Unemployment is still the Nation’s Number 1 problem
Posted: March 3, 2011 Filed under: jobs, unemployment | Tags: jobs, unemployment 16 CommentsThe Gallup unemployment survey shows U.S. unemployment back up to 10.3% in February. It finds underemployment to be 19.9%.
The percentage of part-time workers who want full-time work worsened considerably in February, increasing to 9.6% of the workforce from 9.1% at the end of January. A larger percentage of the U.S. workforce is working part time and wanting full-time work now than was the case a year ago (9.3%).
This is undoubtedly due to the austerity budgets of states and municipalities combined with the inaction on the part of the Federal Government. The original Obama stimulus was 40% tax cuts and the recent tax cuts enacted and extended in December continue to prove to be worthless in terms of stimulating the economy and creating jobs as many economists–including this one–have warned.
The labor market continues to show mixed results for job creation depending on which study you read.
The report from ADP (.pdf) also shows continued improvement. It says that 217,000 jobs were added to the private sector in February. That’s the second best result, after it’s tally for December of 247,000, since the recovery began last year. It’s also slightly higher than the 189,000 it recorded for January. Of course, the Bureau of Labor Statistics only indicated 50,000 private sector jobs added that month, so the divergence between ADP and the BLS could continue.
Next, there’s the Challenger, Gray & Christmas report (.pdf). It doesn’t provide good news. The report says planned job cuts rose to 50,702 in February — the most since March 2010. This also marks the second straight month of rising planned layoffs, according to the firm. A big chunk of February’s layoffs came from government and non-profit employers, which reported 16,380 planned cuts — up 154% from January. If firings are increasing, then they will make it more difficult for the economy to add net new jobs.
Calculated Risk added two points to consider
• Remember that the weak payroll report in January (only 36,000 jobs added) was blamed on the snow. Usually I don’t buy the weather excuse, but it did appear weather played a role this time. If there is a bounce back, it will be useful to average the last two months together to estimate the current pace of payroll growth. If there is no bounce back – that would definitely be bad news.
• Even if the payroll report shows improvement, the employment situation remains grim. There are 7.7 million fewer payroll jobs now than before the recession started in 2007 with almost 14 million Americans currently unemployed. Another 8.4 million are working part time for economic reasons, and about 4 million more workers have left the labor force. Of those unemployed, 6.2 million have been unemployed for six months or more.
The official rate as measured by the BLS comes out tomorrow morning. Given the ongoing mixed signals in various labor and job statistics, it seems clear that we need some kind of jobs program. NFL negotiations are going down to the wire. Perhaps, a potential NFL lockout will get some people to at least notice what’s going on with jobs, jobs losses, and collective bargaining. We have to do something to get policy makers to realize that what they’ve been doing isn’t working because it’s not getting people back to work.
Friday Reads
Posted: February 4, 2011 Filed under: Feminists, Festivities, fetus fetishists, Food, morning reads, Reproductive Rights, U.S. Economy, U.S. Politics, Women's Rights | Tags: Ben Bernanke, fat Americans, Free and cheap Birth Control, GDP forcible rape HR3, lunar new year, quantitative easing, Trade, unemployment, year of metal rabbit 18 Comments
Good Morning and Happy Lunar New Year
The Egyptian revolution continues to be the top story around the world. We will continue to run live blog updates to give you the latest reliable news sources on the subject. There’s a few stories on the economy that I’d like to share this morning beyond that topic.
First, Happy Lunar New Year!!
2011 is the Year of the Metal Rabbit.
Chinese astrologer Alvin Ang of Bazi Destiny foresees “the global situation may be affected by serious political change and global calamities.”
Hong Kong-based feng shui master Joseph Wong gives a different take. “This coming year everything will be better than last year,” he told CNN’s Pauline Chiou. “They will see business go upwards mostly, but take care with the shares and stocks. There will be some fluctuations in August and September.”
Fed Chair Ben Bernanke gave a speech at the National Press Club yesterday that indicated continuing concern about the ability of the current recovery to sustain any reasonable decrease in the unemployment rate. He also indicated the need for a long term plan to deal with the Federal deficit. There were a few mentions of the continuing need for QE and statements that the monetary policy to date had worked given the recovery of the equity markets. He did sound a bit more upbeat than the last time we heard from him and while he acted like the recovery was slower than any one would wish, he did state that he felt it was becoming ‘self-sustaining’.
Here’s some analysis on our unemployment vis a vis the Bernanke Statements from The Economist.
The Fed’s forecast range for the unemployment rate in 2012 is 7.7% to 8.2%, and the Congressional Budget Office forecasts an unemployment rate of 8.4% (this forecast dates to after the announcement of QE2, but isn’t meaningfully different from its forecasts from the summer of 2010). This would suggest that with QE2 in place, American unemployment is likely to be between 6% and 7% in 2012. That’s not full employment, but it’s pretty close. You can argue that more needs to be done (indeed, I think the Fed itself could do more). But it is worth noting that the Fed has put the American economy on a substantially better recovery path than it faced before (Scott Sumner would say it has returned the economy to the path off which it previously led it).A big risk is that the Fed will back away from its policy too quickly, thinking all is going well and worrying premptively about inflation. As Karl Smith says, today’s speech is somewhat reassuring on that front.
The NYT had an op ed up on Trade indicating that Republicans are trying to remove some provisions that now help workers retrain should they lose their jobs to overseas locations. It’s worth reading just to see how truly Dickensian the Republicans seem to be these days.
Most Republican lawmakers claim they are pro-trade. Their principled position is evidently no match for parochialism and politics. Last month, a conflict over imported sleeping bags between a company in Alabama and a rival in Kentucky led Senate Republicans to block the extension of the Generalized System of Preferences, or G.S.P., which has granted preferential access to some $20 billion worth of imports from developing countries.
Now Senator Jon Kyl and his colleagues in the Finance Committee are threatening to block the Trade Adjustment Assistance program, which provides income and training for American workers whose employers can’t compete with rising imports. It is due to expire on Feb. 12, and Mr. Kyl and company are refusing to extend it unless the White House promises to advance the long-pending trade deal with Colombia.
Speaking of Dickensian Republican policy, the GOP dropped the ‘forcible rape’ language from HR3. The Hyde Amendment has long entertained the idiocy of letting one loud and obnoxious group of zealots deny Federal funding of their personal pet peeve while the rest of us continue to fund all kinds of abominable projects. Tops on my opt out list are renditions for torture and bail outs of Investment banks. But, American Fetus Fetishists get special treatment. At least this attempt at narrowing rape definitions is gone now.
House Republicans plan to sidestep a charged debate over the distinction between “forcible rape” and “rape” by altering the language of a bill banning taxpayer subsidies for abortions.
The provision in question, written as an exemption from the ban for women who become pregnant as a result of “forcible rape,” touched off a firestorm of criticism from women’s groups, and it gained enough attention to become the subject of a satirical segment on Comedy Central’s “The Daily Show with Jon Stewart.”
But a spokesman for the bill’s author, Rep. Chris Smith (R-N.J.), says the modifier “forcible” will be dropped so that the exemption covers all forms of rape, as well as cases of incest and the endangerment of the life of the mother.“The word forcible will be replaced with the original language from the Hyde Amendment,” Smith spokesman Jeff Sagnip told POLITICO, referring to the long-standing ban on direct use of taxpayer dollars for abortion services.
A real Democratic congress and president would’ve gotten rid of this stupid provision by now. However, here is something that if true will make me do the Snoopy dance.
The Obama administration is examining whether the new health care law can be used to require insurance plans to offer contraceptives and other family planning services to women free of charge.
Such a requirement could remove cost as a barrier to birth control, a longtime goal of advocates for women’s rights and experts on women’s health. But it is likely to reignite debate over the federal role in health care, especially reproductive health, at a time when Republicans in Congress have vowed to repeal the law or dismantle it piece by piece. It is also raising objections from the Roman Catholic Church and is expected to generate a robust debate about privacy.
The law says insurers must cover “preventive health services” and cannot charge for them. The administration has asked a panel of outside experts to help identify the specific preventive services that must be covered for women.
Administration officials said they expected the list to include contraception and family planning because a large body of scientific evidence showed the effectiveness of those services. But the officials said they preferred to have the panel of independent experts make the initial recommendations so the public would see them as based on science, not politics.
Many obstetricians, gynecologists, pediatricians and public health experts have called for coverage of family planning services, including contraceptives, without co-payments, deductibles or other cost-sharing requirements.
Will the Cult of the Angry Sky God get the ultimate veto on this too?
Well, back to the exercise equipment folks! Bloomberg.com says ‘American Waistlines Expand Fastest Among Rich Nations’,
Americans grew fatter at a faster pace than residents of any other wealthy nation since 1980, during a period when obesity worldwide nearly doubled, researchers found.
Almost 10 percent of the world’s population was obese in 2008, according to studies published today by the medical journal The Lancet. The percentage of people with uncontrolled hypertension, or high blood pressure, fell, with high-income countries showing a larger drop. Cholesterol levels declined in North America, Australia and Europe, but increased in East and Southeast Asia as well as the Pacific region, researchers said.
What’s on your reading and blogging list today?
Normalizing Poverty
Posted: January 31, 2011 Filed under: poverty, U.S. Economy | Tags: homelessness, hunger, Poverty, unemployment 16 Comments
A very disturbing article from The Economist caught my eyes over the weekend. It seems like about as good of a time as any to share this with you. It’s one of those articles you probably won’t see in the US media because it basically decries the notion that we’re the exceptional nation of opportunity and chance and that all that politically motivated and packaged hope and change has really brought neither to most of us.
It’s about Sarasota, Florida which has the been named meanest city in America by the National Coalition for the Homeless. There are some amazing trends that we don’t hear too much about here. For example, do you know that “Arizona now has the second highest poverty rate in the nation, after Mississippi”? How about this? Poverty is growing fastest in suburbs and especially sunbelt suburbs. A third of America’s poor now live in suburban areas according to the article that cites Elizabeth Kneebone of the Brookings Institution.
Here are the poverty statistics for Sarasota which joins Bakersfield, California; Boise, Idaho; Greenville, South Carolina; Lakeland, Florida and Tucson, Arizona as having the fastest climbing poverty in the country.
THE statistics are worthy of Detroit or Newark: almost half the children in the local schools are from families poor enough to be eligible for free or cut-price lunches; a tenth of households qualify for food stamps; one in eight residents gets free meals from soup kitchens or food banks; perhaps one in 12 has suffered a recent spell of homelessness. Yet the spot in question is not a benighted rust-belt city, but Sarasota, Florida—a balmy, palm-studded resort town on the shores of the Gulf of Mexico.
The Sarasota-Bradenton metropolitan area, a two-county sprawl of condominiums, marinas and retirement homes, saw the proportion of people living below the poverty line rise by more between 2007 and 2009 than any other big city in America, from 9.2% to 13.7%, according to the Census Bureau.
The story is filled with tales of citizens surviving in a tent and shed city run by the Catholic Church called Pinellas Hope. The picture you see above shows one of the sheds and a resident. A small tent city that was supposed to be a six month temporary situation is booming.
Between 200 and 300 people live there at a time, large by shelter standards, but they are just a slice of Pinellas County’s overall homeless population, estimated at nearly 7,000.
Thousands of potential candidates are disqualified by a no-booze, no- drugs policy. Families with children aren’t allowed. Background checks seek to weed out sex offenders and those with violent pasts.
Even among those who do get in, dysfunction can run high.
Before background and sobriety checks improved, Tent City managers twice asked sheriff’s deputies to pose as residents to investigate drug dealing. Dozens were arrested.
Through April, deputies have been called to Tent City 102 times, though serious crimes like assault, drug dealing and grand theft have diminished noticeably over the past year.
Four out of 10 residents get kicked out, land in jail, or simply leave.
Who are American’s poor? What will happen as the US austerity program pushes more and more people over the edge? The official poverty rate in the US for 2009 was 14.5% . You can compare our country with other countries at the CIA World Factbook. The countries with the worst poverty statistics are on the Continent of Africa. For example, Cameroon has a 48% poverty level. Canada’s poverty rate is just under 11% as is the poverty rate in Germany.
More information on poverty can be found at the National Poverty Center at the University of Michigan. The 2009 poverty threshold for a family of four was $ 21,756. For a single person under 65 it was $ 11,161.
The poverty rate for all persons masks considerable variation between racial/ethnic subgroups. Poverty rates for blacks and Hispanics greatly exceed the national average. In 2009, 25.8 percent of blacks and 25.3 percent of Hispanics were poor, compared to 9.4 percent of non-Hispanic whites and 12.5 percent of Asians.
Poverty rates are highest for families headed by single women, particularly if they are black or Hispanic. In 2009, 29.9 percent of households headed by single women were poor, while 16.9 percent of households headed by single men and 5.8 percent of married-couple households lived in poverty.
There are also differences between native-born and foreign-born residents. In 2009, 19.0 percent of foreign-born residents lived in poverty, compared to 13.7 percent of residents born in the United States. Foreign-born, non-citizens had an even higher incidence of poverty, at a rate of 25.1 percent.
I think that it’s important we put these numbers out there. The President and Congress are clearly putting ‘entitlements’ on the table. Any changes will effect these numbers. There is also a link between unemployment and Poverty. There is no indication that there are any programs or there is a will in this country to deal with the high unemployment rate that we are now experiencing. Forecasted GDP growth is not high enough to bring it down any time soon. This article is actually a year old. See much difference now?
The response of state and local governments to this social catastrophe is drastic reductions in social services and job cuts, under conditions where the Obama administration refuses to provide emergency aid to help cover budget deficits.
The total deficit of the states from 2009 to 2012 is now estimated at $460 billion, a figure that is likely to grow as more state capitals adjust estimates for rapidly declining tax revenue.
”Anything and everything’s on the table,” said Todd Haggerty, a policy associate with the National Conference of State Legislators. States have “cut the fat, cut the muscle and are now cutting bone. The easy decisions have already been made.”
The fiscal situation confronting the states is expected to deteriorate sharply next year when funds from the federal economic stimulus package, the American Recovery and Reinvestment Act, are exhausted.
Like the states, the federal government faces a fiscal catastrophe, with cumulative US budget deficits expected to top $10 trillion by the end of the new decade, according to the Obama administration’s rather optimistic forecast. Cuts in spending must be put in place, in part, to convince creditors, especially China, that the US “can get its finances back in order,” the Wall Street Journal wrote Monday in a feature on the annual gathering of the American Economic Association.
The response of the Obama administration is to call for an unprecedented program of fiscal austerity and sharp cuts in social spending, to be announced in his State of the Union address early next month and outlined in the new federal budget proposal shortly thereafter. Obama’s repeated insistence on the need for Americans to reduce their consumption—even as trillions more are allocated for the banks and for ever-expanding wars in Central Asia and the Middle East—is code language for a deepening of the assault on the working class.
The discussion of possible deficit reduction measures includes regressive taxes such as a national sales tax and sweeping cuts in entitlement programs on which millions of people rely, such as Medicare and Social Security.
If this continues, we will see civil unrest. I am reminded of the tweet from Robert Reich posted by Zaladonis yesterday and another one that I had read earlier.
30 Jan
RBReich Robert Reich 3.5% ec growth pitiful. We’re in so deep a hole that we need twice that to get jobs back. Don’t believe the Wall St cheerleaders.
30 JanRBReich Robert Reich
If you think revolts in Tunis, Egypt, and Yemen are big, wait for coming food and energy shortages around world. US shld take lead now.
Late Night Drift
Posted: January 19, 2011 Filed under: Barack Obama, U.S. Economy, U.S. Politics | Tags: Barack Obama, Christina Romer, jobs, Larry Summers, New York Times Magazine, Obama economic team, U.S. Economy, U.S. Politics, unemployment 16 Comments
I’ll bet Dakinikat can’t wait to start plowing through the New York Times Magazine’s cover story this week: The White House Looks for Work: Inside Obama’s Struggle to Bring Down Unemployment, by Peter Baker.
Who knew Obama was involved in a struggle over jobs? As far as I can tell jobs are about the last thing on Obama’s mind. But what do I know? Apparently, there has been a life and death struggle going on within the President’s economic team over jobs.
Let me just buy them a clue: the answer isn’t cutting the deficit and wiping out the social safety net. Anyway, back to the Caucus blog’s preview of the upcoming NYT mag story and some of the “surprisingly newsy nuggets” we can look forward to reading on Sunday morning.
Mr. Baker writes that the president’s economic team “fractured repeatedly over philosophy (should jobs or deficits take priority?) and personality (who got to attend which meetings?), resulting in feuds that ultimately helped break it apart.”
Wait…that’s news?
The most sensible “tidbit” in the article comes from Christina Romer.
“In Washington, she said, ‘you’re not supposed to say the obvious thing, which is that in retrospect of course it should have been bigger. With unemployment at 10 percent, I don’t know how you could say you wouldn’t have done anything different. Of course you would have made it bigger.’”
— In the article, Ms. Romer said the Obama administration should have gone back to Congress for more stimulus money to bolster the economy when it was clear how bad things really were.
He writes: “‘In my mind,’ she said, ‘the problem was not in the original package; it was in not adjusting to changed circumstances.’ Once it was clear that the situation was deteriorating, she said, the White House should have gone back to Congress for more stimulus money. ‘That was where we could have been bolder,’ she said.”
Duh. For that kind of truth-telling, you get sent to Siberia UC Berkeley.
There’s a supposedly funny story about Larry Summers that I don’t understand. Can someone explain it to me?
Mr. Baker offers this fun tidbit about Mr. Summers: “Tan from a holiday in Jamaica and trying to get his bearings again at Harvard, where he plans to teach a course on Obama’s economic policy and write a book, Summers sat at a corner table and ordered bisque and — from the lighter-fare menu — a steak ‘as rare as your chef will make it.’”
On second thought, maybe Dak should skip the NYT mag article. If these are the highlights, it sounds like a crashing bore. And I didn’t see anything about jobs in there either.
Our Dismal Job Market
Posted: January 7, 2011 Filed under: Barack Obama, Breaking News, financial institutions, Global Financial Crisis, jobs, Team Obama, The Great Recession, The Media SUCKS, the villagers, U.S. Economy, U.S. Politics, We are so F'd | Tags: Gene Sperling, labor force participation rate, long term unemployment, rigid wages, Sticky wages, unemployment 11 Comments
Economists–well at least NeoKeynesian economists that look at data–frequently use words like “rigid” and “sticky” to describe the jobs market. Rigid is a good word. It means “deficient in or devoid of flexibility”. The Labor Markets are the biggest empirical hurdles to jump if you want to buy into some variant of supply-side economics or NeoClassical economics.
Wages and quantities of labor used to adjust very slowly. They appear to be dismally slow these days. Part of this is obviously due to outsourcing. The substitution of foreign (e.g. outside of our borders; legal status really doesn’t matter for purposes of macro growth) for US-based workers seems to have made the NeoKeynesian assumptions of sticky and rigid wages even more so.
What’s very interesting about today’s BLS report on jobs is that the unemployment rate inched down but the fundamentals in the job market don’t appear to be changing much. Plus, the unemployment rate inched down based on the way it’s calculated by more than anything else. It’s not really fooling people that know economics or finance, but will the public at large embrace the nuance? A huge portion of the populace is simply leaving the job market.
Felix Salmon explains some of the nuances in his Reuters Blog today called “No good news for the long-term unemployed”. He focuses on some of the buried numbers rather than the top number. Yes, he has a nifty graph you should check that out too.
The December jobs report turns recent history on its head. We’ve been used to healthy increases in employment making no dent in the unemployment rate, but this time a mediocre jobs figure—just 103,000 new jobs were created—coincides with a gratifyingly large fall in unemployment, to 9.4% from 9.8%. For those keeping track at home, that’s employment up by 103,000 and unemployment down by a whopping 556,000.
There’s no doubt that the headline payrolls number is a disappointment. The economy just doesn’t seem to be creating jobs: we need to see 150,000 new jobs a month just to keep pace with population growth. But is there some good news, at least, on the unemployment front?
I’m not sure. While unemployment is down from both December 2009 and December 2010, it’s down only for those who have been out of work for less than 26 weeks. The ranks of the long-term unemployed are still rising
Well, it’s not so ‘whopping’ in context–as we’ll see in a moment–but let’s look at some other things. The underlying numbers appear to be a total disconnect–and Salmon’s analysis is not unique among economists’ take on the situation–with the assessment of the President who just appointed lawyer Gene Sperling to do an economist’s job. President Obama also continued his rhetoric on substanial job creation being just around the corner and how the trend is just so much rosier under his leadership. Does any one outside of his circle actually believe this?
Now, read this Bloomberg article and notice the part at the end that I highlighted.
Obama said Sperling has been an “extraordinary asset” over the past two years as a senior adviser to Treasury Secretary Timothy Geithner, helping to pass a small-business jobs bill and a tax-cut compromise.
Obama said one of the reasons he selected Sperling is that “he’s done this before,” a reference to Sperling’s 1996-2000 leadership of the NEC during the Bill Clinton administration.
Obama also named Jason Furman as principal deputy director of the NEC, and nominated Katharine Abraham to the Council of Economic Advisers. He also nominated Heather Higginbottom as deputy director of the Office of Management and Budget.
Obama spoke on the same day that government data showed that the U.S. added 130,000 jobs in December and the unemployment rate dropped to 9.4%. Read MarketWatch’s story about jobs report.
Obama trumpeted 12 straight months of private-sector job creation and said, “the trend is clear.” But he said there’s a lot of work to do to get more people back in the labor force, and pledged to forge ahead with more job-creation efforts.
Sperling was also deputy NEC director during Clinton’s first term, which was marked by standoffs that resulted in government shutdowns. Sperling helped negotiate a balanced budget agreement in 1997 and was an advocate for the repeal of the Glass-Steagall law that separated commercial and investment banking.
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