Friday, September 07, 2012
Friday morning national hangover
The fantasy from last night:
... And I’m asking you to choose that future. I’m asking you to rally around a set of goals for your country, goals in manufacturing, energy, education, national security, and the deficit; real, achievable plans that will lead to new jobs, more opportunity, and rebuild this economy on a stronger foundation.
We can choose a future where we export more products and outsource fewer jobs. After a decade that was defined by what we bought and borrowed, we’re getting back to basics, and doing what America has always done best:
We’re making things again....
I’ve worked with business leaders who are bringing jobs back to America, not because our workers make less pay, but because we make better products....
After a decade of decline, this country created over half a million manufacturing jobs in the last two and a half years....
We’ve doubled our use of renewable energy, and thousands of Americans have jobs today building wind turbines, and long-lasting batteries....
The reality in the cold morning light:
U.S. employers added 96,000 jobs last month, a weak figure that could slow any momentum President Barack Obama hoped to gain from his speech to the Democratic National Convention.
The unemployment rate fell to 8.1 percent from 8.3 percent in July, the Labor Department said Friday. But that was only because more people gave up looking for work. The government only counts people as unemployed if they are actively searching.
The government also said 41,000 fewer jobs were created in July and June than first estimated. The economy has added just 139,000 jobs a month since the beginning of the year, below 2011’s average of 153,000.
Dow Jones industrial futures, which had been up before the report, fell soon after it was released.
The report was weak throughout. Hourly pay fell, manufacturers cut the most jobs in two years and the number of people in the work force dropped to its lowest level in 31 years.
In addition to those who’ve given up looking for work, many young Americans are avoiding the job market by remaining in school. All told, the proportion of the population that is either working or looking for work fell to 63.5 percent. That’s the lowest level in 31 years for the labor force participation rate.
Average hourly wages dipped a penny to $23.52 and are only slightly ahead of inflation in the past year.
Many of the jobs were in lower-paying industries such as retail, which added 6,100 jobs, and hotels, restaurants and other leisure industries, which gained 34,000. Higher-paying manufacturing jobs fell by 15,000, the most in two years.
If you've been paying attention, you'll have noticed that the downward adjustment of previous figures for July and June by 41,000 jobs continues a long and depressingly consistent pattern: the Bureau of Labor Statistics, long thought to be one of the most genuinely nonpartisan of Washington institutions, now seems only able to err in one direction (overstating employment), but to do so like clockwork every month. So the 96k claimed new jobs for August — which was well short of the 125k expected by most economists before today's report — will probably be revised downward by tens of thousands, too.
The President bragged about the improvement of manufacturing employment, and promised a million new manufacturing jobs if he's given a second term. But the WaPo's reference to a drop in "higher paying manufacturing jobs" meant that manufacturing jobs in general are higher paying, not that just the number of top-paying jobs in the manufacturing sector dropped. Last month's 15k drop in total manufacturing jobs is the first since September 2011.
Of course, all such changes are completely dwarfed by the number of people who've given up and dropped out of the workforce altogether; there are almost three million more such Americans now than there were this time last year; 368k gave up in August alone, and if they hadn't, the nominal unemployment rate would have risen to 8.4% instead of dropping. And this is the 43rd straight month of unemployment above 8%, even using that understated calculation — can you remember when Dubya was villified for an unemployment rate around 5%?
The POTUS gets the monthly jobs report on the Thursday afternoon before they're released. President Obama knew these lousy numbers while he stood before the country claiming he has turned things around and that his "path leads to a better place." He and his partisans had a fine convention. It's too bad they are so unable to acknowledge — much less cope with — the world outside of it.
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(1) Dorothy Olson made the following comment | Sep 7, 2012 2:08:43 PM | Permalink
Veronique de Rugy over at NRO highlights one factor about wannabee retirees that escapes scrutiny by most commentators. I notice, 'cuz I'm one of those who are deferring. She says:
"More and more people are giving up looking for work in this grim economy, and the boomers are retiring. Interestingly, this trend would probably be more pronounced if the economy was better, since the recession has caused many seniors to defer their exit from the labor force. The only age group that saw its labor-force participation go up since the recession is those 65 and older."
That's not a good thing as it forecloses many positions from the up and coming workforce. I'd love to retire (I'm 66), but my retirement funds and other investments are earning zip (and I'm afraid of losing any future greater earnings to inflation), and if I quit now & need to return to work later I probably won't be able to at my present earning level.
The uncertainty of the retirement investment climate is virtually forcing me to continue to work in financial self-defense.
(2) Neo made the following comment | Sep 8, 2012 5:06:05 PM | Permalink
The absence of any loud noise on Friday's funemployment numbers from the press says we are "on plan."
This continues the Obama "LightWorker" strategy (i.e. Obama will run on the only thing he has, his popularity).
Notice that Obama's speech on Thursday night didn't tackle anything difficult (i.e. unemployment nada, entitlement reform nada). His polling indicated that a flat speech was his best plan of attack. He knows that all he has to do is offer the illusion of new programs (knowing he can blame Republicans when they don't get passed) and stay away from the "heavy lifting" (that's for the Republicans to make the first move). Then merely run on his popularity.
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