The November Employment Report: A Wake-up Call (Awful is an understatement)

National Review ^ | 12/03/2010 | Douglas Holtz-Eakin

[SeekAndFind]

Awful. That’s the best one can say about the November employment report. The headline — that unemployment jumped to 9.8 percent — is not really the bad news. If and when the economy does catch fire, droves of discouraged workers will flood back into the labor market and the rate will easily exceed 10 percent. So a rising unemployment rate is not really the main concern.

No, the main concern is that there were only 50,000 private-sector jobs created, not nearly enough to make a dent in the employment woes. And that was the bright spot. For blue-collar workers — “production and nonsupervisory employees” — aggregate hours fell, aggregate payrolls fell, average weekly hours fell, average hourly earnings fell, and average weekly earnings fell. In the household survey, employment actually declined.

Unlike the recent past months, this report offers less of a mixed reading and more plain bad news.

It’s also a bit mysterious. The other data for November showed considerably more promise, and the ADP Employment Report on Wednesday pointed to large job gains. We should expect the data nerds to tear apart the seasonal adjustment of the numbers — always tricky for the holiday season — and see if something fishy turns up.

But mostly this is an alarm bell for the lame-duck Congress. No more games — extend all the tax cuts for two years, patch the AMT, and turn to cutting spending and tax reform.

Going forward, Congress has lost the luxury of extended debate on boutique social issues. All focus should be on growth. Every policy should be evaluated for its impact on growth. Wake up.

— Douglas Holtz-Eakin is president of the American Action Forum.

[patriot preacher]

It will only get worse if the Dems don’t extend current tax rates set during the Bush Administration. If taxes increase in January on those making $250,000 and more — which constitute 90%+ of the job creators in the nation — then unemployment will spike again. The fool Democrats just can’t SEE that, or they just don’t care. Either way, it’s criminal.

[NeverForgetBataan]

“For blue-collar workers — “production and nonsupervisory employees” — aggregate hours fell, aggregate payrolls fell, average weekly hours fell, average hourly earnings fell, and average weekly earnings fell”
______________________________________________________________________________________________________________________________________________

Well, that’s twenty years of unchecked outsourcing of manufacturing jobs to China coming home to roost.

But hey... I digress... we didn’t need those jobs anyway. They weren’t worthwhile.... I think that’s what I was told
anyway. Better to let the Chinese do those low-skill and low-wage jobs......

[boomop1]

Had the pubies went along with the extension this report would have not been as stated this is a scheme to get the extension, and be critical of the conservatives..

[monkeyshine]

I am an independent businessman, manufacturer. In that capacity I buy all kinds of components and supplies from scores and scores of vendors. In October, somewhat unusually, I had at least 18 of my vendors take extraordinary steps to solicit orders. Some scheduled impromptu meetings of no particular import, only to conclude them with an appeal for an October order. Others came in with candies and cakes for my staff, only to seek info and put little bugs in the ears of my staff about placing an order. One vendors flat out said ‘it’s nearing the end of the month and I’m pulling out all stops to get your business.’ Another offered a 20% discount if they could ship before month end.

This unprecedented string of special appeals was alarming to me. It got to the point where my staff and I were joking, If a vendor called we bet amongst ourselves what they would do or offer for an order.

October was the 1st month in the final quarter. September ‘might have been decent due to holiday shipments going out to retailers/wholesalers. IMHO it all rests on December. If December is soft the quarter will suck. For those in the stock market, most companies won’t report 4th quarter and year end results until March or so, unless their fiscal years are not in sync with calendar years. I am looking at holiday sales news stories for clues and will ask some clerks if they think business was soft compared to the previous year, or if prices were marked down earlier than usual. I expect a general stock market rally until the first quarterly reports start to come out, and I might be looking for short plays to make in February.

I take no pleasure in this. We all suffer with the economy. But the trillions, perhaps 6 trillion or as high as 9 trillion in off budget and deficit spending has not helped main street one bit. The GOP congress, IMHO, is missing the boat if they push fiscal austerity over main street stimulus. I’m not saying we need to give away the store, but I do think that credit to main street needs to be lubricated. The banks should not be allowed to take fed cash and use it to buy bonds and stocks. I wouldn’t mind an expansion of the SBA program to encourage entrepreneurship. Mind you, SBA loans require the borrower to show that the enterprise is viable and to put up equity. We need to encourage main street risk taking to revive this economy. Secret loans to Toyota, Ford etc were simply triage to stem the bleeding. To grow this economy average citizens need access to capital it is as simple as that.

[Kartographer]

OBAMAVILLE

Gett’n a head fake,
watchin' msn’s take;
All of their pundits oozing foul oil.
Clean’n my six gun on my front porch swing.
Felling my blood--
It’s beginnin' to boil.

Wasted away again in Obamaville,
Searchin' for a job so I can earn my salt.
Some people claim that Bush is to blame,
But I know it's Obama’s fault.

There’s no rhyme or reason,
They are all commitin’ treason
With nothing to show but a brand new tax or two.
But they are real beauties,
Despotic duties, how they got passed
I haven't a clue.

Wasted away again in Obamaville,
Searchin' for a job so I can earn my salt.
Some people claim that it’s Bush we should blame,
Now I think,-- hell with them it’s Obama’s fault.

I blew out my flip flop,
Stepped on a pop top;
Cut my heel, but I just cruise on back home.
Because no medical care will the doctors render
They say there’s little service I can tender
And there’s no need for me to hang on.

Wasted away again in Obamaville
Searchin' for a job so I can earn my salt.
Some people claim that Bush is to blame,
But I know, it's my own damn fault.
Yes, and some people claim that Bush is to blame,
And I know because of my vote it's my own damn fault damn fault.

[Spok]

This is no surprise to anyone who understands what the failure to extend Dubya’s tax cuts means to the economy. No matter how many times Obama, Pelosi and the MSM tell us that unemployment checks and food stamps create prosperity, the economy is not going to validate their idiotic deception.

[Lurker]

We're a VAR in the IT field. Every single one of our vendors has done the very same thing. Of course, I'm doing it to my customers, too.

[Cyber Ninja]

The tax cuts have to be extended at least 3 years.

Two years gives 0’Zer0 a weapon to get even with
us for what I’m sure will happen in 2012.

[moehoward]

"we didn’t need those jobs anyway. They weren’t worthwhile.... I think that’s what I was told anyway."

I seem to recall something along that line as well. Wasn't there also something in there about "jobs Americans wont do", too?

[Texas resident]

The democrats are a vindictive lot. They are loyal to their party only not to this country. They are going to wait out the calender to let the Bush tax rate reductions reset up so that they get a tax hike without having to vote on it. They will extend the unemployment checks. The net effect will be that they have created a scorched earth scenario when the repubs take office in January. Then their media will go into full force assault on the repubs trying to make the case that they are at fault for all the economic chaos.
It’s who they are.

[NeverForgetBataan]

Yep. I remember that excuse too.

[andy58-in-nh]

... and once again, the stock market rockets to new yearly highs. The dollar is getting crushed again today? Stocks go up. The Fed monetizes another $6.8 billion in debt today? Stocks go up. The computers are happily trading with each other and the insipid financial news media sees green shoots everywhere. At some point, it will become evident that the stock market is not a proxy for the economy. VERY evident. Until then: party’s on! Go buy some more Apple and Amazon - the “experts” say it’s time to jump back in the pool, where the water’s always just right and never is heard a discouraging word... like “debt” for instance.

[monkeyshine]

Yes, and I am too but in different ways apropos to the customs and practices in my line of work.

And this is the deflation that the Fed is worried about. You and I are offering discounts and distributors are taking discounts and retailers are asking for discounts and consumers are buying at discount. Ironically, while producer prices may be flat to slightly up, producer costs are rising - at least at list price. It makes for a very precarious situation. I really do wonder if we aren’t in a liquidity trap.

But then I see what the Fed and Government did. They gave cash to the big companies but did nothing for the typical company. Car makers, industrial manufacturers, banks and brokers, insurers all got bailouts. That stopped the collapse but did not turn the ship around. And while I am not advocating massive deficit spending, I do see that the average businesses, which in total employ tens of millions but individually maybe only employ 2 to 50 people each, are the ones who need access to capital.

None should or would borrow without need, borrow without specific purpose or borrow if they couldn’t afford to. But what I fear will happen is that the big companies will be able to stifle the small guy. The big guy can afford to keep prices low in the face of rising costs, while the small guy cannot. And if it doesn’t change what will happen is that it will be harder and harder for independent producers to compete and there will be an increase in conglomeration and control of production, distribution and retail. Innovation will be hampered. Entrepreneurship will be extraordinarily difficult. And society and commerce will become homogenous and bland.

The American Dream is at risk and I am afraid almost nobody can see that.