Posted on 02/08/2014 10:30:04 AM PST by Kaslin
The economy created only 113,000 jobs in January, up from 75,000 in December. Colder than normal weather was a factor but that simply does not explain two consecutive months of poor performance. These sad results are consistent with a broadly underperforming economy.
Construction, manufacturing and hospitality registered gains, while retail trade, financial services and education and health services disappointed.
In 2013, GDP growth slipped to 1.9 percent, thanks to the $200 billion January tax increase and sequestration spending cuts, but this year should be somewhat better. President Obama is not likely to get from Congress the higher taxes he proposes and jobs creation is likely to be in the range of 200,000 per month.
Economists expect the first quarter to be slow, as global currency and equity markets adjust to the Federal Reserve phasing down purchases of longer-term Treasury and mortgage-backed securities; however, the fundamentals under the U.S. and global expansion are firming, even if those are not exciting.
Global growth will rebalance a bit from Asia to the Atlantic community as Europe begins shaking off sovereign debt problems. Conditions in Europe and the United States will broaden the foundations for global growth, and reduce vulnerabilities to dodgy banking practices and economic nationalism in places like China, Japan and Latin America.
Currently, the U.S. economy is weighed down by a colder than normal winter, and the market inefficiencies and drag on household finances imposed by the rollout of ObamaCare. However, more robust household formation and balance sheets will give the residential construction and auto sectors a boost as warmer weather arrives. 2014 will be a good year for pickup trucks so ubiquitous on construction sites, and employment in industries supporting housing and motor vehicles.
In January, unemployment fell a notch to 6.6 percent, largely because 91,000 additional working-age adults chose not to seek employment. Alarming numbers of prime working age adults remain stuck in low-wage, part-time jobs with few benefits.
Factoring in adults on the sidelines who say they would seek employment if conditions were better and part-timers desiring full-time work, the jobless rate rises to 12.7percent and that likely understates the scope of the problem. As many working-age men have become despondent, and displaced spouses in formerly two-earner families have become reconciled to permanent unemployment.
The economy needs to add about 360,000 jobs each month to push unemployment down to about 6 percent and provide employment for those frustrated adults. That would require GDP growth in the range of 4 to 5 percent.
Over the last four and one-half years, the pace of GDP growth has been a paltry 2.4 percent—about the same as during the Bush expansion. Ronald Reagan inherited a much tougher unemployment situation than either the two most recent occupants of the Oval Office, yet he managed 4.8 percent growth and created many more jobs.
Technology and globalization are most frequently blamed for the listless jobs market but nothing is particularly novel about the current era. Disruptive technologies began when the arrow replaced the stone, and international commerce has been on the upswing long before Marco Polo.
In all times, the quality of government policy, business culture and individual initiative decide which societies most effectively exploit new technologies and broader commercial opportunities, and accomplish prosperity and productive employment for the wider citizenry.
The defining difference between the recent two disappointing economic recoveries and the strong record of the 1980s has been the predisposition of presidents from both parties to champion politically-expedient remedies—bailouts and entitlements that steal money from promising R&D, public infrastructure and private investment to bolster inefficient hospitals, abusive financial houses and decadent universities.
When the best incomes are to be earned gaming regulators, dodging prosecutors and fielding gladiators for Saturdayspectacles, no wonder the economy doesn’t grow, and one out of every six adult men is jobless and likely to stay that way.
Decadence begets decay.
Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist. He tweets @pmorici1
"What you mean you only got 113k jobs, why you lazy lima bean."
Oh well, didn’t Hussen or a spokesman say that people would rather not work anyway, so as to have time to pursue their real interests? Someone else can pay the bills.
“Over the last four and one-half years, the pace of GDP growth has been a paltry 2.4 percent—about the same as during the Bush expansion. Ronald Reagan inherited a much tougher unemployment situation than either the two most recent occupants of the Oval Office, yet he managed 4.8 percent growth and created many more jobs.”
As they say, unless you LEARN from History you are DOOMED to repeat it.
Some reason we follow the dumb stuff we’ve historically done as a Nation in regard to the Economy? Why not repeat what worked?!?!
Yeesh! Even this white, racist (sic), middle-aged, Bible & gun clinger can figure this out for herself!
Only 113,000 jobs created but they moved enough people out of the work force to make the unemployment numbers go down.
We have come to expect corruption and dishonesty from politicians and bureaucrats but we don’t have to believe their lies and made up facts.
But to have almost the entire media complicit in the scamming of America by Obama for more than five years is too much.
Obama would still be back in Chicago making a living scamming the poor blacks if it wasn’t for the media propping him up, covering up his lies and half truths, and treating his fantasies as if they were real.
He states the economy needs 360k per month jobs to get to 6% yet its been dipping there regardless. The appropriate statement is the needs jobs and people being counted out of the workforce totaling 360k to reach 6%.
Thats the Obama formula for job growth. Stop counting the unemployed.
What’s this “colder weather than normal” BS have to do with hiring?
If I need to hire a new accountant, I don’t care if the weather is 46f or 38f. I don’t need to postpone the hiring of personnel simply because I have to put on a jacket.
Decadence begets decay.
+++++++++
Wow. What a politically incorrect idea. Tens or perhaps hundreds of thousands of “Workers” (in the Marxist sense) elect to spend more time with their kids, doctors, hospitals and various Government websites and this is considered “decay”?
Admittedly, these “Workers” will experience a reduced standard of living but this will be balanced by a vast expansion of wealth and power inside The Beltway. A small sacrifice by the many for the sake of the few. A time honored tradition.
Economics is really not very complicated. If you want to sell more apples, or cars, lower the price. If you want to sell more labor, lower the price. If you want to motivate people to work, make it harder to stay home. If you want to increase unemployment, pay people not to work. Again, this is all very simple stuff.
With all of that said, the politics of economics always plays against people who cite the reality. Which parent did you like better? The mom who made you do your homework and eat your vegetables or the dad who fed you McDonalds and let you skip school? Politically speaking, the Dems are the Dad in my example.....and ‘we’ love him better than mom....for now.
The economy we currently have is quite predictable. The fact is, when the economy is bad, it is best policy to make running a business as cheap as possible.....and when it does get rolling along that’s when labor should start complaining about not getting their cut. Today we have a poor econmy and a government who makes policy as if we have a extremely robust econmy. Basically, Obama is an ass....but, he’s letting everyone have ice cream for dinner, so no one is noticing.....for now.
I agree. I’m a carpenter/contractor, and have been working on a cement board siding project with my brother in West Chester, PA. We’ve been outside in snow and bitter cold for two months.There are 10 guys there every day. Bills must be paid in spite of the temperature. Also, I didn’t see any mention of how many jobs were “saved” in January.
If you subtract the deficit spending over the last 5 years from GDP then we actually have negative GDP growth.
“Funemployment”
That can only be an MSM phrase when Democrats are in power...
I’ve now read several “SPINS” on this latest “Lack of Jobs” report. Excuses, false information & reclassification of terms permeate the “SPINS”.
So many people left the workforce -—— BS! Very few workers left the workforce.. bottom line.. they are no longer counted!
They are not counted because they are not presently employed or collecting UI benefits.
I read a letter from my state Unemployment Insurance fund to employers. It stated the State DOL was actively working to remove workers from the unemployment rolls to reduce the insurance fund burden. Because of the DOL actions, the UI premiums were being reduced. It stated that the average number of weeks the DOL would pay benefits was 26 weeks.
let me get this straight, after all the layoffs from the Christmas rush, 113,000 NEW JOBS were added??? is that before or after the layoffs were counted or simply a number cut from whole cloth? please...
Yep. Exactly. Things are not good! I survived Carter - I joined the Army because I couldn’t find a decent job & they’d pay for my college.
I don’t know WHAT the kids of today are going to do to survive this. It looks pretty hopeless to me some days.
Morici identified Technology and Globalization as major issues that need addressed. But, Demographics is the main factor that will either cause growth or stagnation.
I see the ‘progressive’ agenda being the majority at this time. That means we’re screwed. There isn’t a growth policy to be found in that aisle.
What are kids going to do? Draw disability and work in the shadow economy. 15 million plus illegal aliens can’t be wrong.
I consider it absurd that government is included in GDP figures, even when it is all operating on borrowed money. I also consider it absurd that government employees are even counted as employed people. They are all paid with tax money or borrowed money.
On the other hand if you start looking into what percentage of America is actually employed at PRODUCTIVE work you probably won’t be able to sleep.
"Decadence breeds decay."
And, the word "decadence," according to dictionary.com can be described as:
The act of falling into an inferior condition or state; deterioration; decay: Some historians hold that the fall of Rome can be attributed to internal decadence.2.moral degeneration or decay; turpitude.3.unrestrained or excessive self-indulgence.
Perhaps the ability to anticipate the steps which lead to such decadence might be useful in order to avoid it.
Would-be tyrannical leaders sometimes "fool" the people by claiming their policies are designed to "help" them. C. S. Lewis spoke of that kind of approaching tyranny.
"Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience." - C. S. LewisHear Samuel Adams:
"Is it now high time for the people of this country to explicitly declare whether they will be free men or slaves. It is an important question which ought to be decided. It concerns more than anything in this life. The salvation of our souls is interested in this event. For wherever tyranny is established, immorality of every kind comes in like a torrent, it is in the interest of tyrants to reduce the people to ignorance and vice.” - Samuel Adams
And:
“The utopian schemes of leveling and a community of goods, are as visionary and impractical as those which vest all property in the crown. These ideas are arbitrary, despotic, and, in our government unconstitutional.” - Samuel Adams
One of the funniest “In Living Color” skits I can recall - especially when he’s looking at the newborn baby and asks: “How many job he have?”. He then goes on describing how many jobs he had as a baby...
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