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More Job Market Malaise

December was probably not a one-off.

by
Tom Blumer

Bio

January 11, 2014 - 12:56 am
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On the Wednesday conference call following the release of the ADP’s December National Employment Report on private-sector hiring, Mark Zandi, chief economist at Moody’s Analytics, the firm primarily responsible for the report’s preparation, told attendees: “It feels like the job market has kicked into a higher gear.”

It’s hard to blame Zandi for wanting this to happen. After what he described as a lot of “false starts” in the past four and a half years since the recession officially ended, who doesn’t want to see some better employment news?

ADP’s report showed that private firms added 238,000 jobs. Though far from outstanding, that’s a very decent number which, if replicated for about the next three years, would finally get the job market into the neighborhood of where it needs to be. I for one would be glad to start arguing that the private sector has finally figured out how to maneuver around the Obama administration’s legal and regulatory web and its Keynesianism-on-steroids mindset, and is at long last beginning to genuinely recover the dynamism that many of us thought was lost forever.

Friday’s employment report from the government blew those hopes to bits. On a seasonally adjusted basis, the economy added only 74,000 jobs; the private sector added only 87,000. Though the official unemployment rate declined to 6.7 percent, the primary reason for its decline was the same as it’s almost always been in the four-plus years since its 10 percent peak in late 2009: Vast hordes of Americans stopped looking for work, bringing the labor force participation rate to a 36-year low. The job market malaise remains in full force.

Within minutes of the report’s release, Zandi was in complete denial on CNBC’s Squawk Box:

I wouldn’t pay any attention at all to these numbers. They’re not consistent with anything. … they’ll be revised up and away.

The problem is that Friday’s raw numbers before seasonal adjustment — that is, Uncle Sam’s best estimates of what actually happened — tell us that the job market took a significant turn for the worse in December that even extraordinary upward revisions won’t be able to negate:

NSAjobs0109to1213NFPandPvt

Between February and November, the overall job market turned in improvements over the same month in 2012 seven out of ten times. The average improvement was almost 32,000. As seen above, December went the wrong way by an astonishing 170,000. That’s a turn for the worse of over a quarter million jobs when measured against November, and of over 200,000 compared to the average of the previous ten months.

The private sector deterioration is almost as bad. It shows eight of ten year-over-year improvements from February to November, with an average pickup of 24,000. Its December decay against November was 208,000, and over 180,000 compared to the previous ten months’ average.

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Top Rated Comments   
"The longer it goes, the uglier the bubble burst will be."

It would be of considerable comfort if it were realistic to believe that the bursting of the bubble would lead to an awakening of the public as to the actual causes of the catastrophe. We could then pick up the pieces and collectively vow that this will never happen again. The perpetrators would be made to wither under the intense beam of the spotlight wielded by an outraged public.

The terrifying reality is that such will not happen. Most likely the ignorant, propagandized, and indoctrinated majority will cry out to their most oppressive and tyrannical false heroes for relief from their misery while the rest of us will become the targets of blame-shifting to be hated, despised, and eradicated financially if not physically.

Surely, that is the plan.
13 weeks ago
13 weeks ago Link To Comment
cfb, thanks for the comment.

Obviously in all six instances, jobs will be lost, employer health care coverage will be lost, the purchasing power of those who are still working will decline, or a combo of all three ... but the power of the left to rule by decree and intrude at the micro level into everyone's lives will be enhanced, which is what it's really all about.

The answer to your final question is that I'm somewhat surprised it hasn't happened by now, but it took me a while to appreciate that the QE game is being done on a coordinated worldwide scale. That makes me think it can hang on for several more years. The longer it goes, the uglier the bubble burst will be.
13 weeks ago
13 weeks ago Link To Comment
Tom, for most non-economists...the blur of statistics and fog of war on capitalism makes their eyes glaze over after the first sentence. They grab the sound bite from Zandi and run with it...like a child running with a scissors.

If you would be kind enough to give your input into the following questions in lay terms, that might help immensely.

1) Obamacare seizes one sixth of the economy, it makes an array of products "non-conforming" so that they are not available as options for purchase, and has threatened to "deal with" insurance companies that don't "assist" in the rollout of "enrollees" who don't pay, may not qualify, and didn't elect a particular plan, just Lookie Lou'd at it...what happens to the economy when that system collapses?

2) Obama and his czars and czarinas have declared by royal decree that the employer mandate be magically held until...surprise!!!...after the elections. What happens to the job market when employers make decisions about compliance with the IRS-overseer program...and start reacting to forced compliance rules?

3) the czars and czarinas in the Obama cabal at the EPA have recently moved to destroy the coal industry, have crushed every attempt to expand oil and gas, have sold an entire city and a million acres of land...what impact will unchecked royal rule in energy have on the economy?

4) 13 million border crashers may be given a free ride into full benefits, largely lower skilled...ripe for recruitment into "protection" by either the welfare state or Workers Party membership...which sector of the economy will be hardest hit by the rush of manual labor bodies into a deep recession?

5) the pressure on minimum wage and other Workers Party class warfare arguments into the teeth of a CRA created deep recession...what impact will inflationary pressures have on the jobless recovery?


6) if the CRA-UNO-ACORN devised crash of real estate, mortgage, banking has destroyed the job market for realtors, home builders, mortgage lenders, and Obamacare craters so badly that it destroys the life, health and disability insurance job sector and the EPA destroys the energy sector, the military despising cabal destroys that manufacturing sector, the government royal takeover of Detroit and the Worker Party dominance in auto manufacturing...including making bankruptcy preferences in federal cases...what impact will that have on free market recovery?

That should be enough for now. How will the pressures of half the public not contributing to cover all these royal rule programs (add in 13 million to that percentage at your leisure) impact the jobless recovery?

And if the Fed keeps printing money to cover it all...when will the dam break and the bubble burst?
13 weeks ago
13 weeks ago Link To Comment
All Comments   (32)
All Comments   (32)
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Ashlyn. I agree that Joseph`s rep0rt is impossible, on wednesday I got a brand new Ford from earning $9921 this-past/4 weeks and in excess of ten-grand this past-munth. it's by-far my favourite-work I've ever done. I began this 4 months ago and right away started bringing in over $72, per hour. find more information star56.com
13 weeks ago
13 weeks ago Link To Comment
The amount of private capital investment remains near its lows since the financial crisis.

It matters little what new or improved industry or technology might help lead a real recovery if the capital to invest in it isn't available.

It should also be noted that the ENTIRE "improvement" in the unemployment rate is caused by the net decline in the labor force. It is ALL just those we no longer count as unemployed.

And remember that so-called "discouraged" workers haven't necessarily stopped looking for work or withdrawn from the labor force voluntarily. We do not even try to measure that. Once unemployment benefits are exhausted, those no longer receiving benefits are just dropped from the calculations.
13 weeks ago
13 weeks ago Link To Comment
From 1873-1893, the US experienced something similar. It was a slow growth period of fits and starts and it was referred to as "the Long Depression." Just when it seemed to be reaching an end, the stock market crashed and we experienced the "Panic of 1893." What we are going through right now is not the same but similar. Until we enter a new phase brought about by as yet an unknown industry, things are likely to remain as they are for quite some time.
13 weeks ago
13 weeks ago Link To Comment
Sorry, but that simply won't wash. A perfect storm of events occurred during the Grant administration that created the Panic of 1873. Some of these events included war and financial failures abroad, rampant financial speculation, scandal, the inflationary effects of our civil war, and domestic disasters that threatened to collapse our banking system plus Grant not being the most capable of presidents.

Our malaise stems from having elected a fully indoctrinated Marxist president who inherited a rather routine recession from a fiscally irresponsible predecessor and chose to capitalize upon the situation in order to erode our economy dramatically and create sufficient economic chaos so as to "fundamentally transform" our culture and economic system to fit far-left radical utopian vision.

There it is. A truthful history lesson in one long sentence. Get over the notion that we have been there before or that this is simply a repeat of history.

"Until we enter a new phase brought about by as yet an unknown industry, things are likely to remain as they are for quite some time."

No. Until we install an administration that is dedicated to fiscal and constitutional responsibility and governance and champions free markets and responsible capitalism things are likely to remain as they are for quite some time. In that environment many new industries will follow.





13 weeks ago
13 weeks ago Link To Comment
"Let's not read too much into these statistics..." - Broke Obamba
13 weeks ago
13 weeks ago Link To Comment
While I don't even pretend anyone with half a brain believes anything this regime or it's mouthpieces say, we the working class people of this country were sold out way before Obama came on the scene by the twin progressive regimes of the Bushes and Clintons. We were sold down the river for corporate profits and sheer raw power and greed of the political class. Anyone who thinks our savior will come from either of the current political parties is a naïve fool. Your vote doesn't matter, it gets cancelled out by a illiterate fool or dead person who is voting the scum back in office for a free toke of the crack pipe. Hunker down folks, it's going to be a bumpy ride.
13 weeks ago
13 weeks ago Link To Comment
You're probably right. The greedy billionaires continue to steal more and more from the working class almost as much under Obama as under Bush, but at least now you will not be thrown into the death camp at Gitmo for saying so. Yes, the illiterate Teabagging Koch suckers still vote and this does still militate against the votes of intelligent, compassionate progressives. Obamacare might have introduced a smidgen of compassion into the health care system but it is still dominated by greed. Perhaps it is time for the working to class to seize all the wealth of the Wall Street fat cats for themselves and use it to provide food, housing, education, and jobs for all.
13 weeks ago
13 weeks ago Link To Comment
More kabuki theater. Every time the economy manages small gains in the tens of thousands of jobs, the media hypes it.

Every so often the BLS has to make major corrections so their lies do not get their statistics too far from the true observable statistics.

DDSS
13 weeks ago
13 weeks ago Link To Comment
zandi thinks we shouldn't worry because the current low number isn't consistent with any other numbers. BS. the october 2012 numbers weren't consistent with anything. but since they helped obama and muted romney, they were accepted as fact. in fact, they were fudged to help obama. real people who live and work in the real economy really know what's really going on with the economy: it sucks. the stock market is in a bubble caused by the fed - a bubble that has only benefited the rich. if instead of the fed spending $5trillion in buying new debt the fed govt has cut taxes for working people $5trillion, then the economy might be steaming along by know, this could have been done by giving people earning under $75k a hiatus on fica taxes. this would have been tantamount to giving working people a 7% raise. and if a hiatus had been extended to businesses with fewer than 50 employees, then it would have been tantamount to a 7% cash infusion for each small company and this would have led to massive new hiring. instead, obama and his cronies did what was best for the big banks and the well-connected. they are a mix of chicago machine politicians helping out the machine and brezhnev socialists and scum. we must fix this in november. it's probably the last chance this nation has at remaining free.
13 weeks ago
13 weeks ago Link To Comment
The regime's policies are making things much worse, but there are also issues beyond their redistribution wet dreams.

The unparalleled economic growth of the last 200 years has been fueled by innovation; i.e., by new products and services; i.e., by industrialization (including industrialization of agriculture), new materials, new modes of transportation, new communication tools and channels, and other forms of automation.

It was ALL organic. The government had virtually nothing to do with it. No government service had any but the merest impact on any of the major improvements in the modern world. The break-up of AT&T is the classic example. While the government allowed/imposed that telecommunications monopoly, telecom changed at a snail’s pace. When the strangle hold was lifted, BANG. 25 years later, the world is a significantly different place and the people and economies of the world have profited immensely; not because of government, but because the death grip of government, for once, was released. (and btw, don’t expect big business to champion such a thing for any other industry, ever. Why should they forsake their profits for the greater good?)

The problem now that doesn't receive enough attention is that government strangles innovation with regulations, some of which are legitimate, but most of which are entirely arbitrary and an exercise of unbridled power rather that an effort to protect the public. Even if you want to give the Statists credit for good intentions, there is a point beyond which the best intentioned controls are detrimental rather than beneficial. Who thinks the automobile industry could develop in today's environment? There is absolutely no way the all controlling government would allow the buggy industry to be made obsolete, would allow the pollution, would allow even a few deaths from automobiles not to speak of millions, etc., etc. Yet, what fool can't recognize the overwhelming benefits to humanity of the transportation innovation that have emerged in just 100 years.

Part of this Is also the media’s fault, as usual. When every individual tragedy in the world is sensationalized and used as a club to forward the Marxist media’s agenda, it is nearly impossible to get a product off the ground that can’t be made bullet proof before introduction. It’s no coincidence that almost all innovation in recent decade has been in electronics; few people die or are maimed by cell phones. Yet the media still tries to convince us that they cause cancer, yada yada yada.

But what if some of the billions poured into electronic had been poured into exploiting the resources on the moon? Who knows what our energy situation would be and what other improvement would have been created? It didn’t happen and it won’t happen for many decades and at much greater expense than it took to create prior industries; there would be the inevitable disasters, loss of life, tragic setbacks, etc., etc. So, it CAN’T happen at the speed of prior technologies. The nuclear energy industry is another example, and there are probably many other and better examples as well. Innovation is strangled, and therefore the economy is and will be strangled until people, not just the government, realize that progress entails risk, that tiny variations in restaurant formats is not real innovation, and that the only way America is going to continue to be the global economic engine is if Americans with the ability to harness emerging technologies are allowed to do so without the iron fist of government bureaucrats.

Less government, not more government.
13 weeks ago
13 weeks ago Link To Comment
The economic growth of America, from a backward country to a superpower, was largely due to our concept of equality. Any Joe with a head full of ideas, some determination to make something of himself, had the possibility through hard work and a bit of luck to move up from being dirt-poor to wealthy. Sometimes it happens overnight and sometimes it takes a few generations. Americans were encouraged to work hard, learn and be inventive. My great-grandparents were poor farmers, up working at 4AM and didn't go to bed until well after sundown each day. My grandparents were well-off farmers. My parents were college educated and so are my siblings and I. I don't know anyone who is well-to-do that got that way through government handouts or programs—usually the opposite happens. Generally they, their parents or grandparents worked very hard to get them there. You can wait on the government or you can wait on the lottery, but hard work, innovation and taking a few risks have a proven history of getting people out of poverty.
13 weeks ago
13 weeks ago Link To Comment
I agree completely. It's no coincidence that the modern world began about the time that the US was founded. In 200 years, the lifestyle and lifespan of average people improved more than in the prior 20,000 years. And the US wasn't founded to foster government; it was founded to constrain government. In today's world, government is the biggest problem we have. As we speak, the Statists are racing to close out the greatest period of growth in the history of mankind while they hold their brain-dead supporters at bay with crumbs stolen from the tables of the few people who actually know how to make things better, and to put themselves back permanently in control, forever.
13 weeks ago
13 weeks ago Link To Comment
Tom,

Thanks for the article. I want to run something buy you. If we look at really deep structural insufficiency in economic performance - loss of jobs overseas, loss of middle salaried to lower salaried, the loss of our manufacturing base, and the decreasing participation rates iin the economic in total, we see issues that started before Reagan and are continuing today.

Reagan helped as he showed that decreasing taxes and regulation can take any economic machine and improve its job creation performance at any time. Obama has been a disaster because he has singlehandedly aggravated and has been any an all standards made all performance worse.

I see, though, these deep issues as insufficient capital formation. And that will not be solved until a advantageous way to allow pretax dollars to flow into investment.

13 weeks ago
13 weeks ago Link To Comment
if insead of $5trillion QE we had $5trillion in tax cuts for small businesses and workers, then we'd be soaring by now.
13 weeks ago
13 weeks ago Link To Comment
I agree the real problems are long-term, but NOT an issue of capital formation. Most are issues of "globalization", some of which are basic economics where China will happily build stuff so cheaply it *seems* we should take advantage of it, some of which are bleeding edge where we are taking Ricardo way past the limits he ever considered, dismantling our own country in the process. That has nothing to do with capital formation. We've GOT capital in excess but we employ it only in China. Oops.
13 weeks ago
13 weeks ago Link To Comment
IHH's point about capital formation is of course important.

The managed trade issue is too.

The problem with Ricardo's comparative advantage is that it only works when both parties' primary objective is to maximize their material well-being.

That isn't the case of certain of our trading "partners," esp China, whose objective is to steal our knowledge, produce what we currently produce, and lull us into losing our ability to produce.

Imagine using Ricardo's two-person model with two products: food and drinkable water. Eventually, they'll figure out that one guy is better at making food and the other other is better at producing water, so each devotes all of his efforts to making that one thing.

Ah, but the guy producing the food retains the tools needed to make drinkable water (and learns all he can about how the other guy is doing it), and convinces the guy currently producing the water that he doesn't need the tools to make food any more.

Suddenly, the guy producing the food who can make water for himself says, "Sorry, I'm not selling you food any more, and I don't need your water, because I'll make it myself."

The guy who can now only make water starves to death.
13 weeks ago
13 weeks ago Link To Comment
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