February 7, 2014

Sympathetic AP: Obama Mulling ‘You Can Keep Your ‘Junk’ Health Insurance Plan For Three More Years’ Maneuver

In yet another bizarre and extra-constitutional twist in the saga of the Affordable Care Act, aka Obamacare, a clearly sympathetic Associated Press — that’s why I call it the Administration’s Press — is reporting that the Obama administration is considering a three-year delay in demanding that health insurance companies drop so-called “substandard” or “junk” individual policies.

But that’s not how the AP’s Tom Murphy is framing the clearly leaked proposed move. You won’t find the word “delay” in his entire story, which is a why a friend of mine who tried to find something about it online and couldn’t thought that only Fox News was reporting it. No-no-no. The AP only describes the move as an “extension” which would take the pesky problem of arbitrarily cancelled individual policies off the table until — imagine that — after the 2016 elections (HT American Thinker via Free Republic; bolds are mine):

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Mark Zandi Still Isn’t Buying That December Was So Bad, Seems to Lower His 2014 Jobs Outlook Without Admitting It

Filed under: Economy,Taxes & Government — Tom @ 10:39 am

Mark Zandi seems to have forgotten that he told those on Wednesday’s ADP conference call that he expects monthly job growth to be 225,000 for 2014. My notes indicate that he (my notes, not his exact words) “expects a breakout to (a) 225K average for all of 2014.”

As can be seen in this CNBC video, he seems to have taken it down, while acting as if nothing has changed (Zandi segment begins at the 1:24 mark; bolds are mine):

HOST: Mark, did you have the high number on the way into this?

MARK ZANDI: I did. I had 170. I was high.

HOST: So what do you think went wrong here?

ZANDI: Well, you know, the way — I think a lot of weather is still in this number, and the 30,000 decline in government, something odd is going on there. So, y’know, take the 113, add in the 29 for the lost government, we had upward revisions, we’ll get more upward revisions for the December number when it’s all said and done. We’ve got a number of revisions coming in.

The bottom line in my view is that the trend in the job market has not changed. Nothing fundamental is going on here. We’re still in the 175 – 200k per month, and that will become evident in the spring. I mean that rings hollow on a day like this when we get a weak number. But I think that’s the reality of what’s going on.

I suppose that Zandi can claim that we haven’t seen the “breakout” yet, and that when it happens, it will pull the year-long average up to 225K. But today’s report, assuming it doesn’t get revised (it will, but we don’t know which way), already requires job adds averaging 235K during the remaining 11 months of this year.

But if, as he seemingly implies, we’ll still be at 175K-200K in the spring, the rest of the year will have to average something like 275K for the full-year average he predicted on Wednesday to occur. That seems quite unlikely.

January 2014 Employment Situation Summary (020714): More Malaise — 113K Job Adds, Topline Unemployment Down to 6.6%

Today’s employment report calls for posting Aerosmith’s “Same Old Song and Dance”:

**** ORIGINAL POST ****

In light of conflicting data about how well or poorly the economy has been doing during the past month or so and the stock market’s down year thus far, today’s employment report is getting even more attention than usual. It’s too bad, as will be seen later, that almost no one will focus on what really happened in January.

Predictions:

  • On Wednesday’s ADP conference call, Mark Zandi of Moody’s predicted 170,000 seasonally adjusted job additions and the unemployment rate dipping from 6.7% to 6.6%.
  • Bloomberg has 180,000 jobs and the unemployment rate staying the same.
  • Christopher Rugaber at the Associated Press has 170,000 jobs adds and the unemployment rate staying the same. Rugaber seems to be getting excuses ready if he needs them, which is why I’ve saved it for future reference if needed.
  • This Reuters report has 185,000 jobs added with no unemployment rate prediction.

Raw (not seasonally adjusted) data benchmarks

This is a particularly important report for the raw data (i.e., the government’s estimate of what really happened) as opposed to the seasonally adjusted information almost everyone will report, as seen in the following graphic:

NSAandSAjobAddsEstabJan2000toJan2014prelim

The question about January isn’t how many jobs were added. It’s how many net workers lost their jobs.

Based on the track record since the turn of the century, I’m going to say that the economy isn’t meaningfully improving unless January job losses overall were limited to 2.53 million or fewer, and private-sector jobs losses were 2.05 million or fewer. I’m using those benchmarks because they’re 100,000 or so below January 2012. If the economy can’t do significantly better than that, it’s probably going to continue to be a very long time before we see a legitimate jobs recovery. I also considered the fact that December Christmas season hiring was lower than usual, so the post-season job losses should also be lower than usual.

Many other items bear watching, including but not limited to the labor force participation rate, the part-time worker stats, and what industries see outsized or lower than expected job declines on the ground. It will also be interesting to see the size of the revisions to November and December — especially December, since last month’s result was called bogus and too low by a lot of the “experts.”

We’ll find out what happened here at 8:30.

Last-minute note: For those who think I’m setting today’s bars too high — “Getting headline unemployment down to 6 percent, while employing those folks at the margins of the labor market, would require about 365,000 jobs each month for three years — about double the pace accomplished since the economic recovery began and during the George W. Bush expansion.”

HERE IT IS (permanent link to full HTML) The snap judgment is that it’s the same old song and dance —

Total nonfarm payroll employment rose by 113,000 in January, and the unemployment rate was little changed at 6.6 percent, the U.S. Bureau of Labor Statistics reported today. Employment grew in construction, manufacturing, wholesale trade, and mining.

Household Survey Data

Both the number of unemployed persons, at 10.2 million, and the unemployment rate, at 6.6 percent, changed little in January. Since October, the jobless rate has decreased by 0.6 percentage point.

… After accounting for the annual adjustment to the population controls, the civilian labor force rose by 499,000 in January, and the labor force participation rate edged up to 63.0 percent. Total employment, as measured by the household survey, increased by 616,000 over the month, and the employment-population ratio increased by 0.2 percentage point to 58.8 percent.

… Establishment Survey Data

Total nonfarm payroll employment increased by 113,000 in January. In 2013, employment growth averaged 194,000 per month. In January, job gains occurred in construction, manufacturing, wholesale trade, and mining.

The change in total nonfarm payroll employment for November was revised from +241,000 to +274,000, and the change for December was revised from +74,000 to +75,000. With these revisions, employment gains in November and December were 34,000 higher than previously reported. 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 the revisions in this news release.

Mark Zandi, who was completely convinced that December’s original 74K was bogus and way too low, must be gritting his teeth today. There’s another revision to December coming in February, so he could still end up being right.

Now let’s look at the revised raw and seasonally adjusted results:

  • The total nonfarm payroll job loss was 2.870 million — the worst since 2009 (barely, but still worse), and 340,000 below my pre-release benchmark (yes, I’m looking at the numbers after the population control adjustments.
  • The private-sector job loss was a nearly as awful 2.346 million — the worst since 2009, and a sliver less than 300,000 below my pre-release benchmark.

This is a very, very weak report. More detail is forthcoming.

______________________________________

UPDATE 1: Chris Rugaber at AP is already furiously spinning (report will be revised again, but I also saved this iteration) —

Hiring was surprisingly weak in January for the second straight month, likely renewing concern that the U.S. economy might be slowing after a strong finish last year.

Chris, December had 75,000 job adds. That’s not “a strong finish last year.”

UPDATE 2: The Household Survey says that seasonally adjusted January employment increased by 638,000. That seems to be a long-overdue catch-up to the Establishment Survey trend of the past year. UPDATE 2A: The breakdown, which doesn’t add to the total because of independent seasonal adjustment calculations, is 378K full-time and 168K part-time.

UPDATE 3: The civilian labor force increased by a seasonally adjusted 523,000. But even with that increase, the labor force is 239,000 lower than January 2013, and 13,000 below September 2013.

UPDATE 4: The unemployment rate for African-American men went from 11.5% to 12.0%.

UPDATE 5: Seasonally adjusted temp employment grew by 8,100. December’s temp adds were revised to 30,100 from 40,400. 40% of December’s 75K in seasonally adjusted net job adds were temps.

UPDATE 6: Average weekly hours in retail dropped to 31.1, which I believe may be an historic low.

UPDATE 7: Commenter Scott tipped me to this paragraph in today’s report —

This revision incorporates the reclassification of jobs in the QCEW. Private household employment is out of scope for the establishment survey. The QCEW reclassified some private household employment into an industry that is in scope for the establishment survey–services for the elderly and persons with disabilities. This reclassification accounted for an increase of 466,000 jobs in the establishment survey. This increase of 466,000 associated with reclassification was offset by survey error of -119,000 for a total net benchmark revision of +347,000 on a not seasonally adjusted basis. Historical time series have been reconstructed to incorporate these revisions.

The cynical response would be, “Well, if your economy can’t create new jobs, you invent them.” But at least at first glance, that seems unfair.

Assuming the people involved do work and get paid for it, they probably should be considered employed. If someone has a counter-argument for that, I’d like to hear it.

Earlier text in the related section of the report indicates that these “new” employees were spread across a period of either 21 months or the past 5 years (it’s hard to tell), and not just dumped into a single month. This does increase reported Obama-era employment in comparison to previous administrations, because the adjustments don’t go back to any previous administration. If (emphasis if) the people in this category were being detected but not reported all along, I would question why that wasn’t done.

Note that these jobs were added into the Establishment Survey, where this month showed 113K seasonally adjusted job adds, but not into the Household Survey, which showed an increase of over 500K in total employment.

UPDATE 8: Things might have been worse but for the fact that January’s Birth-Death adjustment of -307,000 was less than January 2013′s -314k and January 2012′s -367K — which is odd, given that the job losses which BLS could estimate from its survey were clearly higher this time around (specifically: 2012 without birth/death was -2.225 million; 2013 was -2.550 million; 2014 was -2.563 million)

Friday Off-Topic (Moderated) Open Thread (020714)

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

This open thread will stay at or near the top today. Rules are here. Possible comment fodder may follow. Other topics are also fair game.

Positivity: Beauty in the Heart of Steubenville

Filed under: Positivity — Tom @ 6:00 am

From Steubenville, Ohio:

01.27.14

A city that’s lost it’s luster is receiving some TLC from it’s local university students.

A group of students from Franciscan University of Steubenville have set out to revitalize their downtown by turning a vacant music hall into a concert venue. The idea is to draw people to the ailing downtown by hosting concerts and free music lessons for kids who would otherwise be unable to afford them.

Steubenville, Ohio is rich in history and culture, but has suffered over the past few decades since the steel industry slowed in the 1980s. Many beautiful, historic buildings have been left to gather dust – or worse – to crumble due to lack of upkeep.

This group of students have dubbed their plan “The Harmonium Project.” For months they’ve been working to renovate the ballroom of the historic Oddfellows building right in the heart of downtown.

Their hope according to one of the founders, Marc Barnes of the Patheos blog, Bad Catholic, is that by “plant(ing) something beautiful” they’ll encourage students from all over the Tri-State area to “enter into communion with their city, to be united with their neighbor in the mutual enjoyment, the mutual contemplation, even, of something good.”

To be sure, Steubenville is a beautiful city, but it has fallen on tough times. These students are working to change their city (and they do claim it as their city now) into a place where people will want to gather and where businesses will, once again, want to open shop. …

Go here for the rest of the story.