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A Stable Jobs Boom
NRO ^
| January 13, 2006, 10:17 a.m.
| By Jerry Bowyer
Posted on 01/13/2006 7:34:16 AM PST by .cnI redruM
Record corporate profits will sustain the new payrolls of the last few years.
Not all jobs are created equal. Some are volatile and speculative, and some are backed by real, existing profits. As it turns out, the jobs created over the last several years are backed by record levels of corporate profit.
From 2001 to 2005, weve seen a 1.4 percent increase in payroll jobs. But over that same period of time, weve seen corporate profits jump from $767 billion to $1.3 trillion an increase of more than 70 percent.
This is in stark contrast to the job boom of the late 1990s, which greatly outpaced the growth of corporate profits. From 1997 to 2000, corporate profits actually decreased from $868 billion to $817 billion, a drop of almost 6 percent. Over that same time period, payroll jobs increased from 122 million to 131 million a jump of 7.4 percent. Profits were dropping, but corporations kept hiring new workers anyway.
It follows that since todays jobs are backed by rapidly growing profits, they should be more stable than the ones created in the late 1990s.
TOPICS: Business/Economy; Extended News; News/Current Events
KEYWORDS: economics; employment; profit; thebusheconomy
This is one of the better efforts to describe the jobs market I've seen. It's an analysis I haven't seen done before. Rather than looking at what the jobs are or where they are, the article examines whether the firms hiring have enough profit margin to maintain a stable payroll.
To me, this is particularly salient, given recent events in the labor market. If anyone working for Delphi or GM hasn't gotten the message, here it is in plain English. "If the company you work for isn't making a profit, they can't promise you dick without lying."
That's a facet I'll definitely look at before I take a job within anyone. Not just what they promise, but whether they are strong enough to actually deliver.
To: .cnI redruM
I started this thread earlier, and I think it reinforces your point. Hope you don't mind me adding this to the discussion.
The four-week moving average of initial claims for jobless benefits, i.e., layoffs, now stands at 311,500. (See here.)
To put that into perspective, as of January 11, 1997, during the medias self-proclaimed greatest economic expansion of all time, that particular measure of the health of the nations labor markets stood at 344,500. (Scroll around here.)
Now, heres the real story:
Total employment back in Jan. 1997 was 128.3 million.
Today, however, total employment is around 143 million.
(Scroll around here.)
In other words, roughly 14 million *more* people currently are employed, when compared to Jan. 1997, but *much fewer* people are getting laid off from their jobs.
Go figure.
BTW, how do you suppose Yahoo/AP headlined this mornings news about jobless claims?
Indeed:
Jobless Claims Up.
To: .cnI redruM
But, how can this be? I just read a
thread here that all but suggested the economy is in shambles and we should just pack up and head to the mountains with all the can goods our mule train can carry.
3
posted on
01/13/2006 7:37:48 AM PST
by
Skooz
(Property taxes are immoral)
To: Skooz
LOL!!! I read that same doom and gloom thread a few minutes ago!
4
posted on
01/13/2006 7:39:35 AM PST
by
PhiKapMom
(Throw out OK's Governor DoLittle in 2006!)
To: Skooz
Someone has to train and breed those mules. I think your decision will be strongly pro-growth. Also, make sure those granola bars and bags of trail mix are made in the USA.
5
posted on
01/13/2006 7:42:02 AM PST
by
.cnI redruM
(To Live in the past is to die in the Present - Bill Belichick)
To: Skooz
I read the same retread, Keynesian propaganda. That's why I posted this one.
6
posted on
01/13/2006 7:42:46 AM PST
by
.cnI redruM
(To Live in the past is to die in the Present - Bill Belichick)
To: .cnI redruM
Your analysis is right on. In 2010 we will be looking back and saying wow!
Happy that we were long in 2006.
7
posted on
01/13/2006 8:22:50 AM PST
by
robomurph
To: Skooz
we should just pack up and head to the mountains with all the can goods our mule train can carry You just described my dream vacation!
8
posted on
01/13/2006 10:10:54 AM PST
by
redgolum
("God is dead" -- Nietzsche. "Nietzsche is dead" -- God.)
To: robomurph
Yep. We live in better times than I thought we would back on Sep 12, 2001 when I stood in line to get on to the base where I worked for 4.5 hours.
9
posted on
01/13/2006 10:13:01 AM PST
by
.cnI redruM
(To Live in the past is to die in the Present - Bill Belichick)
To: .cnI redruM
This is the chart from the article:
Sorry for the late reply; I just ran across this. It looks like change in corporate profits precedes change in employment. If you lag corporate profits by a year and a half, the lines there would have a high correlation, especially in the Bush upswing. Causes precede effects. This suggests that corporate profits (coming first) is the cause, and employment is the effect. Corporate profits (cause) has gone up in all the Bush years, with employment increases following. Corporate profits (cause) started to go down in mid 1999, well before Bush's election. Blaming Bush for the reception, as Democrats did, just isn't right.
10
posted on
01/20/2006 5:27:51 PM PST
by
ChessExpert
(They called him Uncle Joe)
To: ChessExpert
Correction: Blaming Bush for the recession, as Democrats did, just isn't right.
11
posted on
01/20/2006 5:29:41 PM PST
by
ChessExpert
(They called him Uncle Joe)
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