Jobs Report, Take #2

April 6th, 2012 at 10:05 am

As mentioned in my earlier post, we may be at the beginning of another downshift in job growth or March’s disappointing report could be an anomalous blip down in a better underlying trend.  There’s some reason to hope for the latter—I noted the seasonality issues caused by the mild winter—but we could also be seeing the impact of higher gas prices on growth, real incomes, and consumption.  

Still, you really don’t want to build too big a story out of one month, especially when it’s off trend.  Look at it this way.  If you plot the monthly gains in the private sector, as I do in Figure 1 below, you clearly see the March deceleration.

Source: BLS

But if you smooth out some of the possible monthly anomalies by taking quarterly averages, and then plot average monthly gains over the past three quarters, you get the clear step function below.

Source: BLS

We don’t know which is correct.  I’d remain about as nervous as I was before.  We’re adding jobs, but at too slow a clip.  We have tools to do something about it, but I’m afraid they come under the rubric of fiscal stimulus, and those of us who would take advantage of low borrowing rates to apply such stimulus right now are in a distinct minority around here.

All’s I’m saying is that if it were me, I’d be out there saying:

You know what, America?  This monthly jobs report may be a one-off disappointment or it could signal that the job market is doing worse than we thought.  Either way, there’s too many un- and underemployed people out there. 

And guess what else there is out there?  There’s too many crumbling public schools, too many bad roads, too many water systems, airports, rail lines, and you name it in need of repair.  There are too many states and towns cutting back on vital services, laying off teachers, cops, firefighters.  Too many homeowners underwater on their mortgages.

So let’s marry a problem with a solution here, take advantage of historically low interest rates—a market signal that this is precisely the time to make these investments—and take out some serious insurance against the possibility that the March report is flashing red.

Or something to that effect.

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12 comments in reply to "Jobs Report, Take #2"

  1. davesnyd says:

    Umm, I think you’re preaching to the choir for the most part– we’re hear listening because we agree with you.

    Question is, why aren’t your friends in the Administration listening, too?

    • mainmati says:

      Because, as you know, nothing Obama can do that will address the stimulus will get through Congress. That’s been the case now for almost 3 years. The GOP wants to destroy the economy and will not be satisfied with half measures.

  2. markg8 says:

    Not to mention that this work needs to be done sooner or later and the cost of labor and materials is never going to be lower. It’s political malpractice not to do this work now. We know the GOP doesn’t want the economy to recover on Obama’s watch. It’s up to us to throw them out of office so we can get on with rebuilding the country.

  3. Will says:

    Yes, why aren’t more pundits making this point? We Democrats seem to be very bad at this whole “messaging” thing.

  4. Fred Donaldson says:

    Recently watched a report on Hearst’s San Simeon and its 56 bedrooms, 61 bathrooms, 19 sitting rooms, 127 acres and learned that there were another half dozen Hearst homes that were also immense and were stuffed with his art treasures, etc.

    We would get more jobs if we encouraged our rich masters to build more magnificent edifices – those with 100 rooms or more, and particularly in desolate locations where the trucking industry would benefit.

    I think Mr. Romney is not setting an example with only one elevator for his autos in his California mansion by the sea. As a GOP candidate, especially, he should build a small skyscraper for his cars, plus some 100 rooms just to show his wealth, and improve the jobs situation in the U.S.

    We need to beg the rich to flaunt their wealth in a big way, because the March BLS labor report reveals a stagnant number of total persons working (142,034,000), which is less than in August 2005 (142,434,000), and that doesn’t take into account all the people (125,000 a month or so), who should have been added to the workforce through population growth in the past 80 months.

  5. thump says:

    Not to mention investments in electrified transport which will help reduce our dependence on said oil prices. But I guess people who sell oil don’t care what happens in the US since they can now sell in a growing global market.

  6. Nadia says:

    I honestly think that it’s not in the President’s interest to try and talk up jobs numbers that are greeted as disappointing in most outlets. From the standpoint of the message. The truth is trends do matter much more than the level, but the problem is that this trend is not sufficient for re-election. Nate Silver calculated that the President needs roughly ~150,000 jobs per month to win re-election. At 120,000, he would be a modest underdog. It’s not unsurmountable, but it stacks the deck against Democrats and Obama.

    Talking about this as a sign that we’re recovering from the worst recession since the Depression and talking about avoiding going back to the policies that got us into this mess fails to speak to how much people are suffering or offer them any hope for relief. Moreover, talking about it as one month is problematic if weak jobs reports come in later.

    Stan Greenberg and Democracy Corps found that messages that included emphasis on progress tended to fare poorly, and excluding it improved messages.

    I know that’s really painful to hear in light of coming back from the worst of the financial crisis and the harm that a lot of a right-wing policy did. But, the data in Greenberg seems to strongly point towards the reality that voters are not responsive to it.

    Instead, an economic message focused primarily on the way forward is more likely to be successful. Priorities USA noted that the President gained ground on jobs against Republicans in Congress last fall after his jobs plan introduction.

    Rather than talking about progress, Bush policies, and ups and downs, the President should primarily focus on fighting hard for public investment and the social safety net.

    Fighting for a vision of economic renewal is the only path to Democratic Ascendancy on the economy.

  7. Thingumbobesquire says:

    Actually, the economy is far, far worse than these mere unemployment numbers portend. Ever since the advent of the so called information age, consumer economy and the break up of Bretton Woods when Nixon pulled the plug on gold reserve ratio, there has been a looting of our nation’s physical economy by the financial speculators. Now I realize that academic (perhaps better quackademic) economists like that genius helicopter Ben Bernanke do not have the sense to give two cents about what kind of employment there is because to them money is money. (That’s why they think printing it is the financial panacea, while in reality diarrhea is more like it.) But due to the economic monetary nostrums of these very same quacks, we have become a virtual junkheap of an economy.

    The problem can only be solved by first shutting down the lunatic bucket shop derivative securities speculators like Goldman Sachs and George Soros’ Quantum Fund by separating out their worthless casino chip nominal values and cutting them loose through bankruptcy. That means a return to Glass Steagall and a new Bretton Woods.

    Second we need to take down the Federal Reserve which is nothing but an instrument of these very same financial houses like Goldman and Morgan Stanley that have created this execrable mess. We must return to the principle of Alexander Hamilton’s design of a national credit system for the restoration of a physically productive economy. His attack on Adam Smith by name in his Report on Manufactures to the Congress, puts the lie to the myth of so called free enterprise. This means creating a Third National Bank of the United States that is not in the control of today’s international financial oligarchy radiating out of the City of London and Wall Street.

    The reason the United States of America was established was to promote the general welfare. Period. Without that commitment, we are but a sorry reality show parody of the rancid Roman Empire’s bread and circuses. Today that means repair and development of long term sustainability of our wrecked physical economy. Credit must be established like Hamilton and later Lincoln did to promote investment in high technology water, power, transportation, and agriculture.

    The manned space program, that the crazed Obama administration has just sunk, must be restored and vastly accelerated. We must dump the pseudo science of radical environmentalism and use advanced technologies like thorium nuclear reactors (of which there is enough proven supply to be mined at current rates of usage to last over a thousand years.) We must finance continent scale water projects that would provide fresh water enough to green the deserts like the North American Water and Power Alliance that was idiotically thrown into the dust bin. Nuclear fusion (that the insane Obama clique has just defunded) and matter anti-matter research must be made our top priority. These measures (and all that they entail) alone will restore a functioning physical economy that will promote the nations long term general welfare, anything else is too little too late.

    • Fred Donaldson says:

      During the 1936 Olympics, a group of business leaders were invited to a talk in Berlin, that criticized the Nuremberg laws and other monstrous activities of the Third Reich. William Shirer recalls that the situation was dismissed by the attending happy American capitalists, who commented instead that the people seemed happy and there was no union unrest. Hooray! Germans towed the line. (Or were sent to concentration camps.)

      Things today in America in some ways are even worse. In 1936 the German government was at least involved in huge public works, reduced rate public susidized vacations for workers, including even cruises, and building one public structure after another.

      If the worst administration anywhere in history knew that at least something had to be done to benefit the people, what depths have the we reached by ignoring this in our dribble down plutocracy.

  8. bmasck says:

    Mark Zandi of Moody’s said Friday that if it weren’t for the loss of government sector – federal, state and local – that the unemployment rate would be 0.2%

    Looking at Jan 2009 – February 2012 there have been 41,000 private sector job losses and 584,000 public (fed, state, local).

    Todd provided further analysis that 72% of job losses in 2011 came in 12 states that recently became governed by republicans. MT, MN, WI, MI, IN, OH, PA, ME, NH, NC, AL and TX.

    If you look at Wisconsin, for example, Gov. Walker refused stimulus funds to improve the rail system there and took the hit on jobs in his state. Wisconsin, a state with the most political agenda, has the worst employment record, shedding the most jobs.

    This is simply in support of Mr. Bernstein’s call for infrastructure spending and replace police, firefighters and teachers where the cuts were too deep. One example, Flint, Michigan, one of the nation’s most violent cities has cut police and has lower relative salaries than neighboring communities.

    Now is the time to start beating this drum and not stop until change follows.

  9. Mr. Derp says:

    Like it or not this is Obama’s economy now. You and I know that if the economic numbers were better every single person posting on this site, including the author, would be singing praises about how smart and wonderful Obama is and how he single-handedly got us out of the worst depression, recession, and every other “ession”. Instead he economy is tanking and somehow it’s the GOP’s fault? Somehow they are magically willing the entire U.S. economy to fail? They have that much power over you? I don’t think so.
    Actually I think Obama meant what he said:
    – “There were no shovel-ready jobs”
    – “Your energy costs will necessarily skyrocket”
    – “I just want to spread the wealth around”

    Wake up!

  10. Jeffrey says:

    Stimulating jobs through investment in our crumbling infrastructure would be a wise investment – in more ways than one.