Professor Mark J. Perry's Blog for Economics and Finance
1. Manufacturing employment (data here) has increased for the last three months, the first time in four years of three consecutive monthly increases.
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
17 Comments:
Job growth in health care is another bright spot:
Job Market Brightens as U.S. Payrolls Surge in March
April 2, 2010
Health care, which grew steadily even during the depths of the recession, has added 588,000 jobs since the start of the downturn over two years ago, including 27,000 jobs in March.
“We have had this massive disaster, but we’re at a place now where things are stabilizing,” said Heidi Shierholz, an economist at the Economic Policy Institute in Washington. “But the report does not signal yet that the private sector is poised to create jobs at a healthy enough rate to start bringing unemployment down.”
Indeed, the government predicts the jobless rate will average 9.8 percent next year and 8.4 percent in 2012 before falling to 5 percent in 2016. The rate was 4.7 percent in November 2007, the month before the recession began.
Most of that 162,000 were government and temporary workers:
- 48,000 were temporary government Census workers;
- 40,000 were employed in other temporary help services;
- 27,000 were long-term care and nursing health care workers;
- 17,000 in manufacturing and 8,000 in mining.
“The number of long-term unemployed (those jobless for 27 weeks and over) increased by 414,000 over the month to 6.5 million. In March, 44.1 percent of unemployed persons were jobless for 27 weeks or more.”
Bureau of Labor Statistics
Funny, when Bush was in office, the press saw only clouds on the horizon. Now, they see only silver linings.
still, not exactly a "V" recovery in this troubling employment chart
i suspect that employment recovery will remain sub-par for this entire business cycle as offshoring continues to be an attractive alternative to domestic hires.
the new normal?
It seems, the Fed understands the problem well:
Federal Reserve Bank of New York
The U.S. Economic Outlook
April 1, 2010
William C. Dudley, President and Chief Executive Officer
"I believe that the recovery is likely to be quite muted compared with past recoveries.
The early stages of past recoveries have been led by consumer spending, particularly for durable goods and residential investment. For example, in the first year of recovery following the deep recessions of 1973-1975 and 1981-1982, real consumer spending increased an average of 6.5 percent and residential investment rose an average of 38 percent. It is unlikely that we will experience this type of strength this time. Households have suffered unusually large shocks to both income and wealth and many remain highly leveraged.
Real consumer spending increased at a 2.25 percent annual rate over the second half of 2009 and looks to be growing at about that rate in the first quarter of 2010.
Residential investment did increase over the second half of 2009, boosted by relatively low mortgage interest rates, lower home prices and the first-time home buyer tax credit. But recent data on the housing sector indicates that the recovery has stalled. As with consumption, we are unlikely to see the typical surge of housing starts and residential investment that was a key feature of most past recoveries.
Given that the personal saving rate is still relatively low, it will be hard for consumer spending to grow more quickly without large increases in real labor income. But big increases in real labor income won't be possible without a much stronger recovery in output. And a much stronger recovery in output is unlikely without stronger consumption."
i suspect that employment recovery will remain sub-par for this entire business cycle as offshoring continues to be an attractive alternative to domestic hires.
Another reason to kill it. While there may be some use to it, it has been implemented in a way that leaves too many out of work for too long. Bring it back when there's an actual problem (U-3 < 2%, U-6 @ 2% for non-permatemp work).
Seth, if you want unnecessary jobs, why not put people to work breaking windows and then fixing them?
Or they can produce $40,000 electric autos that are worth $20,000, produce alternative energy at five times the cost, etc.
Seth, if you want unnecessary jobs, why not put people to work breaking windows and then fixing them?
The problem is that the offshoring that's going on is politically driven to happen. In exchange, repeal most environmental regulations and establish very low tax rates. Consider it as a way to reduce crime.
There's too much creativity in finding ways not to hire people in the US than there are ways to employ them. That is indeed a problem, and you want to make it worse.
An employers' market is a problem. Permatemps aren't the answer, and neither is offshoring with high employment rates. Another wrong answer is knowingly collapsing the economy by withdrawal.
They should be subject to the same US-based market forces (upward or downward) that the US citizen experiences.
Job growth in health care is another bright spot
Not so quick!
Manufacturing creates wealth; health care consumes it. An increase in health care employment certainly benefits those who get the jobs, but the net gain to economic growth is probably negative or at best neutral (the value-added from pharmaceuticals and medical devices might offset some of the consumption).
This isn't to say that health care isn't a valuable service, just that it doesn't -- in general -- contribute to economic growth which is due to the accumulation of capital.
Seth, I stated before, consumers seeking the lowest price is no different than producers seeking the lowest cost.
Nonetheless, I'm sure some consumers buy the significantly more expensive "politically correct" good. I guess, you believe, they're reducing "crime."
Digging a hole and filling it back up again, over and over, won't raise your living standard.
Craig, according to you, getting a haircut, replacing your worn coat, buying new tires, etc. don't create wealth, they consume it.
Manufacturing creates wealth; health care consumes it.
That applies even if the manufactured good is "virtual" in the sense of a developed piece of software. But taken too far, it can be a hole dig/fill.
Seth, I stated before, consumers seeking the lowest price is no different than producers seeking the lowest cost.
The problem is that when you disregard the producer's condition completely, Third World countries are the result. They don't care about quality that much or even the working conditions. That is, they're universally willing to sacrifice the producer(even against the producer's will).
That's what you get when your optimal situation happens - not caring about the producer beyond them being treated like a cog.
Combine that with the political influence to move work there, and you get trouble. Thus I don't completely disallow it, but the margin for allowing it at very low levels of unemployment.
Do everything first to get people within the US willing and able to do the work, then reconsider it when you're having trouble @ < 2% U3, 2% U6, and no permatemps included.
Craig, according to you, getting a haircut, replacing your worn coat, buying new tires, etc. don't create wealth, they consume it.
You described maintenance purchases, not new purchases. It still leaves room for switching brands to the competitor.
Do everything first to get people within the US willing and able to do the work, then reconsider it when you're having trouble @ < 2% U3, 2% U6, and no permatemps included.
No, company towns with incredibly low wages(or similar practices) do not count.
>"I believe that the recovery is likely to be quite muted compared with past recoveries."
Well, that's understandable. Those past recoveries weren't happening at a time when the largest federal spending increase in history in the form of "TARP", "stimulus", "jobs" programs, and a "healthcare reform" package were being jammed down our throats, soon to be followed by "immigration reform" and "cap & trade".
How can anyone, consumer or business, plan for the future or risk spending money when they don't know what will happen in their lives from day to day?
>"Combine that with the political influence to move work there, and you get trouble. Thus I don't completely disallow it, but the margin for allowing it at very low levels of unemployment."
Sethstorm,
I was really impressed with your Hyundai retort to juandos, even though I didn't agree with your premise. It seemed so clearly worded! I understood the whole thing.
Now you're back to not making any sense.
What happened?
>"...if you want unnecessary jobs, why not put people to work breaking windows and then fixing them?">
You are ignoring union rules. The people whose job it is to break windows, cannot also be the people who fix them, nor can either of those people clean up the broken glass. We must maintain high employment in the glass repair industry.
The merchant whose window is broken will need a $90 city permit to get the window fixed, as well as possible building code upgrades to his entire building, depending on its age.
I'm sure that what the merchant expects is a $200 window repair, will cost at least $1,850.
You want consumption? You got consumption.
sethstorm's rant about Hyundai didn't make any more sense than any of his previous rants...
Speaking with clarity from the point of view of abymsal ignorance is just 'politico speak'...
Note the following 'sethstormsism: "The problem is that when you disregard the producer's condition completely, Third World countries are the result"...
Now this is an incredibly silly and clueless rant...
It has NO basis in reality...
3rd world countries are 3rd world for a very wide variety of reasons, one of them being the inability to start their own industry...
Post a Comment
<< Home