The new employment report is out. It is my intent to keep this chart up-to-date.
I see three reasons to be concerned.
1. The trend line now has us in negative growth territory. Let's hope the long-term trend does not continue.
2. We are already above that trend line and I tend to be a believer in "return to the mean" theories. If the trend does indeed continue then I would not expect to see it happen anytime soon though. Momentum is still up. This is a long-term prediction at best.
3. MaxedOutMama describes the current report as schizophrenic. Who am I to argue?
January 25, 2011
Obama State Of The Union Speech 2011: FULL TEXT & VIDEO
So, yes, the world has changed. The competition for jobs is real. But this shouldn't discourage us. It should challenge us. Remember -- for all the hits we've taken these last few years, for all the naysayers predicting our decline, America still has the largest, most prosperous economy in the world. (Applause.)
The naysayers would point to the word "still" and ask why it is there? It is a word that a coach would say at half-time if you are losing the Super Bowl.
"The competition is real. Don't be discouraged. Rise up to the challenge. You've taken some hits in the first half but we're still in this game!"
We should have no illusions about the work ahead of us. Reforming our schools, changing the way we use energy, reducing our deficit -- none of this will be easy. All of it will take time. And it will be harder because we will argue about everything. The costs. The details. The letter of every law.
This blog was founded on prosperous illusions.
See Also:
Long-Term Nonfarm Payroll Growth
Source Data:
St. Louis Fed: Total Nonfarm Payrolls
Yeah, giving a motivational speech to a team that's losing the Super Bowl is a job for a coach who didn't prepare his team to play.
ReplyDelete"We're No. 2!" Second place is for losers, it is true. But what I don't get is why the American people should feel the need to lead the world. I mean, hey, we got our own problems to take care of.
We don't need to be dominant, but we do need to be resilient. We have the resources to be self-reliant, so develop them.
This guy, Obama, is an empty suit, and a cheap one at that.
GawainsGhost,
ReplyDelete"Yeah, giving a motivational speech to a team that's losing the Super Bowl is a job for a coach who didn't prepare his team to play."
I don't think anyone really has a clue how to create more jobs long-term. I sure don't.
I'm pretty sure it wasn't this though.
RE: employment report:
ReplyDeleteJob growth from business will not keep up with population expansion due to business investment in labor saving technology both equipment and software.
Adding employment in large numbers will come from labor intensive activities such as, teaching,police,fire,health workers,public art projects,physical education,R&D labs,R&D lab techs this along with shorter work weeks for workers in traditional business sectors creating a wider employment base. Japan is showing a similar employment trend to ours with greater numbers of temporary and laid off workers due to tech productivity developments even though there population level is declining.
Given the coming State cutbacks my guess is for a significant downward trend in employment producing lower tax revenue,higher unemployment and probably more easy money from Ben hoping to spike the employment numbers but the old models don't hunt.
I don't think anyone really has a clue how to create more jobs long-term. I sure don't.
ReplyDeleteMe neither. I can come up with a few decent plans on how to delete jobs though. I'm sure there are others who can come up with even better plans than me.
Job growth from business will not keep up with population expansion due to business investment in labor saving technology both equipment and software.
ReplyDeleteI don't buy this reasoning. We've been coming up with unskilled-labor-saving devices for over 150 years. If this reasoning was valid we would have been killing jobs for at least that long.
I'm more concerned with why we have so much more unskilled labor (and also skilled labor in fields with little demand) following the rapid growth of education spending.
It would seem that there are exciting new labor intensive job opportunities being created in the boating industry. That's something I guess. Sigh.
ReplyDeleteI can tell you how to create more jobs long term. Bring back manufacturing to this country. Stop exporting jobs. Develop natural resources. Rebuild infrastructure. Implement a fair tax system. Or, as the Marines say, "Improvise, adapt, overcome."
ReplyDeleteWe have the capability to do all that. Whether we have the wherwithall is another question entirely.
Charles Kiting,
ReplyDelete"I don't buy this reasoning. We've been coming up with unskilled-labor-saving devices for over 150 years. If this reasoning was valid we would have been killing jobs for at least that long."
Our $10 trillion cumulative trade deficit began in the 1980s.
That's when we first thought up unskilled-labor-transferring devices. Sigh.
GawainsGhost,
ReplyDeleteThat would definitely help. I won't hold my breath waiting for Walmart to be flooded with "Made in USA" products though.
I just don't see it happening, even though it would be in our best interest.
Does that trendline accout for snow? You know how snow changes everything !
ReplyDeleteGYSC,
ReplyDeleteSome of it accounts for John Snow. Close enough?
November 21, 2008
White House philosophy stoked mortgage bonfire
"The Bush administration took a lot of pride that homeownership had reached historic highs," Snow said in an interview. "But what we forgot in the process was that it has to be done in the context of people being able to afford their house. We now realize there was a high cost."
They forgot.
The Land That Time Forgot
mark, you are way too smart.
ReplyDeleteI don't buy investment in labor saving technology as the cause of employment destruction. Labor saving technologies are introduced all the time. Charlie Chaplin does a good parody of labor saving technologies – such as the conveyor belt assembly – in Modern Times (http://www.youtube.com/watch?v=MHdmaFJ6W6M&feature=related ). At the same time as efficient ways are found to satisfy old human needs, new human needs are invented: travel over long distances, time-saving home appliances, communication and entertainment devices, fresh vegetables in the winter, life-prolonging medical treatments, etc, etc. I don't see a reason that prevents us from inventing new wants and redefining symbols of status in new ways now.
ReplyDeleteHowever, it seems to me that there is a lack of want and motivation to invent and construct new things. I am often surprised at the breadth of heretical honesty (and often prevarication) in Bill Gross' Investment Outlook letters. In the last one, he points out that 'Money can be used to make money', and goes on to imply the logical outcome of this discovery: if so, why bother make stuff? And indeed, in a system obsessed with money alone why bother? One can see firms refusing to invest and instead preferring to catabolize themselves. Pfizer just decided to cut down on investment into research and to increase share buyback outlays. As a nation we are progressively losing skills and forgetting how to make stuff. How can you do R&D if you can't manufacture a prototype in your workshop? And if occupations that have to do with making stuff lack in status and prestige and pay, why bother going to college, except to learn finance.
I may be completely wrong, but the emerging dichotomy is buildup of 'keyboard' wealth vs security and prosperity afforded by technological progress. (sorry for the length)
"We have the capability to do all that. Whether we have the wherwithall is another question entirely."
ReplyDeletethe real issue is whether or not those
who decided to globalize this country, and captured the government
in order to do just that,
will allow us to do "all that."
It is no accident that the jobs and
income growth reversals commenced
after the country ate the "downsize
the corporation upsize the individual" con job which was the first step to the wholesale outsourcing and technology transfer to Chindia (which are really offshore manufacturing platforms and not "emerging economies").
When this country became an economic powerhouse, it had a population that knew how to work with its hands. People had experience in keeping machines running, so they could conceive of new machines and inventions to make the machines run better.
ReplyDeleteWe seem to have young people now that can't change a tire or cook a pot roast. I'm starting to think Waldorf schools have the right idea. We need to stop filling our kids full of leftist crap and start teaching them how to do things with their hands. It's the only way I can see to turn things around.
@ Charles and nilys -
ReplyDeleteYou are reviving the old "lump of labor fallacy" canard. Don't fall in the the absolutist thinking trap that reduces so much of economics to drivel.
http://jazzbumpa.blogspot.com/2010/12/thinking-like-economist-means-that.html
http://jazzbumpa.blogspot.com/2010/12/moron-lump-of-labor-fallacy-fallacy.html
Also, here's my take on the Payroll numbers.
http://jazzbumpa.blogspot.com/2011/02/total-payroll-change.html
Thanks for all the thought inspiring comments!
ReplyDeleteGYSC,
If I was so smart I would have waited longer before I sold my gold and silver, lol. ;)
nilys,
I don't buy investment in labor saving technology as the cause of employment destruction.
I'm not sure where I stand on that. I think both you and Charles Kiting make some good points here. However, I think both of you aren't factoring in what $10 trillion in cumulative trade deficits can do to transfer production to other countries. $10 trillion is a heap of money. That's over $30,000 per man, woman, and child in the USA. Ouch.
In Hell's Kitchen,
"...outsourcing and technology transfer to Chindia..."
It's never been done before in the history of our country. I point to this as proof that "it is different this time". You've got to have a lot of conviction to utter "the different this time" phrase, but I do believe it.
Teri,
"We seem to have young people now that can't change a tire or cook a pot roast."
I hear you. Maybe that's what is keeping the restaurant industry alive. Good grief.
JazzBumpa,
From your link:
Total Payroll Change
There is is, slouching toward Zero. Minimum was October, '08, Maximum was a year ago, February, '10. Do you see any reason for optimism here?
No.
You charted peak to peak. I actually did that too at one point but thought I'd just keep the chart simple. Trough to trough isn't looking so good either.
Teri,
ReplyDelete"People had experience in keeping machines running, so they could conceive of new machines and inventions to make the machines run better."
I've been thinking about that for a few minutes and I really think you have nailed it.
Let's take your concept and run with it.
People now have experience in keeping debt machines running, so they can conceive of new ways to make debt machines run better. Or so they thought.
Remarks by Chairman Alan Greenspan (April 8, 2005)
A brief look back at the evolution of the consumer finance market reveals that the financial services industry has long been competitive, innovative, and resilient. Especially in the past decade, technological advances have resulted in increased efficiency and scale within the financial services industry. Innovation has brought about a multitude of new products, such as subprime loans and niche credit programs for immigrants. Such developments are representative of the market responses that have driven the financial services industry throughout the history of our country.
...
Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending; indeed, today subprime mortgages account for roughly 10 percent of the number of all mortgages outstanding, up from just 1 or 2 percent in the early 1990s.
Oops!
For those interested, Retirement Blues has been added to my blog list.
ReplyDeleteThis should not be confused with Down Payment Blues. That's actually a song from my favorite band. ;)
Mark -
ReplyDeleteThanks for the link up.
I always connect peaks of a down-sloping trend and valleys of an up-sloping trend.
That's usually the more coherent boundary for a trend channel.
Cheers!
JzB
Jazzbumpa,
ReplyDeleteI'm a sucker for retirement blues.
Jazzbumpa,
ReplyDeleteI would like to think that I am fully in the camp of those who don't uphold the LoLF.
Stagflationary Mark,
Sure, 'outsourcing' abroad of making stuff is an indication of our – as a working society – esteem for, of how much we value making stuff. And we obviously don't value making stuff. To rehash my point, our condition is a function of our priorities, values, of what we consider prestigious and status-giving. Were primary labor – as opposed to management and financial 'labor' – valued, we would be producing and inventing more, and the pay inequality between management and labor would not be as wide and widening.
Everything and anything evolves and develops. Not surprisingly, the 'credit machine' permutated, evolved and metamorphosed. The difference between a credit machine and an actual machine is that one is virtual – in the head of men, ink on the paper and bits of data in the CPU, RAM and hard drive, while the other is real – of atoms and molecules. And while the FED does bailouts, the nature does not. Screw up our physical machine, and the virtual machine would turn to ether as if it never even existed.
nilys,
ReplyDelete"To rehash my point, our condition is a function of our priorities, values, of what we consider prestigious and status-giving."
I agree.
There's a shortage of people who draw physical blood in my area. It is needed but it doesn't pay well and many seem to think it is beneath them. My girlfriend is training to do that as a stepping stone into nursing.
There's no shortage of those who would draw Bernanke's "life blood" though.