Part-time jobs typically increase between Memorial Day, and Labor Day, decrease between Labor Day and Thanksgiving, increase again between Thanksgiving and New Year's Day and decrease from New Year's Day to Memorial Day. Official employment figures are "seasonally adjusted" to avoid distortions introduced by these employment cycles.
My favorite economist once again puts things in perspective:
Today’s announcement of 284,000 new unemployment claims is a shockingly low number. As a share of the population it is the lowest figure since the 1960s. The 4 week moving average (302,000) is roughly tied with April 2000 for the lowest figure in 45 years. Next week’s figures could easily push the average below the April 2000 low.
So we have three data points:
1. Employment/population ratio is horrible.
2. Unemployment rate is mediocre.
3. New claims figures are great.
I believe the unemployment rate (6.1%) is the most informative. There is still some slack, but far less than in 2009. Unemployment has been falling at a very steady 0.1% per month for a year and a half. That will continue. Meanwhile, productivity numbers are horrible and likely to stay that way. As I’ve been saying, get used to 3% NGDP growth as the new normal, 1.2% real and 1.8% deflator. That means lower than normal interest rates as far as the eye can see.
Good post. I would only add that the claim by the usual suspects that all the jobs being added are low wage or part time jobs is simply not true.
The USA still has the most productive labor force in the world and that, combined with physical security and legal protection for contracts, makes it a place that jobs are moving into from from less productive, less secure locations overseas. There is still a net outflow, I suspect, but I also believe--though I have not done the necessary research to back this up--that the gap is narrowing as more manufacturing jobs relocate back here. Yes you can get a factory worker for half price in a dozen countries around the world, but you may also be faced with political control of your company, coercion, bribery, threats of physical violence, lack of intellectual property protection, etc. not to mention a far less productive and stable work force.
In what amounts to a tremendous irony, we might see a raft of major corporations re-incorporate outside the USA for tax reasons at the same time as they move manufacturing operations back into the USA for all those other reasons. But I repeat, this is just my sense of things, I haven't done the research.
In a blog post that I quoted a while back, Scott Sumner predicted that unemployment would fall rapidly to its natural level (which the Fed defines #$%$4%). This morning's unemployment report bears him out:
The number of people seeking U.S. unemployment benefits fell last week to its lowest level in more than eight years.
Weekly applications for unemployment aid dropped 19,000 to a seasonally adjusted 284,000, the Labor Department said Thursday. That's the lowest reading since February 2006, nearly two years before the Great Recession began.
The four-week average, a less volatile measure, declined 7,250 to 302,000. Claims for jobless aid have been falling for the past three months. Recent reports have coincided with the temporary summer shutdowns of auto plants, yet the impact of those closures is addressed through seasonal adjustments.
Applications are a proxy for layoffs. When employers hold onto their workers, it's a sign of potential income gains, increased hiring and confidence that the economy will grow. The recent drop-off in unemployment benefit applications point to a substantial number of jobs added in July, raising expectations for the monthly employment report to be released August 1.
It's hard to know what to make of you and Springer. The data compiled by the Fed economists strongly suggest that (at long last) the long-term unemployed are starting to find jobs rather than dropping out of the labor market. So why do you respond with the claim (completely unsupported by any data) that the reduction in long-term unemployment is because people are dropping out of the labor market? It's one thing to provide informed criticism, it's quite another to stick your fingers in your ears and say "Neener Neener".
Are you so committed to finding anything good to say about the current administration that you have to close your eyes to reality when it doesn't accord with your political prejudices? Almost the entire job recovery has been in the private sector and that continues to be true. So why aren't you celebrating the fact that the private sector is now producing enough jobs to put a dent in long-term unemployment?
In a paper issued this week, two Federal Reserve economists, Tomaz Cajner and David Ratner, find that the percentage of the unemployed who have been jobless for more than 27 weeks – the definition of “long-term” unemployment – has been dropping sharply in recent months, and that there is strong evidence to suggest that it is because they are finding jobs rather than simply dropping out of the labor force altogether.
The news is good for the jobless, and it’s also good for Cajner and Ratner’s boss, Federal Reserve Board Chair Janet Yellen, who has staked out a public position claiming that as the economy continues to recover, the long-term jobless and even those who have left the workforce in discouragement, would begin to find work again.
Further support for Yellen’s theory appeared yesterday in the National Association for Business Economics Business Conditions survey. NABE found that fewer companies are having trouble attracting skilled workers today than did this time last year – a counterintuitive finding, given that the economy has added 1.2 million jobs in the last 12 months and skilled workers were, presumably, among the most attractive candidates for hire. A possible explanation is that, as per Yellen’s prediction, discouraged workers are rejoining the labor force.
In their paper, Cajner and Ratner point out that in terms of creating the large number of long-term jobless, the Great Recession was much worse than previous economic downturns. It peaked at 45 percent of the jobless, whereas in the 1982 recession, it topped out at 26 percent.
“In many ways the fight against unemployment during the recent recovery has been mainly one of bringing down the long-term unemployment rate,” they write. And finally, that’s starting to happen.
“Since December 2013,” according to Cajner and Ratner, “the long-term unemployment rate dropped 0.5 percentage point, thereby accounting for almost the entire decline in the aggregate unemployment rate.”
In August 2013, USA Today reported on a comparison of the Bush and Obama presidencies with regard to vacation time made by CBS News. Here's the summary:
"At the same point in Bush's presidency, the 43rd president had spent 367 days at his ranch in Crawford, Texas, and his parent's compound at Kennebunkport, Maine, according to a count by CBS News reporter Mark Knoller. Obama, who doesn't own a vacation home, has spent a total of 92 days of his presidency on vacation, according to Knoller."
Politifact then fact-checked this statement and rated it "Mostly True"finding that the numbers were accurate but pointing out that Bush claimed the Crawford Ranch was an extension of the White House. You can make of that claim what you will.
NO, it tells us a lot about the government of Venezuela and its real agenda.
This "declaration" doesn't even indicate who (if anybody) signed it. It seems to be aimed mostly at the UN for supporting carbon markets as a preferred approach to greenhouse gas reduction.
The hypocrisy of the Venezuelan government which subsists almost entirely on revenues from state-owned oil sales, attacking a program aimed at reducing greenhouse gas emissions, is impossible to overstate.
You must hang around higher-class bars than I do. When I lived in Chicago, the kinds of women I met in bars usually said things like, "What's your sign?" [My usual answer: "No left turn"]
I guess the moral of the story is, if you wait long enough, virtually every prediction comes true sometime.
Boy: I want to be a pundit when I grow up.
Mom: A pundit? Why?
Boy: Because you always have a job no matter how much you screw up.
Mom: I don't understand.
Boy: In 1993 the pundits all said the Clinton tax increase would wreck the economy, create mass unemployment and balloon the deficit.
Boy: We had the best job growth in history, unemployment went below 4%, and the federal budget ran a surplus.
Mom: Hmmmm. Is there more?
Boy: Yes. In 2003 the pundits all said the Bush tax cuts would spur growth, shrink the deficit and reduce unemployment.
Boy: We had the worst job growth in history, unemployment went over 10% and the deficit ballooned.
Mom: I'm beginning to see a pattern.
Boy: The same pundits said invading Iraq would bring democracy, peace and prosperity to the middle east and destroy Islamic fundamentalism.
Boy: Jeez, Mom, don't you ever read the papers? The same pundits also said QE would spur hyper-inflation, drive interest rates to the moon, turn the recession into a depression and balloon the deficit.
Boy: Inflation is uber-low, so are interest rates, the economy has recovered all the jobs it lost in the great recession and the deficit has been cut by 2/3..
Mom: Didn't any of those pundits lose their jobs?
Boy: Did pigs learn to fly?
As someone who has relatives living in Israel, I'm only too well aware of the threat posed by Hamas' possession of sophisticated weapons. Israel faces a real existential threat and anybody who thinks otherwise is living in a dream world. And I'm aware of the tunnel network and that the current offensive is designed, at least in part, to locate and dynamite as many of the tunnels as possible. Nonetheless, Hamas has been more or less quiet for the past two years and there was some glimmering of hope for a detente. Not any more. It seems as if every time things look even slightly hopeful some nut on one side or the other makes it his personal business to destroy that hope by assassination, murder, or other means.
Your point about the brutality of Arab factions to one another in Iraq, Syria etc is well taken but it doesn't really change the fact that civilians are being killed in the hundreds which is a tragedy now matter how you look at it.
I promised Lan I wouldn't rehash the Iraq War with him but I would love to know what "gains" we made in overthrowing Saddam. Is the middle east more stable now? Is Islamic fundamentalism less of a force? Is Iran weaker than it was when Saddam was fighting against the Iranians? Are oil prices lower? Is Egypt more democratic? Is Syria peaceful? Has the Sunni insurgency become less violent?
As for Afghanistan, Obama is following the Bush Iraq playbook massively increasing the American troop presence in the country in the hope of stabilizing it and creating a national government that can hold the country together after we leave. It didn't work in Iraq and it isn't going to work in Afghanistan either. The Russians figured that out in the 1980s but I guess we think we're just so much smarter than they are that we can succeed in governing as a non-Islamic occupying force when they couldn't.
What do you imagine Romney would be doing if he were President? I can tell you: he would be doing exactly what Bush and Obama have done because the truth is we do not have the power to impress our will militarily on the countries of the middle east. We can blow them off the map; but we cannot govern them, either directly of through puppets.
First of all, Hamas did not "start it" as you put it. Three Israeli teenagers were kidnapped and murdered by a group of Palestinian gangsters not part of Hamas. The Israeli government knew less than 24 hours after the boys disappeared that they were dead and who killed them. (The government found the boys' bullet riddled car which had their blood all over it.) Nonetheless, the government kept the facts secret and lied to the parents of the boys. letting them continue to hope that their children might be alive. The government also did nothing to dispel suspicion that the boys had been kidnapped by Hamas. A group of Israeli teen-agers then took revenge by kidnapping and burning alive a Palestinian boy which, predictably, enraged the Palestinians. Hamas fired rockets, Israel retaliated with an invasion, and here we are. Israel's attack on Gaza (after 2 years of relative peace and quiet from Hamas, by the way) has resulted in hundreds of civilian deaths, at least half of whom are children.
There's no excuse for any of the murders but there's also no getting around the fact that if the government of Israel had acted promptly and truthfully and held the real perpetrators to account, there probably would not be a war today. But now that there is a war, it's all 'you're either for me or against me" and rationality is out the window.
So Obama is (in my view) quite right to express concern about the civilian death toll in Gaza and to press for a cease fire.
In foreign policy, the key word is "continuity". Obama's foreign policy priorities, his willingness to employ military means to deal with terrorists, his broken promise to close Guantanamo, his wariness toward Russia, his support of NSA spying, and many other actions are a continuation of Bush administration policies, as even #$%$ Cheney has grudgingly admitted. Yes, Netanyahu doesn't like him but,from my point of view, that's a plus for Obama. In spite of their personal animosity, Obama hasn't wavered in his support of Israel. Particularly at this moment, it would be easy for him to scold the Israelis for the ferocity of their assault on Gaza, but he has done nothing other than utter the predictable platitudes about the terrible toll the war is taking on both sides and offering to help broker a cease-fire, actions identical to those Bush would have taken in his place.
On social issues, he is more liberal than most Republicans, but came late and reluctantly to the support of gay marriage, waiting until nearly half the states had already legalized it before signing on . He has mostly stayed out of the abortion debate, though he is most likely pro-choice. He has deported illegals at 3-4 times the rate that Bush did--an action for which he gets no credit at all on the right--and is struggling to find an appropriate answer to the terrible humanitarian crisis on the border which would test the resolve of any President. I doubt, for example, that Marco Rubio, were he President, would find it easy to send children back to probable death at the hands of drug smugglers.
On economic policy, he appointed Janey Yellen, a clone of Bush's Fed Chair, Ben Bernanke, and has jet to order his Justice department to prosecute even one banker in connection with the massive frauds that preceded the Great Recession.
Bottom line is that Obama is much more like Bush than he is like Elizabeth Warren.
Put aside the overheated and typically fallacious bombast that fills the anti-Obama posts on this board and try taking a look at Obama objectively.
First of all, anyone honest will admit that it's far too soon to render an overall judgment on his presidency. We are just now beginning to get balanced assessments of JFK; later Presidents (Carter, Reagan, Clinton, Bush) are still being attacked and defended by their partisans, making sober assessment difficult, if not impossible. And there is the matter of sealed Presidential files, which generally contain information that colors and clarifies our understanding of events but which aren't available to historians for 50 to 75 years. But even with those major limitations, we can reach some conclusions.
First, Obama is moderately conservative Democrat. Only in the overheated atmosphere of the present day when conservative activists attack anyone to the left of Ramses II as a RINO, that would be obvious. Case in point: his flat-out rejection of calls from the left wing of his party for a "public option" in the ACA. But there are numerous other examples of Obama either trimming his legislative ambitions or making serious concessions in an effort to win Republican votes. He has done this so frequently, if has led many people in the Democratic Party to tear their hair out. Don't believe me, just drop in to Daily Kos and read the archives which are an encyclopedia of liberal disappointment.
It is also clear that he's not a big spender. As the Wall Street Journal was the first to report, federal spending under Obama is increasing at it slowest pace since the Eisenhower administration. For that reason, among others, the deficit as a percentage of GDP has dropped from 9.8% in 2009, when Obama took office, to 2.8% today, and the deficit scolds who were warning of Greek-style inflation have gone away. There's more but I"m running our of room.
Actually, the Bush administration was too busy touting "the ownership society" and taking credit for the fact that home ownership reached its highest level ever during his administration. Of course, it got to that level through reckless lending, liars' loans, and the incredibly foolish policies of Fannie and Freddie.
Bush, in his own words, used "the mighty muscle of the federal government" to increase home ownership levels.
--He proposed affordable housing tax incentives.
--He insisted that Fannie Mae and Freddie Mac meet ambitious new goals for low-income lending.
--Concerned that down payments were a barrier, Bush persuaded Congress to spend as much as $200 million a year to help first-time buyers with down payments and closing costs.
--And he pushed to allow first-time buyers to qualify for government insured mortgages with no money down.
--He also leaned on mortgage brokers and lenders to devise their own innovations. And corporate America, eyeing a lucrative market, delivered in ways Bush might not have expected, with a proliferation of too-good-to-be-true teaser rates and interest-only loans that were sold to investors in a loosely regulated environment. But Bush populated the financial system's alphabet soup of oversight agencies with people who, like him, wanted fewer rules, not more.
Don't get me wrong, I think what Bush tried to do was admirable. But, as we know all too well, the road to Hell is paved with good intentions and Bush's "ownership society" drive is no exception.
If you have read any of my posts on this topic, you know that I don't believe in giving Presidents either much credit or much blame for what the economy does during their terms in office. My point in comparing the economy under Bush and Obama was simply to underscore how ridiculous it is for Rah to characterize the Obama Presidency as a failure while giving Bush a pass.
As for QE being a Ponzi scheme, well, we'll just have to agree to disagree. I think the Fed acted responsibly to head off a depression by using monetary policy as an economic stimulus. With interest rates at zero, the Fed had to turn to unconventional methods of stimulus and they proved moderately effective. This was especially important in light of the fact that Congress (via the sequester) adopted a contractionary fiscal policy at the same time.
One of the things that bugs me about political debate on the economy is the quick resort that both parties have to slogans in place of thoughts. If you listen to the GOP, low taxes and no regulations will solve every problem. If you listen to the Democrats, targeted spending increases and enhanced regulations will solve every problem. What we should be discussing (imho) is how to put the economy on a stable long-term growth path accepting as a given that the moderate welfare state is here to stay. No conceivable combination of President and Congress is going to do away with either Social Security or Medicare or (for that matter) most of the ACA, though it will undoubtedly undergo further modification in light of experience. It should be possible for mature adults to reach agreement on such a goal, but so far that hasn't happened.
First of all, the Fed is an independent agency. Ben Bernanke, the architect of QE, is a Bush appointee. He originally took office as Chairman on February 1, 2006, when he also began a 14-year term as a member of the Board. So Obama literally had nothing to do with QE.
Second, I don't think you understand QE. The Fed has been buying existing government debt in the open market. QE did not increase the amount of government issued debt, it moved the ownership of existing debt from individuals and institutions to the Fed.The forced exchange of debt for case was stimulative but the stimulus did not come from additional borrowing.