Today’s jobs report was a home run. Large employment gains, a significant drop in the unemployment rate, and details that suggest there is something big going on below the top-line numbers. There were three key positive details. First, construction employment is surging, a sign that the real estate misery might be abating. Second, manufacturing employment jumped in the sectors that are highly correlated with the automobile sector. This is a sign that consumers are finally starting to feel optimistic enough to buy cars, an observation that was confirmed in retail employment, where car dealers seem to be adding workers as well. That will have repercussions throughout the economy. Finally, the machine manufacturers are ramping up employment, suggesting that plant operators across the economy are looking to ramp up capacity.
While the headline is about January, the positive inflection of employment growth is now about three months old. This is an important observation as we look at the data because of seasonal factors. The acceleration in January might be overstated because we had the best January weather in memory. The seasonals expect a lot more snow than we had. But since the good news goes back to November, it seems unlikely that this is a big enough deal to change the bottom line.
This is unquestionably good news, not for our political opponents, but for America. We should not try to spin this away. Anticipating objections re: the arguments on size of the labor force (which GREW month-over-month), “people who have given up looking for work,” etc, I read this piece earlier this week. It makes the point that despite some weakness, labor force participation rates are roughly in line with expectations, when you account for age-based demographic shifts in how the labor force is composed.
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What our political response should be is some variation on, “It’s about TIME! Where the hell has his been, Mr. President? America should have been enjoying numbers like this a minimum of two years ago, instead of dealing with the ceaseless uncertainty due to Obamacare, Dodd-Frank, looming tax increases, and your unwillingness to cut spending in any meaningful way.” For an example of how America performs when we do pretty much the exact opposite of your plans these past three years, here it all is in one concise picture:
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Phil Gramm went into the comparison with recoveries past in greater detail in the WSJ yesterday.
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Reply to this commentLinkReport AbuseThe idea that "uncertainty due to Obamacare" delayed the recovery is pure fantasy.
Reply to this commentLinkReport Abuse'Uncertainty' has always been a fantasy argument. Since when is there ever certainty, other than Drudge will bogeyman the hell out of any good news for the ol' USA. Now, that's CERTAIN.
Reply to this commentLinkReport AbuseMr. Edelman, Was James Madison living in a fantasy when he stated in the Federalist Papers that uncertain government regulations cause businesses to hesitate and economies to stagnate?
Reply to this commentLinkReport AbuseYeah, in logic, your statement is what we call a "gratuitous assertion." There certainly seems to be no shortage of titans in business, CEOs, investment giants, who come on CNBC and attest to exactly that in interviews. Or business owners who answer in surveys that the burden of regulations and the threat of looming taxes is right up there with a lack of customers for the reasons they're hesitant to hire.
How about backing that argument up, other than simply parroting the talking point?
Reply to this commentLinkReport AbuseAnecdote City. Why don't you compare the number of regulations over this 3 year period vs. others? It'd be nice to know.....
Reply to this commentLinkReport AbuseHomework assigment, Jeffrey. Look up "anecdote."
A survey is a scientific sampling of opinion. Interviews may be "anecdotes," but consistent results across multiple surveys are not.
Even on their own terms, the "anecdotal" opinions of people wildly successful in business and who might know a thing or two about how economies work might be worth a little more than the demands of whiny ideologues.
Reply to this commentLinkReport AbuseIf we could harness that spin, we could salve the energy crisis.
While Bush signed more regulations, Obama's regulations were 10 times more expensive.
Reply to this commentLinkReport AbuseI guess anything that actual business people say about what is motivating them, is fantasy. So long as some left wing professor says otherwise.
Reply to this commentLinkReport AbuseHow about this:
"McClatchy reached out to owners of small businesses, many of them mom-and-pop operations, to find out whether they indeed were being choked by regulation, whether uncertainty over taxes affected their hiring plans and whether the health care overhaul was helping or hurting their business.
Their response was surprising.
None of the business owners complained about regulation in their particular industries, and most seemed to welcome it. Some pointed to the lack of regulation in mortgage lending as a principal cause of the financial crisis that brought about the Great Recession of 2007-09 and its grim aftermath."
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Republicans are like Steve Martin's Theodoric of York, who tried to cure every malady with a good bleeding. Until they get to inflict some more budget-busting tax cuts on us, they'll whine about "uncertainty". But it's just blather.
Businesses need customers!
Reply to this commentLinkReport AbuseWhen you raise the cost of employment (Health Mandates) you get less of it. Simple as that. Europe has had high rates of unemployment for this exact reason for decades.
Reply to this commentLinkReport AbuseYou are not consistent.
You cannot maintain your first and your second point both, because the graph of your point 2 is not corrected for demographic distribution 1981 vs 2011.
Following the logic of your first point, the graph of your second point is completely explainable by the dramatic changes in demographic age distribution.
Following the logic of your second point, if the graph is valid as is, then there is a serious basic error in your first link's logic.
Reply to this commentLinkReport AbuseI'm not inconsistent at all. First of all, the link on LFPR compared 1995 and 2005, not 1981, with today's recovery.
And the chart plotting the 1981 recover was on simple growth in raw numbers of payroll employment. The composition of the labor force of that period is not germaine to that data. It's a simple question of "how many jobs were created."
Reply to this commentLinkReport AbuseA home run in a game where we're losing 65-2, with two outs and the top of the ninth.
Reply to this commentLinkReport AbuseContra this:
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Reply to this commentLinkReport AbuseAnd what about the drop in participation rate? -1.2 million. What do you think about that?
Reply to this commentLinkReport AbuseGreat jobs report. I knew it was when I saw Drudge in absolute panic, bogeymanning about the 'drop in the labor force participation rate'. BOO! LOL.
Kevin, perhaps you could learn us Keynesians, right now, how the uncertainty of Dodd-Frank, Obamacare, etc. has suddenly been superseded by some other factor. Or are you going to argue that without it, we'd be having jobs gains of 600,000/ month?
Reply to this commentLinkReport AbuseYou know, your urge to gloat ought to be muted with the lateness of this bit of good news. Economies have recessions, they recover. ALWAYS. Even socialist economies in Europe recover from its recessions, eventually. The question for determining the best policy is how quickly, and how strongly.
Any fairminded person ought to be out here apologizing for why it took you two and a half freaking years to post numbers we would have seen in any average recovery long ago, not chest bumping everyone on the thread.
Your argument doesn't even make sense on its own terms! Just a few months ago Paul Krugman was fretting about a double dip, because "stimulus" clearly wasn't large enough, and the last installments of it had just been spent! And what would the economy do without more govt spending to "prop up demand?" What changed since then, Mr. Keynesian??
Reply to this commentLinkReport AbuseMeh. Balance sheet recession, liquidity trap. It's been explained a ZILLION times that there was no way this would be a speedy recovery. Any fairminded person knows that.
Reply to this commentLinkReport AbuseOh, of course. Forget all that pants-wetting the left's economic brain trust did just a few short months ago. We DIDN'T get the economic medicine in the form of more govt spending that you said was critical, and the economy came back to life without it. The period where it WAS getting that spending, we limped along for 3 years.
Makes perfect sense!
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