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September 2, 2011

Another miserable jobs report

Pay little attention to those who say the August jobs report isn't as bad as it looks because of the Verizon strike. 45,000 Verizon workers were on strike during the week that the Labor Department surveyed employers. So the optimistic reading is that rather than stay level last month the economy added 45,000 jobs. Doesn't matter much. Addition of 45,000 jobs or additional of zero jobs -- that's far less than is needed to lower the unemployment rate.

This -- in combo with the latest consumer-confidence reading and other weak indicators -- will add to worries about a double-dip recession. And it will put added pressure on Obama when he gives his jobs speech. It also raises odds that the Fed will launch new monetary stimulus in the form of buying longer-term debt. (Normally the Fed adds money to the economy by buying short-term Treasuries, effectively lowering short-term rates. But short-term rates are already basically zero.)

Also discouraging are the revisions to previous monthly jobs reports. Remember the relief rally last month after BLS reported that the economy added 117,000 jobs in July? That got downgraded to 85,000 jobs in today's report. June got demoted from a gain of 46,000 to a gain of 20,000.

The economy really is at stall speed. But does that mean it will start diving? The Economist magazine said this week that the U.S. economy is already so prostrate it's hard to imagine where new economic decline and layoffs could come from. The housing market is at rock bottom. Manufacturing is mean and lean. Well, how about state and local government? And Wall Street?

Posted by Jay Hancock at 8:44 AM | | Comments (11)
Categories: The Great Recession
        

Comments

While the jobs report isn't exactly good news, it does show stabilization. Your headline suggests that we are headed toward another free fall. Call me Pollyanna, but I believe a continued talk about a double dip recession is what is causing the lack of consumer confidence. Perhaps if the news outlets eased up on the rhetoric the American people would be less fearful. Less fear - greater confidence - increased purchasing - increased manufacturing - more jobs - better economy. Over simplified I know, but we are what we believe and if we are constantly told we are in bad shape we will believe it. Lets take a page from The Help and tell ourselves "You are Strong, You are Smart, You are Important" Sooner or later we will be all of those again.

I think it is obvious if you go out in public that most businesses are doing pretty well. Go to Target any day or any similar businesses and it's a mad house. People are still out buying stuff every where I go. The media likes to be all doom and gloom and comparing things to the way there were a few years ago is just not realistic- things were messed up and there was so much corruption in the financial/housing industry hence the reason we got to this point. If everyone would just relax, we will be just fine. We also have to realize that times are changing and technology is changing the type of workforce we need. A lot of people don't have the proper skills for the jobs that are available. A lot of skilled workers are finding that their skills are no longer needed.

I think it is obvious if you go out in public that most businesses are doing pretty well. Go to Target any day or any similar businesses and it's a mad house. People are still out buying stuff every where I go. The media likes to be all doom and gloom and comparing things to the way there were a few years ago is just not realistic- things were messed up and there was so much corruption in the financial/housing industry hence the reason we got to this point. If everyone would just relax, we will be just fine. We also have to realize that times are changing and technology is changing the type of workforce we need. A lot of people don't have the proper skills for the jobs that are available. A lot of skilled workers are finding that their skills are no longer needed.

"While the jobs report isn't exactly good news"

OMG! Not exactly good news?
The first time since 1945 is NOT GOOD news at all!

So Pollyanna, to "fix" the economy we should just not talk about it?

As you admit you really cannot think for yourself so you believe what you are told and not hearing it will make everything hunkydory?

There is a person who lives in a fairytale!

A recession is negative economic growth. And economic growth will not occur until businesses begin to expand a grow again. Not government -- businesses. And businesses will not grow and expand under the threat of increasing regulation, the threat of increased expenses (taxes or otherwise), and the looming disaster that is "nationalized healthcare". They will buckle down and not take risk when there is little chance of reward; they will merely maintain the status quo, or worse, will actually shrink in order to fly further under the radar.

Couple that with a dramatic change in the economics of the country -- individuals themselves deciding (or having it decided for them) to get by on less, to consume less, to borrow less to fuel that reduced consumption, and you have a very negative outlook.

For all the bloviating chatter about how we need "cheap money" to fuel borrowing and spending, the fact is that interest rates are near zero in many cases as it is, and people are not willing to take on debt even at these pathetically low rates. Neither are businesses.

And temporary tax reductions -- like the payroll tax rate reduction -- won't do it, either.

Couple of things maybe the gang here can help me with.

1. Am I the only one who feels like he constantly hears how the experts are always "surprised" by the new low job numbers?

2. Along that same sort of line I feel like each month the numbers are "revised" for the past month or two and they are always lowered.

3. How exactly do they get this number of 0 for jobs created. Someone explain to me the equation or measurement that goes into this. I find it hard to believe that not a single job was created.

4. Finally to all the men out there. Is my wife the only one out there doing her best to kepe the economy going?

The fact of the matter is quantitative easing did not work. QE3 won't work either. Obummer is the worst President of all time. He makes Jimmy Carter look good. 2012 can't come soon enough. Obummer is a complete failure. New leadership will get this economy going again.

Amen, Pollyanna, Amen.

Brian, great comment on the wife.

No she is not alone. My wife came home and bought 3 dresses with 50% discounts.
She was only going to buy one but since she was saving 50% on 1 she said she was doing better by saving 150% on 3!

There are things happening on the job front that we don''t understand. HR people tell us that applicants withdraw when unemployment benefits are extended. But who wants to work for $18/hour when the CEO is making $24 million/year. Are the only ones looking for work are those with $30,000 in student loans to pay off? What's going on here? All will be explained in the President's speech on Thursday.

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About Jay Hancock
Jay Hancock has been a financial columnist for The Baltimore Sun since 2001. He has also been The Baltimore Sun's diplomatic correspondent in Washington and its chief economics writer. Before moving to Baltimore in 1994 he worked for The Virginian-Pilot of Norfolk and The Daily Press of Newport News.

His columns appear Tuesdays and Sundays.
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