The GDP numbers came out, and the word is “meh”, with the economy growing at a 2.8% annual rate in the 4th quarter, under performing the forecast of 3%, and giving a 1.7% increase for the year.
We need to top 3% for a while to really improve our situation.
Yesterday,initial unemployment claims rose, to 377,000, as did continuing claims, though the 4-week moving average, and extended claims fell.
That being said, Consumer sentiment rose in January, which is good news.
Initial claims just rose to 399,000, up 24K from last weeks “already revised upward” number, basically the dividing line (rule of thumb 400K) between getting worse, and not getting worse, with the less volatile 4-week moving average rising by 7,750 to 381,750, with continuing claims rising as well, though emergency claims fell.
One step forward, one step back.
It’s showing some improvement, but nothing to crow about, the quote, “expanded at a modest to moderate pace,” is a pretty good description.
The improvement is pretty modest, but it’s in eleven of the twelve Fed Banks’ regions.
And the numbers are good in an anemic sort of way, with unemployment (U-3) falling from 8.7% to 8.3%, and non-farm payrolls rising by 200K.
So how good is this?
Not very good, according to the Shrill One:
First, note that there are still about 6 million fewer jobs than there were at the end of 2007 — and that we would normally have expected to have added around 5 million jobs over a four-year period. So we’re 11 million jobs down — and we need at least 100,000 jobs a month just to keep up with working-age population growth. Do the math, and you’ll see that it would take 9 or 10 years of growth at this rate to restore full employment.
Alternatively, note that during the Clinton years — all 8 of them — the economy added around 230,000 jobs a month. As it did that, the unemployment rate fell about 3 1/2 percentage points — which is about what we’d need from here to get back to something that felt like full employment. Again, this suggests that we’re looking at something like a decade-long haul to have full recovery.
Not good enough.
I love it when economists mud wrestle, but a number of the conservative fresh water* economists, Kantoos and Tyler Cowen, have complained that Krugman is being mean about them.
I love Krugman’s response to this criticism:
So Alex Tabarrok thinks I treat everyone who disagrees with me as mendacious idiots, and Tyler Cowen says that I always demonize my opponents.
I plead innocent. I only treat people as mendacious idiots if they are mendacious idiots.
Seriously: I have some big disagreements with Ken Rogoff, but if you use the little search box up there on the upper right and enter “Rogoff” I think you’ll find that I have always treated him with respect. On the other hand, enter “Heritage” and you’ll find me pretty scornful — but with very good reason! And I always document what I’m saying.
Now, what about people like Cochrane? You need to bear two things in mind. First, he and his friends entered this whole debate by declaring that Keynesian economics of any stripe was total nonsense, “fairy tales” that nobody serious believes. Then they proceeded to make howling, basic errors. And I was supposed to respond politely? I’ve never gone ad hominem on them — but I’ve called nonsense and ignorance when I see them. So?
I think that this is a valid response, and fairly straightforward, and measured.
On the other hand, Brad Delong goes seriously medieval on John Cochrain, and ends with:
What do I see here? A bunch of overheated and largely false rhetoric. A bunch of apparently false claims about the way the world works. A bunch of false claims about pretty basic economic theories. Occasionally correct claims that are then–almost invariably taken back–by something that claims (for reasons I do not understand) to be a refutation.
Overall, it does not seem to me to add up to a coherent argument.
Kantoos, what else do you want me to do with this?
Seriously, it’s a very nice Fisking.
It also proves a point that Krugman is wont to make, that salt water economists can cogently discuss fresh water economics, but fresh water economists cannot cogently discuss salt water economics.
Basically, when salt water economists teach, they teach both theories, and fresh water economists only teach their theories, which is why we see things like the walkout from former Bush Administration Economist Greg Mankiw’s intro to economics class at Harvard (yes, technically a salt water school, but Mankiw is a fresh water economist) because they found narrow and parochial.
This for a bloody introductory survey course that should expose them to the full range of theories.
But I think that I’m ranting here a bit.
*If you look at schools of economics, those in the center of the country, (fresh water) on lakes and rivers, tend to be extremely conservative, either Austrian, or Milton Friedman, while those on the coasts (salt water) tend to be more liberal.
Pretty good news today, with initial unemployment claims falling to 372K, a drop of 15,000, from last weeks (adjusted upward) claims, with the 4-week moving average falling to the lowest number since July 2008 (!), 373,250, with continuing claims falling, though emergency claims rose slightly.
Additionally, the ADP survey, (same link) indicates a 325,000 increase in private sector jobs, though I’ll wait for tomorrow’s NFP numbers for the official word.
We also saw the ISM’s manufacturing index grew strongly and the non-manufacturing index rose modestly.
All in all, it’s pretty good news, I’m just wondering how much government jobs have hemorrhaged over the past month.
Still, initial unemployment claims rising by 15K to 383,000 is still not good news.
The 4-week moving average fell, but continuing claims rose, though emergency claims fell.
I’ll wait until we are out of the holiday season before drawing any conclusions.
And, once again, we are seeing some pretty good news, with initial claims falling slightly again, with the 4-week moving average, continuing claims, and extended claims falling as well.
It’s good news.
It’s time to look at the employment/population ratio now.
Yesterday, we saw the best number for initial jobless claims in 3½ years, dropping to 366,000, with the 4-week moving average dropping to 387,750, though continuing claims rose marginally, and extended claims jumped by almost 10%.
Still, overall, this is good news, particularly when juxtaposed with the fact that inflation is still nowhere to be seen, though the “very serious” central bankers are still chasing that phantom.
For those of you have followed my blog for a while, I started it in May of 2007, I have been suggesting that the Euro was likely to supplant the US as the world’s reserve currency.
Well, I missed a couple of things:
Now, I’m inclined to believe that, absent a German exit from the Euro, that the unified currency is doomed, and the EU may be as well.
Unlike my hairier brother,* I do not think that another war in Europe is inevitable, though I think that an EU breakup has a potential of leading to some shooting, or, more likely, some sort of a “Cold Peace.”
*The Indians call him “Carpet who walks”.
And the news is actually pretty good, with initial claims falling to the lowest level since February, 381,000, with the less volatile 4-week moving average falling to 393,250, and the continuing and extended claims fell as well.
Definitely good news. If we maintain this for the next 4 weeks or so, I’ll believe that this is neither an outlier or an artifact of misused correction factors.
.
Yeah, I’m a glass half full kind of guy
And at first glance, they look pretty good on balance with the unemployment rate (U-3) falling below 9% for the first time since this March. (The more broadly defined U-6 fell as well)
Of course, the falling unemployment rate was largely the result of a decline in people looking for jobs, the increase in the non-farm payroll of 120K is less than the (roughly) 175K increase needed to accommodate natural growth in the labor force. (Private payrolls were pretty good, but state and local payrolls continue to hemorrhage)
I would still say that this more good than bad news, as are the latest ISM factory numbers, which point to continued growth.
On the other hand yesterday’s initial unemployment claims were back over 400,000.
It’s better, but we are still firmly in lost decade territory.
Well, the last thing didn’t work out, so I am looking for a job.
Basically, one of the rules of thumb is that November and December are pretty dead, particularly after Thanksgiving.
I’m not sure why, but since the first week of November, things, at least those things that are presented to me by recruiters, are on a fairly sharp upswing.
I’m not sure why this is so, and it could be that my experience is an outlier.
And they suck wet farts from dead pigeons.
80,000 new jobs on the NFP when natural growth in the labor market requires something like 175K, and while the jobless rate fell to 9.0%, that’s because people are stopping looking for jobs.
It’s not a time for half-measures.
And initial claims are below 400,000 for the first time in over a month, with the less volatile 4-week moving average falling slightly from 406,500 to 404,500, continuing claims falling by 15K to 3.68M, but extended and emergency claims rose by 39.9K to 3.68M.
The number is still too damn high. This is still too high to presage any sort recovery in the job market.
Tomorrow’s monthly jobless figures from the DoL should give us some more detail.
Reviewing recent events, French President Nicolas Sarkosy has concluded that Greece should never have been admitted to the Euro zone:
French President Nicolas Sarkozy has said allowing Greece into the eurozone in 2001 was a “mistake”.He said Greece was “not ready” at the time. But, he added, it could be rescued thanks to Wednesday’s EU deal on the euro debt crisis.
This should surprise no one.
Greece, except by virtue of its geography, is closer to a 3rd world nation than it is a 1st world nation.
Any sensible individual would have noted that Greece was iffy for entry into the EU’s free trade zone, so it was always clear that a common currency would be a stretch.
What happened was that the Eurocrats in Brussels, Paris, and Bonn/Berlin thought that the post Berlin Wall Unity Schtick European Union trumped reality.
FWIW, I stil think that the solution here, at least in the short term, is to kick Germany out of the Euro, and allow. A rising Deutsche Mark to fix imbalances.
I’m shocked, shocked to find that gambling is going on here!So, now that we are looking into the corruption and cronyism in Mubarak’s Egypt, and it turns out that it has its roots in the American led privatization of the Egyptian economy, just like the rampant corruption in post-Soviet Russia:
Beginning two decades ago, the United States government bankrolled an Egyptian think tank dedicated to economic reform. A different outcome is only now becoming visible in the fallout from Egypt’s Arab Spring.
Formed with a $10 million endowment from the U.S. Agency for International Development, the Egyptian Center for Economic Studies gathered captains of industry in a small circle — with the president’s son Gamal Mubarak at the center. Over time, members of the group would assume top roles in Egypt’s ruling party and government.
Today, Gamal Mubarak and four of those think tank members are in jail, charged with squandering public funds in the sale of public resources, lands and government-run companies as part of a dramatic restructuring. Some have fled the country, pilloried amid the public outrage over insider deals and corruption that toppled President Hosni Mubarak.
“It became a crony capitalism,” Magda Kandil, the think tank’s new executive director, said of the privatization program advocated by its founders. Because of the corruption, the center now estimates, the assets that Egypt has sold off since 1991 have netted only about $10 billion, $90 billion less than their estimated worth.
The privatization saga is a cautionary tale about the power and perils of U.S. foreign aid — most notably the nearly $8 billion that the United States has provided to Egypt since the 1990s to push the country toward economic reforms.
This is not a bug, it’s a feature. This sort of economic liberalization is all about creating a few corrupt individuals, because it’s cheaper to allow cronies to get siphon off a billion or two while our banksters steal the rest than it is to allow those resources to accrue legally to the workers and the country.
I may seem cynical about this, but the corruption in Egypt, or Russia, or pretty much all of other privatization schemes outside of the Scandinavian countries run this way, so I’ve come to the conclusion that this is the actual goal of these policies.
And initial claims are again just marginally better, 404,000 down from last week’s adjusted 409,000, which is still too damn high.
Actually, it’s worse than it sounds, because they adjusted last week’s numbers were adjusted up from 405,000, (isn’t it always the way?) so it’s really a negligible drop.
What’s more, continuing claims rose, though emergency claims fell, probably as people hit 99 weeks.
We are not anywhere near a recovery.
It turns out that much of the lending to small businesses in China is done by loan sharks, because the official banks prefer to lend to large state owned enterprises.
That’s not shocking. Official Chinese societal structures have always been for the benefit of the few over the many.
That being said, a throw away line in a New York Times article is truly shocking:
Such illegal lending amounts to about $630 billion a year, or the equivalent of about 10 percent of China’s gross domestic product, according to estimates by the investment bank UBS.
10%? 10% of the f%$#ing Chinese economy is loan sharking???????
When the bubble bursts in China, and there is a bubble in China, it’s going to be incredibly ugly.
So who’s really being un-American here? Not the protesters, who are simply trying to get their voices heard. No, the real extremists here are America’s oligarchs, who want to suppress any criticism of the sources of their wealth.
Go read the rest.
As an aside, the reaction of the 1% does not reflect the positions of people who feel that they truly deserve their prestige and power.
Deep down, they know that they are parasitic frauds, and they are terrified at being exposed.