L-188 From United States of America, joined Jul 1999, 29349 posts, RR: 62 Posted (9 years 7 months 2 weeks 5 days 3 hours ago) and read 1297 times:
For those of you are still convinced that the US economy is going into the tank and are using unemployment figures to back that up, I have to throw some water on you.
Non-farm jobs increased by 57,000 in September, Analysts and economists have been expecting a decline by about 30,000.
I think that this news coupled with the growth in the second quarter can't be ignored as proof of the rebound of the US economy.
LoneStarMike From United States of America, joined Jul 2000, 3637 posts, RR: 38 Reply 2, posted (9 years 7 months 2 weeks 5 days 3 hours ago) and read 1257 times:
57k jobs is about 1/4 the average monthly payroll expansion during Clinton's last term in office.
If the economy continues to gain jobs at this rate, it will take almost four years to recover the jobs lost since President Bush began his term.
Over half the jobs gained in September (58% to be precise) are what the Labor Department calls "temporary help services" -- temps, in other words. That may be great news for temporary agencies, but it suggests business confidence remains quite fragile, otherwise you'd see permanent jobs being created, not temp jobs.
Then again, I guess 57k jobs is better than nothing.
B2707SST From United States of America, joined Apr 2003, 1350 posts, RR: 60 Reply 3, posted (9 years 7 months 2 weeks 5 days 3 hours ago) and read 1253 times:
"57k jobs is about 1/4 the average monthly payroll expansion during Clinton's last term in office."
Which almost everyone now acknowledges was the height of an unsustainable boom, fueled by too-expansionary monetary policy, technology mania, panic buying in the stock market, and a splash of fraudulant corporate accounting. Not that any of these were Clinton's fault, but he benefitted politically from the biggest and longest boom since the 1920s, while Bush is paying for the inevitable return to reality. Presidents of both parties routinely get credit/blame for the performance of the economy when they have little influence over it (as long as they generally let the market work). The massive interventions during the Great Depression, on the other hand...
Cfalk From , joined Dec 1969, posts, RR: Reply 4, posted (9 years 7 months 2 weeks 5 days 2 hours ago) and read 1247 times:
I've been listening tos CNBC, Bloomberg, CNN, BBC, and am hearing economists speculating about 200,000 to 300,000 new jobs growth per month by sometime next year. I think they are just a little overexhuberant.
More importantly than the jobs figures, however, is that Bureau of Labor data indicates that hours worked per person is increasing to well beyond 40 hours/week, and that average paid overtime is also increasing to around 2 hours per week. These are leading indicators which will give you an idea of how many new jobs will open up in the coming months. These numbers mean that there is a pent-up demand for labor which will suck in a lot of the unemployed as soon as employers see that this recovery is for real and they can hire again. This is far better news than the 57,000 new jobs. It shows that the foundation for recovery is real, and that all that is needed is a bit of confidence from the companies and employers.
PROSA From United States of America, joined Oct 2001, 5439 posts, RR: 5 Reply 5, posted (9 years 7 months 2 weeks 5 days 2 hours ago) and read 1247 times:
Over half the jobs gained in September (58% to be precise) are what the Labor Department calls "temporary help services" -- temps, in other words. That may be great news for temporary agencies, but it suggests business confidence remains quite fragile, otherwise you'd see permanent jobs being created, not temp jobs.
Temporary jobs are a leading indicator of overall employment. In other words, an increase in temporary jobs tends to show that permanent jobs will be increasing before long. A company that's seeing its business increase often will not hire more permanent workers until it is reasonably sure that the increase will continue; as a result, its first response to the pickup in business activity may be to take on temporary workers, especially if it is not practicable to get its current staff to work overtime. If conditions stay good, it then may start permanent hiring. This works the other way too, so a decline in temporary jobs may soon translate into a decline in permanent jobs too.
As a result, the fact that last month's job growth was concentrated in temporary jobs may not be an entirely bad sign. That being said, it's important not to get too excited over the 57,000 increase, as one month of growth is not necessarily indicative of a trend, and in any event the labor force - which includes job seekers as well as employed persons - is growing by more than that number each month.
"Let me think about it" = the coward's way of saying "no"
Cfalk From , joined Dec 1969, posts, RR: Reply 6, posted (9 years 7 months 2 weeks 5 days 2 hours ago) and read 1243 times:
Hmmm... I missed the temp. labor data. That makes things look even better, when taken in combination with what I said earlier about work hours and overtime.
There seems to be an awful lot of bottled-up demand in the U.S. economy. This is great news for the economy (and terrible news for democrats next November). But it can be tricky. Such pent-up demand, once it is released, can cause various indicators to spike and growth to temporarily go through the roof, causing inflation. The Federal Reserve will have to be extremely careful to weather the spikes and manage the growth to tolerable levels. Luckily there is Alan Greenspan there. He's an old pro - I assume that he learned his lesson from the 90's not to let growth run wild.
LoneStarMike From United States of America, joined Jul 2000, 3637 posts, RR: 38 Reply 8, posted (9 years 7 months 2 weeks 5 days ago) and read 1231 times:
Well, in the interest of fairness, here's another article by Neal Cavuto that makes a case for why the economy is doing well and why we shouldn't be worried.
If anything, retail sales remain very strong, up nearly one full percentage point in the latest month. What's more, stores from Wal-Mart and Federated to Radio Shack and Pier One are consistently reporting year-over-year sales gains, on average four to five percent higher on a same store basis. That's double the advance so-called experts predicted!
What's going on here? I think I know. We're a nation of liars. But I mean that in the kindest sense. We say we're worried, but that doesn't mean we take our dire views to heart. We might be concerned about our own jobs, but that doesn't mean we've forgotten our own kids.
We're still buying them clothes and toys. We're still taking them out to eat. And we're still treating ourselves to the little things when even the big things get pricey. How else could you explain the double-digit sales gains being recorded by cost-conscious retailers like Best Buy and the Dollar Tree? I'll tell you how . . . common sense. People are cautious, but they're not stupid. And they're certainly not slashing their wrists.
Maybe he's right.
Here'sanother article I read recently. I know you guys will laugh because I got it off a poker website.
Swings Suggest Investors Checking Their Bets October 3, 2003
I don't post this article because I necessarily agree with their economic theories, but because it describe my frame of mind about the stock market right now when it says:
Friday, an unexpected rise of 57,000 jobs in the U.S. employment report for September cranked up the buy orders. Given the dismal U.S. jobs performance this year -- even with the September rise, the U.S. economy has still shed 222,000 jobs in the past six months -- you'd think this drop in the enormous U.S. employment bucket wouldn't generate so much excitement, especially given that beyond the headline number, the details contained in the report looked tepid at best. Yet happy thoughts abounded.
It all has the feel of people who are wishing for good news a little too hard, while fearing bad news a little too much. This emotional tug-of-war among investors suggests a mood that has more than a whiff of uncertainty and hesitation in it. Neither bears nor bulls are confident. Everyone seems nervous.
That is SO my sentiment right now. I don't really know what is going to happen, so rather than be surprised (and not in a good way) I decided to exit the market and wait on the sidelines until I can be more sure about where the economy is headed.
The article asks a lot of questions, but these were the two that stood out for me:
How good will the third-quarter corporate profits be when they come out in the next few weeks, and can they possibly meet the market's high expectations?
Is October going to bring with it another market slump, as it has on several famous occasions in the past?
I don't know about "several" occasions in the past, but I do know the stock market crash of 1929 was in October, and that one about 15 years (1989?) ago where the DOW dropped 508 points in one day was also in October.
Speaking of the stock market crash of 1929, does anyone see any similarities in what happened then and what is happening now. It's seems through most of the 1920's people were making money hand over fist and partying like there was no tomorrow and drinking champaigne and then all of a sudden -- BOOM! Depression.
Fast forward to the 1990's. We had a lot of good years financially speaking, but the parties are fewer and the champaigne isn't flowing like it used to. We have a huge deficit and it's still uncertain how long we'll be in Iraq, nor what the final pricetag on Iraq reconstruction will be. And here is it October. AAAARRRGH!! (I keep thinking of that song -- "Go on Take the Money and Run!" Of course I realize that we have some safeguards in place that we didn't have back then, but still...
I'm probably just being overly cautious (superstitious) but then again, It's my money so I have to do what I feel most comfortable with. Hopefully when all these companies start reporting earnings, they'll be enough to boost consumer confidence a little more and we'll have a better idea of what lies ahead. But for now, (just for the short term, hopefully) I'd rather be safe than sorry.
B2707SST From United States of America, joined Apr 2003, 1350 posts, RR: 60 Reply 9, posted (9 years 7 months 2 weeks 5 days ago) and read 1223 times:
There are many parallels between the 1920s and the 1990s, but I wouldn't worry too much about another Great Depression. One reason is that we have our economic bases covered. Keynesians think we need to stimulate aggregate demand by increasing government spending and running large deficits - mission certainly accomplished here. Monetarists think we need an accomodative monetary policy, hence record low interest rates. Supply-siders think we need to stimulate business activity, hence the recent increase in depreciation allowances, cuts on the dividend tax, and income tax rate cuts. It doesn't much matter who is right, since we've done it all. Personally, I'm not confident in any of these remedies, but most people are, and perception often counts for more than reality.
Another key factor in the Great Depression that gets overlooked is the massive network of government interventions implemented by Roosevelt. Extensive price controls, wage freezes, absurd regulations, soaring tax rates, and superfluous government projects kept the labor, goods, and capital markets from adjusting to the changed business conditions of the 1930s. The economy continued at some minimal level in spite of his programs, not because of them.
For example, almost any economist will tell you that a surefire way to create unemployment is to keep wages artificially high during a recession, which the Roosevelt Administration tried to do under the mistaken belief that it would maintain workers' purchasing power. Instead, they were simply laid off as their employers, unable to pay such high wages, closed up shop. Many New Deal programs were ruled unconstitutional, but the infamous "court packing" scandal allowed Roosevelt to push others through. In 1939, in a national poll, more than two-thirds of Americans said they believed that the attitude of the Roosevelt administration was delaying an economic recovery. During World War II, many of these restrictions were modified or dropped to facilitate war production, aiding the economic recovery.
An essay entitled "Great Myths About the Great Depression" (http://www.mackinac.org/archives/1998/sp1998-01.pdf) goes into more detail about the Roosevelt war on business during the Depression. The author is, of course, highly biased, but it makes for a different perspective than the typical history textbook.
Ybacpa From United States of America, joined Feb 2001, 1108 posts, RR: 1 Reply 10, posted (9 years 7 months 2 weeks 4 days 14 hours ago) and read 1208 times:
increased by 57,000 .... expecting a decline by about 30,000
So the analysts were off by about 90,000 jobs? By itself, it is a statistical anomoly, representing a very small fraction of one percent of the total jobs in the economy. Until we've had several back-to-back months of similar job creations, this number can not be taken seriously.
Keep in mind these numbers are often revised up or down in future, sometimes even significantly.
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LoneStarMike From United States of America, joined Jul 2000, 3637 posts, RR: 38 Reply 12, posted (9 years 7 months 2 weeks 2 days 8 hours ago) and read 1172 times:
Keep in mind these numbers are often revised up or down in future, sometimes even significantly
You mean like this?
Data Revision Confirms Weak Jobs PictureSun Oct 5, 2003
WASHINGTON (Reuters) - A warning by the U.S. Labor Department (news - web sites) that it expects to revise down past employment data pours cold water on the view of some economists who believed the jobs market had been improving for some time, analysts said on Friday.
Statisticians at the Labor Department said they expect to revise down U.S. payroll employment by about 145,000 for the March 2003 reference month -- effectively showing even greater weakness in the sluggish labor market than previously thought.
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