<a href='http://www.nytimes.com/2004/08/07/business/07econ.html' target='_blank'>http://www.nytimes.com/2004/08/07/business/07econ.html</a>

In Blow to Bush, Only 32,000 Jobs Created in July

Job growth ground nearly to a halt last month, the Labor Department reported yesterday, raising new concerns about the economy's strength and reshaping the political debate over its performance less than three months before election day.

Employers added just 32,000 jobs in July, a small fraction of what forecasters had expected and far below the robust gains in employment earlier this year. The government also announced that job growth in May and June was less than initially estimated.

"The economy is spinning its wheels again," said Richard Yamarone, chief economist at Argus Research in New York. "Corporate America is reluctant to hire anyone above the bare minimum."

There's quite a bit more to the jobs market than just that number.

In fact, I don't remember an Election that spent so much time concentrating on that number and that number alone. I'll pull together some figures and show you what I mean.

Plus, if jobs aren't being created (which they are), it's not a "blow to Bush"...it's a blow to people that want to work that can't find jobs. Funny how the media skews everything as being about the election. At best, I find it extremely obtuse and callous.

BearcatCarl Wrote:Plus, if jobs aren't being created (which they are), it's not a "blow to Bush"...it's a blow to people that want to work that can't find jobs. Funny how the media skews everything as being about the election. At best, I find it extremely obtuse and callous.

If the jobs number had been good, it would have been posted here yesterday, with someone squealing with delight about what a good job Bush is doing.

The lower-than-expected numbers aren't much of a surprise. Ever since the "big one" on 9-11 corporations are a bit more gun-shy about hiring more than they really need. Add the record high oil-barrel prices and the omnipresent Iraq ogre in the background, and Corporate America is going to be little more nervous when it comes to their checkbooks.

Motown Bronco Wrote:The lower-than-expected numbers aren't much of a surprise.

I dunno, Motown. I respect your words.

But the Times is saying it was " a small fraction of what forecasters had expected."

The economy, and using the stock market to gauge it, have always been a momentum play. That momentum is seriously being questioned at this moment.

My opinion is that a relatively recent dynamic is in effect now. The stock market is so much more closely watched by so many people since investing was widely marketed to the masses that each company's profit performance is critical every quarter. (At least if you're one of those highly compensated execs who knows they can be turned out on a whim). So the cash flow equation is tilted inordinately towards producing short-term profits. Execs also learned during the recession how easy it is to prop up those profit margins by cutting labor costs. So creating jobs is one of the last options companies will turn to in the challenge to boost profits.

Bush's tax cuts put more money into the economy, but don't have a strategy for addressing this quandary. So he's risked the momentum stall that we may be seeing emerge at this moment.

Still amazes me how people, liberal AND conservative, think that a President creates jobs. Hell, CNN ran the headline yesterday, "Bush only created XXXX jobs" ......what, he hire more help at the White House?

I know, Rebel...the media is falling all over themselves in giddiness for how the alleged "bad jobs data" buoys Kerry:

<a href='http://www.msnbc.msn.com/id/5624615/' target='_blank'>Spin, baby, spin</a>


But like I said, there's more to those numbers than meets the eye. Check out the data:


<a href='http://www.bls.gov/news.release/empsit.nr0.htm' target='_blank'>32,000 jobs, or 600,000? What about the unemployment rate?</a>

Note: they always release the nonfarm employment data as the big number, so I'm not screaming conspiracy. It's just that you can spin those numbers into anything you want.

I agree that there is something wrong with this report. The economists' estimates could not have been off by as much as they were and the Household Survey could not have varied as much as it did. The number is something closer to the middle-250k-300k, I believe.

You are right Reb, US companies are not nationally owned, therefore the president cannot tell a single ceo to hire anyone or not to send a job overseas. If you think John Kerry will create jobs your nuts. From his statments he plans on tinkering with the economy and that seldom works. He plans to ethier punish companies that send jobs overseas, at the very least that will cause higher operating costs. Some companies will not be able to bear these cost and will fold. Or he will give companies tax incentives to keep jobs here. This could anger foreign investers who might not want to invest there money here. That is one of the things that weird about John Kerry, when it comes to foreign policy, he wants us to be out there makings freinds, but when it comes to the economy he wants isolationism. The best thing goverment can do for the economy is to get out of the way and let it work. I for one dont want to go back to the 70s were goverment regulation stifled the economy to a standstill.

BearcatCarl Wrote:I know, Rebel...the media is falling all over themselves in giddiness for how the alleged "bad jobs data" buoys Kerry:

<a href='http://www.msnbc.msn.com/id/5624615/' target='_blank'>Spin, baby, spin</a>


But like I said, there's more to those numbers than meets the eye. Check out the data:


<a href='http://www.bls.gov/news.release/empsit.nr0.htm' target='_blank'>32,000 jobs, or 600,000? What about the unemployment rate?</a>

I guess we are lucky here that we quibble over how many jobs were added in a given quarter. Meanwhile, in the workers' paradises of France and Germany, unemployment has fluctuated between 9% and 12% for some time now. (To their credit, the leaders of Fr and Ger have tried to roll back some of the disasterously bad social policies that have partially led to this jobless rate, but are naturally met by fierce street demonstrations by labor unions, enlightened students, and the habitually unemployed).

You couldn't be more right, Motown.

Socko Wiethe Wrote:Bush's tax cuts put more money into the economy, but don't have a strategy for addressing this quandary. So he's risked the momentum stall that we may be seeing emerge at this moment.

That's not Bush's fault. The "blame" can be spread over several sectors:

Education- The high quality students in the US get jobs...but they are too few. US education is very poor, from grade school up. Universities are forced to dumb down courses. Too many students are looking for a cushy 40 hr week. In comes workers from India, Russia, Singapore, etc. Better trained thatn the majority of US workers...and more willing.

R&D- Too few US industries put out dollars for R&D. Those that do want big supplements from the Govt. US companies don't tend to look forward far enough. Quarterly or annual results are the most meaningful. Long term R&D and product cycles are out of favor.

Oil- The price of oil and the uncertainty about the Middle East hurts everybody.

High Expectations- The "irrational exuberance" of the '90's set a bad precedent. Consider these facts: US homes have nearly doubled in sq. footage over the past 40 years. And families are smaller. Yet despite all of this extra space, the rented storage business is booming. Folks in the US have tons of stuff. We have had a surplus in the US for a long time. Life's been good. But, as globalization comes along, this surplus is going to get taken by the needy of the world. Unfortunately, while this sounds simple, it will be painful.
Globalization is non-partisan. It's not something to point fingers at. It's a fact, and people need to deal with it as fact, not clamor for gov't to save them.

That's a pretty good analysis, Torch. I remember in Portland (Hillsboro, to be precise) a few years back when Intel was RECRUITING overseas to find people of all skill levels to fill their breach...big salaries, free upscale apartment living (many of these people lived in my complex). I asked one of the Intel guys why they were going overseas and he said they couldn't find enough "qualified" Americans to fill the positions.

Paul Krugman weighs in:

<a href='http://www.nytimes.com/2004/08/10/opinion/10krugman.html?hp' target='_blank'>http://www.nytimes.com/2004/08/10/opinion/...krugman.html?hp</a>

Excerpts:

When Friday's dismal job report was released, traders in the Chicago pit began chanting, "Kerry, Kerry." But apologists for President Bush's economic policies are frantically spinning the bad news....

The shocking news that the economy added only 32,000 jobs in July comes from payroll data. Experts say what Alan Greenspan said in February: "Everything we've looked at suggests that it's the payroll data which are the series which you have to follow." Another measure of employment, from the household survey, fluctuates erratically; for example, it fell by 265,000 in February, a result nobody believes. Yet because July's household number was good, suddenly administration officials were telling reporters to look at that number, not the more reliable payroll data...


What we've just seen is as clear a test of trickledown economics as we're ever likely to get. Twice, in 2001 and in 2003, the administration insisted that a tax cut heavily tilted toward the affluent was just what the economy needed. Officials brushed aside pleas to give relief instead to lower- and middle-income families, who would be more likely to spend the money, and to cash-strapped state and local governments. Given the actual results - huge deficits, but minimal job growth - don't you wish the administration had listened to that advice?

Wow, Krugman, there's an impartial source of information. :rolleyes:

Krugman is a pseudo-intelleckshual who thinks socialism is a very cool idea that just hasn't been given the proper chance.

Give my regards to Karl Marx.

BearcatCarl Wrote:Krugman is a pseudo-intelleckshual who thinks socialism is a very cool idea that just hasn't been given the proper chance.

Give my regards to Karl Marx.

That is a slander.

Krugman is a respected economist. While he spends more of his time writing for popular audiences than he used to, he is the real deal. His PhD is from Yale. He was a professor at MIT and then moved to Princeton.

Below is a link to a homage of sorts to Krugman. It was inspired by his receipt, in 1991, of the John Bates Clark Medal, given every two years to "that American economist under forty who is adjudged to have made a significant contribution to economic thought and knowledge."

Milton Friedman won the same medal in 1951.

<a href='http://web.mit.edu/krugman/www/dixit.html' target='_blank'>http://web.mit.edu/krugman/www/dixit.html</a>

Schadenfreude Wrote:<a href='http://www.nytimes.com/2004/08/07/business/07econ.html' target='_blank'>http://www.nytimes.com/2004/08/07/business/07econ.html</a>

In Blow to Bush, Only 32,000 Jobs Created in July

Job growth ground nearly to a halt last month, the Labor Department reported yesterday, raising new concerns about the economy's strength and reshaping the political debate over its performance less than three months before election day.

Employers added just 32,000 jobs in July, a small fraction of what forecasters had expected and far below the robust gains in employment earlier this year. The government also announced that job growth in May and June was less than initially estimated.

"The economy is spinning its wheels again," said Richard Yamarone, chief economist at Argus Research in New York. "Corporate America is reluctant to hire anyone above the bare minimum."

In a blow to Schadenfreude, here is an op/ed that details the significance of the 32,000:

Quote:Bush Economy: Highest Total Employment in American History

The July jobs report is out and it's being spun as bad news for the President by people who don't understand how the data is collected and calculated. The media is reporting that only 32,000 jobs were created in July. But that's not true, for a number of reasons.

First, the 32,000 figure has a statistical quirk in it: July is one of two months, the other being January, that the government statisticians simply assume that a certain percentages of businesses fail, and they reduce the jobs-growth estimate by tens of thousands of jobs to account for it. According to the New York Post's <a href='http://www.nypost.com/seven/08052004/business/18381.htm' target='_blank'>John Crudele</a>, a year ago that lead to the job-growth number being slashed by 83,000 jobs in July.

Second, the 32,000 figure reflects only "nonfarm payroll jobs," which means, roughly, jobs created by employers. This data come from the government's monthly "Payroll Survey," which generally misses small businesses, especially newer small businesses, and always misses self-employed people.

The real number you should focus on is this one:&nbsp; Total employment in America rose by 629,000 to 139.66 million people in July, based on the government's Household Survey, which is also the data on which the official unemployment rate is based. Unemployment dropped a tenth of a percent in July.

A few months ago I published numerous posts on my blog documenting the surge nationwide in the growth of the number of limited-liability corporations, one of the most popular forms of incorporation for the self-employed and for new entrepreneurs just launching their ventures. (My most recent post on the LLC surge is <a href='http://billhobbs.com/hobbsonline/004185.html' target='_blank'>here</a>.) And more recently I <a href='http://billhobbs.com/hobbsonline/004278.html' target='_blank'>linked</a> from my blog to <a href='http://forum.belmont.edu/cornwall/archives/2004/07/data_on_the_ame_1.html' target='_blank'>Jeff Cornwall's commentary</a> on a <a href='http://www.kauffman.org/pages/430.cfm' target='_blank'>Kauffman Foundation report</a> that shows a resurgence of entrepreneurship among Americans, especially minorities but also among whites. As Dr. Cornwall noted, the Kauffman report showed that most entrepreneurs are starting businesses because they see an unfilled need in the marketplace, not because they are discouraged job-seekers.

The American economy is, more than ever, being driven by entrepreneurs, not by big corporations. That's why, more then ever, the jobs number that matters is the total employment number, not just the number of "nonfarm payroll jobs."


Here are some basic facts you need to know about the American economy under President George W. Bush:

*The unemployment rate has fallen from 6.2 percent in July 2003 to 5.5 percent now.

*The number of unemployed people has fallen from 9.1 million in july 2003 to 8.2 million now.

*In Jaunary 2001, the month that George W. Bush took office, 135,999,000 Americans had jobs. By October of that year, the number of Americans with jobs had slumped to 134,562,000 - as the sudden negative economic impact of the 9/11 attacks combined with the economic slowdown that began almost a year before Bush took office (with the stock market collapse in April 2000) to cause unemployment to surge.

Today, 139,660,000 Americans have jobs, more than at any time in our nation's history.

I blame the Bush tax cuts.

<a href='http://www.blogsforbush.com/mt/archives/001640.html' target='_blank'>http://www.blogsforbush.com/mt/archives/001640.html</a>