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Unemployment falls to 7.8% (but only 114,000 job added?)

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Engineer

Elite Member
Oct 9, 1999
39,255
699
126
The President owns the economy from Day One because he's ultimately responsible for leading the country, and the President never owns the economy because his power is inherently and intentionally limited. Obama's supermajority was the most power a President has had over the economy in my lifetime, and even that was only absolute party power for eight months. And even there, he's limited by the self-interest of party and cohorts who want to get re-elected and can only be pushed and bribed so far. The nearest thing I can recall was Reagan, who had a unique ability to go over the press to the American people and could therefore shame the Democrats into giving him what he wanted - for a price. So there really can't be a definitive answer, just one side desperately trying to claim credit for every good thing that happens whilst dodging blame for every bad thing that happens, and the other side desperately trying to deny that credit and affix that blame.


This same situation is also why I think we're arguing over fractions of a point rather than points in growth and unemployment. We've lost much of the wealth-producing work we used to have, which kills the effect of stimulus be it tax cuts or redistribution of seized wealth or borrowed spending.

Rather than fewer unions, perhaps what we need are more unions, specifically high tech unions running training programs that train the well-paid, highly technical workers these companies claim to need. And of course, revamped laws and tax codes that favor companies producing domestically and penalize companies producing abroad. It should be axiomatic that we can't all be designers and marketing consultants and telephone sterilizers if we want to consume real products, but we ought to be able to construct a reasonably productive economy that achieves much of our current (largely borrowed) material wealth without our rivers catching fire and our middle schoolers working production.
You're likely to find 100 Congressmen/women who would rather sign a new "FREE" trade agreement than find 1 to even think about doing what I have bolded. Remember, we'll be just fine and dandy with the new service sector economy. :whiste:

The corporations have been pulling the foundation out (middle class solid jobs that build wealth) for years. The building has been very shaky and propped up with sticks. If some work isn't done on the foundation and soon, we all know what's going to happen....

 
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zinfamous

No Lifer
Jul 12, 2006
105,653
20,417
136
The President owns the economy from Day One because he's ultimately responsible for leading the country, and the President never owns the economy because his power is inherently and intentionally limited. Obama's supermajority was the most power a President has had over the economy in my lifetime, and even that was only absolute party power for eight months. And even there, he's limited by the self-interest of party and cohorts who want to get re-elected and can only be pushed and bribed so far. The nearest thing I can recall was Reagan, who had a unique ability to go over the press to the American people and could therefore shame the Democrats into giving him what he wanted - for a price. So there really can't be a definitive answer, just one side desperately trying to claim credit for every good thing that happens whilst dodging blame for every bad thing that happens, and the other side desperately trying to deny that credit and affix that blame.


This same situation is also why I think we're arguing over fractions of a point rather than points in growth and unemployment. We've lost much of the wealth-producing work we used to have, which kills the effect of stimulus be it tax cuts or redistribution of seized wealth or borrowed spending.

Rather than fewer unions, perhaps what we need are more unions, specifically high tech unions running training programs that train the well-paid, highly technical workers these companies claim to need. And of course, revamped laws and tax codes that favor companies producing domestically and penalize companies producing abroad. It should be axiomatic that we can't all be designers and marketing consultants and telephone sterilizers if we want to consume real products, but we ought to be able to construct a reasonably productive economy that achieves much of our current (largely borrowed) material wealth without our rivers catching fire and our middle schoolers working production.
I'm all for things like this....of course you have to contend with such parroting as c-c-c-c-c-c-c-communism! D: and other baseless labels.

It's incentives like that--I think adding better mentoring programs for higher education (i.e: Yes, you need an education and it is very important, but please do not take a $120k loan to get a Philosophy degree at MIT) are also needed, but I don't see a real manufacturing base ever returning here.

It's not the cost of labor by salary that keeps corporations overseas, so much as it is the cost of using human labor, that we all agree, as Americans, are essential (humane working conditions and necessary labor laws). I see the contemporary "unskilled" labor force in this country migrating completely to the service sector. I mean, you're still gonna need 17 year-old stoners loading boxes in the warehouse, but if you aren't working the cash registers or serving tables, I think there isn't much of a future for the uneducated in this country :\

For better or worse, it's what most of us have wanted for decades now, and we have to adapt.
 

Infohawk

Lifer
Jan 12, 2002
17,848
1
0
When this argument was made in 2010 and 2011, it was generally valid. Not so much this year, yet the argument continues...

We've seen a .7% drop in the unemployment rate and a .1% drop in the participation rate so far this year. The numbers in total for this year are showing a trend of a stable participation rate and modestly improving employment. Maybe next year it's better or worse, but that is what we're seeing as the current trend.

- wolf
You could have also said in 2011 that there was only a 0.2% drop in the participation rate. Yet the trend is still in the wrong direction. I don't think you can be too caught up in the fact that it's a decimal point of a percentage. When you look at how many Americans that corresponds to it's in the hundreds of thousands. Now we could be seeing a bottoming out and we wouldn't necessarily know it'until later, but right now I don't see how one can be sure things have stabilized.
 

Fern

Elite Member
Super Moderator
Sep 30, 2003
26,917
173
106
-snip-

(Fern): Regarding the actual BLS release, one has to remember that the top number is SAAR (seasonally adjusted, annualized rate), which is different from raw data (appears to be 860K actual jobs added):
Seasonal adjustment factor is supposed to account for typical seasonal hiring patterns this time of year, if they haven't been shifted from normal time of year they occur.

Biggie seems to be that college students with summer jobs went back to school earlier than seasonal adjustment factor accounts for right now, so maybe that cut into last month's number, but boosted this month's one (I am trying to watch Morningstar take, but video is hanging right now).

Honestly, putting political talking points about unemployment rate aside, my guess is that more careful analysis will show continued, slow but steady, employment growth, but growth that is not fast enough to put significant dent into those who may have lost their job from peak employment in January 2008 (beginning of Bush's last year).

It's good news, but still for many, it is not enough, and not fast enough (recovery in economy and jobs).
Thanks.

But where my current confusion comes from is that we have two reports: One saying 114K new jobs, and then another (household survey) saying +800K. I don't understand how we treat these two in arriving at the numbers. Nor do I readily see how we could possibly have such a huge difference in them.

Given my state of confusion it's probably best that I wait and watch some business when it's discussed.

Fern
 

werepossum

Elite Member
Jul 10, 2006
29,876
460
126
You're likely to find 100 Congressmen/women who would rather sign a new "FREE" trade agreement than find 1 to even think about doing what I have bolded. Remember, we'll be just fine and dandy with the new service sector economy. :whiste:

The corporations have been pulling the foundation out (middle class solid jobs that build wealth) for years. The building has been very shaky and propped up with sticks. If some work isn't done on the foundation and soon, we all know what's going to happen....

Agreed, but I don't blame corporations. They have to play within the rules Congress sets, and if Congress allows foreign-made products to come in without significant tariffs, American corporations in most markets must also cut costs or be out-competed. An American corporation selling for example American-made hard drives, paying American labor and benefit rates and abiding by American regulations, will soon be put out of business by corporations selling competing products made in Thailand or China.

I'm all for things like this....of course you have to contend with such parroting as c-c-c-c-c-c-c-communism! D: and other baseless labels.

It's incentives like that--I think adding better mentoring programs for higher education (i.e: Yes, you need an education and it is very important, but please do not take a $120k loan to get a Philosophy degree at MIT) are also needed, but I don't see a real manufacturing base ever returning here.

It's not the cost of labor by salary that keeps corporations overseas, so much as it is the cost of using human labor, that we all agree, as Americans, are essential (humane working conditions and necessary labor laws). I see the contemporary "unskilled" labor force in this country migrating completely to the service sector. I mean, you're still gonna need 17 year-old stoners loading boxes in the warehouse, but if you aren't working the cash registers or serving tables, I think there isn't much of a future for the uneducated in this country :\

For better or worse, it's what most of us have wanted for decades now, and we have to adapt.
Agreed, and you may be right about our manufacturing base never coming back. But a fair amount of, say, appliance manufacturing is being re-shored due to rising Chinese labor costs and poor quality. There's no free lunch, and as Chinese workers become more skilled and sophisticated they will demand more money and benefits. One can still go to the smaller and less modern provinces for cheaper labor, but then your quality goes down. And at some point China is going to have to devote massive resources to cleaning up its environment and to internal consumption - although they only have to stay beloe us to keep eating our lunch.

The other thing that makes me think manufacturing can be brought back is the trend toward automation. Unfortunately while that increases societal wealth, it has the down side of concentrating wealth. The fewer people command high wages (through whatever means), the stronger the voting block of the low wage earners, the more the gap in income will be artificially lowered, and thus the less incentive to put forth the effort required to become a high wage earner.
 

Engineer

Elite Member
Oct 9, 1999
39,255
699
126
Agreed, but I don't blame corporations. They have to play within the rules Congress sets, and if Congress allows foreign-made products to come in without significant tariffs, American corporations in most markets must also cut costs or be out-competed. An American corporation selling for example American-made hard drives, paying American labor and benefit rates and abiding by American regulations, will soon be put out of business by corporations selling competing products made in Thailand or China.
and you don't think that corporations desire for cheaper labor and more money have anything to do with it? Really? Don't think that corporations just love these free trade agreements? Don't think that the same cons in CONgress have anything to do with these corporations?

I've worked for companies that outsourced and they didn't do it to keep from losing ground to competitors, they were leading the way out as fast as they could shut us (US plants) down.

 

PJABBER

Diamond Member
Feb 8, 2001
4,824
0
0
Trivia Question: At the current rate, how long will it take the Obama Administration to reduce unemployment to 5%?


Answer:
396 months = 33 years
 

blankslate

Diamond Member
Jun 16, 2008
8,484
430
126
Apparently this lowering in the rate came even as more people started looking for work again.

I've heard Mitt Romney on the radio saying that one of the factors in the lower rate was that more people stopped looking for work. This is not correct the labor force has increased last month and decreased in previous months.

http://www.reuters.com/article/2012/10/05/us-usa-economy-idUSBRE8930PZ20121005

Economists had expected the unemployment rate to rise to 8.2 percent in September. The drop last month came even as Americans returned to the labor force to resume the hunt for work. The workforce had shrunk in the prior two months.

http://www.bls.gov/news.release/empsit.nr0.htm
The overall trend in
the employment-population ratio for this year has been flat. The civilian labor
force rose by 418,000 to 155.1 million in September, while the labor force
participation rate was little changed at 63.6 percent.
So the lowering in the unemployment rate isn't due to people leaving the workforce by quitting their job searches. The number of people looking has been overall flat. Decreasing in some months and increasing in others.


Of course the reduction in unemployment rates is not as good news as we need since some of those jobs are part-time when many were looking for full-time employment. But at least it got a little better instead of worse.
 

mshan

Diamond Member
Nov 16, 2004
7,869
0
71
"But where my current confusion comes from is that we have two reports: One saying 114K new jobs, and then another (household survey) saying +800K."
I think the 800k number is the actual raw number, based upon corporate payrolls they sample.

But to compare apples to oranges months (most job hiring, I believe, takes place in those spring and summer months when high school and colleges graduate and those graduates enter workforce with real jobs). Other months (July?) I think there is actually very little actual hiring.

So BLS take a monthly snapshot and annualizes the number (SAAR), and does all sorts of seasonal adjustments so you can validly compare say December to July.

Don't understand it in depth, but I think you have to view those numbers more as a rate of acceleration or deceleration basis, on a relative basis, compared to other months.

I think BLS samples are incomplete, so there is lots of guesswork, inference, and fill in the blanks to come up with their number (revisions after the fact presumably reflect more actual data coming into them).

All in all, I think it is a good number for Main Street America, but for many, it is still not enough (absolute number of jobs created) or fast enough (those that lost their jobs for whatever reason from January 1 2008 peak) being reabsorbed and getting good, reasonably paying full time job.

You have to remember that whole world is still undergoing debt deleveraging from credible bubble years, so people and businesses and maybe governments (er, maybe not them, seems like they all will eventually pay off debt via gentleman's default of higher inflation and devalued currency), are paying down debt, rather than spending more.

Plus uncertainty about taxes, healthcare law and new fees, and most importantly, fiscal cliff (is gridlock in lameduck Congress going to produce a temporary shallow recession early next year?) are things holding back businesses (here, from what Bob Johnson said, I think it is more large corporations, rather than small and medium size businesses who are already hiring because their businesses are improving) holding back expansion plans if otherwise makes sense.

They want to know what health care law fees are and what corporate and individual income tax rates are going to be. Then they can decide whether or not it makes sense to expand business or hire. certainty and predictability, those are the key sentiments I hear over and over again when CEO types, who are talking their own businesses, and not politics or idealogy, say.

China (http://humblestudentofthemarkets.blogspot.com/2012/09/watch-for-storm-clouds-on-horizon.html) change of leadership is supposed to finally take place in November I think, plus we will hopefully have more (questionable) Chinese economic data as to whether their economy has come in for a bumpy landing (7% nominal gdp growth, or 5 - 6% gdp growth), or whether economy has truly crashed and is in actual recession.

My only somewhat informed take on Europe is that they are choosing Japanification (http://brontecapital.blogspot.com/2008/07/deflation-and-bank-bailouts-in-japan.html and http://www.testosteronepit.com/home/2011/9/21/how-long-can-japan-play-the-endgame.html) as a way to deal with mountains of debt they've developed over the years. So maybe won't contribute much to global growth, but if this tail risk (European Lehman moment or Credit Ansalt type cascade of bank failures http://www.businessweek.com/magazine/content/11_18/b4226012481756.htm) can be taken off table, then the Asian Currency Crisis / Russian default /Long-Term Capital Management scenario* from late 1990s may be able to develop again (then, I believe, 1/3 of global gdp went off line, but U. S. stock market was able to rally hard into year 2000, and economy didn't do bad during those years, either):

* "Staring Into the Abyss

It was late in September of 1998. I was flying from New York to Bermuda to speak at a hedge fund conference, and found myself upgraded at the last minute, back in the day when I did not fly that much, so I was feeling rather happy. As the door closed, a patrician-looking gentleman stepped in and came and sat next to me, immediately picking up a file and burrowing into it. I had a book and the Wall Street Journal, so I was content to read.

As soon as we took off, he asked for a scotch. He proceeded, over the next hour, to wage a very aggressive war on the diminishing cache of scotch bottles stored on board. (No, it was not Art Cashin. He doesn't fly.) It was an arduous campaign, but he was fully committed to winning.

He glanced over to my Journal and noted some headline about the crisis that had occurred the previous week. I had been following the extreme market volatility with interest, but this was in the first decade of the internet, so most of what you came by you still read in print or heard on the phone.

"They don't really know how close we came," he shuddered, his eyes showing the first signs of emotion – and fear – I had seen from him. That piqued my interest, and I engaged him, though without touching his precious hoard of scotch. I settled for a nice chardonnay. It turned out he was the second-ranking executive at one of the three largest banks in the country. He had been at the table in the NY Fed boardroom when 14 banks were forced to put in $3.625 billion to keep Long Term Capital from collapsing, with only Bear Stearns declining (one of the reasons they had no friends ten years later). The NY Fed president had essentially called all the heads of the banks, told them to be in the room, not to send proxies, and to bring their checkbooks. There was subsequently a lot of criticism of the Fed, but they did what a central bank is supposed to do in times like that: they made the children play nice in the sandbox. They were the only entity that could force the various monster-ego players to even sit in the same room with each other.

"No one will ever really know," he said again. But of course, soon everyone did, as Roger Lowenstein wrote the must-read real-life thriller When Genius Failed.

"We walked to the edge of the abyss, and we looked over." He proceeded to regale me with the stories of the negotiations, as the immensity of what would happen if they allowed the collapse dawned on the group one by one. They all had exposure to LTCM but did not realize the extent of it until it was too late. Looking back, it might have looked something like the credit crisis of 2008 if they had not acted, except it would have happened much faster.

I can tell you that no one in that room wanted to write a $300-million check. It was not good for their careers. Interestingly, after two years the fund was liquidated and the banks got back their capital plus a small profit.

Now, the bankers and leaders of Europe are getting ready to walk to the edge of the Abyss. It will be a long way down, and look like the 7th level of Dante's Inferno."


http://seekingalpha.com/article/321072-europe-staring-into-the-abyss
Bob Johnson at end of video clip I provided above says employers cut back to much because of all the chatter on tv and now realize they let people go they needed and are scrambling to hire them back.

Lifting of remaining uncertainties hopefully portends the acceleration in job market both commentators in that video clip anticipate in 1Q 2013 (http://www.morningstar.com/Cover/videoCenter.aspx?id=569632).


:)
 
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werepossum

Elite Member
Jul 10, 2006
29,876
460
126
and you don't think that corporations desire for cheaper labor and more money have anything to do with it? Really? Don't think that corporations just love these free trade agreements? Don't think that the same cons in CONgress have anything to do with these corporations?

I've worked for companies that outsourced and they didn't do it to keep from losing ground to competitors, they were leading the way out as fast as they could shut us (US plants) down.

Again, agreed, but the fault lies in those who make such rules, not those who benefit or even who ask them to do so. Unfortunately both parties find this useful, the Democrats to get more people dependent on government and the Republicans because they largely identify with the successful.
 

Nemesis 1

Lifer
Dec 30, 2006
11,379
0
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I think the 800k number is the actual raw number, based upon corporate payrolls they sample.
With 600,000 of those jobs Government Jobs. Thats not productive to the American economy seems to be the other way around . or Money isn't real and everyone is pretending it is . They have to be pretending none can be that stupid Those 600,000 jobs covers 2 months the last 2
 
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ivwshane

Lifer
May 15, 2000
29,043
9,180
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I agree 100% with welsh
The guy interviewing him is suppose to be a news man . Clearly this shows he cares nothing about the truth in News. The News person (cough) clearly is a bias political puppet

http://leanforward.msnbc.com/_news/2012/10/05/14248410-welch-i-have-no-evidence-for-jobs-conspiracy-theory-but-i-dont-take-it-back?lite
He asked welch if he had evidence of tampering of the numbers he said he didn't and then you claim Chris wasn't interested in the truth?

I don't think you are interested in the truth since zero evidence apparently is good enough for you to believe someone.
 

ivwshane

Lifer
May 15, 2000
29,043
9,180
136
With 600,000 of those jobs Government Jobs. Thats not productive to the American economy seems to be the other way around . or Money isn't real and everyone is pretending it is . They have to be pretending none can be that stupid
I can send you a mirror if you'd like;)
 

buckshot24

Diamond Member
Nov 3, 2009
9,916
85
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Sweet, so many people decided to stop looking for work that the rate goes down .5% what a rebounding economy!

The U6 number remains at the same level.
 

Nemesis 1

Lifer
Dec 30, 2006
11,379
0
0
He asked welch if he had evidence of tampering of the numbers he said he didn't and then you claim Chris wasn't interested in the truth?

I don't think you are interested in the truth since zero evidence apparently is good enough for you to believe someone.
Ya I watched it. and I also listened to a man who has done nothing useful his whole life who lives the American dream A so called News man did Not listen to what welsh was saying . You know 600.000 new government jobs over the last 2 months is not good news in so far as. WE the PEOPLE have to pay their wages and the great retirement accounts. With those numbers the morelly likely thing is a government name change to U.S.S.R united states socialist republic
 

Doppel

Lifer
Feb 5, 2011
13,313
2
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Regardless of how the numbers are being bent this is a major reduction the number people care about most. Obama will tout this. It's a very bad number for Romney.

It was 8.1, right? Now it's 7.8. Bad for Romney. Imagine if it had gone from 8.1 to 8.4? At that point hell I'd start supporting Romney.

Romney hammered away in the debate how important the economy is and that is for darn sure, but if unemployment is coming down that's what people want to hear.
 

buckshot24

Diamond Member
Nov 3, 2009
9,916
85
91
Regardless of how the numbers are being bent this is a major reduction the number people care about most. Obama will tout this. It's a very bad number for Romney.

It was 8.1, right? Now it's 7.8. Bad for Romney. Imagine if it had gone from 8.1 to 8.4? At that point hell I'd start supporting Romney.

Romney hammered away in the debate how important the economy is and that is for darn sure, but if unemployment is coming down that's what people want to hear.
7.8<8.1 agreed.

Problem is the only reason it goes down like this is because people just gave up. Will people care about the background to this number? I hope so.
 

ivwshane

Lifer
May 15, 2000
29,043
9,180
136
Ya I watched it. and I also listened to a man who has done nothing useful his whole life who lives the American dream A so called News man did Not listen to what welsh was saying . You know 600.000 new government jobs over the last 2 months is not good news in so far as. WE the PEOPLE have to pay their wages and the great retirement accounts. With those numbers the morelly likely thing is a government name change to U.S.S.R united states socialist republic

I see that you are allergic to facts as well. 600,000 government jobs? What alternative reality do you live in?
 

Engineer

Elite Member
Oct 9, 1999
39,255
699
126
7.8<8.1 agreed.

Problem is the only reason it goes down like this is because people just gave up. Will people care about the background to this number? I hope so.
As was pointed out to me, the OP states that MORE people were in the job market, not less.

The Labor Department says employers added 114,000 jobs in September. The economy also created 86,000 more jobs in July and August than first estimated. Wages rose in September and more people started looking for work.
 

ivwshane

Lifer
May 15, 2000
29,043
9,180
136
7.8<8.1 agreed.

Problem is the only reason it goes down like this is because people just gave up. Will people care about the background to this number? I hope so.
I see you are continuing with your "I'm not ashamed of my ignorance" theme.

I'll quote the line to make it easy for you and I'll post a citation too.

Wages rose in September. And more people started looking for work.

http://finance.yahoo.com/news/us-jobless-rate-falls-7-123110416.html

Not good enough? Maybe this link from your favorite news site will help:

The Labor Department report showed the economy created 86,000 more jobs in July and August than first estimated. Wages rose in September and more people started looking for work.

http://www.foxnews.com/politics/2012/10/05/jobless-rate-falls-to-78-percent-in-september/
 

sportage

Diamond Member
Feb 1, 2008
9,511
1,493
126
Hey guys...
GW burnt down the house. Fire spreads pretty fast. Doesn't take too long to burn something down.

Obama brought in the boards and tools and the rebuilding started.
A hammer and nail takes a lot longer than a can of gas and a match. Duh...

So what we are seeing with the new jobs numbers is the frame starting to take shape. Republicans prefer smoldering waste.
And here are the republicans, standing near by with more gas and matches, not quite interested in seeing boards now appearing to take the shape of a frame.

Button line? Fuck the republicans. All they care about are gas cans and matches. Fuckers....
 
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piasabird

Lifer
Feb 6, 2002
17,183
60
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So are the total number of people employed people dropping or what is exactly gong on? I dont have a problem with good news, I just would like to know exactly what is going on. It is possible for a reduction in the unemployment rate not to be good news if the total employment numbers are decreasing. Many things could be happening like More people retiring, starting SS, or going on disability. Also there could be a lot of people who never got a job to begin with so they never filed for unemployment like young people age 18-30.

This week there were mass demonstrations in Italy where they say the unemployment rate for young men is like 35%. Is that where we are heading?

How much should we belive the figures that come from the government?
 
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