And the right wingers are STILL lying through their teeth about the "great economy".
BTW, note the strong increase in corporate profits--the only "positive" sign.
A weak "recovery"+flat or dropping wages+record government debt+a collapsing housing market+foreign policy catastrophe=disaster for the Republicans in 2008.
7 comments:
180,000 jobs were created in March*
Actually, that isn't the case. From Angry Bear:
Whatever the motivation behind such assertions, sincere or propagandistic, they misrepresent what is actually happening. Furthermore, how does the average citizen relate to an estimate like 97,000? On the face of it, it is just a big number.
To better understand job growth, common analytic methods applied are to: display the raw job numbers over time; use moving averages; chart a function of the number of months after an event like a recession; look at period-to-period percent changes; graph employment-to-population ratios.
What is variously missing in these approaches is, for example, being able to: identify specific months such as September 2001; make meaningful comparisons over time or across administrations; evaluate against some objective criterion; directly take into account US population growth; clearly represent the data so that it can tell its own story.
Interestingly, working-age population data can supply context and further our understanding of the jobs data. The BLS has monthly payroll and population data from January 1948 on. The Bureau’s default working-age population is defined as ages 16 and up. More realistic is to use ages 18-64. It turns out that these data, ages 18-64 beginning with January 1948, correlate highly with the payroll data (simple correlation coefficient > .99). Indeed, a strong correlation makes sense: more people mean more consumers mean more jobs.
As an improvement then, besides the raw or nominal count, the monthly job creation numbers can be expressed on a more human scale, as a rate that adjusts for population growth. This can easily be accomplished by reporting the monthly estimates as the number of jobs created per 1,000 adults (JPT) aged 18-64. That is: {total monthly change in the number of jobs created} divided by {total working-age population in 1,000's for that month}. This simple metric would enhance understanding. Furthermore, it would put job-creation numbers in real terms so reasonable comparisons can be made, just as we use the CPI to make dollars comparable over time.
Explicitly recognizing the important role population growth plays in job creation, at least for developed countries, shows that economic policy often affects only the margins of job growth (recall, one JPT is one new job per 1,000 people per month), and can help belie incredible claims about job creation.
For example, Allan Hubbard and Edward P. Lazear, WSJ, October 2, 2006 wrote "In the past three years [we have added more jobs] than all the jobs added in the European Union and Japan combined." Such claims continued to appear on the Whitehouse website at least into February 2007, e.g., here. Assuming a similar relationship exists between job and population growth with the EU and Japan as with the US, a quick check in the CIA World Factbook and a little arithmetic show that for every one person added to the EU and Japan combined, we put four new people into our population. Of course our job creation is higher. One might just as well claim that “Under our administration we have fewer people per square mile than in the EU or Japan.”
With the JPT index we can put the payroll numbers in perspective. For instance, the average JPT since January 1948 is 1. Since the overall average is 1 and the working-age population is now about 186 million, the March payroll numbers would have to be 186,000 just to be average. Individual data points can be identified and put in context, such as September 2001. Beginning with Truman, the average Democratic JPT is more than double the average Republican JPT. Bush I and Bush II are virtually tied for the lowest average JPT of all administrations, at 0.35 and 0.36 respectively.
I might add, for clarification, that the administration is only CLAIMING 97,000 new jobs for March 07. Just to be AVERAGE job creation would have to be 180,000.
I must correct myself. BLS is indeed saying 180,000 for March, but this just keeps pace with population growth.
The dollar strengthened on the indication of job market strength that analysts said bodes well for sustaining consumers' incomes and spending, even if the overall pace of economic activity is easing.
"This report is consistent with the idea that the U.S. job market remains solid and that economic growth by no means is going to drift down to recessionary levels," said Stuart Hoffman, chief economist for PNC Financial Services in Pittsburgh.*
... and as the other set of your data indicates, the number of jobs created alone doesn't go very far in describing economic 'quality': information regarding wages (and benefits) are needed for gauging the validity of claims about any real gains.
The true crisis is debt at all levels, which has reached record totals. How long can an expansion by fueled by borrowed money until it caves in?
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