Friday, August 03, 2012

From Today's Jobs Report: Demand for Temporary, Manufacturing, and Oil/Gas Jobs Remains Strong

From today's BLS Employment Situation report:

1. The number of "temporary help services jobs" increased by 14,100 in July to the highest employment level since January of 2008 when the recession was just getting started (see chart above).  This part of the labor market has now made almost a complete recovery from the effects of the recession, and suggests that the overall labor market will continue to gradually improve because the demand for temporary employment is generally considered to be a leading indicator of future, broader-based labor demand.  The increased hiring of temporary workers also suggests that many U.S. firms are probably cautiously hiring new workers on a temporary basis to meet increasing demand for output and production, and will gradually switch to more permanent hiring as the overall economy improves and uncertainty about future tax policy and pending fiscal issues are resolved.  

2. Manufacturing employment increased in July for the tenth consecutive month, which brings the total number of new manufacturing jobs added over the last year to 222,000, and the total number of new factory jobs created since 2010 to 524,000. 

3. For the tenth straight month, the manufacturing jobless rate in July (7.2%) was less than the national rate.  

4. "Oil and gas extraction" employment increased in July to the highest level in almost 24 years, since August 1988.  Compared to a year ago, the number of oil and gas jobs in the U.S. has increased by 11.6% and by 27.4% compared to the onset of the recession in December 2007.   

MP: Several of the bright spots in the labor market in July include strong demand for temporary workers, factory workers, and workers in the oil and gas industry. Here's some additional commentary on today's employment report:

Scott Grannis: "In any event, no matter how you slice and dice these numbers, jobs are growing and there is absolutely no sign of a recession." 

Brian Wesbury/First Trust: "But the lack of a very strong recovery doesn’t mean we’re not recovering at all. The unemployment rate is down 0.8 points from a year ago and we expect further modest improvement in the year ahead."

104 Comments:

At 8/03/2012 2:20 PM, Blogger Jon Murphy said...

Hm...interesting report.

 
At 8/03/2012 2:26 PM, Blogger morganovich said...

"In any event, no matter how you slice and dice these numbers, jobs are growing and there is absolutely no sign of a recession."

according to the bls press release, the number of civilians employed dropped by 195k from june to july making the number of workers lower than may as well. (page 4 of bls release)

http://www.bls.gov/news.release/pdf/empsit.pdf

the only reason we did not see this cause a jump in the unemployment headline number was that 150k people were dropped from the workforce. the laborforce participation rate was down seq and yoy and the number of people not in the labor force continues to soar, up 348k seq and nearly 2 million yoy.

that sure does not look like an expansion to me.

sorry scott, but perhaps you did not look at all the ways this can be sliced and diced. one needs to be careful with SA numbers.


even with this labor force fudging and the vast expansion of disability rolls, this is the 41st straight month over 8% u3, a post ww2 record.

i realize that the seasonally adjusted payrolls figure showing a jobs jump and that seems contradictory to the bls data, but i think it's mostly in the adjustment, i have just not had a chance to work through it yet.

 
At 8/03/2012 2:30 PM, Blogger Junkyard_hawg1985 said...

For about five months near the end of last year, the household survey was showing three month job creation of around 1 million. Since February, a grand total of 135,000 jobs have been added which comes out to an average of 27,000 jobs per month. The sharp drop in jobs is consistent with the sharp drop in the ISM non-manufacturing employment index which is now showing contraction. I suspect that today's positive establishment survey will be revised down in future months.

 
At 8/03/2012 2:37 PM, Blogger Jon Murphy said...

one needs to be careful with SA numbers.

Precisely why I don't like to look at them. As you can probably guess, I disagree with this month's report.

 
At 8/03/2012 2:49 PM, Blogger morganovich said...

so, i went and looked at a little historical data here.

the change in employment from june to july this year was -195 (non sa).

past years:

2011 -38k
2010 -159k
2009 -155
2008 -72
2007 -30
2006 -34
2005 +438
2004 +629
2003 -260

from this, it would seem we must conclude that this year was the worst june-jul since 2003, a rotten year for jobs.

this year looks far more like the bad years than the good, and while the traditional seasonal patterns seems negative, it is far less so that the adjusted number would seem to imply. the mean jobs change over the last decade is actually positive. the median is about -36k, also far better than this result.

this makes me pretty skeptical about that adjusted payrolls number being so far off of the unadjusted data.

it's nearly a 400k swing, and i see little to justify it.

 
At 8/03/2012 3:00 PM, Blogger sethstorm said...

Perhaps the Right-to-Work law needs to be extended to include temporary workers. They're no different than unions in ultimate function, just that the employer organizes them. Despite this, employers excuse temporary workers (obviously) as an easily controlled populace while doing everything to smite people associated with a worker-organized union.



Businesses aren't entitled to perfect conditions or people, despite their complaints about not having them. Shame that one has to pander to employers - at the expense of workers - instead of making it nigh-impossible for employers to avoid hiring US citizens directly.

 
At 8/03/2012 3:01 PM, Blogger PeakTrader said...

Shilling: New recession has begun
Aug. 3, 2012

Earlier this year, Shilling predicted a global recession would occur in 2012; now, it’s well underway in Europe and he said it already has hit our shores.

“I think the U.S. is in recession,” he said.

But here’s the good news, if you can call it that: He expects this to be a brief, mild, cyclical recession, not the kind we had in 2008-2009.

“I think the recession started in the second quarter and will run about a year,” he said.

He predicts a decline in GDP of 3.5% from peak to trough “because I’m not looking for a financial crisis.

Europe, however, which does have a fiscal crisis, a financial crisis and everything in between should show a 6.5% decline from peak to trough.

[May 31, 2012 - According to the National Bureau of Economic Research (NBER), the most recent recession lasted 18 months and output contracted by 5.1 percent from peak (December 2007) to trough (June 2009).]

A Gary Shilling - Bachelor’s degree in physics, magna cum laude, from Amherst College where he was elected to Phi Beta Kappa and Sigma Xi. Master’s degree and Doctorate in Economics at Stanford University.

 
At 8/03/2012 3:12 PM, Blogger Jon Murphy said...

rom this, it would seem we must conclude that this year was the worst june-jul since 2003, a rotten year for jobs.

Percentage-wise, it's the worst since 2001.

while the traditional seasonal patterns seems negative...

This year's seasonal rise (March-August) hasn't been terrible. Best seasonal rise (thus far, including July) since 2006.

This report wasn't the best for July. But there are some good signs. The year-over-year number (July 2012 over July 2011) is pretty decent (2.0% gain). For context, the long run average is 1.4% y-o-y growth. The annual data (which adjusts for seasonality) is up 1.4%. Again, for context, the long run average is 1.4%.

It is also important to remember that employment is a lagging economic indicator. Historically, it lags the economy by about a quarter or two. The less-than-stellar July is a reflection of the slower growth during the early bit of the second quarter.

A wee bit of prediction. August's number will likely be weak, but historically speaking, August is a weak month for employment anyway. September will likely be meh as well. Come the 4th quarter, we'll probably see mildly better numbers.

So, the TL;DR version:

Not a great July report, but no signs of imminent or current recession. Growth rates are pretty steady. Given the other economic data out there, this month is likely an aberration, rather than a trend. Another month or two of meh reports, before some better news come 4Q12.

 
At 8/03/2012 3:26 PM, Blogger PeakTrader said...

Morganovich says: "this year was the worst june-jul since 2003, a rotten year for jobs."

The U.S. created 20 million new jobs in the 1991-00 expansion and few of those jobs were lost in the 2001 recession (which was so mild per capita real GDP didn't fall in 2001).

The jobs recovery in the early 2000s was slow, because more jobs were being added to the mountain of jobs in the 1990s.

 
At 8/03/2012 3:26 PM, Blogger Mark J. Perry said...

Yes, but civilian employment is up by 1.43 million jobs this year, and by 2.7 million over the last 12 months, including gains of 847k in January, 428k in Feb. and 422k in May.

 
At 8/03/2012 3:26 PM, Blogger Jon Murphy said...

“I think the U.S. is in recession,” he said.

I have a question for Dr. Shilling. How can the US be in recession when our economy is growing?

US Production is rising (both according to the FRB and the PMI).

Real Consumer Spending is rising.

Business-to-business activity is at record levels and rising.

Construction is improving (albeit mildly).

Employment is rising (also mildly).

The USLI is indicating weakness a year from now, but not now.

The Chicago Fed National Activity Index is rising.

US trade (exports plus imports) are rising.

Wholesale Trade is at record levels and rising.

Housing Sales are improving.

This is hardly a barnburner of an economy right now, but it is certainly not in recession. I mean, you need to ignore reams and reams of data (cherry-pick, if you will), or change the definition of a recession (like the ECRI has done) to define our current economy as recessionary.

What we are seeing right now is the resiliency of the American consumer. The American economy is being propped up from the inside, not outside, currently. However, that trend will likely fall apart come this time next year. If we were coming from a better position, we would probably be able to hold off recession a bit longer, but given the tax increases and/or government cuts expected in the first half of 2013, the US consumer and businesses will not be able to hold up the economy any better.

He expects this to be a brief, mild, cyclical recession, not the kind we had in 2008-2009.

“I think the recession started in the second quarter and will run about a year,” he said.


He certainly got that right. Just the timing of the start wrong.

 
At 8/03/2012 3:40 PM, Blogger PeakTrader said...

Jon, the U.S. hasn't generated a self-sustaining virtuous cycle of consumption-employment, even after massive government spending and quantitative easings.

The economy has been slipping, since late last year.

 
At 8/03/2012 4:43 PM, Blogger Rufus II said...

Out here in hillbilly-land Median Household Income Peaked in

1999.

 
At 8/03/2012 4:58 PM, Blogger juandos said...

"Yes, but civilian employment is up by 1.43 million jobs this year, and by 2.7 million over the last 12 months, including gains of 847k in January, 428k in Feb. and 422k in May"...

Hmmm, well Mark those numbers seem questionable...

U.S. economy creates just 33,000 NET NEW jobs since January 2009

1. Net jobs created under President Obama (from Jan 09): 33,000.

2. Jobs needed monthly for unemployment rate to be below 8% on Election Day if current participation rate holds steady: 279,003.

3. Unemployment if participation rate was at demographic trend 11.5%.

4. Number of “missing workers:” 3.4 million.

5. Jobs needed to return to pre-recession peak (peak of Nov 07): 4.4 million.

 
At 8/03/2012 5:07 PM, Blogger rjs said...

the reference week for this survey was the 8th, before the drought got bad and curtailed oil & gas operations...it will be interesting to see what august figures for oil & gas jobs look like in the next report...

 
At 8/03/2012 6:47 PM, Blogger Ron H. said...

"Perhaps the Right-to-Work law needs to be extended to include temporary workers...blah, blah, blah..."

And just like clockwork, at the mention of the word "jobs", sethstorm wakes up from a nap on the couch in his mother's basement to type a few meaningless lines for our entertainment then drifts off to dreamland once more.

 
At 8/03/2012 7:05 PM, Blogger Ron H. said...

"Out here in hillbilly-land Median Household Income Peaked in

1999.
"

As was explained to you by several commentators the last time you throw up that chart, Median Household Income isn't a very good measure of well being for a number of obvious reasons.

Did you not read them, not understand them, or do you just insist on being wrong?

 
At 8/03/2012 7:07 PM, Blogger Publius said...

Horrific report.

BLS published a headline number this morning which was unreferenced vs. June’s number, either seasonally adjusted (SA) or non-seasonally adjusted (NSA). BLS did not specify. Thus, we have no sequential reference (see morganovich’s comment above).

Further, the household survey showed a drop of 195,000 jobs, and part-time vs. full time jobs made further tradeoffs

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012/07-2/Part%20vs%20Full%20Time%20July.jpg

The actual headline unemployment rate, based on historical reporting methodologies and workforce participation rates, is closer to 11 – 12%, not 8%. The real unemployment rate is still probably 15 – 18%.

 
At 8/03/2012 7:33 PM, Blogger Rufus II said...

Oh, no, I read, and understood them. I also understood that they were wrong.

Median Family Income is down drastically. If you think there are mitigating statistics, "STATE THEM."

I gave my stats; you give yours.

Lotsa luck.

 
At 8/03/2012 7:57 PM, Blogger Buddy R Pacifico said...

Keep your eye on private job creation:

From Bloomberg:

"The Labor Department data showed that private payrolls, which exclude government agencies, rose 172,000, exceeding the forecast for a gain of 110,000.

morgan is correct that people are dropping out of the workforce and much of that is very generous social security/state disability rulings. The money is running out for those programs though due to overwhelming subscribers.

 
At 8/03/2012 8:12 PM, Blogger morganovich said...

peak-

it took until 2004 for payrolls to get back to 2000 levels.

in 2003, the number of jobs was still declining until very late in the year.

i'm not sure what your point is.

mine was that 2003 was not a strong year for jobs creation and that if we look at the seasonal pattern over the last 10 years, the seasonal adjustment applied to the raw jobs number to get SA payrolls for this july looks way out of wack and was the only reason we saw a positive number.

 
At 8/03/2012 8:15 PM, Blogger morganovich said...

buddy-

that private payrolls number you are citing is a seasonally adjusted number.

take a look at the raw data in the bls release and you will see that the adjustment appears to be the only reason it is a positive number, and as i laid out above, this month's adjustment was roughly 10X the median seasonal pattern over the last 10 years when you look at the raw data, making this appear to be a very fishy number and not one i would rely on.

 
At 8/03/2012 8:27 PM, Blogger morganovich said...

rufus-

median family size is down as well.

in such a case, median family income can be a very misleading figure.

eg-

if you are poor, perhaps your parents move in with you and you and they pool your income as one family.

if you and they are become slightly wealthier, perhaps they move out and you both live apart and now register as 2 families with lower family income even though your overall income rose.

http://mjperry.blogspot.com/2010/01/how-media-misuse-income-data.html

mark has done some work on this.

real median income per family member was at a new high in 2007.

it has dropped since then, and you could argue that it's been overstated post boskin alterations to cpi, but the data you presented is measuring changes in household size as opposed to changes in overall income.

 
At 8/03/2012 9:22 PM, Blogger Jon Murphy said...

I have to laugh. I have been preaching using NSA numbers for over six months now (on this blog). When the SA numbers were pointing down (but the NSA numbers pointing up) all the commentators here were citing the SA numbers and laughing at me for using NSA numbers. Now that the SA number is pointing up and the NSA number is pointing down, suddenly we can't trust the SA numbers.

 
At 8/03/2012 9:24 PM, Blogger Rufus II said...

Family Size in 1990 was 2.63

Family Size in 2000 was 2.62

Family Size in 2009 was 2.63


I'm sorry; that dog won't hunt.

Family Size

 
At 8/03/2012 9:44 PM, Blogger Rufus II said...

So, the last Census Data we have for Family Size is 2.63.

$49,445.00 / 2.63 = $18,800.00

In 2000 it was $53,164.00 / 2.62 = $20,291.00

Income per Family Member has fallen by $1,491.00/Yr Since 2000.

 
At 8/03/2012 9:50 PM, Blogger Rufus II said...

Did I mention that we're spending an extra $1,500.00/yr on Gas?

GDP, Schmee dee pee; out here in hillbilly-land we're getting kllled.

 
At 8/03/2012 10:26 PM, Blogger Buddy R Pacifico said...

Rufus states:

"Family Size in 1990 was 2.63

Family Size in 2000 was 2.62

Family Size in 2009 was 2.63

I'm sorry; that dog won't hunt."


Rufus left out the part about that the statistics go back to 1930.

In 1930 the average family size was 3.67.

Hmmm, who is missing?

The father, you know the guy formerly known as the breadwinner.

Rufus, you ain't nothing but a hound dog, and if you can't get the most of the facts straight, then you ain't no friend of mine.

 
At 8/03/2012 10:30 PM, Blogger Ron H. said...

Rufus:

"I'm sorry; that dog won't hunt.

Family Size
"

Oh Good. You cited a news article without sources so when I cite this NBER report I needn't fear that you will question mine.

The NBER report states:

"Changes in family structure - notably a doubling of the percent of families headed by a single woman - can account for a 3.7 percentage point increase in poverty rates, more than the entire rise in the poverty rate from 10.7 percent to 12.8 percent since 1980."

CoAbode - an advocacy group for single mothers that promotes home sharing - describes the same changes in household composition over time.

While neither of these items directly cite their sources with links, both claim the use of Census data.

Hopefully you can understand that even without major changes in household *size*, the changes in *composition*, particularly the increased number of single women heads of household who are more likely to have low income, is more than enough to explain the decrease in median household income.

In light of ever increasing per capita income, to what would YOU atribute a decrease in median household income if not size or composition?

 
At 8/03/2012 10:34 PM, Blogger Buddy R Pacifico said...

Revised last line:

Rufus, you ain't nothing but a hound dog, and if you cant' present a few more lines of data, then you ain't no friend of mine.

 
At 8/03/2012 10:37 PM, Blogger Rufus II said...

I didn't leave out Anything. I stated that Median Family Income has fallen substantially since 2000, and I gave Census Data to prove it.

 
At 8/03/2012 10:40 PM, Blogger Ron H. said...

"Did I mention that we're spending an extra $1,500.00/yr on Gas?"

Wait a minute. Didn't you say that ethanol was saving us $1200/yr? Do you mean that the price of gas in real terms is really $2700/yr more than...whenever you thought it was less?

You could really help yourself by providing references, as your claim is pretty hard to accept, especially considering the source, Mr. Fast-and-loose-with-numbers.

 
At 8/03/2012 10:44 PM, Blogger Rufus II said...

Increasing "per capita" income?

Simple, Bill Gates, Warren Buffet, and Mitt Romney are doing very well (too bad that 2 out of the 3 aren't very enthusiastic at paying income taxes.)


Oh, that NBER link goes to something called "rufus II's Blogs)

 
At 8/03/2012 10:46 PM, Blogger Rufus II said...

The $1,200.00 year figure would be for a two-car family. (1,200 gallons used/yr.)

 
At 8/03/2012 10:48 PM, Blogger Rufus II said...

And, as for the "ethanol savings," I gave this link, yesterday -

CARD Peer-Reviewed Study

 
At 8/03/2012 10:52 PM, Blogger Rufus II said...

Ah, Buddy, I knows we will always be friens.

 
At 8/03/2012 11:05 PM, Blogger Buddy R Pacifico said...

"Ah, Buddy, I knows we will always be friens."

Um, ok, but please know that in reference to myself, I prefer the term hillbilly deluxe.

 
At 8/03/2012 11:11 PM, Blogger Rufus II said...

I've been bopping about the web a bit, and the anecdotal evidence, so far, doesn't indicate much, if any, increase in single-parent households since 2000.

If you have evidence to the contrary please post it.

 
At 8/04/2012 1:22 AM, Blogger Publius said...

http://cafehayek.com/2012/02/inequality-and-stagnation.html

Your contrary evidence, my lord.

Now, may we all resume our house functions, Lord Keynes, whilst you theorize the improbable?

Regards,

Carson

 
At 8/04/2012 1:39 AM, Blogger Ron H. said...

"Oh, that NBER link goes to something called "rufus II's Blogs)"

Sorry try this one.

 
At 8/04/2012 1:41 AM, Blogger Ron H. said...

"Simple, Bill Gates, Warren Buffet, and Mitt Romney are doing very well (too bad that 2 out of the 3 aren't very enthusiastic at paying income taxes.)"

I forgot - you have a great deal of trouble with numbers. Never mind, Rufus. You can continue to be ignorant. It's not my problem.

 
At 8/04/2012 1:44 AM, Blogger Ron H. said...

"The $1,200.00 year figure would be for a two-car family. (1,200 gallons used/yr.)

And, as for the "ethanol savings," I gave this link, yesterday -
"

That's nice, but you didn't explain the $2700.

 
At 8/04/2012 2:08 AM, Blogger Ron H. said...

"If you have evidence to the contrary please post it."

I have given you two references and they use census data. You could probably bop on over there and find the data for yourself. If you have trouble, ask someone at your location to help you.

 
At 8/04/2012 2:19 AM, Blogger PeakTrader said...

I suspect, U.S. median household income was roughly flat in the 2000s, because most immigrants, and their children, had lower skills than the domestic population.

A hundred years ago, most immigrants had roughly the same skills as the domestic population.

Also, there were much fewer high-skilled immigrants compared to low-skilled immigrants and there were more high and low skilled immigrants compared to average skilled immigrants.

Nonetheless, I recall in the mid-2000s, many immigrants with low-skills, and who could barely speak english, were able to buy houses and new or almost new autos.

 
At 8/04/2012 2:32 AM, Blogger PeakTrader said...

Moreover, it should be noted trade deficits subtract from income (output = GDP = income).

U.S. trade deficits reached $800 billion in the 2000s (or 6% of GDP).

So, U.S. living standards rose faster than what was reflected in income growth.

 
At 8/04/2012 6:48 AM, Blogger Jon Murphy said...

Moreover, it should be noted trade deficits subtract from income (output = GDP = income).

Just a remainder that GDP is national income, not personal income. Imports do subtract from national income, but they boost personal income by lowering prices, thus leading to your correct conclusion that standard of living is rising faster than income levels would suggest.

 
At 8/04/2012 7:12 AM, Blogger juandos said...

Some folks here are really spinning the baloney...

The Jobs Gap: America needs 11 million more workers to return to pre great recession employment levels

 
At 8/04/2012 7:32 AM, Blogger VangelV said...

the only reason we did not see this cause a jump in the unemployment headline number was that 150k people were dropped from the workforce. the laborforce participation rate was down seq and yoy and the number of people not in the labor force continues to soar, up 348k seq and nearly 2 million yoy.

that sure does not look like an expansion to me.


The data manipulation and statistical games continue. If it were an Olympic sport the US would sweep the top spots.

 
At 8/04/2012 7:35 AM, Blogger marmico said...

In light of ever increasing per capita income, to what would YOU atribute a decrease in median household income if not size or composition?

Distribution.

 
At 8/04/2012 7:35 AM, Blogger VangelV said...

I suspect, U.S. median household income was roughly flat in the 2000s, because most immigrants, and their children, had lower skills than the domestic population.

A hundred years ago, most immigrants had roughly the same skills as the domestic population.


Nice narrative but it does not fit the evidence. A hundred years ago most immigrants were low skill workers who could not even speak the language. Today the immigrant population includes very high skilled workers who make hundreds of thousands per year and wind up starting high tech companies that create thousands of jobs for Americans.

 
At 8/04/2012 9:35 AM, Blogger morganovich said...

rufus-

you data is just plain wrong.

http://www.census.gov/statab/hist/HS-12.pdf

http://www.census.gov/newsroom/releases/archives/2010_census/cb11-cn144.html

family size was not static at 2.63.

seems like you are the one with the dodgy dog here. that 2.63 number was for 1990.

but 1980 was 2.75
1990 2.63
2000 2.59
and 2010 even after a rise form 2007 was 2.58

household size has increased a bit since 2007, but that is precisely what you would expect if people get poorer: more are forced to cohabitatate and take in or move in with parents.

that's the data straight from the census.

so, as you seem to be fond of saying:

"If you think there are mitigating statistics, "STATE THEM."

these are very clear and demolish your claims.

 
At 8/04/2012 9:40 AM, Blogger morganovich said...

rufus-

"I didn't leave out Anything. I stated that Median Family Income has fallen substantially since 2000, and I gave Census Data to prove it."

yes, you did. you left out the effects of changing household size on that data, and i gave you census data to prove it.

 
At 8/04/2012 10:54 AM, Blogger VangelV said...

In case anyone missed it, I think that the analysis in Barrons is something that the optimists need to be able to answer.

Here, courtesy of Zero Hedge, we might be able to provide Dave with a clue as to how the BLS managed that little trick: It added 377,000 jobs for seasonal adjustment. That just happened to be the largest such adjustment in July for the past 10 years.

Moreover, the always interesting but not particularly reliable birth/death model chipped in 52,000 additions. Together, these happy statistical enhancements added up to something like 429,000, which even by our rudimentary math dwarfs 163,000.

In any case, as Dave points out, even 163,000 is nothing to crow about, when at this point in the business cycle with the recovery winding up (or maybe winding down is a more suitable phase) its third year, payrolls should be tacking on 220,000 or so a month. What's more, he notes, consumer pocketbooks remain pinched. There was, for one thing, no growth in July in hours worked and a meager 0.1% uptick in average hourly earnings, which means in real terms after inflation, wages actually contracted last month.

The unemployment rate inched up to 8.3%, from 8.2%, while our personal favorite measure of the job market -- U6, which includes folks who'd love a full-time or at least a more rewarding job, but can't find one -- rose a tad, to 15%, from 14.9%. That means, Dave explains, that one in every seven Americans is either unemployed or underemployed. "In this light," he comments, "it would be most disingenuous to consider this a robust report, headline notwithstanding."


As usual, things are not what they are reported to be and the numbers do not reflect reality. I think that it is about time that the academics and government officials got away from their models and began to look at the real world as it is.

 
At 8/04/2012 1:38 PM, Blogger Ron H. said...

Marmico:

"Distribution."

Meaningless vote seeking nonsense.

 
At 8/04/2012 1:50 PM, Blogger Ron H. said...

Vangel

"As usual, things are not what they are reported to be and the numbers do not reflect reality. I think that it is about time that the academics and government officials got away from their models and began to look at the real world as it is."

It's all about incentives.

 
At 8/04/2012 2:54 PM, Blogger Henry H said...

This comment has been removed by the author.

 
At 8/04/2012 2:58 PM, Blogger Henry H said...

morganovich said...
so, i went and looked at a little historical data here.

the change in employment from june to july this year was -195 (non sa).

past years:

2011 -38k
2010 -159k
2009 -155
2008 -72
2007 -30
2006 -34
2005 +438
2004 +629
2003 -260

from this, it would seem we must conclude that this year was the worst june-jul since 2003, a rotten year for jobs.

this year looks far more like the bad years than the good, and while the traditional seasonal patterns seems negative, it is far less so that the adjusted number would seem to imply. the mean jobs change over the last decade is actually positive. the median is about -36k, also far better than this result.

this makes me pretty skeptical about that adjusted payrolls number being so far off of the unadjusted data.

it's nearly a 400k swing, and i see little to justify it.

Your numbers seem to be off for 2012. You are mixing up NSA and SA numbers.

Page 11 of the report shows a -195k SA and a -76k NSA for June to July 2012. The other numbers for previous years look inaccurate also.

Employment Release

 
At 8/04/2012 3:11 PM, Blogger bart said...

Recession watch


Recession watch, more real stats

 
At 8/04/2012 3:44 PM, Blogger VangelV said...

It's all about incentives.

Of course. All governments want to make things look better because the goal is power, not truth. Only fools ignore this by accepting blindly what should be seen with skeptical eyes.

 
At 8/04/2012 4:44 PM, Blogger PeakTrader said...

This comment has been removed by the author.

 
At 8/04/2012 4:46 PM, Blogger PeakTrader said...

VangelV says: "A hundred years ago most immigrants were low skill workers who could not even speak the language."

So were most of the domestic population, except they could speak the language (half of the U.S. population were farmers):

Immigration and the American Industrial Revolution From 1880 to 1920

"Immigrants were no less skilled than native born workers. The real question, in our judgment, is not the skill level of immigrants, but their role in filling the demand for labor in manufacturing and other key sectors of the emerging industrial economy.

Immigrants purchased homes, opened small businesses and invested heavily in the education of their children...immigrants to the United States also brought European technology that increased the productivity of American industry."

 
At 8/04/2012 5:39 PM, Blogger morganovich said...

This comment has been removed by the author.

 
At 8/04/2012 6:02 PM, Blogger morganovich said...

henry-

rats.

you are correct. i did a data pull and got the wrong series. oops.

using the correct data, we get the jun-jul swing of:

2012: -76
11: +255
10: +252
09: +229
08: +221
07: +357
06: +357
05: +870
04: +839
03: +35

ironically, this makes the point i was trying to make much more forcefully.

2012 was the only time in a decade that july NSA employment has been lower than the preceding june's and shows that the seasonal pattern is generally very positive.

the SA applied to this year's figure looks like it was 119 vs the median over the prior 9 years of 255. using that figure, we'd get a SA of -331.

thanks for catching that henry.

 
At 8/04/2012 6:09 PM, Blogger morganovich said...

bart-

that's a good chart.

you really ought to start a site called "bart's charts".

i know some (like peak) will disagree, but the evidence that americans are worse off than a decade ago in terms of real wealth is pretty overwhelming.

that's what an interventionist and capricious fed and federal government will get you.

bernake makes martin and burns look like karl pohl.

i've been reading taylor's new book on the cycles in the us toward and away from economic freedom and arbitrary "discretion" regimes of the fed as opposed to rule based ones.

you might want to pick it up.

it's not aimed at a particularly sophisticated reader, but it lays out some good history and information.

people talk about going back in time and stopping hitler.

personally, i'd go for Samuelson.

 
At 8/04/2012 7:05 PM, Blogger Peter Holdridge said...

(posted with a friend's ID instead of my bart ID, since mine keeps getting deleted)





bart-

that's a good chart.


Thanks morganovich, much appreciated





you really ought to start a site called "bart's charts".

Good one, a guy on another forum about 6 years ago jokingly kept getting after me about copyright fees for the term "bart charts".

I have something over 10,000 charts on my site and update about 1500-2000 per week. ( http://www.nowandthefuture.com or http://www.nowandfutures.com )




i know some (like peak) will disagree, but the evidence that americans are worse off than a decade ago in terms of real wealth is pretty overwhelming.

that's what an interventionist and capricious fed and federal government will get you.

bernake makes martin and burns look like karl pohl.



Indeed, there are some people who will never see stuff as obvious as the decline in the total standards of living until it really whacks them personally.

I actually feel sorry for Bernanke, history will not treat him well, much like Greenspan.





i've been reading taylor's new book on the cycles in the us toward and away from economic freedom and arbitrary "discretion" regimes of the fed as opposed to rule based ones.

you might want to pick it up.

it's not aimed at a particularly sophisticated reader, but it lays out some good history and information.

people talk about going back in time and stopping hitler.

personally, i'd go for Samuelson.


I'll have to check out that Taylor book, You're the third person to mention it. I did spend a lot of time studying the work and massive history from the Foundation for the Study of Cycles in the 70s. Some day I'll build some charts from my voluminous notes.

Samuelson is sure in my top 10 in economics, although the funny thing about Keynesians or neo-Keynesians is that if they really would have followed Keynes and saved during the good times as Keynes actually said, we wouldn't be in this mess.

 
At 8/04/2012 8:12 PM, Blogger VangelV said...

Immigrants purchased homes, opened small businesses and invested heavily in the education of their children...immigrants to the United States also brought European technology that increased the productivity of American industry.

They purchase homes, open businesses and invest in education today as well. The problem today is government getting in the way and rewarding people who put their hands out without contributing. And keeping very qualified immigrants out of the country.

 
At 8/04/2012 9:10 PM, Blogger Ron H. said...

Bart - or whoever you are:

"Good one, a guy on another forum about 6 years ago jokingly kept getting after me about copyright fees for the term "bart charts"."

Well than how about Bart Smart Chart Cart?

 
At 8/05/2012 1:14 AM, Blogger PeakTrader said...

Morganovich says: "...the evidence that americans are worse off than a decade ago in terms of real wealth is pretty overwhelming...people talk about going back in time and stopping hitler. personally, i'd go for Samuelson...bernake makes martin and burns look like karl pohl."

That statement reflects an overwhelming ignorance of economics. Why not blame fire departments for fires too?

Obviously, you'd rather get rid of the firefighters, like Bernanke and Samuelson, and keep the arsonists, like Obama, Castro, and Chavez.

You never understood real wealth. Massive idle resources are unnecessary.

 
At 8/05/2012 2:18 AM, Blogger PeakTrader said...

Small economies tend to grow faster than large economies. However, in the 20th century, U.S. per capita real GDP increased faster than in the 19th century.

Excerpts from Dr Perry's article:

Capitalism and Markets Fuel Economic Growth
January 28, 2009

"Between 1800 and 1904, real GDP per capita grew in the U.S. at 1.5% per year.

The 1.5% annual growth translated into almost a 5 time(s) increase in per capita real GDP between 1800 and 1904, from $1,069 to $5,202.

As impressive as the 1.5% real annual growth was in the 19th Century, the average growth rate in the 20th Century increased by more than a third, to above 2% per year from 1904-2008.

Because of the higher growth rate, real (per capita) GDP increased more than 8 times between 1904 and 2008, from $5,202 in 1904 to $42,675 in 2008.

If annual growth had continued at 1.5%, real GDP per capita today would be only $24,475...instead it's actually 74% higher at $42,675."

My comment: Also, the U.S. has consumed more than produced in the long-run, since around 1980, through up to $800 billion a year trade deficits, which add to U.S. living standards, and the U.S. continues to consume more than produce, in the global economy.

 
At 8/05/2012 2:44 AM, Blogger PeakTrader said...

It may be a little harsh to equate Obama with Castro and Chavez.

Obama didn't start this massive fire (although, he would've voted for it).

However, he hasn't really done anything effective to put it out, unlike Bernanke and his team, who've done as much as they can.

 
At 8/05/2012 7:51 AM, Blogger PeakTrader said...

According to Measuring Worth, U.S. per capita real GDP average annual growth rose much faster at the height of the Information Revolution than at the height of the Industrial Revolution:

1871-1914 1.56%
1982-2007 2.22%

 
At 8/05/2012 8:53 AM, Blogger PeakTrader said...

Resources are deployed inefficiently in boom-bust cycles, both in the boom and bust phases, because of economic strain and slack.

List of recessions in the United States - Wikipedia

Recessions in the Industrial Revolution - 1871-1914

Period - Percent Decline of Business Activity

1873-79 - 33.6%
1882-85 - 32.8%
1887-88 - 14.6%
1890-91 - 22.1%
1893-94 - 37.3%
1895-97 - 25.2%
1899-00 - 15.5%
1902-04 - 16.2%
1907-08 - 29.2%
1910-12 - 14.7%
1913-14 - 25.9%

Recessions in the Information Revolution - 1982-2007

Period - Percent of Contraction

1990-91 - 1.4%
2001 - 0.3%

 
At 8/05/2012 9:04 AM, Blogger PeakTrader said...

So, smoothing-out business cycles, through monetary and fiscal policies, boosted per capita real GDP growth.

 
At 8/05/2012 9:59 AM, Blogger bart said...

morganovich said...
i know some (like peak) will disagree, but the evidence that americans are worse off than a decade ago in terms of real wealth is pretty overwhelming.


Obviously, PT didn't read the part about "than a decade ago"... and continues to avoid all the incontrovertible proof contained in my CPPI work, etc.

 
At 8/05/2012 10:10 AM, Blogger bart said...

morganovich said...

i know some (like peak) will disagree, but the evidence that americans are worse off than a decade ago in terms of real wealth is pretty overwhelming.


Obviously PT didn't see and is ignoring the part about "than a decade ago", and continues to ignore the incontrovertible proof in my CPPI, etc.

Chicken still equals beef and an F150 equal a Pinto in his mind, and airline seats and leg room are still wonderful and haven't changed.

 
At 8/05/2012 10:12 AM, Blogger bart said...

morganovich said...

i know some (like peak) will disagree, but the evidence that americans are worse off than a decade ago in terms of real wealth is pretty overwhelming.


Obviously PT didn't see and is ignoring the part about "than a decade ago", and continues to ignore the incontrovertible proof in my CPPI, etc.

Chicken still equals beef and an F150 equal a Pinto in his mind, and airline seats and leg room are still wonderful and haven't changed.

 
At 8/05/2012 10:12 AM, Blogger PeakTrader said...

Immigration likely made the U.S. a superpower in the late 19th century - immigrants with roughly the same skills as the domestic population. So, when population doubled, GDP doubled.

Per capita real GDP growth was slow in the 19th century compared to the 20th century, particularly in a country rich in natural resources.

There was a much better understanding of economics in the 20th century, because of economists like Paul Samuelson.

 
At 8/05/2012 10:15 AM, Blogger bart said...

The funny thing about Samuelson or Keynesians or neo-Keynesians is that if they really would have followed Keynes and saved during the good times as Keynes actually said, we wouldn't be in this mess.

In other words, stupid and worthless in the area.

 
At 8/05/2012 10:19 AM, Blogger PeakTrader said...

Bart, obviously, you ignored the real wealth created up to 2007 and the real wealth destroyed after 2007.

"...ignore the incontrovertible proof in my CPPI..."

I haven't ignored it, the "proof" isn't really there.

 
At 8/05/2012 10:22 AM, Blogger bart said...

Nothing but narrative and failure to just plain look.

But continue believing that chicken=beef and an F150=Pinto and OER=Case Shiller/FHFA/Radar Logic, airline seats and leg room are still wonderful and haven't changed, etc etc etc ad nauseum.

 
At 8/05/2012 10:26 AM, Blogger bart said...

Ron H. said...

Well than how about Bart Smart Chart Cart?



hmmm... it does have a ring to it... -g-

 
At 8/05/2012 10:32 AM, Blogger VangelV said...

That statement reflects an overwhelming ignorance of economics. Why not blame fire departments for fires too?

Obviously, you'd rather get rid of the firefighters, like Bernanke and Samuelson, and keep the arsonists, like Obama, Castro, and Chavez.

You never understood real wealth. Massive idle resources are unnecessary.


It seems that it is you who have no understanding of economics. When central bankers create purchasing power out of thin air they rob savers of resources and move the economy away from production and towards speculation in financial markets. Bernanke has declared a war against savings and by doing so has encouraged the growth of a massive bubble in bonds.

 
At 8/05/2012 10:38 AM, Blogger PeakTrader said...

VangelV, I guess, you won't be happy until we go back to 19th century business cycles.

 
At 8/05/2012 11:23 AM, Blogger VangelV said...

It may be a little harsh to equate Obama with Castro and Chavez.

Obama didn't start this massive fire (although, he would've voted for it).


It isn't harsh at all. Obama and Bush have killed many more people than Chavez and Castro.

 
At 8/05/2012 11:25 AM, Blogger VangelV said...

mmigration likely made the U.S. a superpower in the late 19th century - immigrants with roughly the same skills as the domestic population. So, when population doubled, GDP doubled.

Per capita real GDP growth was slow in the 19th century compared to the 20th century, particularly in a country rich in natural resources.

There was a much better understanding of economics in the 20th century, because of economists like Paul Samuelson.


Really? I recall Samuelson telling us that the USSR would have stronger economic growth because it was capable of central planning. He was an smart man who was ignorant of real world economics but thought that he knew what he did not know.

 
At 8/05/2012 11:34 AM, Blogger VangelV said...

VangelV, I guess, you won't be happy until we go back to 19th century business cycles.

I would be much happier with a gold standard than the fiat system that we have today. Unlike the 19 th century the economy is not as vulnerable to droughts and other climate events and given the better communication available the damage done by booms created by state government manipulation of credit will be much smaller.

History teaches us that it is moral, practical, or wise to rob savers of purchasing power and to encourage a consumption based economy. I guess you missed that lesson.

 
At 8/05/2012 11:35 AM, Blogger bart said...

Re: CPPI
PeakTrader said...

I haven't ignored it, the "proof" isn't really there.


In your mind, chicken still equals beef, an F150 equal a Pinto, airline seats and leg room are still wonderful, OER is still perfect since 1983 regardless of the facts from Case Shiller and FHFA, it's ok with you that taxes aren't part of CPI regardless of them averaging 30% of consumer's total expenses for decades, etc etc etc ad nauseum.

 
At 8/05/2012 11:47 AM, Blogger VangelV said...

Yes, and the Leading Indexes are positive for 33 states, and the national leading index is positive at 1.01% expected growth over the next six months. Sluggish economic growth is certainly what we can expect over the next six months, but there's nothing here in either report (state coincident and leading indexes) to suggest a current or pending recession, as Jon Murphy comments.

Admitting that things may not be as rosy as you have been predicting is a good first step but you need to go a lot further. From what I see municipalities and states are on the verge of bankruptcy. The government run 'trust funds' are in trouble as they are paying out more than is being taken in as contributions and the special purpose securities have to be cashed in at a time when the debt ceiling is looming large. The US has several wars abroad and may be looking at a conflict that reaches the SA oil fields. Deficits are exploding and most companies are looking at lower real earnings in the future. I have yet to mention the biggest bubble in history as bond rates are getting close to zero and the Fed has a harder time purchasing more treasuries without messing up bank reserves. And speaking of banks we are looking at many that will have to be merged or closed as the insolvency rate goes up once the value of reserves is marked to market. Add to this a capital spending contraction in China and we are in a much more difficult position than you realize.

Of course, it helps to go through life with your eyes open and look at the real world rather than economic models that have never shown any promise to begin with. But that is a subject for another thread.

 
At 8/05/2012 12:50 PM, Blogger bart said...

PeakTrader said...
Bart, obviously, you ignored the real wealth created up to 2007 and the real wealth destroyed after 2007.


Fascinating.

You apparently agree now that "the evidence that americans are worse off than a decade ago in terms of real wealth is pretty overwhelming."

 
At 8/05/2012 2:30 PM, Blogger Ron H. said...

"I actually feel sorry for Bernanke, history will not treat him well, much like Greenspan."

The Bernanke is where he is because he fought very hard for many years to get there. He has cost hundreds of millions of people - some of them not yet born - trillions of dollars, just as his predecessor did, and you feel sorry for him?

In my opinion he deserves every shovelful history heaps on him.

 
At 8/05/2012 2:39 PM, Blogger Ron H. said...

Peak

"Because of the higher growth rate, real (per capita) GDP increased more than 8 times between 1904 and 2008, from $5,202 in 1904 to $42,675 in 2008."

How much of that is private GDP as opposed to government GDP?

Government GDP increased very little in the 19th century, but has exploded in the 20th.

 
At 8/05/2012 4:08 PM, Blogger PeakTrader said...

Ron, all you have to do is compare the U.S. economy today to the 1970s to see living standards, labor standards, and environmental standards are substantially higher today (see episode of Kojak).

 
At 8/05/2012 4:26 PM, Blogger PeakTrader said...

Real Disposable Personal Income Per Capita is way up.

Chart:

http://research.stlouisfed.org/fred2/series/A229RX0/

"Disposable personal income definition: The total amount of money available for an individual or population to spend or save after taxes have been paid."

 
At 8/05/2012 5:34 PM, Blogger Ron H. said...

Peak:

"Ron, all you have to do is compare the U.S. economy today to the 1970s to see living standards, labor standards, and environmental standards are substantially higher today (see episode of Kojak)."

And that's what I'm trying to do, but you didn't answer my question. GDP is a poor indicator of individual well-being unless the government portion is removed.

 
At 8/05/2012 5:44 PM, Blogger Ron H. said...

"Ron, all you have to do is compare the U.S. economy today to the 1970s to see living standards, labor standards, and environmental standards are substantially higher today (see episode of Kojak)."

And of course my question was in reference to your claim that GDP growth in the 20th century was greater than GDP growth in the 19th century, therefore we must be better off.

 
At 8/05/2012 7:00 PM, Blogger bart said...

PeakTrader said...

Real Disposable Personal Income Per Capita is way up.

...

"Disposable personal income definition: The total amount of money available for an individual or population to spend or save after taxes have been paid."


First, the definition is just plain *wrong*. Transfer payments are included, which substantially biases the result.

Second, it uses CPI which has been proven to be substantially too low, most of the time.

Summing up, the chart is both misleading and basically worthless - as in lying.

 
At 8/05/2012 7:02 PM, Blogger bart said...

Ron, all you have to do is compare the U.S. economy today to the 1970s to see living standards, labor standards, and environmental standards are substantially higher today (see episode of Kojak).



A TV episode is your "proof", that's funny... and very sad.

 
At 8/05/2012 7:05 PM, Blogger bart said...

Ron H. said...
"I actually feel sorry for Bernanke, history will not treat him well, much like Greenspan."

The Bernanke is where he is because he fought very hard for many years to get there. He has cost hundreds of millions of people - some of them not yet born - trillions of dollars, just as his predecessor did, and you feel sorry for him?

In my opinion he deserves every shovelful history heaps on him.


Agreed and yes, he does deserve every shovelful - but I do feel sorry for him, since he has so little clue of what's ahead, much like a little of what Greenspan has already seen.

Both are in for much more pain and bad times.

 
At 8/06/2012 4:32 PM, Blogger PeakTrader said...

Dr Perry said: "If annual growth had continued at 1.5% (the 1800-1904 rate), real GDP per capita today would be only $24,475."

Even real disposable personal income per capita (i.e. after tax income) is much higher than that today.

 
At 8/06/2012 4:41 PM, Blogger bart said...

PT:

Even real disposable personal income per capita (i.e. after tax income) is much higher than that today.


When you subtract transfer payments, they're barely above even - and when the full CPPI correction is applied, they dropped,

 
At 8/06/2012 4:52 PM, Blogger PeakTrader said...

The implication of my statement above is real income is $8,000 a year higher than it would've otherwise been and there's no taxpayer cost for the federal government, because real disposable personal income per capita is about $33,000 in 2012.

 
At 8/06/2012 5:07 PM, Blogger bart said...

Wrong again.

Personal income less tranfer payments, since last recession

 
At 8/06/2012 5:18 PM, Blogger PeakTrader said...

One person's loss is another's gain. Transfer payments don't just disappear (even when working for the federal government).

 
At 8/06/2012 5:20 PM, Blogger bart said...

That's two prizes for top quality irony in one day PT.

Keep drinking the Kool Aid and ignoring the actual reality... or perhaps you're admitting that you're a socialist or worse?

 

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