The Economy Stays Muddled
I’ve been a bit distracted this past week or so, what with moving into a new place and getting things settled in, but it sure does look like things are going on pretty much as they have been with the economy. Of course, the Economists are surprised at the figures being reported. Economists are always surprised by the figures reported.
First up is the private sector jobs report from payroll processor ADP that came out Wednesday, May 4. Via the NY Times:
Private employers in the United States added 179,000 jobs in April, while the pace of growth in the services sector unexpectedly eased in April to its lowest level since August 2010, according to economic reports released on Wednesday.
In the jobs report, the ADP Employer Services report fell short of economists’ expectations for a gain of 198,000, according to a Reuters survey. March private payrolls were revised up to an increase of 207,000 from a previously reported 201,000.
Then the economists were really surprised when the Initial Unemployment Claims report for last week that came out yesterday showed another big job in claims. Via Reuters:
While the surprise jump in initial claims for unemployment benefits was blamed on factors ranging from spring break layoffs to the introduction of an emergency benefits program, economists said it corroborated reports this week indicating a loss of momentum in job creation.
New claims for state jobless benefits rose 43,000 to 474,000, the highest since mid-August, the Labor Department said on Thursday. Economists had expected claims to fall.
“We do not think that the entire rise in claims over the last month can be explained by special factors alone,” said Harm Bandholz, chief U.S. economist at UniCredit Research in New York. “It seems instead as if the improvement in the labor market slowed a bit.”
The data, a day before the U.S. government’s comprehensive employment report for April, was the latest to suggest a softening in the jobs market.
Doncha just love the phrase “…softening in the jobs market”? As if the jobs market for the last few years hasn’t already been closely resembling a marshmallow in strength.
Finally was today’s (Friday May 6) report from the Bureau of Labor Statistics, again via Reuters:
The U.S. private sector in April generated the most jobs since February 2006, but the jobless rate jumped back up to 9 percent from the previous month’s 8.8 percent.
As economists try to make sense of these conflicting signals, perhaps the only certainty was that it will take another couple more months of data to figure out exactly where the U.S. economy is headed.
Total U.S. non-farm payroll employment expanded by 244,000 jobs in April according to the Labor Department’s survey of employers, well above median forecasts in a Reuters poll for a gain of 186,000 and the strongest reading in 11 months.
However, the separate household survey, from which the unemployment rate is derived, painted an entirely different picture. It showed the number of employed Americans falling by 190,000 on net following a 291,000 rise in March. The number of jobless in that report, meanwhile, rose by 205,000.
Dave Leonhardt at The NY Times Economix blog had “5 Questions about the Friday Jobs Report” this morning prior to the report being issued. But those questions also reflect the muddled nature of the current economy. The folks at Calculated Risk have a good summary of the BLS figures:
This pace of job growth is just more than enough to keep up with the growth in the labor force, so it will only push down the unemployment rate slowly. The unemployment rate has declined from 9.4% in December 2010 to 9.0% in April.
The increase in the unemployment rate from 8.8% to 9.0% in April, was bad news, especially since the participation rate was unchanged at 64.2%. Note: This is the percentage of the working age population in the labor force. I expect the participation rate to move a little higher as the job market improves, and that will keep the unemployment rate elevated all year.
The increase in the the number of part time workers for economic reasons, and the increase in U-6 to 15.9% were more bad news. There are a total of 13.75 million Americans unemployed.
So with the muddled and mostly bad news, what say our Beltway Village Idiots Pundits, courtiers, and elected representatives? On Wednesday, the Washington Post reported that the “Leaders of minority parties in Senate and House introduce jobs agendas.”:
“It’s been 120 days of the Republican majority, and we haven’t seen a jobs bill yet,” Rep. James E. Clyburn (S.C.), the No. 3 House Democrat, told reporters. “Maybe they need some ideas.”
The 28 other House Democrats flanking Clyburn, of course, came prepared to offer some in the form of a “Make It in America” agenda. Among them: new programs to train workers in advanced manufacturing, investments in transportation infrastructure, research and development tax credits, and savings accounts for small-business start-ups.
Across the Rotunda, five Republicans took to the Senate floor to explain some ideas of their own, packaged simply as the “Senate Republican Jobs Plan.” Among them: require a statutory spending limit for the government, reduce individual and corporate tax rates, prohibit the federal regulation of greenhouse gases and repeal President Obama’s health-care law.
Earth to the Washington Post – calling something a “jobs program” doesn’t make it one, although the proposal from the House, while no where near enough to bring the 25M to 30M un and underemployed people back to full employment at decent wages, might be a bit more helpful than the senate Republican ‘proposal’ which is the same crap they’ve been tossing out for a dozen years that has not worked. Although it shows the Senate Republicans are at least able to fake it, unlike their House counterparts who think re-defining rape is more important than jobs.
I would weep for my country if this weren’t so damn typical. It becomes more and more difficult to remember that there once was a time, and not even all that long ago, when even the corrupt politicians made at least some pretense of doing things for the benefit of all people.
And because I can:
Cross posted from Just A Small Town Country Boy