Today’s economic statistical releases:
The big number today is the monthly employment situation. The BLS released the headline as "Unemployment rate falls to 8.6% in November; payroll employment rises by 120,000". The numbers behind the headline are less impressive. Actually, the headline isn’t all that impressive, considering that 120,000 new jobs is, at best, an anemic rate of job growth. Also, it’s the time of year when a fair amount of hiring is seasonal, for temporary Christmas jobs, which can make the employment situation look better than it actually is, despite the seasonal adjustments to the data employed by BLS. Looking deeper, the labor force participation rate continued to fall -0.2% to 64% as nearly half a million workers left the labor force.If the labor force participation rate was at the historical average of 66%, the unemployment rate would be 11.41%. 2.6 million persons were marginally attached to the labor force, about the same as last November. The average workweek is unchanged at 34.3 hours, where it has been since September. Even worse, average earnings declined this month with the average hourly wage dropping 2 cents an hour to $23.18. So, I think we can say that the drop in the unemployment rate is mainly due to people leaving the labor force, as the rate of job creation is weak. Also, the lack of change in the workweek, and decline in wages implies that hiring pressure among firms is essentially non-existent as there has been no increase in the workweek for three months, and a glut of labor still exists as upward pressure on wages reversed this month. The only positive thing I can glean from this report comes from the household survey, where the number of respondents who are employed rose 278,000 to 140,580,000.
Monster.Com reports their employment index fell 4 points in November to 147 as online recruitment slowed.
I think I’ll check, but I’d guess that if you ever looked up the definition of the term “gas bag” you’d be likely find the picture of ex-Speaker of the House Nancy Pelosi next to it. She’s much more illustrative of the term than say some generic bag filled with hot gas.
“But I’ll tell you this,” said Pelosi, “if President Obama and the House congressional Democrats had not acted, we would be at 15 percent unemployment. Again, no consolation to those without a job, but an important point to make."
At her Oct. 6 briefing, Pelosi said: “Without the Recovery Act and accompanying federal interventions, whether from the Fed or ‘Cash for Clunkers’ or other initiatives, this unemployment rate last year at the time of the election would’ve been 14.5 percent, not 9.5 percent.”
Between her and Debbie Wasserman Shultz, you could compile a book length list of the groundless claims they’ve made. And this is right up there in the top 10 for Pelosi. Of course she doesn’t cite any basis for this claim but there it is nonetheless.
So what about her numbers? Well, lets look at the numbers an agency which at least ran some came up with:
A report published by the Congressional Budget Office in August estimated that in the fourth quarter of 2011, the stimulus signed by President Obama in 2009 would have the impact of reducing the national unemployment rate between 0.3 points to 1.1 points from what it otherwise would have been. The report also said that although CBO initially estimated that the stimulus would cost $787 billion, CBO had subsequently increased its estimated cost to $825 billion.
It was on the basis of these numbers that Barack Obama made the claim that spending this money would keep the unemployment rate under 8%. It went to 9.5% from about 4.8%. In real math, that’s 4.7 points. So essentially Pelosi is just adding the two (9.5 and 4.7 and adding a few tenths) to get her "14.5%” number. There is obviously no backing for this claim.
Oh and cost per job? Well, pick your number but whichever you choose, these were expensive jobs:
According to the CBO report, 600,000 to 2 million people have jobs as of now that were "created or retained" because of the $825 billion stimulus. If the maximum number of 2 million is accepted, that works out to a cost of $412,500 per job. If the minimum number of 600,000 is accepted, that works out to a cost of $1,375,000 per job.
So any way you slice it, expensive. But back to Pelosi. Even if you accept the higher number of 2,000,000 and add that into the unemployed while subtracting it from the employed total and divide it out, you come up with roughly 10.5%. Even if you accept the projection’s top end estimate that 2,000,000 more jobs would have gone, you can’t get to her number from there.
Also note the “points” the CBO report claims might have been shaved by the so-called stimulus. They are nowhere near the 4.7 Pelosi wants you to believe in.
Yeah, I know, typical political nonsense. I just have to wonder, and the question and her answer are on video at the link, whether anyone in the press even challenged the numbers? Since she’s used them twice recently, I’d guess not. Also note her attempt to again blame Bush and the Republicans with her “300 days the Republicans were in power” and claim they did nothing to create jobs at that time. And then look at the unemployment rate at that time (mentioned above). Duh. Again, I doubt that was challenged.
Typical of the “watchdog press” of today I’d say. And very typical of Nancy Pelosi and the “lets make numbers and claims up out of thin air” crowd.
One of the center pieces of the Obama administration’s recovery plan has been its green jobs program. It was touted by the President as an investment in the future. And he even managed to snooker Congress into including $38.6 of your dollars in a federal guaranteed loan program in the Stimulus bill – a version, in this case, of the government going into the venture capitalism business.
The results, as they say, are predictable:
A $38.6 billion loan guarantee program that the Obama administration promised would create or save 65,000 jobs has created just a few thousand jobs two years after it began, government records show.
The program — designed to jump-start the nation’s clean technology industry by giving energy companies access to low-cost, government-backed loans — has directly created 3,545 new, permanent jobs after giving out almost half the allocated amount, according to Energy Department tallies.
Half the money is gone and it has created 3,545 “new, permanent jobs”? You do the math – pretty high cost of job creating wouldn’t you say? Oh, and that number is actually down by 1,100 thanks to Solyndra.
So are green jobs, of the type to be found in alternative energy, the best way to approach easing unemployment? Not really, say some experts:
Obama’s efforts to create green jobs are lagging behind expectations at a time of persistently high unemployment. Many economists say that because alternative-energy projects are so expensive and slow to ramp up, they are not the most efficient way to stimulate the economy.
“There are good reasons to create green jobs, but they have more to do with green than with jobs,” Princeton University economics professor and former Federal Reserve vice chairman Alan Blinder has said.
Which is a nice way of saying this is more about political agendas than putting Americans to work, and unemployment is an excuse, not a reason, for pursuing this agenda. And the cost of that agenda has been pretty prohibitive with no real worthwhile results in the ostensible problem it was supposed help solve – unemployment.
Another example of government using your money to pick winners and losers and everyone coming out poorer in the bargain.
UPDATE: No, I didn’t see Dale’s post. My bad. I’ll leave mine, but now that Dale’s putting up a lot more stuff, I’m going to have to discipline myself to look first before I go popping something up (I use Live Writer, so unless I specifically look at the blog, I don’t see a list of what is up).
Another in a long line of polls showing the President’s approval job ratings continue to fall. Some key elements of the latest poll’s findings:
A majority of Americans don’t believe President Barack Obama’s $447 billion jobs plan will help lower the unemployment rate, skepticism he must overcome as he presses Congress for action and positions himself for re- election.
The downbeat assessment of the American Jobs Act reflects a growing and broad sense of dissatisfaction with the president. Americans disapprove of his handling of the economy by 62 percent to 33 percent, a Bloomberg National Poll conducted Sept. 9-12 shows. The disapproval number represents a nine point increase from six months ago.
One reason that the American people don’t believe Obama’s plan will work is because it is simply a rerun of the $800 billion plus stimulus which didn’t work. Additionally, it has since become clear that he is attempting to get his tax increases past the Republican party by making them the funding mechanism for this. Even Democrats are complaining about that (you don’t raise taxes in a recession – Econ 101).
Harry Truman he ain’t.
And again, electorally, here’s the bad news for Obama:
The president’s job approval rating also stands at the lowest of his presidency — 45 percent. That rating is driven down in part by a majority of independents, 53 percent, who disapprove of his performance.
If it stays like that, he’ll be introducing himself as the former president in 2013. In Obama campaign headquarters, aka the White House, these numbers probably have sirens wailing, lights flashing and grown men crying:
The poll hands Obama new lows in each of the categories that measures his performance on the economy: only 36 percent of respondents approve of his efforts to create jobs, 30 percent approve of how he’s tackled the budget deficit and 39 percent approve of his handling of health care.
So on the issues that most concern American voters, he’s not doing well at all.
But back to his latest attempt to push his tax and spend package through:
By a margin of 51 percent to 40 percent, Americans doubt the package of tax cuts and spending proposals intended to jumpstart job creation that Obama submitted to Congress this week will bring down the 9.1 percent jobless rate. That sentiment undermines one of the core arguments the president is making on the job act’s behalf in a nationwide campaign to build public support.
Compounding Obama’s challenge is that 56 percent of independents, whom the president won in 2008 and will need to win in 2012, are skeptical it will work.
I would guess its mostly because they recognize the package for what it is, and it is certainly not “new”. It is just another, in a long line of attempts by this administration, to push the same old tax increases through Congress. And despite what Obama claims those tax increases are not something the GOP has agreed to in the past – or ever. He gave them a substantial and supportable reason to oppose the package as Obama has presented it.
Finally the big picture as it stands today:
Forty-six percent of independents say they definitely won’t vote to re-elect the president, compared to 21 percent who definitely will support him. In 2008, Obama was backed by 52 percent of independent voters, compared to 44 percent who backed Republican nominee John McCain, an Arizona senator, according to exit polls.
And enthusiasm for Obama? Waning:
Of the respondents who said they’ve supported Obama at one point since he launched his presidential campaign in 2007, fewer than half say they still support him as fervently. Thirty- seven percent say their support has waned and 19 percent say he lost their backing because they’ve grown disappointed or angry with his leadership.
Almost a third of Democrats and Democratic-leaning respondents say they’d like to see Obama face a primary challenge.
Yeah, grim. He’s been found to be an empty suit by many of his own core supporters. Plus he has to run on his record for a change.
The gift that keeps on giving: The White House’s chart of unemployment predictions in the Stimulus/no Stimulus world. Superimposed is the graph of actual unemployment, but now, with wall street economists predictions for the near-term future.
I think a big speech will help, though. ‘Cause that’s what we’ve been missing. Speeches.
The analysis of that speech is pretty straightforward and simple. We’ve spent $800 billion for TARP, $1.4 trillion in the stimulus package, and $2 trillion in quantitative easing from the Fed. Now, if we spend another $430 billion on the American Jobs Act, that’ll be the fix we’ve been looking for, and everything will be peachy.
The president’s child-like faith in the power of government is touching. And frightening.
The Unemployment situation is the big report today, but it’s not the only one.
The Monster Employment Index rose slightly from 144 to 147 as the number of job want ads increased a bit.
Big deal. The headline number today is, of course, the Bureau of Labor Statistics’ report on the national employment situation, and it’s not good. The headline unemployment rate remains unchanged at 9.1%, and no net new payroll jobs were created last month. Last month’s increase in jobs was revised downward to 85,000.
To the extent there is any positive news to this report, it is in the underlying data. The labor force participation rate rose very slightly, from 63.9% to 64%. The U-4 unemployment rate (Total unemployed plus discouraged workers, as a percent of the civilian labor force) fell from 10% to 9.6%. The U-6 rate (Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force) also fell from 16.3% to 16.1%. The number of employed persons also rose from 139,296,000 to 139,627,000.
The bad headline number, though, pushed the Dow down more than 200 points as of 6:40 this morning.
Jobless claims again surprised the “experts” with an “unexpected” jump.
The number of people who filed for unemployment assistance in the U.S. last week rose unexpectedly, official data showed on Thursday.
In a report, the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending August 19 rose by 5,000 to a seasonally adjusted 417,000, confounding expectations for a decline to 405,000.
The previous week’s figure was revised up to 412,000 from 408,000.
Continuing jobless claims in the week ended August 13 fell to 3.641 million from a revised 3.721 million in the preceding week. Analysts had expected continuing jobless claims to decline to 3.700 million.
Tyler Durden provides the Bureau of Labor Statistics justification for the unexpected rise:
Naturally, the BLS is there to provide a justification for the spike, with 8500 jobs apparently "lost" due to the Verizon strike: "Special Factor: As a result of a labor dispute between Communications Workers of America and Verizon Communications, at least 12,500 initial claims were filed in the week ending 8/13/2011 and at least 8,500 initial claims were filed in the week ending 8/20/2011."
Durden also points out why the unemployment total percentage isn’t worse:
In other news, continuing claims came below expectations of 3700K at 3641K, a number that will be revised higher as was last week’s from 3702K to 3721K. The collapse in extended benefits, as the 99 week cliff claims more and more, means that 20K people fewer collected post Continuing Claims benefits, with those on EUC and extended benefits down from 5.8 million a year ago to 3.6 million: this is 1.2 million Americans that no longer can collect anything from Uncle Sam.
It also means they’re no longer counted among the unemployed in the official numbers.
Yeah, it’s worse than you thought – and getting worse still. Can’t wait to see Obama’s jobs plan — after he has his vacation, of course.
While President Obama vacations on Martha’s Vineyard, he is supposedly committing to paper a plan to boost employment. During the recession unemployment has remained high, near 10%, and with the economy slowing again, that number is likely to go higher.
One area that hasn’t suffered jobs losses during Obama’s time in office is the government regulatory regime. In fact, it has managed to add a significant number of jobs, all, unfortunately, at the expense of business. While most Americans feel some level of regulation is necessary by the Federal government, over-regulation is always a danger. When that danger is realized, it is businesses who bear the brunt of the cost of compliance. And, of course, businesses pass their costs on to consumers in the price of their goods. So regulation compliance costs drive the price of goods up.
In the past three years of the Obama administration we’ve seen an explosion of regulations. Investors Business Daily brings you the gory details:
Regulatory agencies have seen their combined budgets grow a healthy 16% since 2008, topping $54 billion, according to the annual "Regulator’s Budget," compiled by George Washington University and Washington University in St. Louis.
That’s at a time when the overall economy grew a paltry 5%.
Meanwhile, employment at these agencies has climbed 13% since Obama took office to more than 281,000, while private-sector jobs shrank by 5.6%.
Michael Mandel, chief economic strategist at the Progressive Policy Institute, found that between March 2010 and March 2011 federal regulatory jobs climbed faster than either private jobs or overall government jobs.
Those agencies have churned out new regulations and rules at an amazing rate:
The Obama administration imposed 75 new major rules in its first 26 months, costing the private sector more than $40 billion, according to a Heritage Foundation study. "No other president has imposed as high a number or cost in a comparable time period," noted the study’s author, James Gattuso.
The number of pages in the Federal Register — where all new rules must be published and which serves as proxy of regulatory activity — jumped 18% in 2010.
This July, regulators imposed a total of 379 new rules that will cost more than $9.5 billion, according to an analysis by Sen. John Barrasso, R-Wyo.
And much more is on the way. The Federal Register notes that more than 4,200 regulations are in the pipeline. That doesn’t count impending clean air rules from the EPA, new derivative rules, or the FCC’s net neutrality rule. Nor does that include recently announced fuel economy mandates or eventual ObamaCare and Dodd-Frank regulations.
As mentioned above, regulations and rules impose a significant cost on businesses which must comply with them. In a time when the economy is staggering, these increases in costs delivers another body blow to any recovery. And most of them have been imposed via the Executive Branch through its various Departments and not Congress. The agenda brought to the White House by Barack Obama is being serviced by regulators and the legislators are being left out
"Our economy is continuing to sink," Sen. Barrasso said, "and it’s being weighed down by regulations coming out of this administration."
By 2008, the cost of complying with federal rules and regulations already exceeded $1.75 trillion a year, according to a 2010 study issued by the Small Business Administration.
Worse, the SBA found that small companies — which account for most of America’s new jobs — spend 36% more per employee to comply with these rules than larger firms.
Of course the administration flatly denies what the reports above tell us is happening:
Cass Sunstein, who runs the White House Office of Information and Regulatory Affairs, denies the regulatory upsurge, writing recently that "there has been no increase in rule making in this administration." He also notes Obama ordered a comprehensive regulatory review in January that uncovered $1 billion worth of needless red tape.
As is always the case, never believe what the administration tells you, always look behind the curtain at the facts. And the facts are that 379 new rules have been imposed under this administration and it has 4,200 new regulations “in the pipeline” not counting the exceptions to that count noted in the IBD article. So, as usual, the numbers tell a different story.
If President Obama is serious about creating job opportunities, this is an area in which he obviously exercises direct control via the federal government and the executive branch. Rolling back the regulator regime, suspending all new rules until a comprehensive study can be made of their economic impact and generally getting regulators out of the way of businesses would be a very good start.
Somehow I doubt any of that will find its way into the jobs plan Mr. Obama presents after his vacation.
It might come as a surprise to some, but the bill Democrat Representative Jan Schakowsky (IL) plans to introduce as a jobs bill is long on borrowing money we don’t have and funneling that money through ineffective government programs. Apparently they still don’t get it.
The member of the Congressional Progressive Caucus would spend $227 billion dollars and, best case, create 2.2 million jobs (or, again best case, a little over $108,000 a dollar a job). Her plan reads like something from the Franklin Roosevelt administration:
Under her plan, the following policies would be implemented:
- The School Improvement Corps would create 400,000 construction and 250,000 maintenance jobs by funding positions created by public school districts to do needed school rehabilitation improvements.
- The Park Improvement Corps would create 100,000 jobs for youth between the ages of 16 and 25 through new funding to the Department of the Interior and the USDA Forest Service’s Public Lands Corps Act. Young people would work on conservation projects on public lands including the restoration and rehabilitation of natural, cultural, and historic resources.
- The Student Jobs Corps would create 250,000 more part-time work study jobs for eligible college students through new funding for the Federal Work Study Program.
- The Neighborhood Heroes Corps would hire 300,000 new teachers, 40,000 new police officers and 12,000 new firefighters.
- The Health Corps would hire at least 40,000 health care providers, including physicians, nurse practitioners, physician assistants, nurses, and health care workers to expand access in underserved rural and urban areas.
- The Child Care Corps would create 100,000 jobs in early childhood care and education through additional funding for Early Head Start.
- The Community Corps would hire 750,000 individuals to do needed work in communities, including housing rehab, weatherization, recycling, and rural conservation.
Perusing the list, there’s absolutely no possible threat of waste, fraud and abuse, is there? 750,000 people hired to “work in the community” doing “recycling” and “rural conservation?” “Weatherization”? Nope, no chance of waste, fraud and abuse, none at all.
Of course, nowhere in there other than initially, is there any mechanism to fund the “jobs” created in the future. They’d last as long as the $227 billion did and then the jobs would go away. That would include the teachers, police officers and firefighters. Those are simply in the plan to make it sound more acceptable. If the localities who will get the teachers, police and firefighters funded by this boondoggle can’t afford to hire them now, chances are very good they won’t be able to keep them when the money runs out.
The jobs listed are also mostly make work jobs on make work projects that might be nice to have done, but aren’t going to contribute to the private economy (the actual engine of the economy) in any meaningful way. Nothing is really “produced”, no wealth is created, no revenue – other than salaries – is taxable.
And finally, which health care providers is “Health Corps” going to hire? There’s a shortage of health care providers in the private market. Why in the world would they leave that to work for government in “underserved rural and urban areas?”
It is clear with Rep. Schakowsky’s proposal that the Progressive side of the aisle still don’t get it. How much louder do the American people have to shout to be heard?
Cut spending. Make government smaller. Make government less costly.
Rep. Schakowsky and the Progressives are still stuck in the 20th century. We’re already living the Raw Deal thanks to spendthrifts like her.
Well, this is interesting. Paul Krugman finally agrees with me:
[W]e already know what isn’t working: the economic policy of the past two years — and the millions of Americans who should have jobs, but don’t."
I’d just like to point out that I knew those economic policies wouldn’t work back in 2009, writing about them here. Since then, I’ve just been watching the kangaroo. So It’s nice to see Krugman joining me in declaring "fail"—though he does so with the advantage of 20/20 hindsight.
I eagerly anticipate my upcoming invitation to Sweden.
Where we diverge is in providing solutions. As always, Krugman’s solution is more spending, and more debt. But with debt already at 100% of GDP, we’re really in uncharted waters, and I have no confidence that more debt is the answer, if the problem is the existing debt overhang.
The real question I’m concentrating on is, "At what point do the markets recognize not only that the debt path we’re on is unsustainable, but that it is going to be impossible to pay it back?" Is that 120% of GDP? 150%? I don’t know. But I fear that we’re going to learn the answer.
On the bright side, I’ll be able to pay off the remaining 19 years of my mortgage for the cost of a nice hat. On the down side, a new Astros baseball cap will cost $200,000. On the bright side, again, the $100,000 from my Nobel will cover half of that, so it’s all good.