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Saturday, December 5, 2009

Conservatives: Be Careful in Talking Down the Jobs Report

Following the release of the jobs numbers yesterday, the folks at Powerline blog met the news with a post called Reasonably good news on the economic front .

The November report on jobs is out and it contains reasonably good news. The best news is that the number of jobs dropped by only 11,000 and the job loss number for
September and October was revised downward by 260,000. In addition, the weekly
number of hours worked and overtime worked jumped, and the temporary-hiring
sector expanded for the fourth month in a row.


The economic news isn't "reasonably good" but stunning. In fact, CNBC called it "too good to be true" and a game changer.




Meanwhile, the folks at Hot Air were as begrudging in their reporting of this news as the folks at Power Line.

The Obama administration gets a little good news this morning. The unemployment rate eased back two-tenths of a point to 10.0%, only the second decline in unemployment since the start of the Obama presidency. However, the number of chronically unemployed rose again, indicating that the front-line decrease does not capture the full direction of unemployment:

At Hot Air, they didn't even bother to report the real story. The real story was that the economy only lost 11000 jobs. It had lost 700,000 jobs in February and so this is a stunning recovery. The news isn't good for the Obama administration but everyone looking for work. Considering the best month up till now in two years we still lost six digits each and every month MINIMUM this news wasn't reasonably good but excellent and stunning. It may in fact still be a game changer.

Here's how a business reporter for the Chicago Tribune reporter covered the story.

the latest jobs numbers are any indication, Americans can worry less about pink
slips and look forward to a year of economic healing.With layoffs easing
sharply, as the Labor Department's numbers suggested Friday, people with jobs
might feel a little more comfortable about spending money, and that could prompt
employers to add a few workers if they are having trouble meeting greater demand
with a tight staff.

The tenor of the coverage at Fox News was largely the same as it was at Hot Air and Powerline. Conservatives had better be very careful here. This is just one month. Next month, we may still lose 100,000 jobs again and be back to misery. It may also be a painfully slow recovery even as job growth enter positive territory. Keep in mind that the country adds about 150,000 people into the job market every month and so that's really the zero number.

That said, I hate Obama's economic policies as much as the next conservative. I don't believe for one second that government spending that leads to trillion dollar deficits will do anything but stunt economic growth. At the same time, when you stop reporting reality and report what you want the news to be, you stop being a journalist and start being a propagandist.

When the jobs number goes from a loss of 140,000 to 11,000 in a month, that's not reasonably good news. It's not a "little good news". It's simply great news. It's certainly no time to celebrate and it takes months to form trends. There is no trend yet but if jobs are positive next month Conservatives had better start to face reality and begin to acknowledge the recovery.

The economic outlook is much better than I thought it would be at this point. I thought we'd lose about a million more jobs for the last six months than we did. That's why I try and make as few predictions as possible. I'm not afraid to acknowledge the mistake, however, and report reality as it is, not as I predicted it.

If conservatives and Republicans are still talking down an economy that's recovering, that would put them in big time hurt. We're still a long way from there. While the economy has bottomed and is beginning to recover, we have no idea what sort of recovery it will be. If it's a slow and painful recovery that doesn't help the president much. That gives his opponents plenty of opportunities to attack.

Furthermore, the economy still has plenty of pitfalls left. Foreclosures are still rising. Commercial mortgages are still on the verge of their own cataclysmic collapse. Banks are still not lending. All of that is also a reality. That doesn't mean that we fail to acknowledge of the stunning news on the jobs front.

3 comments:

Anonymous said...

As you say, other indicators point negative.

Could it be that this data is incorrect.

Have they changed how the number is defined?

Anonymous said...

With respect. The chances of the jobs report improving is zero. There are so many things converging on this economy that an improvement is nowhere to be found.

One has to marvel at the good fortune in the employment number and dollar reaction coming at just the right time to meet next week’s $131 billion sale of US treasuries coming to market. Aren't coincidences wonderful?

Then of course you have to look at the bank closures and specifically look at what the acquiring banks are willing to pay for the liquidated bank's assets. In this last week, the acquiring banks paid 30-50% less for assets. What this means is that of the trillions of dollars currently on bank balance sheets we know that they are worth 30-50% less and we are about to go into a commercial real estate meltdown. This can all be verified on fdic.gov.

These are just two aspects of this evaporating economy. The first quarter 2010 is going to be devastating and unemployment will keep rising. There is far too much optimism floating around as reflected in the idea that we may have hit bottom in the jobs report. There are far too many fundamental conditions in this economy that are not fixable and that need to play out.

Jason Gillman said...

I have looked at the numbers, and there are a couple of parts to note.

1st. The 11,000 includes the increase in government jobs as well. Considering those jobs typically include wonderful benefits because they are represented by unions.. they are GOOD jobs. Unless of course you are a taxpayer paying for them.

2nd. These are preliminary numbers. The gov data for some reason is still sitting 2 months on prelim data. This has not been the norm so far as I know, but means essentially that it is a "rough guess."

3rd. The output per man hour has reached a high not seen since 2003 and the start of the Iraq war. What this indicates is a stress on the existing employees. No more can be layed off from some businesses without affecting overall production. Hopefully those businesses hang in there now.