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Is It Good News? Is It Really, After All This Time, Good News?

Chart via Calculated Risk

Calculated Risk:

From the BLS:

Nonfarm payroll employment increased by 192,000 in February, and the unemployment rate was little changed at 8.9 percent, the U.S. Bureau of Labor Statistics reported today.

The change in total nonfarm payroll employment for December was revised from +121,000 to +152,000, and the change for January was revised from +36,000 to +63,000.

The following graph shows the employment population ratio, the participation rate, and the unemployment rate.

Daniel Indiviglio at The Atlantic:

It should be noted that today’s report revised upwards the number of jobs for both December and January to 152,000 from 121,000 and to 63,000 from 36,000, respectively. Obviously, it’s good news that there were actually 58,000 more jobs created during these two months combined than we thought.

Those 192,000 net new jobs in February according to BLS’s Establishment survey aren’t far off the 250,000 estimated by its Household survey. There was a major discrepancy last month: these surveys estimated 36,000 and 589,000 jobs created, respectively. It’s nice to see these two surveys’ statistics a little closer together in February, as it provides better credibility to the numbers we’re seeing.

Private sector jobs did much better than government jobs in February. Firms added 222,000, while state and local jobs declined by 30,000. Federal jobs were unchanged.

Felix Salmon:

The general reaction to this morning’s jobs report is “meh”, as you might expect, given the release, where the phrases “changed little”, “about unchanged”, “little or no change”, “unchanged”, and “essentially unchanged” all appear in the first five paragraphs. But that’s largely a function of the fact that the release attacks the unemployment figures first; when it comes to payrolls, they rose by a statistically significant amount — 192,000 jobs, and the trend, while modest, is clearly in the right direction:

Since a recent low in February 2010, total payroll employment has grown by 1.3 million, or an average of 106,000 per month.

The really good news in this report is that it’s looking increasingly as though the sharp drop in the unemployment rate over December and January, when it fell from 9.8% to 9.0% in two months, is less of an aberration than it might seem. The 8.9% rate, while undeniably unacceptably high, is the first time we’ve seen an 8 handle on this figure in almost two years. And remember that in October 2009, the number was 10.1%.

Given that unemployment by its nature falls more slowly than it rises, a decrease of 1.2 percentage points in 16 months has to be taken as an indication that something is, finally, going right. (Other unemployment rates, like the much-discussed U6, are also down sharply: it’s now 15.9%, from 17.0% in November.)

Even the worst news of the report, in table A-12, is something of a statistical aberration: while the mean duration of unemployment hit an atrocious new high of 37.1 weeks, that’s mainly because the upper bound for for unemployment duration was changed this year to 5 years from 2 years. The median duration fell, to 21.2 weeks. There’s still an American underclass of about 2.5 million long-term unemployed, but it does seem to be shrinking a little.

Tom Diemer at Politics Daily:

The news wasn’t good enough for the Republican National Committee. RNC Chairman Reince Priebus said even with the better jobs numbers, “we have yet to see the leadership we need coming out of the White House to restore sustainable economic growth. . . . Frankly, if the answer doesn’t involve more spending, this administration is simply out of solutions.”

But Senate Majority Leader Harry Reid (D-Nev.) saw a better day ahead and warned that cutting the federal budget too deeply this year could cost jobs in a fragile economy. “Republicans should work with us to quickly pass a long-term budget that reduces the deficit while protecting jobs, and [giving] business certainty,” he said. Similarly, AFL-CIO President Richard Trumka said the improving economy “remains threatened by irresponsible budget cutting in Congress and in states and cities.”

Ezra Klein:

The most important thing for not only the economy, but also the long-term deficit, is that we get unemployment down, and fast. When businesses begin hiring again, that’ll mean more revenue rushing into state and federal coffers, it’ll mean gains in the stock market, it’ll mean lower social spending through programs like Medicaid and unemployment insurance. Sharp spending cuts may save us some money, but that doesn’t mean they’re a good deal, at least right now. What we need at the moment is more jobs reports like this one — businesses need to be convinced that this is a recovery, not merely a good month. Anything that might get in the way should wait until we’ve had a few of them in a row.

Doug Mataconis:

There are caveats, of course. There are still millions of people sitting outside the labor force after the recession, and returning them to full employment is going to be a difficult, if not impossible, task to achieve The rising price of oil, brought on by the myriad crises in the Middle East, could put a damper on any economic recovery we’re experiencing right now. And, of course, this could all be a one month anomaly. Nonetheless, this is good news and let’s hope it continues.

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Our Bubbles Keep Bursting

David Streitfeld in NYT:

Few believed the housing market here would ever collapse. Now they wonder if it will ever stop slumping.

The rolling real estate crash that ravaged Florida and the Southwest is delivering a new wave of distress to communities once thought to be immune — economically diversified cities where the boom was relatively restrained.

In the last year, home prices in Seattle had a bigger decline than in Las Vegas. Minneapolis dropped more than Miami, and Atlanta fared worse than Phoenix.

The bubble markets, where builders, buyers and banks ran wild, began falling first, economists say, so they are close to the end of the cycle and in some cases on their way back up. Nearly everyone else still has another season of pain.

“When I go out and talk to people around town, they say, ‘Wow, I thought we were going to have a 12 percent correction and call it a day,’ ” said Stan Humphries, chief economist for the housing site Zillow, which is based in Seattle. “But this thing just keeps on going.”

John Ellis at Business Insider:

Everyone thought that when the housing crisis hit, it wouldn’t hit hard in “stable” US cities like Seattle and Minneapolis.  No one thinks that anymore

David Leonhardt at NYT:

When we last listed the price-to-rent ratios in major metropolitan areas, Seattle’s was near the top of the list. Only in the Bay Area of Northern California and in Honolulu were house prices higher, relative to rents.

A sky-high price-to-rent ratio is perhaps the single best sign that an area is in a housing bubble. Real-estate agents, homeowners and even home buyers can tell a lot of stories to justify the bubble — stories about central cities or good school districts being immune to bubbles — but eventually people will realize that renting is a much better deal and more will do so.

There is no such thing as a market price that cannot fall.

Matthew Yglesias:

David Streitfeld writes that “The rolling real estate crash that ravaged Florida and the Southwest is delivering a new wave of distress to communities once thought to be immune — economically diversified cities where the boom was relatively restrained.”

First see David Leonhardt on whether the boom really was all that restrained in Seattle. But the other examples are better and I think this is a reminder that the relationship between the housing market and the economy is push and pull. There was, in fact, an unsustainable bubble in house valuations across much of the country that led to localized unsustainable booms in home building and related activities. That process came to an end in 2006-2007 and we were in recession all throughout 2008 as the unemployment rose and the construction boom unwound. But then came the really giant collapse of aggregate demand in fall of 2008 continuing through the subsequent winter. Now we’re way below the long-term trend level of overall nominal spending:

Overall nominal spending equals overall nominal incomes. And we live in an economy where lots of us have contractual obligations that are nominally denominated. That’s my cable bill, it’s my cell phone bill, and it’s my mortgage, and it’s probably your mortgage too. Fortunately for me, my nominal income isn’t below its pre-crisis trend growth path. But America’s collective income is. So if our nominal income is below where we expected it would be when we signed the contracts, people are going to be unable to pay bills. That means, among other things, serious housing problems even in jurisdictions that never suffered from noteworthy construction booms.

Calculated Risk:

Leonhardt writes:

When we last listed the price-to-rent ratios in major metropolitan areas, Seattle’s was near the top of the list. Only in the Bay Area of Northern California and in Honolulu were house prices higher, relative to rents.

A sky-high price-to-rent ratio is perhaps the single best sign that an area is in a housing bubble. Real-estate agents, homeowners and even home buyers can tell a lot of stories to justify the bubble — stories about central cities or good school districts being immune to bubbles — but eventually people will realize that renting is a much better deal and more will do so.

There is no such thing as a market price that cannot fall.

I agree completely with that last sentence – no place is immune.

Price-to-rent is a great indicator, but some areas have high price-to-rent ratios because of the mix of housing units (rentals units are not perfect substitutes for buying). I prefer tracking price-to-rent over time for a particular city (as opposed to comparing cities), but a high price-to-rent ratio is definitely a warning flag.

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There’s Something Strange In The Numbers Here, Waiter

Chart via Calculated Risk

Calculated Risk:

From the BLS:

The unemployment rate fell by 0.4 percentage point to 9.0 percent in
January, while nonfarm payroll employment changed little (+36,000),
the U.S. Bureau of Labor Statistics reported today.

And on the benchmark revision:

The total nonfarm employment level for March 2010 was revised downward by 378,000 … The previously published level for December 2010 was revised downward by 452,000.

The following graph shows the employment population ratio, the participation rate, and the unemployment rate.

Ryan Avent at Free Exchange at The Economist:

LOOK almost anywhere in the recent economic data and the signs point to an accelerating recovery. A solid fourth quarter GDP report contained a truly blockbuster increase in real final sales. Manufacturing activity is soaring. Consumer spending is up and the trade deficit is down. Markets are trading at their highest level in over two years. And so economists anxiously awaited the first employment figures for 2011, hoping that in January firms would finally react to better conditions by taking on lots of new help.

Instead, the Bureau of Labour Statistics has dropped a puzzler of an employment report in our laps—one which points in many directions but not, decidedly, toward strong job growth. In the month of January, total nonfarm employment grew by a very disappointing 39,000 jobs. This was not at all what forecasters were expecting. Earlier this week, an ADP report indicated that private sector employment rose by 187,000 in January; the BLS pegged the figure at just 50,000. There were some compensating shifts. December’s employment gain was revised upward from 103,000 to 121,000. November’s employment rise, which was originally reported at 39,000, has been revised to a total gain of 93,000.

But there is bad news, as well. The BLS included its annual revision of the previous year’s data in this report, and while job growth over the year looks stronger than before, the level of employment looks worse. In March of last year, 411,000 fewer Americans were working than originally reported. And thanks to a weaker employment performance in April through October, 483,000 fewer Americans were on the job in December than was originally believed to be the case. For now, the economy remains 7.7m jobs short of its previous employment peak.

Felix Salmon:

The BLS press release makes this very clear in a box right at the top, which says that

“Changes to The Employment Situation news release tables are being introduced with this release. In addition, establishment survey data have been revised as a result of the annual benchmarking process and the updating of seasonal adjustment factors. Also, household survey data for January 2011 reflect updated population estimates.”

The effects here are large and unpredictable: the total number of people holding jobs in December 2010, for instance, was revised down by a whopping 452,000 — but despite that, the official December 2010 payrolls number now shows an even bigger month-on-month rise than it did before. More generally the size of the total civilian labor force was revised downwards by 504,000, almost half of which came from the Latino population. That has all manner of knock-on effects: the BLS warns that “data users are cautioned that these annual population adjustments affect the comparability of household data series over time.”

This is a messy report, then — even messier than you’d expect from a monthly data series which is mainly valued for its speed as opposed to its accuracy. At the margin, it’s bad for markets, which concentrate on the headline payrolls number, and it’s good for politicians, who tend to concentrate on the headline unemployment number. But for anybody who’s neither a trader nor a politician, it’s a noisy series which is best treated with a whopping great amount of salt — especially in January, and especially also when any big-picture message is so murky.

Instapundit:

Does this mean that most of the “fall” came from discouraged workers dropping out of the workforce? That would explain the difference between this and the Gallup survey, which showed unemployment rising to 9.8% instead of falling. Or am I missing something?

Matthew Yglesias:

At first glance I thought that was people dropping out of the labor force, but it seems instead to be the conjunction of two different things. One is upward revisions of the last couple of months’ worth of jobs data. The other is a downward revision to the baseline estimate of how many people there are. Basically, more people had jobs a month ago than we thought had been the case, and also there were fewer unemployed people than we thought had been the case.

The upshot is that the new data looks a lot better than the old data. But the new data doesn’t say the situation improved dramatically over the past month, it merely says that last month’s take on the situation was too pessimistic.

Mark Thoma

Brad DeLong:

I want a trained professional to analyze this. It is not unusual for the series to do something odd around Christmastide. It is not unusual for the series to diverge. Not this much.

 

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Falling, Falling, Falling

Sudeep Reddy at WSJ:

In California, former auto worker Maria Gregg was out of work five months last year before landing a new job—at a nearly 20% pay cut.

In Massachusetts, Kevin Cronan, who lost his $150,000-a-year job as a money manager in early 2009, is now frothing cappuccinos at a Starbucks for $8.85 an hour.

In Wisconsin, Dale Szabo, a former manufacturing manager with two master’s degrees, has been searching years for a job comparable to the one he lost in 2003. He’s now a school janitor.

They are among the lucky. There are 14.5 million people on the unemployment rolls, including 6.4 million who have been jobless for more than six months.

But the decline in their fortunes points to a signature outcome of the long downturn in the labor market. Even at times of high unemployment in the past, wages have been very slow to fall; economists describe them as “sticky.” To an extent rarely seen in recessions since the Great Depression, wages for a swath of the labor force this time have taken a sharp and swift fall.

Huffington Post:

When hard times hit, employers typically are reluctant to reduce wages. But this downturn has been different: More than half the workers who found new work by early 2010 after losing jobs between 2007 and 2009 said their pay had dropped, according to Labor Department data cited in the WSJ. A full 36 percent said the new job paid 20 percent less than their former one.

While headlines have focused on the national unemployment rate of 9.4 percent, the pain extends far beyond those 14.5 million who are deemed officially unemployed by government statistics. The only other instance of such severe wage reductions since the Depression was during the recession of the early 1980s, but the current slump is on track to be far worse, the WSJ notes.

Among people who are lucky enough to have work, living standards have been significantly downgraded. Almost a third of America’s working families are now considered low-income, earning less than twice the official poverty threshold, according to a recent report. The recession reversed a period of improvement.

This trend spells a grim future for the American worker, and for the American economy.

“They’re no longer working actively, with a chance to advance and gain more experience and skills,” said Brandon Roberts, manager of the Working Poor Families Project and a co-author of the report on low-income working families. “They’re just putting pieces together to stay afloat, to meet basic needs.”

Calculated Risk:

Even for those who can find work, the impact of the great recession lingers …

Note: Wages are typically sticky downward for those workers who do not lose their jobs – but for those who lose their jobs, wages can fall sharply when they eventually find new work (this happened in the early ’80s too).

James Pethokoukis:

Some liberal economists, for instance, claim wages have been falling since the Golden Era of the 1970s. More likely that they actually went up by at leasts 20 percent in real terms, according to researchers at the Fed.  But I have no doubt that wage growth slowed during the downturn and many folks have suffered a real and permanent loss of income. I think you will hear Democrats talk more and more about wage insurance — having government temporarily make up the shortfall between old and new jobs — especially with Gene Sperling back in the White House. He is a big proponent of the policy.  And we shouldn’t forget that John McCain proposed something like this back in 2008 during the campaign.

Ezra Klein

Rob Bluey at Heritage

Ryan Avent at Free Exchange at The Economist:

Is downward wage rigidity a problem? Mr Reddy’s anecdotes indicate that many of those who’ve been without work for a long time are willing to take new jobs at significant pay cuts, but perhaps others are still holding out for the wages they’re used to.

On the other hand, there may not be jobs available for them. Why would that be the case? Why wouldn’t firms swap out older, more expensive workers for the cheaper unemployed ones available to them? One possibility is that firms are worried about the disruptive impact of such workforce turnover and have decided that it’s better to keep employing existing labour at existing wages. But then we might expect new firms to start up and hire jobless workers; if the unemployed were just as productive as the employed, new businesses could operate at a significant cost advantage over competitors. But Robert Hall argues that credit conditions remain tight for new businesses, who are the big job creators.

Or it could be that jobless workers are simply much less productive than those who continue to work. Ragu Rajan indicates that this kind of structural explanation could be behind most current unemployment, and he therefore emphasises the importance of retraining. But if so many workers are now too unproductive to hire, one has to ask why firms had them on payrolls before the recession. Mr Rajan points to the unusual growth and subsequent collapse in the construction industry, but as Mr Shimer notes unemployment has basically doubled among all subgroups within the labour force. The data seem not to point toward structural factors as the primary driver of unemployment.

Perhaps the problem is a shortfall in demand, which is preventing existing firms from expanding. It could be that the real interest rate simply isn’t low enough to induce firms to invest in new plants and equipment—investments that would produce corresponding jobs.

These are the factors with which economists are currently wrestling in an attempt to understand unemployment. I do think it’s worth pointing out that a little bout of inflation would be helpful in resolving all of the above issues, with the possible exception of structural skills mismatch. So I continue to find criticism of the Fed’s decision to resume easing perplexing.

Ed Morrissey:

In one sense, this is just the normal response to supply and demand.  Labor is a commodity in that sense, and the cost of labor increases when supply is short, and decreases when supply is glutted.  As a hiring manager for several years in the Twin Cities, we had to repeatedly increases wages across the board (not just for new hires) to keep staff on board and to entice qualified applicants to work for us when unemployment in the area was in the 3% range.  Right now it’s more like 7% in this region, and I’m certain that had I remained in that career, I would be finding it much easier to keep the call center staffed without having to raise compensation levels at all.

It may not be quite as bad as it sounds, either.  While compensation falls as the jobless have to settle into new, less-lucrative jobs, prices are also falling in other areas, especially in real estate.  Retail prices have stabilized, but retailers are still relying on heavy discounting to move inventory.  Buying power may not be declining as much as wages, although it’s certainly not increasing.

The reason that the problem is worse than at any time since the Depression, assuming that the WSJ is correct in that analysis, is that we have had the worst extended unemployment since that time.  The best way to resolve this problem is, not coincidentally, the best way to resolve the housing crisis and other economic woes: stimulate job-creating growth.  Unfortunately, as the Obama administration pursues its regulatory expansion, it will disincentivize that kind of domestic investment, which will perpetuate this problem for at least another two years.

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We All Get Punched In The Gut

Chart from Calculated Risk

Calculated Risk:

From the BLS:

The unemployment rate edged up to 9.8 percent in November, and nonfarm payroll employment was little changed (+39,000), the U.S. Bureau of Labor Statistics reported today.

David Leonhardt at NYT:

Overall employment growth fell to 39,000, from 172,000. Private-sector hiring fell to 50,000 — which isn’t nearly enough to keep up with normal population — from more than 100,000 in each of the previous four months. Average hourly pay rose just 1 cent, to $22.75, the smallest gain in five months. The average length of the workweek remained stuck at 34.3 hours.

What’s causing this? No one knows, to be honest. But the most likely suspect is the same one that has been hurting the economy for much of this year. Financial crises do terrible damage, and the economic aftershocks from them tend to last longer and be worse than people initially expect.

Steve Benen:

I realize that economists tend to emphasize that it’s unwise to overreact to any one report, but this one feels like a punch to the gut. For all the indications that the job market was starting to pick up a little steam, this morning’s jobs report suggests the exact opposite.

Ryan Avent at Free Exchange at The Economist:

There is little to be happy about in this report, in other words. But there are some indications that the November numbers may be an aberration. September’s job losses were revised down to 24,000 in this report, while October’s job gains were revised upward, from 151,000 to 172,000. Through November, weekly data on initial jobless claims showed significant improvement. And of course, many other indicators have been flashing positive signs in recent weeks.

It’s likely, then, that the November figures will be revised up in future months to show a better performance more in keeping with broader trends. And it’s important to remember that monthly data are noisy. America’s labour markets have yet to generate job growth sufficient to bring down the unemployment rate. But the pace of recovery has been improving. There is good reason to suspect that when all is said and done this report will appear as a blip marring a strengthening upward employment trend. All the same, policymakers in Washington weighing whether to extend unemployment benefits and tax cuts should heed the obvious weakness in labour markets. They can and should make sure that November’s number remains an anomaly.

Don Suber:

Unemployment rose to 9.8% in November — or a full two points higher than what Barack Obama said it would be if we had done nothing.

One year ago, unemployment was at 10%, which proves Obamanomics has stalled the economy, as there was a net gain of only 39,000 jobs this November.

President Obama can no longer blame President Bush for this mess. Obama has spent record amounts of money and increased the size of the federal government from being 20% of the economy under Bush to now 25% of the economy as he increased the budget from $2.8 trillion a year to $4 trillion.

He has failed.

He is a failure, America.

Nice guy, but a failure none the less.

But he did ban Four Loko.

Philip Klein at the American Spectator

John Cole:

Just a reminder. The Republicans, energized over their November victories, went to Washington and immediately went about securing tax cuts for millionaires and billionaires as priority #1, all while blocking any attempts at job growth legislation and continuation of unemployment benefits. Meanwhile, this is happening:

[…]

A competent political party would be able to make the Republicans pay a political price for this and be forced to make very uncomfortable votes. Does anyone know where I can find a competent political party?

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Bureau Of Labor Statistics, Work Your Magic On Us

Calculated Risk:

From the BLS:

Nonfarm payroll employment changed little (-54,000) in August, and the unemployment rate was about unchanged at 9.6 percent, the U.S. Bureau of Labor Statistics reported today. Government employment fell, as 114,000 temporary workers hired for the decennial census completed their work. Private-sector payroll employment continued to trend up modestly (+67,000).

Census 2010 hiring decreased 114,000 in August. Non-farm payroll employment increased 60,000 in July ex-Census.

Both June and July payroll employment were revised up. “June was revised from -221,000 to -175,000, and the change for July was revised from -131,000 to -54,000.”

Ryan Avent at Free Exchange at The Economist:

GIVEN the consistently disappointing data we’ve seen out of the American economy in recent weeks, the outlook for this morning’s August payroll employment report was uncomfortably uncertain. Initial jobless claims have risen ominously of late, and a number of indicators of economic activity have edged downward, leading some to believe that the Labour Department would provide evidence of a sharp retrenchment in labour markets for the month.

In fact, the figures aren’t that bad. The headline number is negative—off 54,000 for the month—but that’s overwhelmingly due to the continued drawdown in temporary census employment, which subtracted 114,000 jobs from the August report. Ex-census, the economy added 60,000 jobs in August. Private employment rose by 67,000 for the month. Since December of 2009, private employment has grown by a total of 763,000.

Meanwhile, revisions to previous months’ data indicated a better labour market performance than was previously believed. The June employment change was revised from a drop of 221,000 to a decline of 175,000, and the change in July was revised from a decline of 131,000 jobs to a dip of just 54,000. (In both cases, the headline negative figures were also attributable to the unwinding of temporary census hiring). July private employment growth was revised up to 107,000 jobs.

Daniel Indiviglio at The Atlantic:

So why did the unemployment rate manage to rise when most of the news is mildly good? First, because Census job losses are still hurting the overall numbers. Luckily, only 82,000 Census workers were left employed at the end of August. So subsequent months won’t be as affected as the past three, which registered six-digit job declines from this population of temporary workers.

The other factor here was seasonality. August is a month during which the seasonally-adjusted rate generally rises above the unadjusted rate. In fact, the unadjusted unemployment rate declined from 9.7% to 9.5%. Here’s how those two lines interact:

unemp seasonal 2010-08.png

Also, although it’s not shown here, the unadjusted U-6 rate also declined significantly, from 16.8% to 16.4%.

While it’s hard to get excited about a month when 54,000 more Americans were unemployed and the seasonally adjusted rate ticked up slightly, there’s definitely some reason for optimism in this report. The private sector continues to add jobs and most sub-sectors had more workers. There were also fewer long-term unemployed Americans.

Steve Benen:

Indeed, we’ve now seen eight consecutive months of job growth in the private sector, a streak we haven’t seen in a long while.

Also note, the job numbers for June and July were revised in a positive direction. While previous estimates showed the economy losing 221,000 jobs in June, the updated total was a loss of 175,000. In July, last month’s reporting showed a loss of 131,000 jobs, while the revised total was a loss of 54,000.

To be clear, it’s not my intention to sugarcoat the jobs report. The economy needs to be adding jobs — lots of them — right now, and as the chart below shows, the employment landscape’s head is not yet above water. Just to keep up with population growth, the economy needs to add about 150,000 jobs a month. To bring down the unemployment rate, the figure would have to be about double. We’re not even in the ballpark.

But for those looking for good news — or at least less-bad news — today’s jobs report offers at least a glimmer of hope. Things aren’t good, but nearly everyone expected them to be worse. (Dear Dems, don’t use that as a campaign slogan.)

Tim Cavanaugh at Reason:

What is to be done? Robert Reich stands on his desk and calls for — what else? — a second stimulus. Easy for him to say! Los Tiempos de Nueva York explains that nobody’s interested in buying another ticket for the Royal Nonesuch:

President Obama on Monday said his administration was weighing new steps to bolster the economy, but any measures are likely to be small. His options are limited given that Congress has shown little appetite for more spending before the midterm elections in November, in which Republicans are hoping to reclaim both the Senate and the House.

And nobody will ever invest in the stock market again.

Andrew Samwick

Ernest Istook at Heritage:

Credibility plummeted as well as White House happy talk didn’t match the stubbornly inconvenient facts.  Christina Romer, chairwoman of the White House Council of Economic Advisers, amazingly said the lousy August numbers “are reassuring that growth and recovery are continuing.”

Efforts to reach out to its usually-responsive youth audience were stymied by a National League of Cities’ report that began, “Summer jobs prospects for teenagers have been diminishing steadily over the past decade, but early data for June 2010 show that employment rates for the nation’s 16- to 19-year-olds have fallen to stunning new lows.”

It all prompted normally supportive liberal economist Paul Krugman to write, “This isn’t a recovery, in any sense that matters.”

The President had promised allies in Congress that the summer barnstorming tour would trumpet success and turn around the rotten poll numbers for him and his party.  He and the Vice-President made stops that included Ohio, Missouri, Michigan, Kentucky and Illinois, coinciding with fundraisers that included California, Illinois, Wisconsin, Florida, New York, Washington and Ohio.

But the message on Obama’s teleprompter differed dramatically from what everyday Americans were experiencing.  The New York Times put a “Welcome to the Recovery” title on a Pollyanna op-ed by Treasury Secretary Timothy Geithner.  But it was more believable when Geithner admitted to ABC News, “U.S. unemployment may rise again before it falls.  And the economy isn’t recovering rapidly enough.”

The White House and its allies bally-hoo their claims, but the contrast with the personal experience of most Americans is stark.  That’s unlikely to change even with the “re-education” efforts proposed by Health and Human Services Secretary Kathleen Sibelius about the vastly-unpopular Obamacare law.

Those re-education efforts may fall as flat as the classic question, “Who are you going to believe?  Me or your own lying eyes?”

Doug Mataconis:

The stock market seems to be reacting positively to these numbers based on pre-market trading, but there isn’t much good news politically here for the Obama Administration and Democrats. If nothing else, it pretty much confirms what’s in the mind of the public already, and there’s very little chance that the September jobs numbers will be all that better.

We may not be in a double dip recession, but it’s not much of a recovery either, and that’s bad news for the incumbent party

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This Summer Is Hot, Full Of Oil, And Jobless

Daniel Indiviglio at The Atlantic:

The job market has been stagnant so far this summer. Although the U.S. economy lost 131,000 net jobs in July, that was due in large part to a loss of 143,000 temporary government Census workers. The net number was worse than the 60,000 lost economists expected. Meanwhile, the unemployment rate was unchanged in July at 9.5%, reports the Bureau of Labor Statistics. The number of unemployed Americans also remained at 14.6 million. Today’s report shows just how week the job market has been over the past few months, with a significant downward revision to June’s jobs number.

Calculated Risk:

For the current employment recession, employment peaked in December 2007, and this recession is by far the worst recession since WWII in percentage terms, and 2nd worst in terms of the unemployment rate (only early ’80s recession with a peak of 10.8 percent was worse).

This is a very weak report, especially considering the downward revision to June. The participation rate declined again, and that is why the unemployment rate was steady – and that is bad news. I’ll have much more soon .

Mark Thoma:

Many observers are looking for “glimmers of hope” in the report and pointing to private sector job growth of 71,000, which is higher than in previous months and thus evidence of acceleration in job growth, to an increase in hours worked, an increase in wages, and a fall in workers involuntarily working part-time.

However, as noted in the “glimmers of hope” link, and as I have noted many, many times, we need 100,000-150,000 jobs per month just to keep up with population growth, and even more than that if we want to make up for past losses. That is, we need faster growth than 100,000-150,000 per month if we want the economy to do more than just keep up with population growth and reemploy the millions and millions of people who are now out of work. So job growth of 71,000 still represents a declining labor market, and does nothing to offset past losses.

Philip Klein at The American Spectator:

Politically speaking, the difficulty for Democrats is that there are only two more job reports between now and the November elections, so they’re running out of time to change minds about their stewardship of the economy. And at this point, it’s increasingly unlikely that even one gangbusters report would change public attitudes — it would probably take a series of several months, or even quarters, of economic data.

Ryan Avent at Free Exchange at The Economist:

THERE is no getting around it—today is a bad day for the White House. They lose one of their top economic staffers, have the Senate reject one of their Fed nominees, and suffer a gut-wrenching employment report. Of course, the news is worse for the nation’s 14.6 million unemployed workers. In July, payroll employment fell by 131,000, while the unemployment rate held steady at 9.5%. Economists had expected a negative number in July, due to the continued decline in temporary employment associated with the decennial census. The loss of census jobs amounted to a hit to payrolls of 143,000. But the forecast was for other employment categories to perform better.

The real bright spot in the report is the increase in private payroll employment, of 71,000 jobs. Private payrolls have risen in every month of 2010, adding over 600,000 workers all told. Growth there undercuts the argument that economic uncertainty is proving an obstacle to private hiring. But that private payroll growth was largely offset by the loss of 48,000 jobs at the state and local government level. One recent estimate indicated that state and local governments could shed 500,000 workers over the next two years. Democratic leadership has sought to reduce the negative impact of these cuts with aid to states, but has faced stiff opposition. A $26 billion state aid bill passed out of the Senate yesterday only made it through the body after tweaks were made to pay for the cost of the bill—by cutting funding for food stamps.

There were other positive signs in the report. Hours worked and earnings ticked upward for the month. Both the mean and median duration of unemployment declined, as did the number of long-term unemployed. Of course, some of that shift is likely due to the exit of long-term unemployed workers from the labour force. The labour force shrank by 181,000 workers in July, and both the participation rate and the employment-population ratio edged down slightly. And meanwhile, the June payroll figure was revised from a loss of 125,000 jobs to a decline of 221,000 jobs.

Ed Morrissesy:

This isn’t a Recovery Summer.  It’s a slow slide, certainly better than the rapid disintegration of 2009, but we haven’t replaced those jobs yet, either.  Job losses are cumulative.  In a normal recovery with proper economic policies of lower barriers to investor entry, we would see a rapid replacement of jobs in this time frame that would take us back to somewhere around 80% of what was lost, with the remaining 20% being the most difficult to recover.  We have not yet even begun that ascent.  I’ll update this with a couple of slides later this morning to demonstrate the problem.

Expect the White House to hail the best private-sector job creation numbers since March, but economists won’t get fooled.  We’re still descending, and will until we get job creation solidly above 100,000 new additions per month.

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