Counterparties

April 6, 2012

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The full March jobs report is here if you’re interested in perusing a bad, but not entirely horrible, set of numbers before a holiday weekend. The consensus prediction was somewhere around 200,000 new jobs, and the U.S. added 120,000.

This led Paul Krugman to write that we’re still in a “lesser depression,” Mohamed El-Erian to fret about a “mid-year slowdown“, and Jared Bernstein to detect hints of downtrend in private job gains. (For context, we need something like 125,000 new jobs per month just to keep up with population growth.)

A slightly more sunny way to put it: After a few good months, we’re seeing subtle shades of mediocrity in the job market. Like Felix, the NYT’s Catherine Rampell sees March’s job numbers as rather weak, with some worrisome trends:

The average length of the workweek ticked down slightly, to 34.5 hours in March from 34.6 hours in February. The unemployment rate fell to 8.2 percent from 8.3 percent, but that’s primarily because people dropped out of the labor force. (Only people actively looking for work are counted as unemployed.)

The White House spin was muted, but generally positive. Council of Economic Advisers Chairman Alan Krueger, in a statement, said it was all about the manufacturing sector:

Manufacturing continues to be a bright spot and added 37,000 jobs in March. After losing millions of good manufacturing jobs in the years before and during the recession, the economy has added 466,000 manufacturing jobs in the past 25 months – the strongest growth for any 25 month period since September 1995. To continue the revival in manufacturing jobs and output, the President has proposed tax incentives for manufacturers, enhanced training for the workforce, and measures to create manufacturing hubs.

All of those manufactured products will be sold by Amazon, apparently – Matt Yglesias suggests we’re seeing “the end of retail”:

…we have 10,000 fewer people working in general merchandise stores. We have 20,000 fewer people working in electronics and appliance stores. We have 17,000 fewer people working in “sporting goods, hobby, book, and music stores.”

Nouriel Roubini warns, in a tweet, that we should watch out for Okun’s Law:

Is the “over-hiring”, after the “over-firing” in 2008-09, now over? Okun’s Law may start to reassert itself as growth stays below potential

And The Conference Board seems to agree:

Job increases at only 120,000 in March shows that while expectations have been tempered, the labor market has repeatedly proved disappointing. This latest jobs report fails to live up to expectations again. This is most evident in the retail sector where we have now seen two consecutive months of declines. Employers spent a great deal of time and attention reducing costs over the past few years and apparently do not yet see enough solid evidence to sharply reverse course on hiring. This could presage more disappointing job counts later this spring.

All that said, Ryan Avent reminds us that we don’t really know anything anyway:

There is a 90% chance that employment rose by between 20,000 and 220,000 jobs. The change in the number of unemployed from February to March was probably between (roughly) -400,000 and 150,000, and there’s a good chance that the unemployment rate is between 8.1% and 8.5%.

And with that epistemological note we’ll move on to today’s links:

Regulations
The biggest Groupon scandal is what was legal before the JOBS Act – Jonathan Weil at Bloomberg
Groupon just got hit with its first shareholder lawsuit – Paid Content

Alpha
Meet the trader called the “London whale” whose huge bets are distorting the credit markets – WSJ

Politicking
Romney’s disclosures of his Bain financial holdings are as opaque as experts have ever seen – WashPost

Wonks
Obama’s blunder at the World Bank – Jagdish Bhagwati, Project Syndicate

Red Tape
Thanks to “virtually no competition,” HAMP refinancing is sticking some homeowners with higher interest rates – ProPublica
Just 3 percent of eligible homeowners actually apply for a government mortgage audit – HuffPost

Denied
Former Tyco chief Kozlowski denied parole – Bloomberg

Legalese
Twitter finally files lawsuits against spammers – Wired

Oxpeckers
Arianna Huffington no longer runs AOL’s tech sites – TechCrunch

Comparisons
America’s debt struggles are as old as, well, America – NPR

Legends
Whit Stillman: What I read – The Atlantic

Everybody Hurts
The NYC commute, a lament in 16 photos – NYT

More From Felix Salmon
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