The jobs report for October just came out. Headline numbers:
Payrolls up 80,000. That's below the average of the past year -- about 125,000 per month. Once again, private sector jobs went up (104,000); public sector, down (-24,000).
Unemployment ticked down to 9%.
Revisions to September and August added about 100,000 on payrolls, cumulatively, to those months.
We're just very much stuck in a slog here. The private sector is expanding at a snail's pace, while state and local governments continue to cut jobs. It's a vicious cycle where weak employment growth is leading to weak wage* and income growth and that's dampening consumption and GDP growth. And as long as consumers remain strapped, it's hard for me to see why corporations sitting on trillions in cash reserves would invest here as opposed to expanding, emerging economies elsewhere.
Meanwhile, Congress remains in a fantasyland, wallowing in a well-deserved 9% approval rating and blocking every idea that might actually stimulate some job growth.
I don't mean to get all statistical on you this early in morning, but I always like to think about the confidence intervals (statistical reliability) around these employment numbers.
For the payroll survey, the 90% confidence interval for the monthly change in jobs is about 100,000; for the Household survey, it's about 400,000(!).
The means that monthly numbers at or below those levels are statistically indistinguishable from no change at all (more precisely, they will be 90% of the time).
I raise this today because I suspect we'll hear some people get all jiggy about the growth of employment in the Household survey of 277,000. But that's well below the confidence interval of 400,000 (the sample size is a lot smaller in the Household survey; ergo, the wider confidence interval).
That doesn't mean there's no information in the headline numbers for months like October, where the change in both employment numbers is statistically insignificant (as is the change in the unemployment rate, by the way, from 9.1% to 9%; on the other hand, the increase in private sector payrolls of 125K is significant). If you average over a bunch of months, you're essentially increasing the sample size and that gives a more reliable read (which confirms the slog I mentioned).
But let's not forget our stats 101, America!
* Year-over-year, wages were up 1.8%. Consumer prices are rising, as of September, by 3.9% meaning real wages-the buying power of paychecks-are falling.
This post originally appeared at Jared Bernstein's On The Economy blog.
Congress even though Congress is the major impediment to job growth. On the other hand, they are
higly critical of China on almost anything their government does. Now, only if they would do the same
with our Congress as they do to China sometimes, perhaps job growth will drastically improve.
And Congress fiddles while Rome is burning to the ground...
'And as long as consumers remain strapped, it's hard for me to see why corporations sitting on trillions in cash reserves would invest here as opposed to expanding, emerging economies elsewhere'.
Big Business caused this mess and instead of creating work/jobs they are going elsewhere and keeping their money out of country. Here's a list of jobs we can create by the millions right now. But big business won't do this because they only want 'consumerism' of goods/services to feed their bloat.
Get real.
Build millions of miles of bike and horse paths
Replant diversified forests, grasslands and hedgerows
Tear down derelict buildings and parking lots and plant urban farms
Retrofit all buildings
Build light rail and trollies
Clean up every creek, stream, river, lake, beach
Put solar hot water and micro wind on all buildings
Develop clean energy
Put water catchment on all buildings
Modernize water, sewage systems
Put all power lines under ground
Ther has always been a global economy and lower wages. There will be going forwards a permanent growing worker surpluse, educated and uneducated with robotics, office automation...
There was a worker surplus created by assembly line MFG long ago, solved by lowering the work week from 70 hours to 40 and raising wages, addding overtime.. which increased demand, requiring more production and more jobs.. and weekends created leisure industries and more jobs.. and more entreprenuers who had free time to start a business..
Repubs /robber barons did not see these results then or now.. just a race to the bottom economy. Wrong then and wrong now.
Regards
In the rest of the world coporations are required by law to put the good of the country before the good of the company..we are the opposite here.
Single payer for everyone does not need to be subisidized(our currecnt system is subsidized ) as it cost half as much to cover everyone with better coverage and outcomes as now... Its a 50% cost savings, and a 20% drop in the cost of MFG in the U.S.
Regards
Regards
That's where you're wrong, Mr. Berstein. Because there are NO ideas that "might actually stimulate some job growth." We're in a CREDIT recession, caused by excessive PRIVATE borrowing and exacerbated by excessive PUBLIC borrowing. The way to "stimulate some job growth" is to pay down debt...PERIOD!
Yes, I know...you'd REALLY like to believe that YOUR party's solutions (whomever you support) would fix this mess. But they can't. This is NOT a time for Washington to act but rather to sit on the sidelines, allowing creditors to slowly begin to bring down their indebtedness and consumer spending to recover from its sugar-high of mortgage equity consumption. Government action can ONLY prolong a recovery, while shifting the burden onto the shoulders of those least culpable.
Obama's promising you a free lunch. Tax the rich. "They've got all that money under their mattress." WRONG!
When Bush took over we were on target to pay off the reagan debt by 20011 and be debt free, instead repugs and WS went on a drunk and paid for nothing.
How many people are employed by making mortgage payments .. zero! Now if they bought a car with those payments, then people would be employed to build the car.
Major Companies dont have a cash problem, the most cash in the last 20 years. But major companies over the last 3 years have not created a net job in the U.S. between them and worse outsourced 30 million.
Pls tell me where you studied economics...?
And your solution was tried in 1929 under Hoover ( a milder problem than this, since then we had trade surpluses, not gone 8 years with no job creation, and funded our own debt, made stuff) for 4 years.. the results was a growing derpression and FDR being elected.
Regards
You're under the impression that FDR ended the Great Depression? Back to history class, Jocko. And Hoover did what lots of progressives would like to see Obama do. He passed the Smoot-Hawley Tariff Act to protect American jobs. Google that bill to see how well THAT worked! And (unlike you) being a non-partisan, I'd be the first to characterize Bush as one of the most fiscally irresponsible Presidents in modern history. But that only reinforces the dilemma that I referenced. We have too much private debt AND we have too much public debt. Until that's reduced, we're going to be in a slump.
You can continue to imagine that there's a "free lunch" solution here but any actions taken will simply push a full recovery out that much farther.
He's neither a statistician nor an economist, and doesn't have a quant background
Not statistics field, not economics
In the days of the robber barons,. there was no middleclass, just sweat shops and 70 hour work weeks for peanuts.
By you logic the middleclass that developed under New Deal Demand Capitalism from 1930s to 1980 due to Unions, min wage, over time, 40 hiour work weeks, cheap state colloges, did not deserve to do well either... lol
Educatio dropped in America as it did in the middleast with the rise of relgious fundalmentalism.. no suprise there and today we have a major party that is anti science, fact and history.
Regards
Good to know we have a few smart people left in the country. Keep up the good fight.
Regards
The population increased over 60 million since then, a 20% increase! So the FED government increase is far below the rate of population increase.. its up about 3%.
Note hwen the repubs kill the economy andd create one fianical disaster after another, whenther it be 1929 or during Reagan, the FED eomployment has already had to expand to pick up the slack, proces more FED recovery spending and etc.
Pls note that in 2001, the reppube were handed a .5.5 trillion surpluse which would have paid off the reagan debt and left us debt free by 2011 and a tentrillion surplus by 2021. RFepoubs turned that into a 31.5 trillion increase in debt swing.
Obama inherited 1.7 trillion deifcts in BUSH last budget year and ten trillion in the FED rolling budget debt, he has not added to that.
Regards
The Keynes model was for temporary borrowing to prime the pump, not a trillion or two every year. We are headed for a grim reckoning.
The only way hiring will return is if the tax and regulatory environment were drastically change to favor growth in something other than government. It ain't happening with Obama. Ah for Marx's wet dream -- the whithering away of the state. If only.
And why since 1980 did the fortune 1000, create no net jobs but did outsource 30 million jobs and 80% of our industry?
And why did under Bush 60,000 factories close and wages drop `4%.. its not like business did not get the tax breaks and deregulaton they wanted with a repub congress for 14 years and the WH for 8 years! And no job creation, while doubling the debt that reagn tripled? really more than that since he was handed surpluses!
Regards
It is globalization and our failure to compete that is costing jobs. Redistribution of wealth will just drive capital overseas. The tax code is the biggest impediment to job creation. We have to reinvent ourselves competitively, through the marketplace, not the halls of congress and the executive branch. Solyndra shows just how inept they are.