Friday, April 02, 2004

Peak in employment? Leading versus lagging...

On the domestic front, the oldman has heard about the jobs report. He didn't make a prediction this time around because, frankly he didn't know what to think. The last time the oldman made a prediction, he was about a 100,000 job's short!

However, as the NYT reports:
The Labor Department also revised its estimate of jobs added in January and February to 205,000, almost double its previous estimate of 118,000. The revisions pushed average job growth in the first quarter to 171,000 per month, the most vigorous rate since the second quarter of 2000, shortly after the Internet bubble burst.

In other words, the oldman got the past prediction right it's just that it took a month for them to figure out that the oldman was right! Which is a relief, since the oldman thought his mojo was flagging.

The oldman hadn't felt that the picture had changed that much, this time around the number was bigger but as Maxspeaks reports the Household survey actually lost 3000 jobs. While the household survey showed gains, the Administration was happy to trumpet that and play down the Payroll survey. Now that the Payroll survey, which everyone agreed is more reliable, is good the White House is happy to capitalize on that.

However, the picture is more complicated than that. Economic forcasters have admitted that upcoming economic growth will probably be slowed, so that topline GDP growth will decrease going forward into the year with higher gas prices and the like taking their toll. As the oldman indicated, while the payroll survey was more reliable the household survey wasn't just exaggerating jobs created. The household survey was leading the payroll survey. So the jobs that showed up on the payroll survey including revisions now, were some of the jobs "predicted" by the household survey earlier though not as many which is why the household survey is less reliable.

So now that the household survey has taken a dive, we can expect the upcoming payroll surveys to flatten out and then decline. This month in other words was probably the peak month for employment gains, not to mention that about 70,000 of the jobs gained were one time additions from the end of a grocery worker's union strike in sunny California.

Brad also has some the destruction of the middle class and outsourcing up. Brad does fail to call Wessel on his logic when he calls teaching elementary kids a high end job. Next thing ya know sanitation engineering will be a white collar proffession according to these free trade ideologues.

The other sort of jobs destined to remain here are high-end jobs. Some require exchanging information in ways that e-mail and teleconferencing don't handle well. Think about teaching first grade or selling a mansion to a multimillionaire or conceiving new forms of software. Others demand such intimate knowledge of the U.S. that it's hard to see foreigners doing them from afar. Think about marketing to American teenagers or lobbying Congress. [emphasis added]

Besides the idiocy of reducing real estate sales to the rich in his example, Wessel clearly refers to teaching grade school as a "high-end job". Last time I recalled, that and most of the occupations he discusses - real estate, teaching, most marketing and avertising jobs were middle class kind of jobs. He has to refer to these kinds of jobs as "high-end" because most of the other kind of jobs he refers to are working class - physical therapist, etc. - that require just an associate's degree. Not to mention he provides no evidence that the high-end jobs are growing, just the one's requiring community college education.

Again, the theory that only "low end" manufacturing jobs will be exported and that other high end jobs will be created is debunked by what it leaves out.

The oldman has always maintained the insanity of attacking Bush for job losses incurred mainly by trade treaty inequities created under Clinton or produced by a cyclical economic recession. Yes, there has been jobless recovery even more severe than the one in the nineties but despite the dazed insanity of economists it couldn't be fixed by Keynesian stimulus as Sterling Newberry but only delayed while structural reforms took place.

So tax cuts stimulus or high construction stimulus or Fed low interest rate stimulus - it was all just pushing on a string. Underneath all of that, the real economy was bleeding and the fact that it finally came up for some air is not a sign that there was no undertow but just that the undertow wasn't strong enough to kill the victim this time around. If the pattern holds, the next jobless recovery will be even longer and this job creation period will be shorter.

Assuming nothing changes of course.

It almost seems as if the Democrats perversely want to lose. I'm not sure how else to explain their actions. Criticize Bush on the Iraq war over the Clarke affair, instead of focusing on lack of public readiness for potential terrorist attacks where Bush is actually weak. Criticize Bush for the losses of either trade-driven or recession driven job losses, that assuming that the economy isn't dead yet will eventually show some gains and then see Bush trumpet the gains when they finally arrive. Criticize Medicare spending, when whether or not its fiscally responsible it's at least throwing money at seniors (and drug companies) but not Social Security even though Bush has down nothing to fix that program. It's almost as if John Kerry wants to be behind or something.

It's almost as if Democrats are being mind-controlled by Rove who sits in his office chanting "...get elective surgery John Kerry ... get elective surgery ... stay out of the news for another week while Bush and Cheney roast you everyday ... fail to get your message out there while my ads are massacering you and the Democrats have no spokes person... get elective surgery...".

At this point, I may have to get used to another four years and possibly three more wars under our present Commander and Chief.


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