Friday, August 05, 2011

July Employment Report

The BLS website must be down, I can't get the full employment report, but here's a summary from the WSJ:

"Friday's report showed private-sector employers, which account for about 70% of the work force, added 154,000 jobs in July, up from 80,000 in June. Several major industries showed job gains.

Manufacturing employment increased by 24,000 in July, more than double the gain from the previous month. Economists had been expecting a bounce as disruptions to production stemming from Japan's earthquake have been easing. Even the battered construction sector showed a gain, with employment rising by 8,000. However, the housing sector remains a drag on the economy.

Meanwhile, government employment continued to fall—by 37,000—for the ninth month in a row. State and local governments, which are struggling to close budget gaps, showed job losses."

Related: From Reuters, "Canada jobs rise, unemployment rate fell to 7.2% in July, the lowest since 2008."

24 Comments:

At 8/05/2011 8:03 AM, Blogger Junkyard_hawg1985 said...

While the headline numbers may look better, the household survey showed another month where the number of Americans employed dropped. This was on top of a big drop in June. The employment population ratio dropped to a new decade low in July.

 
At 8/05/2011 8:19 AM, Blogger morganovich said...

jh-

yeah.

the only think keeping headline u3 out of the double digits is "workers leaving the workforce".

that does not sound like recovery...

i'm not sure which set of these job creation figure to put more trust in at the moment, though i lean towards the household survey, as it is traditionally a little better and captures small business better.

in an environment of increasing regulation, big companies do better than small.

my fear is that the ADP/BLS numbers are missing this.

planned layoffs and food stamps just spiked too.

 
At 8/05/2011 8:27 AM, Blogger morganovich said...

i love this chart that CR does:

http://cr4re.com/charts/charts.html#category=Employment&chart=EmployRessJuly2011.jpg

shoes you just how different this downturn is.

we are now at twice the post ww2 average number of months since peak employment for a full recovery in jobs, and still have losses essentially equal to the lowest point of the worst drop in that period.

this is not a V or even a U, it's worryingly close to an L.

 
At 8/05/2011 8:29 AM, Blogger Junkyard_hawg1985 said...

I'll add that the seasonally adjusted number of Americans working in July was the lowest of any month in 2011.

 
At 8/05/2011 8:39 AM, Blogger Junkyard_hawg1985 said...

"i'm not sure which set of these job creation figure to put more trust in at the moment, though i lean towards the household survey, as it is traditionally a little better and captures small business better."

Well Said. The household survey data is not routinely revised and as you mention, it captures small business which is struggling.

 
At 8/05/2011 8:59 AM, Blogger Sean said...

morganovich,


this is not a V or even a U, it's worryingly close to an L.

This is pretty much as folks concerned about debt de-leveraging (like Rogoff) predicted, and for the right reasons.

 
At 8/05/2011 9:17 AM, Blogger Dr William J McKibbin said...

The US employment to population ratio continued to decline in July 2011 on an annual basis -- more at:

http://wjmc.blogspot.com/2011/08/us-employment-to-population-ratio.html

The US economy is simply not creating jobs -- not really...

 
At 8/05/2011 9:51 AM, Blogger morganovich said...

sean-

it's also the same sort of thing you saw in the 30's.

aggressive, activist government creates uncertainty which freezes hiring.

this is a worrying correlation:

http://www.coyoteblog.com/coyote_blog/2011/07/someone-must-have-been-reading-my-blog.html

 
At 8/05/2011 10:32 AM, Blogger Buddy R Pacifico said...

If the jobs numbers were simply a single state, ie. NY or CA, then it would be very goods news.

 
At 8/05/2011 11:37 AM, Blogger James said...

“The US economy is simply not creating jobs -- not really...”

Not true!

WE are creating lots of jobs. Just not here and lots of the jobs we create here we are giving to foreigners on green cards and temp visas.

No tariffs No recovery.

 
At 8/05/2011 12:56 PM, Blogger Che is dead said...

I don't get it. You guys all seem to be missing the big picture. Here, let Nancy explain it: LINK

If unemployment continues like this, we're all going to be rolling in the dough!

 
At 8/05/2011 2:32 PM, Blogger James Fraasch said...

Che, isn't it funny how she is a believer in Reaganomics when it suits her cause.

Transfer payments to private individuals apparently have a multiplier effect in Nancy's economic model.

Then why would allowing people to KEEP their tax money not have the same effect?

She didn't realize it, but she made the point that the Laffer's, Mundells, and Waninski's have been stating for years.

Putting money into the pockets of those that spend it creates jobs.

Except, it works far better if it is not government money and the money is not in the form of a government check, but instead in the form of forgone taxes.

 
At 8/05/2011 2:55 PM, Blogger morganovich said...

"No tariffs No recovery."

oh, yeah, smoot hawley really did the trick back in the 30's.

how can you drive a recovery by creating a deadweight loss?

consumers always lose more in higher prices than producers gain by protection.

that's money they cannot spend elsewhere.

losing a dollar to give someone 70 cents can NEVER create prosperity.

 
At 8/05/2011 3:21 PM, Blogger James said...

morganovich,

There are plenty of people to quote who will say Smoot-Hawley caused problems in the 1930s but they can not produce the data to back it up. The totality of their evidence is what someone said it. Smoot-Hawley happened after the decline in trade.

We had a better economy during more that a hundred years of high tariffs than we have had since going to free trade.

 
At 8/05/2011 4:02 PM, Blogger Methinks said...

yeah, Morganovich, you've got to hop on the debunked and defunct Mercantilist wagon. It's all part of paying your "fair share" and other nonsense. Don't you know that forcing everyone to pay more for inferior goods is the road to prosperity?

Oh, and correlation = causation. If the economy grew in the presence of tariffs, then tariffs caused the growth. Get it? It's the same idiot argument proponents of tax increases use - "Well, when BJ Clinton raised taxes, the bubble...I mean economy expanded, so higher taxes (but only on the most productive) are the key to Nirvana."

There, you now have James' arguments in a nutshell.

 
At 8/05/2011 4:20 PM, Blogger James said...

BLS Jobs Data

Employed June 2011…….…….139,334,000
Employed July 2011……..…….139,296,000

How is that not a loss of 38,000 jobs?

 
At 8/05/2011 4:48 PM, Blogger PeakTrader said...

James says: "We had a better economy during more than a hundred years of high tariffs than we have had since going to free trade."

So, we need high tariffs between states, counties, households, etc. for better economies, by avoiding the division of labor, specialization, and trade.

 
At 8/05/2011 7:10 PM, Blogger juandos said...

"There are plenty of people to quote who will say Smoot-Hawley caused problems in the 1930s but they can not produce the data to back it up"...

LMAO!

Good one James...

Do some homework...

 
At 8/06/2011 1:58 AM, Blogger Ron H. said...

"We had a better economy during more that a hundred years of high tariffs than we have had since going to free trade."

Yeah, but the high tariffs weren't the cause of better economy. There was prosperity in spite of the economic drag of tariffs.

 
At 8/06/2011 2:00 AM, Blogger Ron H. said...

"Employed June 2011…….…….139,334,000
Employed July 2011……..…….139,296,000

How is that not a loss of 38,000 jobs?
"

Most likely due to the deadweight losses produced by tariffs. Eliminating all tariffs is the only hope for an improved employment picture.

 
At 8/06/2011 3:14 AM, Blogger PeakTrader said...

The U.S. lead in innovation and invention with the rest of the world is greater now, in the Information Revolution and with more international trade, than in the Industrial Revolution.

The U.S. not only leads the world in Information Age and Biotech Revolution firms, in both revenues and profits, it leads the rest of the world combined.

 
At 8/06/2011 9:51 AM, Blogger morganovich said...

james-

that's a preposterous statement.

there are reams of evidence on the damage smoot hawley did.

it's passage dropped the economy off a cliff.

all tariffs create a deadweight loss in real terms.

how can creating such a loss lead to prosperity?

i note you are silent on those question.

think about it.

if the US consumes 100 cars, 50 made here and 50 made overseas at a price of $20, we have a $2000 market for cars. $1000 is domestic.

let's say we put a $5 tariff in place.

foreign cars now cost $25. demand for us cars goes up, demand for foreign cars drops.

market share shifts and price rises.

price hikes reduce overall demand.

not the market is 80 cars at $25, still a $2000 market.

sure, us automakers, who now sell 60 of them may make more money, but overall, americans are paying the same money for 20% fewer cars.

even if we make the unrealistic assumption that 100 cars are still sold, 70 by the us, 30 from offshore, the US is now paying $2500 (25% more) for the same number of cars and suffering from lesser selection.

the 25% increase in the price of cars comes from somewhere. that's money they cannot spend elsewhere.

and 30% of the price increase does not accrue to american companies.

thus, there is ALWAYS a deadweight loss.

us consumers lose more from higher prices than us producers gain from them.

this graph makes it clear how this must ALWAYS be so:

http://mjperry.blogspot.com/2011/03/econ-101-protectionism-for-dummies.html

you are arguing to benefit special interests at the expense of the society, but are too deluded or misinformed to see it.

you cannot benefit an economy in real terms by arbitrarily making goods more expensive.

 
At 8/06/2011 10:00 AM, Blogger morganovich said...

methinks-

yeah. that foolish chestnut about "we grew with high tariffs so they must be good" gets trotted out all the time. (though not by anyone with even rudimentary reasoning powers)

it's akin to arguing that a room with a blazing fire in it in wintertime is warmed by the open window, so if we want a hot house, we should open all the windows.

as china demonstrates, undergoing an industrial revolution can great growth in spite of a multitude of bad policy, but to draw preposterous causal links from coincidence is a sign that folks like james have no understanding at all of data handling.

it's instructive that not a single one of them can ever present a mechanism by which tariffs cause growth/prosperity.

the argument always goes like this:

tariffs create us jobs by increasing our producer's market share in the domestic economy.

then you ask: how?

by making foreign goods more expensive.

so you say, well, doesn;t that make that good in general more expensive?

yes.

so, we pay more for goods, and therefore have less to spend on other items.

um, yes.

so jobs are lost in other sectors.

well, uh....

they see a job saved at GM, but not the job lost at burger barn because we pay more for our cars and that the latter ALWAYS outnumber the former.

it astounds me that such an easily disproven dogma remains so persistent. it really does speak poorly of the economics education in the US. we really ought to start teaching it in middle school.

 
At 8/06/2011 1:35 PM, Blogger Ron H. said...

"it astounds me that such an easily disproven dogma remains so persistent. it really does speak poorly of the economics education in the US. we really ought to start teaching it in middle school."

I dunno...learning Ha-Joon Chang economics earlier might not be much of an improvement.

There seem to be a lot of well educated people promoting this nonsense.

 

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