Category: Economy

Still Not Enough

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The monthly jobs report is out, and 244,000 non-farm payroll jobs were added last month, which is better than recent history, but still means that we would be over 8½ years away from the already anemic job market that existed in 2008. (8 million jobs lost, natural growth of the labor force is about q75K, so we have about 70k in job “claw back” this month.

Conversely, the unemployment rate actually rose to 9.0%, but this was not because of more entering the workforce, but fewer jobs reported in that study:

Some readers have asked whether the unemployment rate can rise even as employment is growing because more people start looking for work — and thus count as officially unemployed. Theoretically, the answer is yes. This does happen sometimes. But it didn’t happen in April. The unemployment rate rose last month because the household survey showed a decline of 190,000 jobs, not because of a surge in job seekers. That’s why there is no way to reconcile last month’s results of the household survey and employer survey. They make sense only in the context of previous months.

So, your mileage may vary on all of this.

Today’s results are either better than expected but still crappy, or somewhat worse than that.

Great Googly Moogly!

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H/t Wall Street Pit for the graph Pr0n

It’s jobless Thursday, and the numbers are brutal.

It’s back in the 450-485K sweet spot that it hung about for most of last year.

They expected it to fall by about 30K to around 400K, but it rose by 43,000 to 473,000, and the less volatile 4-week moving average rose by 22,250 to 431,250.

Continuing claims rose by 74,000 to 3.73 million, though emergency and extended claims fell by 42,900 to 4.12 million, though in the case of the latter, I do not know how much of this is just the “99ers” exhausting their benefits.

Obama should be running around like his hair is on fire over this report, but he should have been doing that over much of the past year with real unemployment (U-6) staying well over 15%, but because the Banksters are back to paying themselves big bonuses, no one in DC seems to give a damn.

Much more of this, and Sarah Palin will be sworn in as president the day that I make aliyah to Israel.

Economics Update

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It’s Jobless Thursday, and initial claim hit a 3 month high, 429 K, with the 4-week moving average rising, though continuing and extended claims fell.

The numbers have been disappointing, which is not surprising, since the economy grew at an anemic 1.8% annual rate in the 1st quarter.

The problem is that too many people in power (see Geithner, Timothy, for one) think that the economy is recovering fine because the banksters are making lots of money, so they are concerned about the deficit and inflation, as evidenced by this story with its hand wringing about inflation rising, but even though it’s still well under the 2% (I would argue for 6% right now) that the Fed says that we need.

BTW, if you want to read it, here is the Federal Reserve Open Market Committee statement for you to read.

Because Running the Government By, and For, the Banksters is Depressing

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It’s why Americans are more pessimistic about the economy and their future than they have been in years:

Americans are more pessimistic about the nation’s economic outlook and overall direction than they have been at any time since President Obama’s first two months in office, when the country was still officially ensnared in the Great Recession, according to the latest New York Times/CBS News poll.


Amid rising gas prices, stubborn unemployment and a cacophonous debate in Washington over the federal government’s ability to meet its future obligations, the poll presents stark evidence that the slow, if unsteady, gains in public confidence earlier this year that a recovery was under way are now all but gone.


Capturing what appears to be an abrupt change in attitude, the survey shows that the number of Americans who think the economy is getting worse has jumped 13 percentage points in just one month. Though there have been encouraging signs of renewed growth since last fall, many economists are having second thoughts, warning that the pace of expansion might not be fast enough to create significant numbers of new jobs.


The dour public mood is dragging down ratings for both parties in Congress and for President Obama, the poll found.

The Republicans must be high fiving each other in private about this, a bad economy presages a Republican takeover of the Senate, and possibly the White House.

Truth be told, when the good least bad guys Washington, DC think that everything is fine because banksters are doing better, even though unemployment is almost 9% (over 15% for the more accurate U-6), the American public is in the right frame of mind, we are unbelievably screwed.

It Ain’t Just Krugman Who Gets It at the Times

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Dave Leonhardt, one of their more prominent economics reporters, as well as being one of the more prominent contributors to their Economix blog, notices that most of the deficit gets fixed if you just do nothing and let the Bush tax cuts expire:

A trick question: If Congress takes no action in coming years, what will happen to the budget deficit?

It will shrink — and shrink a lot. This simple fact may offer the best hope for deficit reduction.

As federal law currently stands, some significant tax increases are set to take effect in coming years. The most important is the scheduled expiration of the Bush tax cuts at the end of 2012.

Of course, both parties favor the permanent extension of most of those tax cuts — the ones applying to income below $250,000. Both parties also oppose big cuts to the military, Social Security and Medicare, at least in the short term. Unfortunately, the deficit is likely to remain frighteningly large over the next decade without either cuts to those programs or tax increases.

Say what you will about Krugman, and he is a brilliant man who has won the Nobel Prize in Economics, but he does not reflect the conventional thinking at the “Paper of Record.”  He is an outsider.

Mr. Leonhardt, on the other hand, does. He’s been working as a journalist at the Times for about a dozen years, and the fact that he is mentioning this means, at the very least, that the idea that doing nothing will fix the problem is something that is discussed amongst their staff.

Economics Update

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So, the BLS is reporting that job openings rose rapidly in February.

Looking at the ratio of jobs to the unemployed (see graph pr0n), there has definitely been some improvement, but first, it’s still a pretty crappy number, and second, workforce participation is down, so this number is partially an artifact of that.

We also saw retail sales rise and a moderately good beige book from the Fed, though the former has partially been driven by increased gasoline prices.

What worries me, particularly with the deficit cutting fever out there, is the fact that Gallup Economic Confidence Index hit a low for the year.

Economics Update

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It’s Jobless Thursday, and initial unemployment claims fell by 10,000 to 382,000, with the 4-week moving average of initial claims, continuing claims, and emergency claims falling as well.

When juxtaposed with stronger than expected retail sales figures for March, the economic news is generally pertty good, though the fact that home prices continue to crater, falling for the 7th straight month, indicates that real estate is not done with its correction.

Last Week’s Employment Data

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Employment-Population ratio h/t Paul Krugman

So the federal unemployment numbers came out on Friday, and employment rose by 216,000 and the unemployment rate fell to 8.8%.

This is good news, employment actually rose by more than the natural growth of the workforce, about 175K, but this still means that it would take about 13 years for the 8 million people who have lost jobs to become employed again.

When one looks at the employment population ratio (see graph Pr0n) and you can see that it  has the lowest that it has been done in a decade, so a lot of the falling unemployment numbers are people leaving the workforce, whether it is early retirement, going on disability, or just giving up.

It’s still basically a jobless “recovery”.

Economics Update

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Really just a few data points here, with housing starts falling sharply, 22%, in February, and we are seeing uptick on the producer price index.

The former is a mark of sanity, there are still too many homes, new, used, and foreclosures, out there, and if you are building houses without a buyer committed ahead of time, you are nuts in most parts of the country.

As to the PPI, it’s all volatility in commodities, so I would not worry right now, which is what the FOMC said yesterday in its statement as well.

Economics Update

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The Federal Open Market Committee has released its statement, and its policies of low (basically zero) interest rates and quantitative easing (printing money) remain in effect.

Meanwhile, home builder confidence rose in March, but remains really really low, while the New York Feds Empire State Index Rose.

Full FOMC statement after the break:

Release Date: March 15, 2011
For immediate release

Information received since the Federal Open Market Committee met in January suggests that the economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Commodity prices have risen significantly since the summer, and concerns about global supplies of crude oil have contributed to a sharp run-up in oil prices in recent weeks. Nonetheless, longer-term inflation expectations have remained stable, and measures of underlying inflation have been subdued.

Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Currently, the unemployment rate remains elevated, and measures of underlying inflation continue to be somewhat low, relative to levels that the Committee judges to be consistent, over the longer run, with its dual mandate. The recent increases in the prices of energy and other commodities are currently putting upward pressure on inflation. The Committee expects these effects to be transitory, but it will pay close attention to the evolution of inflation and inflation expectations. The Committee continues to anticipate a gradual return to higher levels of resource utilization in a context of price stability.

To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to continue expanding its holdings of securities as announced in November. In particular, the Committee is maintaining its existing policy of reinvesting principal payments from its securities holdings and intends to purchase $600 billion of longer-term Treasury securities by the end of the second quarter of 2011. The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.

The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period.

The Committee will continue to monitor the economic outlook and financial developments and will employ its policy tools as necessary to support the economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate.

Voting for the FOMC monetary policy action were: Ben S. Bernanke, Chairman; William C. Dudley, Vice Chairman; Elizabeth A. Duke; Charles L. Evans; Richard W. Fisher; Narayana Kocherlakota; Charles I. Plosser; Sarah Bloom Raskin; Daniel K. Tarullo; and Janet L. Yellen.
2011 Monetary Policy Releases

Last update: March 15, 2011

Economics Update for the Week

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The news has been good this week.

First, the jobless rate rate fell to below 9% for the first time in about 2 years, and initial unemployment claims fell to a roughly two year low as well.

Note that while the improvement in the labor force was good, 193,000 that rate means that something like 7 more years would be required to reach something approaching a normal employment picture.

Additionally, productivity rose strongly in the 4th quarter, while the Institute for Supply Management’s Manufacturing and Non-Manufacturing indices both rose strongly.

The only real question is whether the pain caucus calling for government austerity will screw this all up by cutting government spending, and possibly tightening monetary policy, too soon.

Economics Update

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The Fed’s Beige Book is out, and it is the same old, same old, a slow recovery that will take years before we are back to what should be normal:

The Federal Reserve said the labor market improved throughout the country early this year, driven by rising retail sales and “solid growth” in manufacturing.

“Labor market conditions continued to strengthen modestly, with all Districts reporting some degree of improvement,” the Fed said today in its Beige Book report, an anecdotal account of the economy released two weeks before meetings of the Federal Open Market Committee. Its last survey, released Jan. 12, said the job market was “firming somewhat.”

Overall, the economy “continued to expand at a modest to moderate pace,” the central bank said in Washington. Eleven of the Fed’s 12 regional banks, including San Francisco and Philadelphia, described their regions as expanding, improving or experiencing moderate growth. Only Chicago reported growth “at a pace not quite as strong” as before.

This translates to, “Well, stocks are up, but this is not really a recovery.”

I am uncertain just how much this fragile and slow recovery might be harmed by the recent spike in oil prices.

We also have conflicting job news, with Challenger, Gray, and Christmas saying that large planned layoffs are up, largely on the loss of jobs at state and local government level, but ADP is forecasting fairly strong private sector job growth.

Now We Know What Gives Timothy Geithner an Erection

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Noam Scheiber interviewed Geithner, and gave us this gem:

I asked Geithner if he had a grand vision for the postcrisis landscape—for, say, a less bloated financial sector with a smaller role in the economy—and a map for how to get there. Could he be a figure like George Marshall, who helped win the World War and then remade Europe so that it couldn’t happen again?

Geithner hunched his shoulders, pressed his knees together, and lifted his heels up off the ground—an almost childlike expression of glee. “We’re going, like, existential,” he said. He told me he subscribes to the view that the world is on the cusp of a major “financial deepening”: As developing economies in the most populous countries mature, they will demand more and increasingly sophisticated financial services, the same way they demand cars for their growing middle classes and information technology for their corporations. If that’s true, then we should want U.S. banks positioned to compete abroad.

“I don’t have any enthusiasm for … trying to shrink the relative importance of the financial system in our economy as a test of reform, because we have to think about the fact that we operate in the broader world,” he said. “It’s the same thing for Microsoft or anything else. We want U.S. firms to benefit from that.” He continued: “Now financial firms are different because of the risk, but you can contain that through regulation.” This was the purpose of the recent financial reform, he said. In effect, Geithner was arguing that we should be as comfortable linking the fate of our economy to Wall Street as to automakers or Silicon Valley.

And then he smoked a cigarette, and asked if was good for me.

H/t David Dayen.

Sorry for that image.

It’s Jobless Thursday

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Well, it’s Jobless Thursday, and the initial unemployment claims numbers are good, they fell to 383,000, a 36,000 drop, with the less volatile 4-week moving average falling to 415,000 from 431,000, and continuing claims fell by 49K to 3.89 million, though extended and emergency claims rose by 84K to 4.64 million.

I hope that this is a part of a trend, but much of this may be driven by the extreme weather that we have seen recently, which has the effect of delaying people trying to get to the unemployment offices.

Of particular concern is the rising emergency and extended claims, because there are large numbers of people, the so-called “99-ers” who have run out of benefits completely, and are so not caught in any of these numbers.

Economics Update

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It’s not a good week for employment.

Initial unemployment claims rose by 51,000 to 454,000, people are talking about snow doing this, but I’m inclined believe that the weather had less to do with this than the underlying weakness in the economy.

The less volatile 4 week moving average rose by 15,750 to 428,750, and continuing claims rose by 94K to 3.99 million, and emergency claims fell by 98K to 4.62 million, though a lot of that last number dropping are people simply running out of benefits completely.

The Federal Reserve is still concerned about such thing, as the latest Federal Open Market Committee statement, which maintains its concerns as well as their quantitative easing (printing money) policy.

It’s Jobless Thursday

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Initial claims for unemployment benefits fell to 404,000 last week, better than forecast, but still about 25K more than what is needed for the start of a meaningful recovery, and the less volatile 4-week moving average dropped 4,000 to 411,750, with continuing claims dropping 26K to 3.86 million, though the total number of people getting benefits, despite the fact that the “99ers” have run out of benefits, rose by more than 400K to 9.61 million.

In related news, manufacturing employment grew for the first time in more than a decade.