IBD Gets a Detail Wrong, Gets the Overall Picture Right on the Employment Report
This morning, I classified the April employment report as “strong,” and in the context of what we’ve seen in the past few years, it was. Later, I tempered my enthusiasm a bit when a commenter pointed out that the Birth/Death estimate for the month was +175,000, which seems ridiculously high by a factor of at least two.
Nonetheless, I’m sticking with “strong,” because the not seasonally adjusted additions, both overall and private, were both over 1 million. I’m not going with “very strong” or “outstanding, simply because for what is probably the 21st out of the last 22 months, the Obama recovery’s job performance trailed that achieved under Ronald Reagan. People who are annoyed at my bring-ups of Reagan might as well get used to it. The Gipper used policies that worked; Obama has utilized historically failed policies which (/surprise) have failed again; Reagan’s results make a mockery of Obama’s.
The editorialists at Investors Business Daily, who should know better, botched the distinction between seasonally adjusted and actual (not seasonally adjusted) job changes, but otherwise got it right in interpreting today’s results, highlighting something to which I hadn’t caught on (in bold):
Despite Growth, Still Not Enough Jobs
Many were impressed with the 244,000 new jobs reported in April. But not us. Many of those new hires likely came at one company, and the unemployment rate actually rose (see Note below — Ed.). The jobless expansion continues.
… Nearly one in four of the April jobs, however, may have come at one company — McDonald’s, which hired 62,000 workers from a million applicants. We’re not knocking Big Mac — it’s a great business — but economic growth can’t be sustained with burger flippers. (Note: On this IBD is wrong. McDonald’s added 62,000 out of the roughly 1.1 million NOT seasonally adjusted jobs added in April in the private sector and overall. That 1.1 million number was then seasonalized to +244K overall and +268K private. — Ed.)
… We stand 7 million jobs below our peak of 138 million in December 2007, just as the recession began.
The economy must create about 120,000 jobs a month just to sop up new entrants into the workforce. So even at the current pace, it’ll take nearly four years just to get back to where we were in 2007. Is that progress?
Coming from a White House that, in addition to hope and change, promised 3.5 million new jobs annually, or 292,000 a month, the April report is disappointing.
… The average spell of unemployment today is 38.3 weeks, close to its all-time high. Even after the 1982 recession, then the worst since the ’30s, the duration of unemployment never got above 21 weeks.
… None of this is an accident, of course. When things go badly, it’s almost always due to bad policies.
We can feel their impact in continued declines in home prices, soaring food inflation and gasoline at over $4 a gallon. We see it too in the alarming and dangerous buildup of spending and public debt, which under Obama has leapt to $14 trillion from $9 trillion.
All this comes from an administration that clings to absurd Keynesian ideas that more spending and higher taxes will create jobs and economic growth.
We know those things don’t work. The White House must either yield to reality and change course, or the voters will change it for them in 2012.
We’re playing a dangerous game of chicken if we think we can wait until November 2012, which really turns into January 20, 2013, which all too easily can turn into the 2013-2014 budget year, before taking a shot at seriously fixing things.
The establishment press’s indifference to the suffering going on with workers and their families in this country as identified in the bolded paragraph above is no longer shocking, but grows ever more disgraceful with each passing month.
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UPDATE: I’m going to address this matter further in the next week or so, but those who are interested how the job market is fundamentally changing, and generally not for the better, should read this item Steve at NRE brought to my attention. Just wait: These conditions will be put at the feet of employers, when it’s really government policies, regulations, and uncertainty that are completely to blame.











