Friday, May 7, 2004

previous entry | main | next entry | TrackBack (0)

Good job numbers

The Bureau of Labor Statistics employment figures for April are out -- and the U.S. economy created 288,000 jobs last month. The number of persons unemployed for 27 weeks or longer declined by 188,000. Revised figures show that since
January, manufacturing employment has increased by 37,000. Over the course of this year, average hourly earnings have grown by by 2.2 percent, and average weekly earnings have increased by 2.5 percent.

In 2004, the economy has averaged the creation of over 200,000 new jobs per month.

In related news, the Financial Times reports that:

First-time claims for unemployment support in the week to May 1 fell by 25,000 to 315,000 - the lowest since October 2000. Continuing claims for unemployment benefit, which tend to provide a better indication of hiring activity, also declined sharply, dropping 69,000 to 2.9m during the week to April 24.

Much of this is due to continued strength in the service sector.

Of course, the economy has had to struggle to create jobs this year in the wake of massive job losses due to offshore outsourcing. Oh wait, according to this BLS breakdown, the economy has created over 200,000 jobs in the "professional business and services" category in 2004, the sector designated as most vulnerable to job losses from offshoring (to be fair, employment in "computer systems design and related services" has fallen by 6,000 since January).

So, great news -- but I'd really like the Bush administration to take the following warning from Alan Greenspan seriously:

The resolution of our current account deficit and household debt burdens does not strike me as overly worrisome, but that is certainly not the case for our yawning fiscal deficit. Our fiscal prospects are, in my judgment, a significant obstacle to long-term stability because the budget deficit is not readily subject to correction by market forces that stabilize other imbalances.

Read the whole speech.

UPDATE: Bruce Bartlett points out that due to the economic recovery, the Congressional Budget Office projects tax revenues for this fiscal year to be up by $100 billion.

posted by Dan on 05.07.04 at 11:04 AM


Bwah-ha-ha. I ...Oops, wrong thread - but right sentiment.

posted by: Tommy G on 05.07.04 at 11:04 AM [permalink]

Did I hear John Kerry scream in horror? The liberal media cannot slant these strong number to make them look bad. President Bush should have never been vulnerable regarding the economy. Oh well, it looks like smooth sailing from here on end.

posted by: David Thomson on 05.07.04 at 11:04 AM [permalink]

Good jobs numbers, bad wage numbers. The growth in wages continues to lag behind inflation, which means, in real terms, even while working hard at their jobs, working Americans are still falling behind the economic curve.

posted by: Adam on 05.07.04 at 11:04 AM [permalink]

Bruce Bartlett is incorrect to say "tax revenues up by $100 billion" if what he means is "tax revenues $100 billion better than we thought they would be". Revenues are "up" or "down" depending on whether they are more or less than the previous year - not whether they are more or less than the figure you just thought of. Some people have interpreted it as "revenues growing even while taxes are cut" which is plain incorrect.

The forecasts were pretty dire for the deficit, now they're very slightly less dire.

The Bush Job Creation Plan was supposed to create an average of over 300,000 new jobs a month. It didn't do anything like that for the first 2 years of tax-cutting. So, by the end of this year, the US will still have lost jobs relative to 2000.

Superb example of setting your expectations low and then declaring victory.

posted by: Thomas Dent on 05.07.04 at 11:04 AM [permalink]

It's good to know the economy is coming around - 2 months of these type of job numbers is very good news.

I've always appreciated the posts around outsourcing. The concern has always been - is there effective training programs for those laid off - is there effective health programs for those laid off - these type of things.

I still think that Walmart is an affront to the values of this nation, and Costco is more the ideal.

Thomas Dent is correct however, in terms of the expectations set by the current economic team, and the results accrued. You can't have your policy and recommendations be inaccurate for 24 months - and then, when things start looking up, claim success for those policies.


posted by: JC on 05.07.04 at 11:04 AM [permalink]

The Bush Job Creation Plan was supposed to create an average of over 300,000 new jobs a month. It didn't do anything like that for the first 2 years of tax-cutting. So, by the end of this year, the US will still have lost jobs relative to 2000.

Of course, the fun part of such forecasting is, as always, "compared to what." I'm sure that it could be argued that even when jobs were lost, it was less than it would be otherwise.

Certainly there was a recession coming before any tax cuts were passed, yes? There are some various models to try to predict the amount of jobs that would have been lost, but I'm not convinced that anyone really knows.

In any case, that deficit is there because of a combination of increased government spending, immediate tax relief for the poor and middle class (new 10% bracket), and marginal tax cuts. It's fairly orthodox Keynesianism that the first two would improve the economy in the short run. Now in the long run it might be a problem, but in the short run that sort of deficit should improve unemployment.

Which is why I think people like Thomas Dent are trying to have their cake and eat it too. It's almost certain that a smaller deficit could only have been accomplished through more job losses-- at least right now in the short run-- according to most models.

posted by: John Thacker on 05.07.04 at 11:04 AM [permalink]

Incidentally, the lag in improvement can also be easily argued from a pro-supply sider point of view. Taking a slight modification of Thomas Dent's view, one that the tax cuts didn't really help until now, one can say that that's because the marginal rate cuts in 2001 were phased in. 2001 and 2002 saw only the immediate rebates to the poor and middle class and the increased spending. It was 2003 and 2004 that saw more immediate marginal rate cuts.

posted by: John Thacker on 05.07.04 at 11:04 AM [permalink]

Does the obvious point really need to be made here? Because the two months of job creation reported by BLS occurred after the marginal rate cuts took effect does not mean the marginal rate cuts produced the jobs.

I understand a politician looking for a cheer line can use this one. It is plausible, and might even be true or at least partly true. For us to have some confidence that it is true, however, we need more than a coincidence of timing to have any confidence that a cut in taxes to a small number of the people who were earning the highest incomes anyway led to the recent increase in job growth.

posted by: Zathras on 05.07.04 at 11:04 AM [permalink]

Jobs are being created now for the same reason that they disappeared in the first place: because the economy goes up and down on regular cycles governed by the fundamental laws of ecnomics, not becasue the government controls it.

In reality the recession adn the jobs lost had nothing to do with Bush's policies, and the recovery now happening has very little to do with his policies either.

Government most certainly can affect the economy, it cannot control it. If you want to watch a sector of the government to see where the economy is going, watch the Federal Reserve, not the White House or the Congress.

posted by: DSpears on 05.07.04 at 11:04 AM [permalink]

I have always maintained that it was wrong to blame GWB for what was always going to be a cyclical recession and recovery. Going down this path was a no-win situation for Krugman and the lib's. The economy was bound to recover sooner or later and that would be the death kneel for everyone who tried to make short-term political hay out of it.

However Democrats are not noted for their collective political IQ.

However, just because jobs are growing now doesn't mean that trade and offshoring didn't have any impact. As a matter of fact, one can argue that the increasing lags in "jobless economic" recovery periods are pointing toward increasing work loss due to capital flight and relocation to cheaper labor pools overseas. The next recessionary cyclical downturn - which may be sooner than one might think - might see an even longer period before jobs pick up after the nominal GDP recovery.

It's like a swimmer who's in trouble, coming up for air once in a while but the time fractions between surfacing get longer and longer. One doesn't need to be a genius to identify the result of that trend.

posted by: Oldman on 05.07.04 at 11:04 AM [permalink]

Fools and liars are quick to identify themselves by the arguments they make. Anyone who argues that Bush is somehow responsible for jobs lost due to a rescession that started before he took office (or a month after he took office if you take the Dems argument) is either a fool or a liar. In any case, they have no credibility.

Neither do they have any credibility when they argue that tax cuts don't help an economy expand.

Why would anyone pay attention to such ridiculous blather?

posted by: stan on 05.07.04 at 11:04 AM [permalink]

Is anyone aware of the comparative wage value of the new jobs created in March and April in relation to the job service sector jobs lost in a similar period?

posted by: Dan P on 05.07.04 at 11:04 AM [permalink]

Is anyone aware of the comparative wage value of the new jobs created in March and April in relation to the job service sector jobs lost in a similar period?

posted by: Dan P on 05.07.04 at 11:04 AM [permalink]

Post a Comment:


Email Address:



Remember your info?