It is here.
Among many litmus tests these days.
All you need to do in order to cure your lack of knowledge of the subject.
Look up the formula percentages and makeup of the CPI and you will answer your own problem. You will see how the weighting is not of the real world.
Dudette/dude, just educate yourself. I am too busy working trying to make money to pay for expensive gasoline and food that does not matter in the formula. At least I have a job and am not a member ot their mythical 8.9% unemployment figure. Search and find out all the different classifications of unemployment they now use!!
Should FromLori leave?
Ummmm.......that would be a big fat hell no.
Keep em’ comin you two.
There are more horses-asses in the world than there are horses.
“In the opinion of all of the moderators that are around today, who encompass a wide range of views, the comments directed at Lori are pithy but do not rise to the level of personal attacks that we would typically pull.”
A thread on the Unemployment Rate, where the poster has not said anything much about the article, or called for “redistribution of wealth” can then be accused of being a commie.
OK, I will remember that.
Thank you.
I can't speak for anyone else but I can safely say I am not "anti-capitalist". It's the best way.
Innovate. Work hard. Produce. Succeed. These are all things that should not be punished but encouraged.
To suggest that all these investigations (do I really need to list them - it would take all day) are politically motivated commie witch-hunts would require genuine insincerity.
What we create are bubbles. We inflate them, bet against them, rate them, insure them, pop them. When the Ponzi grows too big to fail we bail them out. Then we steal the bailout money.
All this money goes in one direction. The "regulators" and policy makers have relationships with those who create the bubbles.
It doesn't require a master of a level two screen to see what's happening. Derivatives, hedge funds, credit default swaps, and naked shorts do not make a good economic foundation.
The funny thing about a Ponzi scheme is that they are much like Jenga castles. A poke from the side, preferably at the bottom, and they tumble. A little poke in just the right place and it all comes falling down.
Our present path is not sustainable and we must change. I do not advocate replacing capitalism, rather, I wish to see it flourish. In order for that to happen we need to remove the rampant fraudulent plaque clogging our economic veins.
I prefer to see the Jenga castle collapse than our country. If someone brands me a commie for thinking that way, so be it.
So much wiggling around instead of just answering the question about unemployment rates. Of a sudden you start talking about the CPI, which has nothing to do with issue.
You simply have nothing to say. Not only you defame innocent people without a moment hesitation -- how very conservative of you! --- but are not even embarrassed when that is pointed out to you. Yep, that's the way our: bring out more defamation --- now about people that handle the CPI.
[ And here you show, unsurprisingly, that you have no idea of what you are talking about: methodological difficulties are not the same thing as falsifying the data. But to know the difference would require you to open a book without pictures. ]
Dudette/dude, just educate yourself.
Please reserve "dude" and "dudette" for your surfing buddies, from whom you appear to get your information.
Search and find out all the different classifications of unemployment they now use!!
Do you even bother to think or before you write such nonsense? You don't have to know anything about these matters -- that's absolutely fine. There is no need to scream about your lack of knowledge, as you do. Most importantly, it would be nice if you stopped defaming people, as the trustingly American values dictate.
Please don’t slam FromLori ,, her posts are usually excellent..
I assure you, I don't slam fromLory --- I don't even know her personally.
For great many months, if not years, I would respond to people like fromLori, blam, Willie Green (now banned, it appears), etc. in the usual way. Some of these people made a career here on FR by posting anti-capitalist propaganda on this conservative forum, and I would reply, showing line by line why those articles false and where they use propaganda methods.
Attack are against all and the same --- Wall Street (esp. Goldman), the Fed, the CEOs and their bonuses, "gouging" oil companies, etc. They usually give themselves in the first few lines/posts by misusing basic terminology of economics and finance.
So, I used to ask for clarifications: "What do you mean by this or that? Where is evidence for your claims? Why do you blame the Fed for something it has no responsibility over, etc.?" Not even once did I receive an answer. Most of the time they would just claim that I work for Goldman, or the Fed, or that I should educate myself... by visiting websites --- that is what passes as education for these people. That's understandable: opening a book without pictures would ruin conspiracy theories they believe in...
I would ask them also, Why are your attacks on financial sector coincide with those practiced by all Leftists since Marx, including Lenin, Hitler and Mussolini? Never an answer either, telling me that they have no idea ---- that's whom Lenin called "useful idiots." Strangely, they are not even bother by this fact. If someone told me that my ideas correspond closely to those of socialists, I would be so disturbed that I'd be unable to sleep at night. Not they; it's OK with those "conservatives" that they repeat old, boring commie propaganda.
In sum, I tried --- for years now --- to engage fromLori and blam into a discussion. They refused. All I do now is attract FReerpers' attention to the fact that what they post is commie propaganda, whether they themselves know that or not.
That's all. There is nothing personal here at all, Neidermeyer, at least on my side.
The problems with the economy go back to the incestuous relationships between Federal Govt , the FED , GS and the banksters in general
You give a great example of what I just said. What's the evidence for your claim? And, how can a person with traditional American values even write something like that without even bothering to be specific?
And, "banksters" (in place of "bankers") shows that you are passed thinking about it: this has become a belief --- and all the facts to the contrary be d-ned.
If you want to discuss the specifics that support your belief --- I am game; we'll have a detailed discussions. But to a wholesale defamation I will respond only by calling it what it is --- a defamation.
And here is another example regarding specifics:
Bernanke can’t print enough paper money to fix their errors,,and his efforts thus far have enslaved us all for generations...
We see it here on FR day in and day out, post after post. It is Congress and presidents that enslaved us for generations. The Fed has absolutely no say in these matters. When Congress passes budgets, however damaging to the future of this country, they become laws. They are laws for Volker, Greenspan and Bernanke just like for everybody else. It does not matter what they think: laws are laws.
So, now the Fed faces enormous debt and deficit spending created by Congress and presidents. It has two instruments at its disposal: interest rates and money supply. It is not in its power to change budgets.
Here is what any economist will tell you. At this point, after our Congress and presidents have passed the destructive budgets, the Fed can print a lot of money to get us out of this debt. That will be devastating; it will ruin the savings of all Americans and hit retirees especially hard. This is a terrible outcome.
The alternative is not to print money. This will leave the value of our enormous debt untouched. Markets will react to that by demanding huge increases in interest rates. That will render businesses unable to borrow and continue operations, leading to layoffs. This will render people unable to buy houses, which will lead to layoffs as well. You will have a years-long recession and 20% unemployment. This is a terrible outcome.
Look at the last two paragraphs: the Fed is in a position "damded if you do and damned if you don't." It is walking over an abyss on both sides. The only -- and very, very slight --- hope is to postpone the fall, letting the economy ---- by some miracle! --- to grow out of debt. That would be a miracle indeed.
So why is the Fed walking over an abyss on both sides, who put it into that position? Congress and presidents. Yes, over multiple decades, but the final push into the abyss given to our economy was given by Pelosi and Obama over the last couple of years.
You and many others blaming the Fed for what Congress and presidents do. This is false to the point of being silly. It's like oversleeping in the morning, missing your plane as a result, and then taking it out on a taxi driver, claiming that "I missed the plane 'cause he woudn't exceed the speed limit when I asked him to do so." It's just silly.
Thank you for bringing civility to this forum.
You give a great example of what I just said. What's the evidence for your claim? And, how can a person with traditional American values even write something like that without even bothering to be specific?
Goldman Sachs Executives Gifted With Public Purpose
Open your eyes pal.
TQ: If you know that, give us evidence. Without support, such evidence is nothing but a defamation.
Marty: Look at the charts previously posted. Are you blind.
Apparently, I don't see. I told you so. I asked you to provide evidence of manipulation you claimed. Your reply: "Total ue in the teens."
How is this evidence of manipulation. Firstly, there are six meausre of unemployment, which of course yield difference numbers. If someone says "Measure U3 is..." and you say "but mesure U6" gives a difference number," that does not indicated a lie. It only says that YOU choose to look at a different measure.
Secondly, even if you did talk about the same thing and doubted the figures --- and, assuming that you, not BLS, were correct --- the BLS' schortcoming may be explained by lots of things: error, shorcoming of methodology, negligence, or deliberate manipulation of data (fraud).
So, what is your evidence that this manupulation and not error, methodological difficulties or something else? That is what I asked. You insist on your belief but offer not a shred of evidence. That is a pity: you appear to feel entitled to defame innocent people.
Frankly Government employees do what they are told. Period.
I am sorry you think of our entire government as if it were an army.
In this particular case you are gravely mistaken. Statistical data are collected by hundreds, if not thousands, of people, many of whom have advanced degrees in statistics and have allegence to their discipline. Great many of these people are in their positions for decades, hence worked under Bush Sr., Clinton, Bush Jr. as well. And, you want us to believe, they are marching in step, like good solders, to the orders of these different generals...
It is your right, of course, to be distrustful and even cynical. If so, you could say, "I don't believe those data." But you go much further and accuse people without a shred of evidence. Since when, Marty, defamation has become a conservative value?
Well, I am asking for help. It would help a great deal if you stayed on course of the discussion. Someone claimed that "The problems with the economy go back to the incestuous relationships..." You give me a link to an article that lists Golmand Sacks alumni that worked in government. That article does not even try to link those people with economy. How do those people cause problems with the economy and which problems?
You don't say a word on that.
Like some other FReepers, you commit a logical fallacy called spurious correlation, wherein after seeing A and B together one concludes that A causes B.
That it is a fallacy is easy to see from the following example: 99.999% of all people that had an auto accident had also eaten cucumbers at least once in their lives. It would be silly, of course, to conclude that eating cucumbers makes you accident-prone.
A more close example to what we are discussing is the fact that throughout the history of our country, about 20% of all Supreme Court Justices are graduates of Harvard Law School. Is there an "incestuous relationship" between Harvard Law and the Supreme Court? Of course not, and nobody has ever alleged that silliness. Has Harvard Law, by supplying for centuries great many Supreme Court Justices created "problems" in this country? Of course not; it would be equally silly to say that: Harvard Law faculty have only recently become liberal loons.
So why are there so many Harvard Law alumni among the Supreme Court Justices? The answer is obvious: Harvard Law has for centuries been one of the best law schools, and it is unsurprising that the best rise to the top.
Guess what? Goldman is hated on Wall Street for attracting and keeping the best and the brightest. It is little wonder that, when president seek someone to serve them, they look for the best and the brightest, and often find them in Goldman Sacks.
It is really funny that the link you view as damning supports what I just said and speaks against your conspiracy theory: the article lists Goldman alumni who were conservative and worked for Bush as well as those that were liberal loons and worked for Clinton.
Believing in conspiracies is the easiest road to take. It's too cold today? This can be explained by physics and tons of atmospheric data, but that's a hard road to take. It's so much easier to conclude: Martians conspired to create that weather.
Take the high road, my friend.
Well, I am asking for help. It would help a great deal if you stayed on course of the discussion. Someone claimed that "The problems with the economy go back to the incestuous relationships..." You give me a link to an article that lists Golmand Sacks alumni that worked in government. That article does not even try to link those people with economy. How do those people cause problems with the economy and which problems?
You don't say a word on that.
Like some other FReepers, you commit a logical fallacy called spurious correlation, wherein after seeing A and B together one concludes that A causes B.
That it is a fallacy is easy to see from the following example: 99.999% of all people that had an auto accident had also eaten cucumbers at least once in their lives. It would be silly, of course, to conclude that eating cucumbers makes you accident-prone.
A more close example to what we are discussing is the fact that throughout the history of our country, about 20% of all Supreme Court Justices are graduates of Harvard Law School. Is there an "incestuous relationship" between Harvard Law and the Supreme Court? Of course not, and nobody has ever alleged that silliness. Has Harvard Law, by supplying for centuries great many Supreme Court Justices created "problems" in this country? Of course not; it would be equally silly to say that: Harvard Law faculty have only recently become liberal loons.
So why are there so many Harvard Law alumni among the Supreme Court Justices? The answer is obvious: Harvard Law has for centuries been one of the best law schools, and it is unsurprising that the best rise to the top.
Guess what? Goldman is hated on Wall Street for attracting and keeping the best and the brightest. It is little wonder that, when president seek someone to serve them, they look for the best and the brightest, and often find them in Goldman Sacks.
It is really funny that the link you view as damning supports what I just said and speaks against your conspiracy theory: the article lists Goldman alumni who were conservative and worked for Bush as well as those that were liberal loons and worked for Clinton.
Believing in conspiracies is the easiest road to take. It's too cold today? This can be explained by physics and tons of atmospheric data, but that's a hard road to take. It's so much easier to conclude: Martians conspired to create that weather.
Take the high road, my friend.
I love your lectures. I think they are indeed a cry for help.
Great many people throw around the word "corporatism" but don't specify what it means to them. It has meant many different things to great many people (see, e.g., Wikipedia's article http://en.wikipedia.org/wiki/Corporatism).
You could also ask, are you for or against capitalism? A person may be all for capitalism (as I am) but still be against unbridled capitalism that allows for a few monopolies to be formed.
The point is, one has to be careful with such all-inclusive notions. The devil is in specifics.
As I said many times on this forum, if you have specific events, tendencies, etc. to discuss, by all means, let's do that. But wholesale notions and accusations do not help us to identify true enemies trying to ruin this great country of ours.
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