More Than 1 Million Jobs Added So Far This Year, Strongest 10-Month Gain in More Than 3 Years
Private-sector payroll jobs increased in October for the 10th straight month, as private employers have added 1,115,000 jobs so far this year, according to today's BLS report (see chart above). The last time there were 10 consecutive months of private employment gains was in the 2006-2007 period before the recession started, which was also the last time that more than 1 million jobs were added in a 10-month period.
21 Comments:
I asked this on the last thread, but I'll ask again in case someone with the answer missed it there.
If the economy is picking up, why did the fed print $600 billion to buy it's own paper? If the economy is doing well -- hiring is up, pick-up sales are up, shipping is up -- why did they need to take this action?
There's no implied accusation there. I just don't understand it.
how is it that we can be allegedly adding jobs while labor force participation drops to a 25 year low?
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/gono/Participation%20Rate.jpg
normalize this to the 66% average, and you get 157.4mm in the labor force not the 153.9mm being reported. that delta of 3.5mm would push reported u3 to 11.6%
Let's not overlook the 330,000 DECREASE in the number of people employed that is reported in the household survey. If we're concerned about total employment, including self employed, that's the number we should focus on.
Note: The NYTimes, in it's email alert, chooses to ignore that number.
Maybe we should wait for the adjustment like we've seen for the last several reports...
michael-
the honest answer is because the fed is lying. they know full well that this round of QE will do nothing for the economy or unemployment.
bernanke's comments at the FOMC meeting are so obviously internally inconsistent that they can only be indicative of a hidden agenda. there is no way he is actually that stupid.
"Low and falling inflation indicate that the economy has considerable spare capacity, implying that there is scope for monetary policy to support further gains in employment without risking economic overheating."
consider what this is really saying. it's saying that we have overcapacity. it's then saying that cheap money will drive employment. see the fallacy? no one cares about fee dessert if they are already gut bustingly full from the buffet. money is already incredibly cheap. hell, it's virtually free. depending on what CPI methodology you believe, real interest rates may already be dramatically negative.
bernanke is arguing that cheap money will cause a capacity and employment expansion in an overcapacity situation. it's just completely untrue. it has not done so thus far and will not do so going forward. there is already too much capacity. cheap money doesn't make adding more a good idea. consumer debt is already to high and consumers are deleveraging. again, he's clearly pushing on a string and worse is advocating policies that will make it increasingly difficult to ever normalize the economy and wean it off addiction to the most outlandishly loose money in american history.
i'm going to give helicopter ben the benefit of the doubt and assume he is smart enough to know this given that any econ undergrad ought to find this exceedingly obvious.
so what is he really up to?
my guess is that having rigged CPI (greenspan) so that it fails to report the actual price level the fed is now interested in creating a great deal of inflation that will not be reported.
why? to bail out the federal governement. if reported CPI is low and actual inflation is high, then it mitigates the social security and medi system messes. it also devalues the federal debt and consumer borrowings and keeps the federal deficit from exploding as interest costs soar.
it looks to me like this is a deliberate attempt to get out from under future obligations without triggering the cost of living adjustments that would make it impossible. using pre greenspan CPI methodology, inflation is already quite high (6-8%). many such as gross at pimco and volcker have commented on this.
that is a very dangerous and morally questionable plan that falls well outside the purported role of the fed.
there is no way to climb down from this sort of policy.
i know it sounds a bit like tin foil hat conspiracy theory territory, but it does fit the facts pretty neatly. i can't come up with a better answer without resorting to "bernanke is a fool", which i doubt.
moganovich,
Thank you for that. Doesn't sound "tin foil hat" to me. Tin foil would be the argument that he's doing it to devalue the dollar so as to pave the way for one world currency. With a picture of George Soros on it.
If we have a 10% drop in employment followed by a 10% increase in employment... and we continue having such cycles... everything is just fine, right?
Well, if we have a 6 or 7 million loss of jobs followed by a 1 million gain in jobs... strongest in more than 3 years... everything is looking up, right?
"If the economy is picking up, why did the fed print $600 billion to buy it's own paper?"
I think morganovich is right about printing meag-bucks to lessen the impact of massive deficits. The other reason is the fed's mandate by Congress to fight unemployment. What should the Congress do besides cutting spending to help private job creation?
Enact the Allen Sinai Stimulus for Private Sector Program. Eliminating the Corportate Income Tax for U.S. firms would be a tremendous boost to the U.S. economy. Where would the $300 to $500 billion dollars probably go?
25% to U.S. Capital Investment
23% Hiring and Training US Employees
14% for U.S. Based R&D
BTW, it is estimated that less then 1% would be used as capital infusion for foreign subsidaries.
this graph provides an excellent illustration of how unemployment has increased and recovered in every recession since ww2.
it makes it very clear what an extraordinarily weak recovery this is.
http://cr4re.com/charts/charts.html#category=Employment&chart=JobLossesAlignedBottomOct2010.jpg
to be "V" shaped, we'd need to be 2.2 percentage points up off the low by now, not the 0.6 that we are.
In July 2009 when the economy started "growing" again, there were 139.817 million Americans employed. Today after 15 months of growth, there are 139.061 million Americans working. This is a loss of 750,000 jobs since the end of the recession. That doesn't sound like a "V", but an "L" recovery.
Dr. Perry,
Respectfully, I see it a bit differently:
http://sbvor.blogspot.com/2010/11/obamas-epic-failure-october-edition.html
Jobs crisis eases, but economy has long way to go
November 5, 2010
"After the severe 1981-82 recession, the economy generated 287,000 jobs a month in 1983 and 323,000 (a month) in 1984 (population was smaller then).
Some months were especially explosive: in September 1983, the economy created 1.1 million jobs. In February 1984, it was 479,000."
How to spur growth (through government reform):
1. Roll-back regulations substantially.
2. Make the Bush tax cuts permanent.
3. Cut spending and then cut taxes.
4. Give visas to millions of wealthy, high-income, and high-skilled immigrants.
5. Steer clear of the private sector whenever possible.
SBVOR isn't the only one who questions this slow job recovery...
Consider this bit from Calculated Risk:
Employment-Population Ratio, Part Time Workers, Unemployed over 26 Weeks
More on the Reagan Recovery:
Economy too weak to generate jobs
May 28, 2010
"After the last severe recession in the early 1980s, (real) GDP grew at rates of 7 to 9 percent for five straight quarters and the unemployment rate dropped from 10.8 to 7.2 percent in 18 months."
Also:
During normal times, expansion in the 3 percent range would be considered healthy for the U.S. economy. But the country is coming out the worst recession since the Great Depression. So growth needs to be stronger — two or three times the current pace — to make a dent in the jobless rate.
Economists say it takes about 3 percent growth to create enough jobs just to keep up with the population increase. It would have to be about 5 percent for a full year just to drive the unemployment rate down 1 percentage point.
My comment: This weak recovery, over the past 16-months, was completely unnecessary, very expensive, and if the recovery doesn't pick-up substantially soon, it'll turn into a disaster with almost no options for a turnaround.
Why is the fed printing 600 billion to buy its own paper?
Politics, not economics.
Many people don't yet believe recovery is upon us because they are not smart enough to recognize it let alone benefit from it..
How can we be adding more bobs and losing labor force participation?
More workers available, maybe?
Morganovitch
Grossly oversimplified. I'm not overleveraged, but at these rates I'm working on it.
Inflation is already quite high.
That's why I'm working on over leveraging.
Makes it clear what an extraordinarly weak recovery this is...
To be v shaped this recovery would have to be as extraordinary as the collapse that preceded it.
Not meeting that standard hardly qualifies the recovery as weak.
To meet that standard would require returning to the bubble conditions that preceded the collapse.
Your argument makes no sense either way.
Unemployment.
How much do we increase productivity before you realize that not everyone should work?
Isn't it now widely recognized that not everyone should own a home? Why should they have a job then?
The goal should be to fully employ idle resources, including 15 million unemployed workers and $2 trillion in cash held by corporations. Idle resources are a waste.
The Obama Adminstration has done many positive things to promote growth. However, it has done many more negative things to prevent growth, which has also offset much of the positive efforts by the Fed.
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