February 1, 2013

Commentary on January Jobs Report

Filed under: Economy,Taxes & Government — Tom @ 2:28 pm

First, the latest update to the stimulus failure graph:

StimulusGraphThruJan2013

The unemployment rate without the shrinkage in the percentage of adults in the labor force, even after considering people who retired of their own accord and not because the economy left them with retirement as the only plausible option, is surely still in double digits.

Commentary/analysis (others may be added this evening):

  • Pethokoukis: “Weak January jobs report shows why Obama doesn’t want to talk about jobs anymore”
  • Noel Sheppard at NewsBusters: “8.5 Million Americans Left Labor Force In Obama’s First Term”
  • LA Times — “Recession Fears Ease”

January Employment Situation Summary (020113): Unemployment at 7.9%; 157K Jobs Added; Prior Months Revised Up by 127K

Filed under: Economy,Taxes & Government — Tom @ 8:22 am

I haven’t had a chance to take the usual look at the raw data from previous years, which I will do after the report’s release, but I can say that January is the most difficult month to peg, because on the ground hundreds of thousands get let go from Christmas and seasonal jobs. This means a fairly good chance that the seasonally adjusted results will not reflect the underlying reality.

That said, the seasonally adjusted predictions from the press are that the unemployment rate will stay the same and that about 155,000 jobs will be added:
- Bloomberg has 165,000.
- Reuters has the aforementioned 155K with no change in the unemployment rate.
- An in-house report at CNBC has the same.

I’m expecting the report not to be that bad but also not impressive, based only on a hunch that the administration wouldn’t have let its jobs council die if it knew that today’s report was going to be really, really awful.

The report will be here at 8:30 a.m.

… HERE IT IS, and it’s tepid for January, with big upward revisions to previous months (full release with tables:

Total nonfarm payroll employment increased by 157,000 in January, and the unemployment rate was essentially unchanged at 7.9 percent, the U.S. Bureau of Labor Statistics reported today. Retail trade, construction, health care, and wholesale trade added jobs over the month.

Household Survey Data

… Among the major worker groups, the unemployment rates for adult men (7.3 percent), adult women (7.3 percent), teenagers (23.4 percent), whites (7.0 percent), blacks (13.8 percent), and Hispanics (9.7 percent) showed little or no change in January. The jobless rate for Asians was 6.5 percent (not seasonally adjusted), little changed from a year earlier.

… Both the employment-population ratio (58.6 percent) and the civilian labor force participation rate (63.6 percent) were unchanged in January.

Establishment Survey Data

Total nonfarm payroll employment increased by 157,000 in January. In 2012, employment growth averaged 181,000 per month. In January, job gains occurred in retail trade, construction, health care, and wholesale trade, while employment edged down in transportation and warehousing.

The change in total nonfarm payroll employment for November was revised from +161,000 to +247,000, and the change for December was revised from +155,000 to +196,000. Monthly revisions result from additional reports received from businesses since the last published estimates and the monthly recalculation of seasonal factors. The annual benchmark process also contributed to these revisions.

Well (pending a look at the actuals), that’s good news and two forms of bad news. The good news is that November and December were better than originally thought. The first form of bad news is that those job gains were achieved in a quarter of contraction which, though it had some underlying strength, was still, well, a quarter of contraction. The second form of bad news is (again, pending a look at the actuals) that the trend is in the wrong direction (from 244K to 196K to 157K).

More later.

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UPDATE: BLS’s annual comprehensive revision added 422,000 jobs, causing much of the upward revision to November and December. Since the employment trough in February 2010, the economy has added 5.5 million jobs in 35 months (an average of 157,000 per month), and is still over 3.2 million jobs shy of the January 2008 peak — before taking population growth during the intervening five years into account.

UPDATE 2: Though you have to bounce between the Household and Establishment Surveys to make the comparison, although total employment is up by almost 1.2 million since January 2009.

UPDATE 3: Full-time employment is only up by 98,000 since January 2009. Full-time employment is still a stunning 5.96 million below its November 2007 peak.

UPDATE 4: Go here for additional commentary and analysis.

Obama’s Economy: The Excuses Begin

Blame everything, except the government’s policies.

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This column went up at PJ Media and was teased here at BizzyBlog on Wednesday.

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Just days after the November presidential and congressional elections which gave President Barack Obama a non-mandate of 50.6% of the popular vote and the demonstrated supported of less than 27% of all U.S. adults, NBC’s Brian Williams actually told viewers: “With the election now over, it is once again safe to talk abut the economy and jobs, Now that it is not a campaign issue, it’s back to reality.”

Still in Democrat-supportive campaign mode, Williams then introduced a report by correspondent Harry Smith about how “the idea that manufacturing in America is dead … is an outright falsehood.” Mary Andringa, President and CEO of Iowa manufacturer Vermeer Corporation and then-Board Chair at the National Association of Manufacturers, told Smith:

What’s really outstanding is the fact that in 2010, the U.S. had an output of $4.8 trillion of manufactured goods. That was up from $4.1 (trillion) in 2000 — and we’ve been through two recessions in the past decade.

That is undoubtedly an impressive achievement which should not be discounted. But then Smith delivered the kicker:

5 million manufacturing jobs were lost in the U.S. in the last decade. But new jobs have been created too, and believe it or not, many manufacturers in the U.S. are looking for help.

This highlights two problems. The first, which is that our educational system and culture are not preparing enough people for the jobs which need to be filled, is self-evident to anyone with open eyes. The second, despite the unfilled positions just noted, is even more important: Unlike what occurred after every other post-World War II downturn, not enough new jobs are currently being created to make up for the ones being lost. The new companies and entire industries which have always emerged and generated enough new jobs to replace those lost as a result of increased productivity in existing industries aren’t appearing at a rate necessary to reduce unemployment to an acceptable level.

Why not?

At the Associated Press, aka the Administration’s Press, the post-election search for an explanation clearly had two important constraints: First, do not blame the Obama administration or the federal government in any way. Second, find something which appears to be plausible and can’t be immediately refuted.

What resulted was a three-part series bemoaning the rapid advancements in technology and smart machines. It can be summarized in four words: “This time it’s different.” Well, it sadly is, and more than likely for the next four years, but not for the reasons AP cites.

AP’s premise: “For decades, science fiction warned of a future when we would be architects of our own obsolescence, replaced by our machines. … [T]he future has arrived.” The team which produced the report believes that technology is advancing so quickly and on so many fronts that it’s simply unreasonable to expect new jobs to appear fast enough to replace the ones being destroyed.

While the pace and nature of tech advancements have been and continue to be phenomenal, the notion that they  are unique to the point of causing insurmountable economic and employment problems should be absurd. As economist and George Mason University Professor Walter Williams pointed out in a 2011 column:

(In) 1900 … about 41 percent of our labor force was employed in agriculture. By 2008, fewer than 3 percent of Americans were employed in agriculture. … [O]ur farmers are the world’s most productive. As a result, Americans are better off.

In 1970, the telecommunications industry employed 421,000 workers as switchboard operators, annually handling 9.8 billion long-distance calls. Today the telecommunications industry employs only 78,000 operators … (processing) more than 100 billion long-distance calls a year.

… Fifty years ago, a typical textile worker operated five machines capable of running thread through a loom 100 times a minute. Today machines run six times as fast, and one worker can oversee 100 of them.

You say, “Williams, certain jobs are destroyed by technology.” You’re right, but many more are created.

Defying Professor Williams’ optimism, AP’s team of reporters left readers with three unacceptable choices as to what will result:

  1. The best-case scenario is that “The economy returns to health after a wrenching transition.” AP quotes leftist economist Joseph Stiglitz as claiming that it will take at least “half a decade,” meaning after Obama’s time in the White House has (hopefully) ended. How convenient.
  2. “The economy continues to produce jobs, just not enough good ones.”
  3. “Technology leads to mass unemployment.”

If this “blame tech” mantra sounds mildly familiar, it’s because Obama himself has on a few unguarded occasions commented on how technology has destroyed jobs, indicting ATMs, airport kiosks and the Internet for sending bank tellers, airline reservation agents and others to the unemployment line, apparently never to return, except perhaps as burger flippers or cashiers. I fear that the AP’s decision to identify tech as the scapegoat is no mere coincidence, and may foreshadow foolish attempts by the administration to slow down technological progress in the name of “saving jobs.” ObamaCare is already slated to do that very thing to the entire healthcare sector.

With all due respect to Professor Williams above, he would be right about enough replacement jobs being created if we were living in a genuine, free-market economy. Unfortunately, that’s not where we are in this nation. Virtually all of the reasons why sufficient job growth isn’t occurring can be traced to the Obama administration’s market-hostile economic policies and postures. Here are ten of the most obvious out of a list which could easily reach several dozen:

  • The war on fossil fuels, which has limited job growth in energy-related industries and caused prices to be higher than they should be for everyone else.
  • Cronyism on steroids.
  • Trillion-dollar deficit spending.
  • New bureaucracies like Dodd-Franks’s Consumer Financial Bureau which Congress can’t legally touch.
  • Sarbanes Oxley, a relic of the 2001 Enron debacle which the administration has done nothing to reform, and which has closed off the going-public option for many companies which would have done so before “Sarbox” became law.
  • Unemployment and other government benefits which make remaining unemployed relatively attractive, or a least a more tolerable circumstance than it should be, and for a longer period of time than should be necessary.
  • Onerous labor laws and regulations. I’ve spoken with many entrepreneurs in the past year, some of whom have had employees in the past. A vast majority of them have told me that they won’t hire any new employees in the current regulatory environment, even if the economy improves. Most start-up entrepreneurs likely feel the same way.
  • Trade policy, a problem which spans the past four administrations but is being most acutely felt now.
  • Federal, state and local tax increases.
  • Last but certainly not least, ObamaCare, especially its career-killing definition of a full-time employee as anyone who works 30 or more hours per week, and the destructive impact it will have in slowing medical innovation and research to a crawl.

What the AP series really tells us is that the economy wasn’t performing as well as the government and the establishment press claimed it was during the presidential campaign — something I believe this week’s report on fourth-quarter gross domestic product will confirm — and that the White House really doesn’t expect the malaise to lift during most of Obama’s second term.

Friday Off-Topic (Moderated) Open Thread (020113)

Filed under: Lucid Links — Tom @ 6:05 am

Rules are here. Possible comment fodder may follow later. Other topics are also fair game.

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Positivity: Author cheers Pope’s ‘flurry’ of social media outreach

Filed under: Positivity — Tom @ 6:00 am

From Orlando, Florida:

Jan 30, 2013 / 04:03 am

A Catholic author and blogger says Pope Benedict’s use of social networking has given the Church an example of how to better evangelize through the media.

“I’d say the most recent efforts are several steps in the right direction,” Brandon Vogt told CNA Jan. 29 – something he and other “tech-savvy Catholics” have been supportive of for some time.

Although Pope Benedict XVI and his predecessor Pope John Paul II often stressed the importance of using new forms of media to evangelize, especially on the Internet, little action was taken to put such tools to use on the Vatican’s part.

However, events such as the creation of Pope Benedict’s Twitter account and the launch of a new iPhone application show a pointed effort on the Vatican’s part to expand its social media outreach.

Just within the last year, Vogt said, the Pope’s “flurry of digital activity has been very surprising and encouraging.”

One day before Pope Benedict announced his World Communications Day message, the Vatican launched “The Pope App,” a tool for the iPhone and iPad that will give users the ability to stream papal events, view several live papal webcams, read news concerning the Pope’s happenings at the Vatican.

This development, as well as the Pope’s theme of “Social Networks: portals of truth and faith; new spaces for evangelization” for the upcoming World Communications Day in May, show the Vatican is “walking the walk” Vogt said.

Go here for the rest of the story.